America AsideThe economic reliance on speculative financial assets isn't the only thing spelling the incoming downfall of the "Global North". Let's take Germany for example, which saw its economy actually shrink in 2024 by 0.2% for completely different reasons. 2025 could see the economy grow again, but only by 0.8% according to the IMF. The reasons behind this shrinkage are manyfold but honing in on two particular aspects of the German economy makes it crystal clear:
- Energy: 70% of Germany's energy consumption is imported, which--for a predominantly industrial nation--is frankly very unwise. From 1960-2023, most of that energy came from Russia.
- Cars: A major contributor to the German economy is its auto-industry, 70% of which is traditionally intended for export.
What focusing on these two sectors alone highlights is Germany's reliance on what Kohei Saito refers to as the Imperial Mode of Living; Outsourcing/Importing necessary aspects of your economy (in this case Energy), while relying on the production and export of unnecessary goods to fund your economy (in this case Cars). Some may argue that cars aren't at all unnecessary, but here we have to get into the question of which cars. If Japan and China offer vehicles that are much more affordable, then German cars become designated as luxury vehicles, and luxury goods are by definition unnecessary. This was not the case for the German auto industry's beginnings, which with its introduction of the VW Beetle offered a very competitive, very affordable "peoples' car", something German automakers today have clearly completely forgotten about. What Japan and China have been doing in recent decades is essentially fill the vacuum left vacant by Germany.
Some commentators blame Germany's economic shrinkage on its lag in the field of Electric Vehicles, but EVs only constitute 16.7% of global car sales right now. Surely Germany could've dominated the remaining 83.3% had it offered a product that was even remotely competitive.
EVs of course are certainly on the rise, and tapping into that market will certainly be necessary if the German auto industry hopes to survive. After all, EVs accounted for no more than 1% of global auto sales as recent as 2019. But pivoting to EVs, the batteries of which rely on heavy resource extraction from the Congo, does nothing towards offering an alternative to the Imperial Mode of Living, and as such is ultimately unsustainable. Looking to EVs as the key to saving the German economy (which from my observations seems to be the dominant narrative), is in the end a short-term view.
EV or not, any city on Earth can only tolerate so many cars. The future, the long-term future, lies in developing robust public transit systems supported by a fixed fleet of cars for rent and rideshare, likely autonomous. The age of the private automobile will ultimately have to come to an end.
Recent Geopolitical DevelopmentWhile the impasse experienced by the German economy was bound to happen sooner or later, the reason it happened when it did has more to do with recent geopolitics than the inherent limitations of endless capitalistic growth. The Russian war on Ukraine and the subsequent sanctions imposed by the US on Russia dictated that Germany follow suit with a complete halt in oil imports from Russia by virtue of its NATO alliance with the US. Meanwhile, US oil and gas exports to Europe jumped from $30 billion annually to now $88.3 billion annually. Since the beginning of the war in 2022, US military aid to Ukraine accounts for no more than $65 billion. Not a bad return on investment. It seems fairly obvious that the US has a vested economic interest in prolonging the war for as long as possible, or at the very least making sure relations between Europe and Russia are never normalized.
To add insult to injury, the US placed tariffs on the import of German goods, increasing their prices to levels beyond the reach of American consumers, a terrible blow for an export-reliant economy like Germany's. Essentially, America has DeFacto crippled the German economy. Most Germans do not know this and will instead lay blame on what they deem to be the most optically obvious culprit: immigrants.
Germany has indeed seen a significant rise in immigrants over the course of the last decade, from around 11% of the population to 18%. This spike however clearly has nothing to do with the sharp economic downturn the country has been experiencing, it just so happens to be an unfortunate coincidence. Alas, immigrants will be targeted because that's how these things go, and far-right / neo-fascist / ultra-nationalist politicians will dominate government.
Meanwhile, the US will continue to egg Japan, South Korea, and Australia on into direct conflict with China over Taiwan, mainly because of American reliance on the Taiwanese semi-conductor industry (which in today's world is an integral part of almost
every industry). Of course, the US doesn't outwardly say that; it makes claims about democratic integrity and so forth, but everyone knows what the conflict is really about. China seems to--very diplomatically actually--be working on swaying the tide on that one: March 2024 saw Chinese Foreign Minister Wang Yi visit Australia for the first time in seven years, and in June 2024 he visited South Korea for the first time in six years, and in December he visited Japan. It seems that relations between China and its neighbors is on their way to improving, while US efforts to sow conflict between neighboring countries (historically successful in the Middle East) is now faltering.
In fact, the only thing the US is succeeding at right now seems to be its ability to piss everyone off; Yoon Suk Yeol, the now impeached South Korean president with an arrest warrant out for him--the one who attempted to declare martial law? Yeah, he's largely considered to be Washington's man is South Korea, and it's said that his motive for declaring martial law stemmed from an intention to launch a war without the need to first go through the National Assembly.
Meanwhile, Japan's Nippon Steel 's proposed $14 billion acquisition of US steel was blocked despite providing assurances that it would not only keep, but grow the number of jobs for American steelworkers. This isn't by the way the first time the US would neg on its proclaimed principles of global free trade. The so-called Japanese bubble burst of 1992? Not really a bubble, it was directly caused by tariffs placed by the Reagan administration on Japanese electronics in 1987 which at the time were outperforming American electronics and offered at far more competitive prices (kind of like China today). American tariffs made Japan's products too expensive for American consumers and within a few years, Japan was forced to grapple with what would later become referred to as its "Lost Decade" (Germany should take note). We may be coming to a point where Japan is getting a little too fed up with American backstabbing.
Strange developments in West Africa are also underway; Niger ordered the withdrawal of 1000 US troops stationed there, as they did the withdrawal of French troops. Mali, Burkina Faso, Chad, Senegal, and Cote d'Ivoire all also ordered the withdrawal of French troops, all there clearly to secure resources considered vital to US/EU capitalist interests. The US and France of course won't give up without a fight and in December 2024 began forging new alliances with Angola and Nigera, both of which may end up entering into conflict with the other aforementioned African nations unless they are able to arrive at an attractive enough diplomatic agreement that would render Western meddling no longer appealing.
And of course, for the first time in history, the International Criminal Court has an arrest warrant out for a major US ally. America responded by passing a bill to sanction the ICC, based in the Hague. At the UNGA last September, 124 nations voted for that same ally to end its occupation of Palestine. Instead of an end to that conflict, we are seeing it expand into neighboring countries.
And finally of course, there are the most recent statements suggesting US interest in annexing Panama, Canada, and Greenland.
America is very quickly descending into rogue state behavior, the final erratic spasms typical of any crumbling empire.
Shift or Shit?Degrowth, by the way, isn't a bad thing. It's only bad when it occurs despite your best efforts to push towards endless growth (hello Germany). If degrowth were to be adopted with intention, one can envision an economic landscape that doesn't heavily rely on the continued extraction of resources just to produce things that no one really needs. Economies based on production intended for consumption that is driven by completely fabricated means can no longer continue.
It feels to me that we may be arriving at a major civilizational crossroads of sorts, one whose implications extend far beyond economies and well into the realm of geopolitics and culture. Many possible roads lie ahead, and one can only hope that the road taken won't be the one wherein one imperial empire falls just for another to fill its shoes. Let us learn from the mistakes of one doomed empire by avoiding empire altogether, and instead embracing cooperation, mutual aid, and environmental respect as the guiding principles for human co-existence going forward.
Ganzeer
Houston, TX
08.01.25