Downstream: Everything You Know About The Global Economy is Wrong w/ Philip Pilkington
Jan 22, 2024
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Philip Pilkington, macroeconomist and podcaster, discusses the shift from a unipolar to a multipolar world, highlighting China's influence. They explore the Israeli war in Gaza and emerging technologies, as well as the implications of inflation for the US election. The podcast also delves into the ChIPs Act, China's governance model, China's potential future wealth, the Conservative Party, and understanding the dollar-based financial system.
The world is shifting from a unipolar system dominated by the US to a multipolar system where power is distributed among multiple countries.
China's rise as an economic and military power is a significant factor driving the transition to a multipolar world.
The shift to a multipolar world poses both challenges and risks, requiring careful understanding and management of geopolitical shifts for global stability.
China's advancements in technology, particularly in hard sciences, position them to lead in cutting-edge sectors, necessitating strategic attention and competition from the West.
Deep dives
The Shift from Unipolarity to Multipolarity
The podcast episode discusses the shift from a world dominated by the United States as the sole global power to a multipolar world where other countries like China and Russia are gaining influence. This shift is attributed to events such as Russia's war in Ukraine and China's economic and technological rise. The guest explains that a multipolar world is one where power is distributed among multiple countries, rather than being concentrated in one dominant power like the US. This shift has global implications and marks a significant change from the unipolar world that many people have grown up in.
Understanding Multipolarity and Unipolarity
The guest clarifies the concept of multipolarity by comparing it to unipolarity, where one country (the US) dominated global affairs. In a unipolar world, America was the primary power and influenced global politics and economics. In a multipolar world, power is distributed among various countries, including the United States, China, Russia, and others. The guest emphasizes that multipolarity does not necessarily mean two superpowers like in the Cold War, but rather a more fluid and distributed system of power. He notes that we are entering a new and unique era with a global distribution of power, unlike anything seen since the 19th century.
The Significance of China in Shaping a Multipolar World
China's rise has played a crucial role in the transition from unipolarity to multipolarity. The guest highlights China's economic and military growth, which has made it a major global power. While Russia has also shown its military capabilities, China's economic influence is seen as more significant. The recent global economic shifts and the ability of countries like Russia to turn to China for trade amidst Western sanctions demonstrate China's importance in the transition toward a multipolar world. The speaker emphasizes that a new world order is emerging, where power is distributed among multiple poles instead of being concentrated solely in the hands of the United States.
Challenges and Impact of a Multipolar World
The guest expresses concerns about the potential challenges and risks posed by the shift to a multipolar world. He suggests that the fragility of Western economies is often underestimated, and decisions made by Western powers in the next few years will shape the 21st century. Miscalculations and conflicts in this new global order could lead to adverse consequences, ranging from another world war to the collapse of global trade and hyperinflation. The guest emphasizes the importance of understanding the geopolitical shifts and their potential impact on the global economy and political stability.
China's Economic Learnings
China has learned a great deal from the West in the past 30 years, but now there is more that China can teach the West than the other way around. China has successfully applied the good parts of Western economic practices while leaving behind the bad parts. The West's economies have become imbalanced due to massive trade deficits, and re-industrialization is necessary to get back on track. Industrial policy is favored over protectionism, but a pragmatic approach is needed that is not an all-encompassing solution.
China's Control in Investment and Housing
China exercises effective control over investment and housing prices, which gives them an advantage in managing their economy. They have levers to control housing market construction investment as well as investment in state-owned enterprises. They can also manipulate investment in the private sector. China has demonstrated the ability to reverse economic wobbles by adjusting investment. They have also shown an ability to manage housing prices. These factors contribute to the stability of the Chinese economy.
China's Technological Advancements
China has made significant strides in technological advancements, particularly in the field of hard sciences. Chinese research universities have been publishing more papers in hard science journals, even surpassing renowned institutions in the West. This progress in research and development, especially in fields like quantum computing, synthetic biology, and material science, positions China to lead in cutting-edge technologies in the future. The West, including Europe, needs to pay attention to China's advancements and develop strategies to compete in these key sectors.
We are in a drastically different world from the one most of us grew up in. This has been proven by the rapid escalation in the events in the Middle East over the last six weeks. No longer are we in a world where, essentially, the US run the show. And this has huge global […]
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