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No Economic Recovery Coming: Welcome to the Fifth World

Updated on May 1, 2012

The United States Enters the Fifth World

Last year, a friend of mine got two offers for the entire crop from his pecan farm in New Mexico: Sell it to the Mexicans, or sell it to the Chinese. Every year, unimaginable amounts of crops, lumber, steel, and other raw materials head down the Columbia and Snake Rivers, out of Portland, and across Asia to the Pacific. The US supplies $15 Billion worth of raw materials for manufacture in Japan, Taiwan, Signapore, South Korea and China.

First world countries take raw materials from second and third world countries, and make them into manufactured goods. That is what gives these first world countries the economic power to rule the world. Before World War II, England was a first world country drawing raw materials from India and China to manufacturing facilities in England, and the British Empire ruled the world. After the war,with the loss of her colonies, England suffered a great deal as the Soviet Union and the United States took over the economic and political leadership of the world. Then the Soviet Union broke apart, and it dropped out of First World status. Europe united 27 separate nations into one economic powerhouse, strengthening its First World position.

Is this sunset for the US as an economic superpower?

Florida Sunset
Florida Sunset | Source

The Five Economic Worlds

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The Five Worlds in the World Economy

The First World is the economic superpowers, originally the US and the Soviet Union. The Second World originally was their allies. Now, it is nations that are developing strong economies and are powerhouses in world trade. The Third World was originally non-aligned nations, then came to refer to the developing world - nations that supply raw materials and can develop economically. This led to acknowledgment of the existence of a Fourth world: nations so poor that the basics of survival are needed before economic development can be addressed. The people of the Fourth World need water, food, sanitation, and the safety of a functioning government to survive.

To make sense of what is happening in the US economy today, we need to introduce a fifth world into our thinking. The first four worlds were based on the modern notion of economic progress. But unending progress is not the true course of history. Babylon fell. Rome fell. The British Empire fell. Recently, the Soviet Union fell. Now, the US is falling.

I use the term Fifth World to refer to the former economic superpowers who are unlikely to regain their economic strength within the next half-century. The United States is now a Fifth World Country. I say this to reinforce the view that anyone expecting significant, lasting recovery for the US economy is not looking at the larger social and production issues facing our country.

Global and local issues

If we look only at the whole United States, we are not seeing the picture accurately. Although the US was considered a First World power for many decades, there are regions and states that, considered by themselves, have remained closer to the Third World in their economy. Of course, they have had the benefit of central government created by an electoral process, which is not true for many Third Word countries. But, as the US as a whole slips into the Fifth World, the experiences will be very different in, say, New Mexico, Florida, and New York City.

A similar point can be made about the European Union. Nations in the EU range from having living standards well above the US to being Third World countries.

Why the Soviet Union Fell and the US is Falling

The Soviet Union was pressured to exceed its economic capacity through the arms race and the space race with the United States. The US was ahead in both races since the mid-1960s, but used propaganda to claim it was behind in firepower and space capability, pushing the Soviet economy to the breaking point.

The Soviet Union had a geographical weak point in Afghanistan, and tried to suppress the tribes there. The US supplied the tribes with weapons and training (using their ally at the time, Osama bin Laden) to drain the Soviet economy to the point of collapse. The Soviet Union collapsed with the fall of the Berlin Wall in November 1989.

From a power politics perspective, the US strategy could be considered brilliant. But the US failed to learn from its own brilliance, and allowed itself to follow the path of the Soviet Union. The Vietnam, First Iraq, Afghanistan, and Second Iraq wars have drained our economy, and we crossed our own breaking point almost five years ago, in October 2007, with the collapse of the stock market and bursting of the real estate bubble.

What about the European Union?

The European Union (EU) is an effort by the nations of Europe to unite economically, and to gain greater economic independence from the US. Most of the countries in the EU are Second World nations; though some are closer to Third World status. The EU effort is historically important - it is the first peaceful effort to unify the cultures and nations of Europe, which have a history of war going back hundreds (or, depending on how you look at it, thousands) of years.

The EU has one major advantage over the USSR and the US: It has not been involved in any devastating, economically draining wars. And another - it includes some nations with the highest standards of living on Earth. But the EU does face many challenges: complexities of linguistic and cultural diversity; a broad range of economic power and standards of living; the challenges of creating the Euro as a unified currency; ancient cultural rivalries; and, most recently, economic failure of some EU governments. Certainly, Europe benefits from the EU. How long those benefits will last.is uncertain. So it is unclear whether the EU will move through the current turmoil (largely caused by the economic difficulties of the US and manipulation of stock and money markets), or follow the US down the slippery slope of becoming a set of fifth world nations.

Immigration is a major issue for the EU. It creates complex linguistic and cultural challenges while straining the economies of nations receiving new immigrants flowing in from poorer parts of the world.

The US in the Fifth World: Living in a Decaying Economy

What is it like to live in a nation with a decaying economy?

No one knows. No one has ever done it before.

In the Soviet Union, the fall from First World status was accompanied by a political breakup. The fate of each nation depended on politics and war. East Germans had the benefit of reuniting with West Germany. Serbs, Croats, and Bosnians, suffered from a horrific war. Slavs and Czechs managed peaceful partition.

But the United States faces a very different journey. We remain a political unit, even as our economy falls, language barriers grow, education falters, and social fragmentation increases. Our political unity allows us to deny our economic collapse and growing social tensions. And general denial makes practical recognition and action much more difficult.

For now, each farmer, miner, and manufacturer will make the decision best for his or her own company. Each worker will make the decision best for his or her own family. Each city, county, and state will make choices that has consequences for its residents. Things are very up-in-the-air in the short term - meaning years and decades.The long-term trends - looking several decades and beyond - are more predictable.

The US had two basic advantages that made us a political and economic superpower - ingenuity and vast natural resources. We are losing the edge on ingenuity, and, in manufacturing, we've lost it. We are draining our natural resources. The small nations of Asia, learning from the Japanese, are becoming the new manufacturing centers. China and India, with their vast populations, are slowly following suit. Over the next 50 to 100 years, if China and India do not get involved in major wars, if they manage their population and cultural issues, and if they continue to grow technologically, they will rise to First World status as nations. Regions within China and India, of course, will remain poor, as they have in the US.

Will the US recognize its new status in the world economy? Will we develop effective survival strategies? How can individuals thrive in the world's first Fifth World former superpower? And what are the long-term effects of global climate change and toxic waste on the economy and the livability of our planet?

For thoughts about all of this - thoughts - not answers, for no one has the answers without a crystal ball - stay tuned to future hubs.

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    • KrisL profile image

      KrisL 5 years ago from S. Florida

      This is real food for thought. It reminds me of an editorial by E. L. Doctorow in this past Sunday's New York Times (4/29/2012), "Unexceptionalism: A Primer" in which he says that the US is approaching

      "unexceptionalism, the political ideal that would render the United States indistinguishable from impoverished, traditionally undemocratic" countries.

      The difference is he's talking more about political process (with some eloquent exaggertion) and you are talking matter-of-factly about economic trends.

    • SidKemp profile image
      Author

      Sid Kemp 5 years ago from Boca Raton, Florida (near Miami and Palm Beach)

      Thank you - there are so many perspectives on these issues. It helps to hear many voices. And I'm honored to be spoken of in the same note with E. L. Doctorow, and with anyone published in the Sunday Times.

    • Electro-Denizen profile image

      Charles 5 years ago from Wales, UK

      Very well written and informative hub.

      This is a subject that fascinates me. I've always felt that the study of macroeconomics is completely flawed, a whole host of mechanisms based on, historically, hardly any data at all. Coupled with the concrete truth that constant progress and production is just fantasy, the converse has to happen eventually and is starting to happen. Presumably a Fifth World Country will slowly fragment economically, though possibly/hopefully not socially, leading to greater local planning. Here in the UK, the government has been encouraging people to grow their own veggies for a long while as part of a survival strategy (presumably), because we don't grow enough on this island to support the population, as too much comes into the country as imports! If there's a breakdown in international transport, that'll be tricky. There's no way of knowing how the unravelling will happen.

    • SidKemp profile image
      Author

      Sid Kemp 5 years ago from Boca Raton, Florida (near Miami and Palm Beach)

      Good insights, Electro! I think macroeconomics is good as far as it goes, but it looks at money and goods independent of the social realities that create them. It's like looking at the tide without considering the moon, the oceans, and the shapes of the bays. It is one of the fields I integrate with General Systems Theory (and a dose of common sense!) to nourish insight into our global situation. I would add one point - the overall decline will be slow, but also chaotic, with random breakdowns, short upturns, and endless surprises as issues of infrastructure, weather, politics, war, economics, and culture all come together to create the world we live in.

    • B. Leekley profile image

      Brian Leekley 5 years ago from Kalamazoo, Michigan, USA

      Interesting.

    • pramodgokhale profile image

      pramodgokhale 5 years ago from Pune( India)

      by SidKemp

      Sir,

      This is all brain storming and deep insight and effort to reach root-cause.As the empires fail and emergence of new empire ,it's nature's cycle.

      You rightly said that USSR and USA powers of the yearsteryears.EU is a power ,but you said that they are not involved directly in war, I differ with you here because Europeans looted and plundered wealth of Asian and African nations and tortures and genoside,they are still feudal and if they feel pinch then their involvement is imminnet anywhere.I am an Indian, we experienced exccesses of British regime,

      after independence we were the victim of cold war but we survived and

      built our nation with strong democratic system. We have had hostile nuclear neighbor like China and Pakistan.

      Rebuilding of Global economy and peace ,just twenty nations at Rio=20 in Brazil. can not decide and dictate. it required all nations of the earth ,understanding and cooperation.

      USA should shed her big brotherly attitude first,change in attitude is most important for nation and leadership there.

      Economies can recover and mankind will survive by determination and efforts.

    • SidKemp profile image
      Author

      Sid Kemp 5 years ago from Boca Raton, Florida (near Miami and Palm Beach)

      Peace be with you, Promodgokhale,

      Thank you for your thoughts and perspective. I agree on all points. When I said "not involved directly in war" I was speaking only of the present, and only of violent war.

      Nature indeed moves in cycles, and when any person or nation tries to get more than their share, they go out of balance and will eventually fall. But some cycles happen in years, others in decades, others in centuries.

      I believe that global peace will arise from the peace in the heart of each and every person on Earth. As we activate such peace within ourselves, we bring stability to the chaotic cycles of war and destruction, of civilizations rising and falling.

      I am grateful to all peoples and nations for their different gifts. Please allow me to express gratitude to India for its many shining lights, from the ancestral Vedas, through Gotama Buddha, to Mahatma Gandhi.

      Be well

    • pramodgokhale profile image

      pramodgokhale 5 years ago from Pune( India)

      Thank You, Sid Kemp,

      Your response and my reaction. I think your Fifth World imagination, is really the way pragmatic American thinks and beyond Horizon.

      In the Fifth World India and China has special role and responsibilities, can not ignore.

      Long back NATO general in typical style declared if necessary we will enter in any part of the world with forces.

    • SidKemp profile image
      Author

      Sid Kemp 5 years ago from Boca Raton, Florida (near Miami and Palm Beach)

      Thank you again for your thoughts. Each nation has its own gifts. I agree completely that India and China are central to the world economy in the 21st century.

    • Bob Green Innes profile image

      Bob Green Innes 5 years ago from Hamilton, Ontario, Canada

      Look to Rome for a blueprint of the future. Vicious selfishness always had a special place at the heart of both Roman and American money systems. This system controls politics, media keeps the masses ignorant and distracted.

    • pramodgokhale profile image

      pramodgokhale 5 years ago from Pune( India)

      SidKemp

      Sir,

      I think your Fifth World ,your brainchild, I request, you write a book on this.the people can learn and understand.this has ignited spark in me,fascinating, charming, at least some lull will vanish.

      You were born in first world, i was born in third world that is India,i can supply some inputs if needed.

      When you pioneered Fifth World, then how to bring it into existence.

      let us go in brief--Scenario.

      If this world is without any super Power,next-- many regional powers without any confrontation on issues.

      Top ten ot twenty nations are adding their Arms inventory with huge amount of wealth, people.dismantling Military-Industrial nexus is difficult.then under the name Minimum Deterrence regimes would defend it.

      The income disparity and have and have nots problem would exist.

      To bring all people on equall status ,it is imagiantion,long way to go.

      Our first goal should be the Human Development, literacy, Health.

      these are all integrated issues, especially in third world and fourth world.

      Eco Conservation and balancing is an issue ,nations should have common consensus to tackle any disaster.If we are able to balance and control environmental related things and share natural resources,in EU Norway to Netherlands undersea HT Power line is connected

      so this give and take and generate wealth and employment too.

      We want to keep mankind happy ,today you think, hope it may come true in long run and you would be the pioneer in History

      Thank you once again for bold initiative.

      Pramod Gokhale

    • SidKemp profile image
      Author

      Sid Kemp 5 years ago from Boca Raton, Florida (near Miami and Palm Beach)

      Sadly, your short summary is likely to be right. Moving forward, each of us, as individuals, families, and small communities can create life as best we can in the midst of the descent.

    • SidKemp profile image
      Author

      Sid Kemp 5 years ago from Boca Raton, Florida (near Miami and Palm Beach)

      Thank you, Pramod, for your beautiful vision. You should write a book!

      Unfortunately, using the same insight and logic that created the article, my vision does not see a way to create a harmonious world in the near term - that is, in the next 200 years or so. As I see it, the best we can hope for if all goes well is 200 to 500 years of chaos and difficulty, with China falling about 100 years from now after the US (probably due to environmental destruction and internal strife) and then a renaissance after that. I am focusing my energy by largely removing myself from political thinking to help small group survive in peaceful ways and develop technologies for harmonious living. I will be writing about that, but I won't be focusing on a global scale. Let's keep in touch!

    • pramodgokhale profile image

      pramodgokhale 5 years ago from Pune( India)

      Yes Sir,

      Thinking minus politics is a right way to interact people and share and exchange views.Impartial thinking, i think you can easily get to mass and suggest

      tools useful to solve the issues.

      Thank you once again

      Pramod Gokhale

    • SidKemp profile image
      Author

      Sid Kemp 5 years ago from Boca Raton, Florida (near Miami and Palm Beach)

      You are very welcome, Pramod.

    • Eugene Hardy profile image

      Eugene Hardy 4 years ago from Southfield, Michigan

      Very nice Hub on what we are living.

      Figuratively, I think it is better to "row" into a fall instead of the uncontrolled fall we have now. As for national and macro-economic policies, we are not using all the cards in our deck.

      I think the best way for the US "row" out of this position is to stop the denial and come clean with the population - then empower that population economically, with a focus on businesses within communities.

      Otherwise, we will not wake up....

    • SidKemp profile image
      Author

      Sid Kemp 4 years ago from Boca Raton, Florida (near Miami and Palm Beach)

      Hi Eugene - I agree that it would be wonderful if the US (government, business, or any part thereof) stopped the denial, came clean, and empowered people. But I'm not waiting for it. In the meantime, I'm living with my eyes open - no denial, empowering myself, and focusing on community and business building.

    • Missing Link profile image

      Missing Link 4 years ago from Oregon

      An excellent hub! In my own mind I had always considered there to be a 4th world but did not realize this was also recognized by institutions, organizations, etc. I also have begun more and more to see the USA in decline and deteriorating and it makes me sad as I very much love my country. I see things similarly per your hub. Good job! Thumbs up and clicked on "awesome".

    • SidKemp profile image
      Author

      Sid Kemp 4 years ago from Boca Raton, Florida (near Miami and Palm Beach)

      Thanks, Missing Link! Your courage in asking questions and looking at reality is what we all need right now.

    • tamarawilhite profile image

      Tamara Wilhite 4 years ago from Fort Worth, Texas

      A large part of our problem is debt, and the cost of deleveraging (paying off that debt). Yet, as a nation, we haven't stopped digging the hole, much less raising ourselves out of it.

    • SidKemp profile image
      Author

      Sid Kemp 4 years ago from Boca Raton, Florida (near Miami and Palm Beach)

      I agree completely. Each year of deficit adds to the debt. The debt is expensive, adding to the deficit. The debt is both a symptom and a cause in a deepening cycle of a problem that is close to being beyond solving already.

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