New Year Special, Part 1: 2010 in Review

Happy new year to all Sublime Oblivion readers! This blog wouldn’t be what it is without you. In fact, I’d have probably abandoned it after a month or two after a couple of posts as I did with my first blog in 2006. So please keep on reading and commenting.

BTW, the image above is of the Xue Long (雪龙) icebreaker in the Arctic. It represents the intersection of several major current trends: The multifaceted rise of China; the growing importance of the Arctic; climate change.

Year in Review: 2010

As usual, I will begin by reviewing the defining trends of this year (Part 1), before making predictions for the next and finishing up by reviewing the accuracy of my 2010 predictions (Part 2). The main global theme of 2010 is the continuing Rise of the Rest – led by but not limited to the BRICs (Brazil, Russia, India, China) – set against the background of the accelerating political, economic and above all institutional and soft power decline of the old Western order.

(1) China keeps getting stronger, on every facet of national power, at an exhilarating rate. A comprehensive overview is well beyond the scope of this post, but a few examples give an idea of the general picture. A country that first displayed its UAV’s in 2006, has now exhibited more than 25 different models. One of them, the WJ600 – boasting a jet engine, multiple missiles and stealth features – might even be more advanced than any US or Israeli model. Just as the year rolled to an end, leaked photos showed that the Chinese now have their own fifth-generation fighter, the Chengdu J-20. Bearing in mind that Russia also revealed its PAK FA this year (after around 25 years of development), I think it’s safe to say that the Chinese have now fully caught up with Russia in non-strategic military technology*.

However, unlike the USSR, China is not a largely one-dimensional military power. What’s far more significant is that in sector after sector it is investing massive resources into R&D and espionage to achieve qualitative near-parity with Western products (e.g. Japanese trains, German machine tools, etc) then seizing their market shares abroad through its lower labor costs. China now produces half the world’s wind turbines and solar panels, a hugely strategic sector given current energy prospects; it has the world’s most powerful supercomputer (and is now second overall to the US in supercomputing); and finally, PISA international standardized tests have confirmed that Chinese youth are now as skilled in reading, math and science as their (far richer) Western and Japanese counterparts.

One can stretch these examples almost indefinitely, but the main point is that “the rise of China” isn’t just 1980’s Japan-style hype; its tenfold larger population makes it the real deal. If you wish, dismiss it by referring to its aging problems (might be an issue by 2030) or its property bubble (when 50% of its population is still rural). But don’t be surprised by not-so-distant headlines such as “China becomes world’s biggest economy by GDP” or “RAND analysts claim PLAN has achieved military superiority in the West Pacific”.

(2) While China is its main champion, many other countries traditionally considered to be economically stagnant, politically unstable and socially backward are emerging as major regional Powers in their own right, and beginning to project global cultural influence. In its adroit PR handling of the flotilla incident, Turkey has staked out its claim to regional prominence by challenging Israel and appealing to global Muslim sentiment. Brazil and Turkey enjoyed blistering growth rates. Russia has resolved its differences with Belarus in recent weeks, and together with Kazakhstan has finalized the timetable for a customs union; with the election of Yanukovych to the Ukrainian Presidency and Ukraine’s (partial) reorientation towards Eurasia, it too may join in the next year or two. Non-Western outlets such as Russia Today and Al Jazeera are now major participants in the global media discourse along with the likes of CNN and the BBC.

(3) The ideological rift between pro-stimulus Democrats and pro-scrouging Republicans – and their mutual capture by special interests (the financial sector, the military-industrial complex, etc) – has become increasingly evident this past year. This now puts the probability of the US ever resolving its budget problems by choice, slim to begin with, at next to zero. At this point, the only realistic chance of returning to fiscal sustainability without unleashing massive social disarray is to increase taxes on the rich, cut security spending, reign in the financial and “homeland security” mafias and rule out future stimuluses (whose effects tend to be crude and non-lasting) in favor of targeted social spending. However, ideological factors preclude this (The Tragedy of Obama: “a corporatist centrist giving endless concessions to Republicans who (successfully) portray him as a radical leftist”).

(4) How not to close awning budget deficits: the UK (I regret to say that I blogged in support of the ConDem coalition). While any idiot can see that the UK is on a fiscally unsustainable path, the ways in which cuts are being made, with a sneering classism that hits the poorest and least-privileged; commercialization of state social functions; and dumping of state assets, is incredibly shorttermist, foments social disarray and undermines longterm prospects. From 2011, the UK will implement the highest university tuition fees in the world. The headlines say it all: “McDonald’s and PepsiCo to help write UK health policy”, “Students could boost marks by showing ‘corporate skills'”, etc.

(5) In Europe, the German corporatist model, the Swedish welfare state, and to a lesser extent French dirigisme, have acquired ideological supremacy over the UK and Irish neoliberal models and the bureaucratized Mediterranean states. In a low-key meeting at Deauville in October, Sarkozy appeared to agree with Merkel’s proposals that would penalize countries that require bailouts by denying them votes in EU councils and placing them under Brussels supervision. Will the Mediterranean accept these Diktats or will it fracture the EU? Is even Germany, with its own high debts and demographic problems, capable of guaranteeing them? In any case, one thing we can say for sure is that this development reinforces the trends towards a multi-speed Europe, with the power of the traditional Franco-German core reinforced further by their (relative) economic resilience.

(6) The posturing by North Korea is, as usual, a show meant to extract concessions. Not worthy of the alarmist headlines.

It appears that the main reason Israel has so far restrained itself from striking Iran – as I still think will happen, eventually – is the remarkable success of the Stuxnet worm at sabotaging its uranium enrichment processes. But in all likelihood – I give it 75% – this strike will come sometime in the next few years.

Afghanistan is as unwinnable as always, but ideological inertia and the “psychology of previous investments” conspire to keep the US there.

(7) If you want the single best example of declining US soft power, consider this: even as prominent US politicians called for the assassination of a controversial foreign journalist for “espionage” or “information terrorism” – and even better, while touting its plans for World Press Freedom Day in May 2011 (presumably Assange isn’t on the invite list) – and Britain imprisoned him on what are almost certainly politically-motivated rape charges from Sweden, the President of Ecuador offered him asylum and the Russians mooted giving him a Nobel Peace Prize. Now I certainly don’t mean this portrayal of Assange’s travails to demonstrate that countries like Russia are altruistic crusaders for transparency and journalistic freedom; to the contrary, its safeguards for leakers are not so much abysmal as non-existent. However, Wikileaks illustrates that when the Western power elite is challenged so openly, forced to go through the political version of the airport body scanners it foists on its own citizenry, all pretensions to lofty ideals such as “rule of law” are tossed out of the window**.

But Wikileaks is more than just a collection of political gossip, or revelations such as that the British train Bangladeshi death squads and US contractors traffic in children for Afghan warlords, or inspiration for national and regional leaker websites such as Indoleaks (Indonesia), Rospil (Russia) or Euroleaks (EU), or even confirmation of “radical” viewpoints such as that the political elites of most European countries take their marching orders from the State Department.

The Wikileaks Saga is a historical crossroads that will determine the future balance between privacy, freedom and security in the West. Down one road, the powers that be will clamp down on journalistic freedoms and the unrestricted Internet, and so confirm the dominance of the one-way “surveillance state”; down the other, the transparency virus unleashed by Wikileaks will destroy the effectiveness of state “authoritarian conspiracies”, leading to citizen empowerment and “universal sousveillance” (two-way surveillance). Since technological development makes increasing surveillance inevitable, and consequently serves to concentrate power in the hands of materially and legally privileged actors such as states and corporations, I think the kind of citizen sousveillance represented by Wikileaks is indispensable for preserving personal freedoms and people power in our cyberpunk future.

(8) In the hottest year on record globally, which saw a devastating heatwave in Russia and unprecedented flooding in Pakistan and Australia, AGW denialism claimed victories in the US Congressional elections and the inconsequential summit in Cancún (without verification or penalties, any targets or commitments aren’t worth the paper they’re on). The climate crisis is now so self-evident and imminently devastating that the only psychological option is to draw in the runaway train curtains and prosecute anyone who peeks out and points out the broken bridge ahead. Geoengineering it will be (attempted).

(9) On Russia, Nikitin has summarized the year with a report card. Swell job. (Apart from the bizarre Khodorkovsky apologetics – talk of teachers’ pets!).

In short. The economy is so-so: though 4% growth is respectable, it should be seen in the context of an 8% GDP decline in 2009. (On the other hand, updated Real GDP per capita calculations by the World Bank and OECD/Eurostat have indicated that Russia’s is around $20,000, higher than the previous estimate of c.$15,000. This makes it similar to Poland, Croatia or Estonia; and in overall size comparable to Germany, and far above France or the UK). Its demographic situation has remained mostly unchanged from 2009, a small rise in births being more than canceled out by a rise in death rates caused by the 44,000 excess deaths due to the heatwave. In the political realm, the biggest developments were: (1) the uneasy survival of the Reset with the US, in which Russia cooperates with the West in return for more technological access; (2) the huge $700bn rearmament program announced for the next decade; and (3) the increasing drive towards recentralization and technocratic management encapsulated by the ouster of Mintimer Shaimiev (Tatarstan) and Yuri Luzhkov (Moscow).

(10) The melting of Arctic sea ice and local warming is creating the foundations for a sustained economic boom. This year the MV Nordic Barents steamed into the record books as the first foreign flagged vessel to sail from Europe to China through the entire Northern Sea Route without stopping at any Russian harbor. With traffic through the North Sea Route expected to increase tenfold over the next decade, ports being expanded, and power and transport infrastructure built up at a furious pace, the Arctic represents the next investment El Dorado after the BRICs. Follow S/O’s sister blog Arctic Progress to stay on top of things at the top of the world!

* Of course, this isn’t to say that all Chinese military tech is now up to Russian standards. E.g. Russia is well ahead in air defense. On the other hand, China’s naval technology is now arguably better. On average, I’d say the qualitative level of conventional arms is now roughly equal.

** Just as they are with the Third World victims of Western imperialism, or its own repressed minorities in urban ghettoes, or Muslims, but when it happens to English-speaking white guys it’s far more serious.

Stay tuned for Part 2 in which I make predictions for 2011 and review those from last year. Meanwhile, please feel free to point out any major events or trends I missed out.


  1. Jean-Christophe Helary says:

    Regarding North Korea, there are other interpretations and one that struck me as the potentially closest to the “truth” is the one linked below:

  2. Don’t know if you missed anything particularly, but for fun you might want to take a look at JH Kunstler’s predictions, written in his usual lurid apocalyptic style:—gird-your-loins-for-lower-living-standards.html

    • I don’t pay attention to Kunstler. He doesn’t study collapse objectively. He actively wishes it and this colors all his “analysis”. He’s preacher to the doomer choir.

  3. “At this point, the only realistic chance of returning to fiscal sustainability without unleashing massive social disarray is to increase taxes on the rich, cut security spending, reign in the financial and “homeland security” mafias and rule out future stimuluses (whose effects tend to be crude and non-lasting) in favor of targeted social spending.”

    I agree with all of that except for the part about social spending. The government shouldn’t be increasing any kind of spending now.

    “From 2011, the UK will implement the highest university tuition fees in the world.”

    I think that way too many people are wasting time in college all over the developed world. The ideal system would have several times fewer people in college than now, but free tuition for the small minority who can pass rigorous entrance exams. And fewer soft majors, of course. Like a lot of other things in life, most of the US educational system exists less because it’s needed by consumers than because there’s money to be made from it by providers. I doubt things are drastically different in the UK.

    “Will the Mediterranean accept these Diktats or will it fracture the EU?”

    I’m guessing that the euro will be dead in a year or two.

    “Afghanistan is as unwinnable as always, but ideological inertia and the “psychology of previous investments” conspire to keep the US there.”

    At some point the US will withdraw from Afghanistan because of budget constraints. World history is conspiting to swell Pushtuns’ heads. They will mistakenly think that they’ve defeated two global superpowers in a row. Fate is setting them up for an epic disappointment somewhere down the line.

    • “cut security spending,”

      I have often fantasized about cutting the grossly bloated, wasteful, destructive military-industrial complex down to size. But what would happen if we did so? First, the sector is so huge that big cuts would would increase unemployment massively. Second, a lot of the sudden unemployed would be highly-skilled guys with tech and military backgrounds. And they’d be mighty pissed off. Think T. McVeigh times 10, or more.

      Does a sensible way out of this even exist?

      • One way to cut military spending without increasing unemployment would be to bring everybody home from Iraq and Afghanistan. I’m sure that they’d consume fewer resources while stationed over here than while being shot at for no national security reason that I can see over there.

        As for the highly-skilled guys, what would be really cool is if some of the government funding for the military-industrial complex could be transferred to NASA and to science.

        • Lol, if NASA and science produce better arms and soldiers, sure this will happen. But for some strange reason America has discovered that it can feel very important by owning all these deadly things. However, be assured, that will pass as soon as it becomes most evidently pointless. The problem is that “most evidently” is very elastic and as long as the cleverest Americans can think up a way to make the military-industrial complex look pointy, it won’t disappear.

      • Sure, Germany, we cut a lot at home and export a lot. Your problem in America is that you have to convince the world to arm a lot more. Perhaps some new invasions will do the job, but this time something powerful, like Iran, Mexico or Nigeria.

  4. Giuseppe Flavio says:

    bureaucratized Mediterranean states
    I know Italy’s bureaucracy (because I’m Italian) and German/Austrian bureaucracy because I have relatives there. Believe me, the latter is heavier than the former, but it’s much more consistent, that is to say the procedures you have to follow don’t change each time you ask what to do or when you ask to different offices. Besides, a certain degree of economic dirigisme can be found in Italy. For example, oil company ENI is state-controlled and its activities abroad (especially in Russia) are a sort of parallel foreign policy.
    In case you’ve read that Berlusconi is a staunch supporter of free-markets, deregulation, etc. well, it’s BS.

    • Are you sure? If we’re to take the East of Business rankings as a rough proxy for bureaucratization, Italy is significantly behind Germany and Austria.

      My impression is that Italy’s main economic problems now are (1) an overly-rigid labor market and (2) 120%-of-GDP debt (though fortunately its receipt to outlay ratio is pretty good in comparison to Spain or the US).

      • Giuseppe Flavio says:

        Yes, I give you a few examples.
        1) Marriage in Austria requires an insane amount of documents, more insane then Italy. I know, one relative of mine married an Austrian woman.
        2) This same relative has won a position as full professor in Germany, before that he was an associate professor in Italy, previously he had the same position in Austria (dozent) and before that he worked as an assistant professor at the same Austrian university (Note: both these positions are tenured in Austria). He had to produce his primary school license (by primary school I mean the 6-11 y.o. school). This is mad, If you have a Ph.D. you obviously got the primary school license. When I got my position as assistant professor I only needed to produce my Ph.D. and some other documents not related to my academic and school career.
        3) At first, this relative was a part-time assistant professor so he could run a private business, and he did run a consulting service for a private enterprise where he worked before. I worked as a consultant with him, and at that time I already was an assistant professor. Unlike him, I hadn’t to start a business (It’s legal here for a university professor/researcher to do consulting for enterprises, you only need the authorization from the rector), neither I had to pay a tax counselor to fill my tax form, I just forwarded the invoice from the Austrian firm to an university office.

        As for Italy’s economy, I fully agree with point 2, but partially disagree with point 1. There are different types of worker contracts, some are very rigid (especially state contracts), others are very flexible. Those with the latter type of contract have serious problems in getting home loans.

      • Giuseppe Flavio says:

        I forgot to suggest that the percentage of state officials over the workforce could be another proxy for bureaucratization.

      • Giuseppe Flavio says:

        And another point.
        4) When I have to participate to a conference related to my research work, I need the authorization from my Department, while the above mentioned relative has to ask for two authorizations: one from the Department, another from the Faculty.
        On this subject, you can read this US vs German bureaucracies comparison.

    • Giuseppe,


      “Berlusconi is a staunch supporter of free-markets, deregulation, etc.”

      Bet that gets him access to an ever-burgeoning market of young underaged girls of ranging exotic.

      • Giuseppe Flavio says:

        A little joke on Berlusconi. An Italian prays “Oh, God, when I begged you to put an end on the guy with all that makeup, all that facelift, and engaged with underages… I didn’t mean Michael Jackson!!!”

    • The difference is perhaps the coffee, Germans drink it out of big mugs and not small doses of espresso. This in turn has a very important function in setting the atmosphere in the office during the consumption of stimulants.

  5. But the PISA test for China measured only Hong Kong and Shanghai. I don’t know if one could accurately expand these results to the whole country. IMO I think it’s not fair to compare a country most developed cities with a whole country. It’s hard to believe that these two regions, with a total population less than thirty million people can represent a country of more than one billion people.

    • That would be a good point, but I wasn’t referring to the Shanghai and Hong Kong results, which I indeed recognize to be outliers.

      … Shanghai got by far the best results out of all the OECD countries (never mind the developing ones). Now while you might (rightly) argue Shanghai draws much of the elite of the Yangtze river delta, the Financial Times has more: “Citing further, as-yet unpublished OECD research, Mr Schleicher said: “We have actually done Pisa in 12 of the provinces in China. Even in some of the very poor areas you get performance close to the OECD average.””

      Since countries like the US and France [as a whole] get scores “close to the OECD average”, this means that the workforces soon to be entering China’s economy, even from its poorest regions, will be no less skilled than those of leading Western economies

      • True, Chinese are very knowledgeable, but from working with them, I had the impression that they don’t think so much about security at their workplace as Germans do. And neither had I the opinion that they worry about economic downturns.

  6. One example of Chinese growth that blows my mind:

    The Shanghai subway began operation in 1995. They’ve already laid 450 km of track. By 2020 they’re planning to have 877 km. Here is the insane system map:

    For comparison, the Moscow Metro has been continually built since 1931. It has 301 km of track. New York has had a subway since 1901. It has 337 km of track.

    The Beijing subway is experiencing similar growth to the one in Shanghai and will be similarly gigantic when finished:

    • If you want gargantuan and disquieting, check out the Underground Great Wall.

      If it has 5000km of tunnels underneath mountains, who knows how many nuclear-tipped ICBM’s can be concealed there?

      • Sure, a Russian or an American will count nuclear tipped ICBMs, but not the Chinese. They always had a small force with a clear second strike doctrine and their force is enough to really damage any enemy doing the first strike (ABM will likely be countered by improved stealth and anti-laser armor). That’s the smartest thing about nukes, make sure that weapon is never used so a big nuclear build up is rather a liability than an asset. Tactical nukes may be an exception, but I think that’s a gray zone the Chinese will also fill with some small nukes of their own. So they make war a playing field for an economy that can finance a modern and powerful army and not some kind of suicide mission. They’re also the only nation that is proud to have fought not 1, but 2 nuclear powers, although the gunfights with the Russians aren’t of the same size as the Korean war, they show a nation post-Mao willing to be aggressive if deemed necessary. None else would have dared so much.

  7. Michael tanner says:

    I believe that an attack on Iran is a possibility, but Irans emergence as a regional power just complicates everything for Neocon-Israeli wat plans. Sure, its Iraq V.2.0, but.. its my opinion that there are plenty of cards still to be played.
    A Sino-Iranian embrace od sorts is a possibility.
    The Reset turning sour could revamp Russo-Iranian ties.
    Turkey has made loud noises regarding its Iranian friends.
    Even India is going back to a less westernized approach.
    Sure, the EU jumped in the sanctions bandwaggon, but didnt you see that coming anyway?
    In my view, the next couple of years will be decisive. A wrong move on Iran could be a catalyst for bigger changes around Eurasia.
    Sorry if this is a bit of a rant :)))

  8. Coincidentally, I saw this on INOSMI, “Taking Down America”, by Alfred McCoy. Despite trivial title, this is intelligent analysis of American empire decline, which fits in many ways with your analysis. Like yours, it’s a 2-parter. I recommend. Here are links to original and Russian translation:

  9. AK, I agree with most of what you’ve written about China and its future prospects, but how would you factor in the issues of water and food scarcity and the demographic/gender imbalance problem? Most western commentary on China that is pessimistic or China-bashing focuses on the environmental condition, with its effects on agriculture and food/water supply and the demographic/gender issue.