*Do we sell our metals that much cheaper by the boat load, than by the truck load*

Hasbeen, that is because local companies price to what the market
will bear, some markets have far higher profit margins then others.
So they would have simply screwed out of you, whatever they could.
What they sell internationally, has to be done at a globally
competitive price.

The price of steel is a fine example. Bluescope steel will sell
internationally for a few hundred $ a tonne. The same steel locally
is much more expensive and yes, a truckload of it is quite different
in price, to a boatload.

Even now, if I buy a steel section where there is import competition,
its hugely different in price per tonne, to where there is not.
On the latter, they screw me for whatever they can, because they can.

Steven, I think that the whole thing will kind of balance out in
the end. America won't be the kind of super industrial power that
she once was and China won't dominate the world either. There will
be a role to play for both countries and of course a host of other
countries who are moving up the industrial scale, such as Korea
and others.

I read somewhere that Foxconn are already looking at using huge
numbers of robots for assembly of electronics, so don't underestimate
the innovastive abilities of the East. They train far more engineers
and science graduates, unlike us and the Americans who train lawyers.

Today its all about operating globally. There are companies like
Korg who make their products in Japan, but also have a US offshoot
to add to their innovative skills with things like software and
design. There are chemical companies in Japan, who develop new
compounds which are sold as herbicides, but use Bayer and others
to market them, as they simply don't have those kinds of supply
chains in place.

China today realises that simply accumulating trillions of $ is not
much good to them, as those $ won't be worth anything. So alot
of their growth will come internally, as people push for a better
lifestyle. Yes, their growth will probably slow down, but so what?

I feel that China still has a long way to go.
China is still determinedly socialist and
authoritarian. It will be interesting to see
how far the country will stray from the socialist
path and whether economic liberalisation will in
turn lead to political democratisation. Of course
given China's size and potential, its economic
future will be of world-historical significance.

Lexi

It's a difficult question. Both Taiwan and South Korea achieved economic "lift off" while they were dictatorships. As they grew wealthier they morphed into democracies.

Pinochet, like South Korea's Park Chun Hee, was a brutal dictator yet he arguably laid the groundwork for the relative prosperity Chile enjoys today.

It would be great if democracy and economic lift-off always went hand in hand. But historically that has not always been true. Quite often democracy has come with prosperity and not the other way around.

And of course dictatorship does not guarantee economic lift-off. I doubt Hugo Chavez's legacy in Venezuela will be prosperity. If anything, the opposite. And his friends, the Castro brothers, have not done Cuba any favours.

The Burmese generals, Egypt's Nasser and Mubarak, Iraq's Saddam Hussein, Libya's Qadaffi and Syria's Assad have all be catastrophes as is the mullah regime in Iran.

But Suharto brought relative piece to what was in the 1960s a war-torn country. He may not have been a nice guy but he probably laid the foundation for Indonesia's relative prosperity and democracy.

However the main point I was trying to make is that the accepted script of America in terminal decline and China the future world hegemon may not be true. I am sure China's relative power will grow but I doubt it will eclipse the US for the foreseeable future.

Of course America may self-destruct. That's how most powerful nations come to grief.

The truth is that most nations are their own worst enemies. In the words of Pogo "We have seen the enemy and it is us."

Dear Steven,

Brilliantly argued.
I fully agree.
You continue to surprise me.

Dear Stephen and Lexi,

It is an interesting proposition that economic liberalisation leads to a democratisation of the political process.

But look at the poster child of laissez faire capitalism and political freedom, the USA. It is in the bottom quartile for the CIA Geni index of income equality ie >40 (along with China), it has by far the highest per capita incarceration rate of its citizens in the world, 25% of its children are living below the poverty line, and crony capitalists own the political system where 85% of elections are won by those with the biggest purses.

These very same statistics in a dictatorship would have us screaming blue murder.

With extremes like China and the US we should be very protective about ensuring we hold the middle ground, constraining our capitalism where appropriate while maintaining decent degrees of personal freedoms, and striving for equality through policy where we can.

Social democracy has a lot going for it.