"Oil, Credit, And The Shifting Balance of Power" by Dr. Edmund Clingan





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Published on Apr 25, 2012

April 18, 2012
As Paul Kennedy wrote in 1986, great powers rise and fall, usually for economic reasons. This analysis enabled Kennedy to predict the end of the Soviet Union. We now have more precise economic measurements, but the lesson remains. It appears that the balance of power has shifted dramatically in the last dozen years. Yet there is complacency. This always seems to be the case in history. An imaginary Chinese pundit of 1820 would have pointed out that no country was close to China in economic size. Its share of the world economy was not much changed from 1750. being from the rich side of the chasm, he would not have cared about the massive divide between rich and poor in China. He could have pointed to impressive production statistics. It was militarily dominant. For all this apparent strength, China was about to suffer catastrophic decline. It would lose about half of its world influence from 1820 to 1870 and then half again from 1870 to 1920. yet American pundits urge confidence.

Oil is the key. American production peaked in 1970. After this, American wages stagnated and other problems developed. The supergiant fields of Alaska could not arrest the decline, and tripling the oil rigs since 2009 has only stabilized the declined. Counting lower-energy liquified natural gas and ethanol as "oil" only masks the problem. As global oil production hit a ceiling around 2006, it forced the energy conservation the the U.S. has long avoided and fractured a precarious structure.

In some ways, an "oil standard" had replaced the gold standard. Its enormous value enabled unprecedented credit and spectacular economic growth. Oil today is still cheap (relative to its value) and will remain cheap even as more people cannot afford gasoline. A cup of gasoline is cheaper than a cup of coffee. As oil production slows and the export market shrinks, it becomes more difficult for countries to exert far-flung influence. The current crisis masks the start of a long emergency: the transition to a new energy system of unknown consumption. The new balance of power will depend on how nations deal with this transition.

Edmund Clingan was born and raised in New York City and received his B.A. in History from Queens College and his M.A. and Ph.D. from the University of Wisconsin-Madison. In 1988-89, he studied at the University of Bonn, Germany, as a Fullbright Scholar. From 1995 to 2004, he taught at the University of North Dakota. He has been at Queensborough since then and teaches courses on ancient civilizations, medieval and early modern Europe, modern western civilization, and modern economic history. Since 2009, he has been Associate Professor of History.

He has published articles in European History Quarterly, The Journal of Contemporary History, and Urban History. In 2001, Greenwood Press published his book Finance from Kaiser to Fuhrer: Budget Politics in Germany, 1912-1934. In 2010, Lexington Books published his book The Lives of Hans Luther, 1879-1962: German Chancellor, Reichsbank President, and Hitler's Ambassador. He is also an internationally recognized expert in the fields of Australian History, where he has served as a grants referee for the Austrian Science Foundation, and Scandinavian History, where he wrote the relevant articles for the Oxford Encyclopedia of the Modern World.

His current project, tentatively titled After U.S. Hegemony: A Historical and Quantitative Approach to Dominance in the Modern World, is under contract to Lexington Books. The Presidential Lecture will draw on material from this research.

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