What makes a superpower a superpower?
Well here is a wiki definition:
A superpower is a state with a dominant position characterized by its extensive ability to exert influence or project power on a global scale. This is done through the combined-means of economic, military, technological and cultural strength as well as diplomatic and soft power influence.
What is interesting in that definition is that combination of starts with the economics, but that one factor is instrumental in creating the following ones. What makes a super power is access to and control of value in order to create the means required to exert influence, and that wealth availability comes from the people of that country and their willingness to give up control to the central power that will choose how, where and when it is spent.
However, where does the income come from and for example, what makes the US such a controlling factor? Perhaps it is the purchase power where 5% of the world's population consume 24% of the world's energy. With that kind of consumption behavior, the money that they generate is enormous and it all runs through the hands of the government in some way shape or form, as well as having controlling factors through trade contracts of the countries who supply the goods and services.
What I wonder is what happens if an increasing amount of the value a government has access to shifts toward private ownership and control. Even if you support your own government's attempted control and influence over other nations, would you actively opt-in to pay for it if you had to actually transfer the funds directly? Default positions are massively influential in maintaining the status quo and the default at the government expenditure level is that we either willingly or at least, do not actively withhold access by default.
People often use the excuse "who would pay for roads" when it comes to opt in services.
Roads in 2014
In 2014, a total of $416 billion was spent on highway and water infrastructure, $320 billion of which came from state and local government, with $112 billion for capital projects and $207 billion for operation and maintenance. The federal contribution amounted to $96 billion, of which $69 billion was for capital projects and $27 billion was for operation and maintenance. Of the $416 billion total, $165 billion was for highways alone, which includes national, state and local roads, bridges and tunnels. Mass transit spending amounted to $65 billion. source
For Fiscal Year 2019 (FY2019), the Department of Defense' budget authority is approximately $693,058,000,000. Approximately $684,985,000,000 is discretionary, approximately $8,081,000,000 is mandatory. The Department of Defense estimates that $652,225,000,000 will actually be spent (outlays). source
Just to put some perspective in, "Operations and Maintenance" for the roads was 207 billion, for the military it was 278 billion and for the military, that is twice what is spent on personnel. In fact, "procurement" is a larger cost than personnel costs also.
This is just one facet of expenditure of course, but I just wanted to highlight one that people could relate to consider if they themselves had to directly transfer the funds, would they make the same expenditure choices as the government? It is an interesting question to consider as the government *should' be working in service of the people, yet if the people would directly support, is it in service?
What I predict is that if everyone was given full or near-full control over their value, the consumption behaviors would change considerably and diverge away from areas like military, even if one was an actual supporter of military might. The other factor that would play a massive role is the same as what happened on Steem with the cost of downvotes where people didn't flag because others didn't flag. Why would some spend on military if all weren't willing to spend and instead use their own value to improve their lives or consume something more personally interesting?
Anything that chips away at the access to economic value a government has undermines its very ability to control, which is why no government wants their currency sent outside of the country to provide support the economies of their potential enemies. I remember hearing about 20 years ago that the estimate of cash heading in envelopes to India was around 8 billion dollars a year and this was a concern, even though it is a drop in the ocean in comparison to that military budget alone.
What happens when crypto starts to really take root and people start shifting some percentage of their wealth into a currency that is highly mobile and cares nothing about borders? What happens when other countries like New Zealand start onboarding their citizens early and helping them generate crypto wealth that will go up in value where the early adopters have the largest gains? Is it possible for smaller countries to reposition themselves in the global economy by enriching their citizens through asset valuation increase and then supporting them to consume?
It is interesting to think about because what is essentially happening is that an economic network is being set up that makes government access to value increasingly difficult as well as value transfer between independent owners increasingly easy, anywhere on earth. Crypto stands to fundamentally change the perception of what is valuable as it can tokenize anything and create it in an immutable physical digital world, while simultaneously providing gateways to spend it on those assets that are uncontrollable at a government level. Is a government able to convert Gods Unchained cards into military expenditure on tanks when cryptos can shift much faster than legislation could ever move.
While I don't have the answers to much of this as this is economics at a level far outside my capabilities and are continually encroaching into areas that have never been available or seen before, I think that it is an interesting area to consider. Currency value is created through a concept that something is tradeable between goods and services, it is not dependent on what that currency is. However, in order to have and hold value, the idea has to hold consistently.
Not many soldiers are going to work for bottle caps if they can't spend them, not many are going to work for US dollars if they have no value to buy the goods and services they require and desire. Will they work without pay if no one who holds and controls value is willing to allocate their resources to military expenditure? Will those with value continue to support the status quo be continuing to spend on the current default options when they control their own funds completely?
The way we earn in this world is increasingly getting tied to the way we consume in a much more direct function, and once this happens, it sets up a change in the supply and demand models to favor consumption habits over the choices made by governments in our stead.
Or at least, that is one scenario.
At some point, all empires, all royal families, all countries and all Superpowers - fail.
[ a Steem original ]