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Is the U.S. ‘Too Big’ for the Group of Seven?

by John Brian Shannon

Q: Are the concerns of a superpower relevant to the other G7 members? A: Not really.

Maybe it’s time for a superpower group of the U.S., China, the EU, Russia, and The Commonwealth of Nations to form up, instead of the G7 group that has worked very well until now.

Even the sage Moses who lived 3400-years ago, suggested, “Thou shall not plow with an ox and a donkey yoked together” and the reason is quite clear to every farmer. Being so dissimilar in size and power, both the ox and the donkey will be miserable the entire time they try to plow forward together and the farmer will spend most of his time ‘arbitrating’ disputes between the two and the plowing enterprise will get little actual plowing done.

It’s unfair to the U.S., it’s unfair to the smaller or weaker members of the G7 club and it’s unfair — even to near-superpowers like Japan and Germany which have far different challenges and causes to ‘plow’ than those of the superpowers.


Shall I list the ways?

If so, this would become a very long blog post indeed!

For just three examples:

  1. Which of the G7 partners have a negative balance of trade of $862.8 billion for 2017? The entire G7 combined doesn’t have a negative balance of trade anywhere approaching that of the United States.
  2. Which of the other G7 members have an inventory of nuclear warheads like the United States which includes 6450 nuclear warheads; 1750 that are retired and awaiting dismantlement, and 3800 that remain part of the U.S. stockpile?
  3. If we’re talking GDP, the U.S. represents 52.8% of the Group of Seven’s GDP, while the next largest country in the group (Japan) represents 13.3% of GDP, with only Germany at 10% remaining as the only other double-digit GDP member of the G7.

Population figures and economic growth indicators may be even more telling than the above indicators of superpower status.


Should the U.S. Join It’s Own 1-Member Club?

That may be a tempting thought for President Donald Trump and certain members of his administration, but there are common concerns among superpowers that only apply to superpowers (and there’s no doubt the U.S. remains the Number One superpower by a significant margin) and it’s those superpowers that must work together to deliver solutions for their large populations.


If we look at a superpower club of 5 members: The United States, China, the EU, The Commonwealth of Nations and Russia, we’re looking at a group that is roughly comparable to each other and have similar challenges.

Let’s look at our three main indicators, just to be certain:

GDP

Big 5 (Nominal) GDP
U.S.A. --------- $20.3 trillion (USD) (Focuseconomics.com)
China ---------- $13.0 trillion (USD) (Focuseconomics.com)
EU ------------- $19.7 trillion (USD) (IMF)
Commonwealth --- $10.4 trillion (USD) (Commonwealth.org)
Russia --------- $1.72 trillion (USD) (IMF/StatisticsTimes.com)

Although there are some disparities in nominal GDP among the five countries, we must remember that China is on an exponential growth curve while The Commonwealth of Nations statistic (provided by commonwealth.org) is from 2017 and their economic group is also growing at a rapid rate ($13 trillion by 2020). Russia is the outlier in this group, however, as we shall see, that country has other (huge) chips on the table when it comes to retaining its superpower status.

Top 10 Countries as ranked by GDP includes G7 countries. Image courtesy of FocusEconomics.com

Top 10 Countries as ranked by GDP — includes G7 countries. Image courtesy of FocusEconomics.com


Nuclear Warheads

Big 5 Nuclear Warheads
U.S.A. --------- 6450 (Federation of American Scientists)
China ----------  270 (Federation of American Scientists)
EU -------------  300 (Federation of American Scientists)
Commonwealth ---  485 (Federation of American Scientists)
Russia --------- 6850 (Federation of American Scientists)

Although nuclear stockpiles vary, the U.S. and Russia were the main protagonists of the Cold War which lasted from 1950 through 1990 which is why they own far more nuclear weapons than all other countries combined. The only EU country to publish their ownership of nuclear weapons is France, with 300 warheads. The Commonwealth of Nations countries that publish ownership of nuclear weapons include the UK, Pakistan and India.

G7 comparison: Estimated Nuclear Warhead Inventories, 2018. Federation of American Scientists

Estimated Nuclear Warhead Inventories, 2018. Federation of American Scientists


Balance of Trade Issues

Big 5 Balance of Trade (in U.S. Dollars)
U.S.A. --------- $-862.8 billion (2017) (Handlesblatt/IMF/WTO)
China ---------- $+98.46 billion (2017) (TradingEconomics.com)
EU ------------- $+44.45 billion (2016) (Statista.com)
Commonwealth --- $-187.5 billion (2015) (Commonwealth.org)
Russia --------- $+115.3 billion (2017) (Statista.com)

GDP and Balance of Trade among the G7 countries in 2017

While balance of trade issues vary wildly between the United States, China, the EU, The Commonwealth of Nations and Russia, very few countries can play in the triple-digit or even high double-digit space occupied by those nations. Especially when analyzed using their (Nominal) and (Purchasing Power Parity) GDP numbers, these are exceptional nations and groupings of nations, which put them in a different category than other countries.


The Big 5 (B5) A Better ‘Fit’ for the United States, China, the EU, The Commonwealth and Russia

There is nothing wrong with small countries and there is nothing wrong with big countries. But small countries have far different challenges than large countries, and everything happens on a truly massive scale for the bigger countries and in country groupings like the EU and The Commonwealth of Nations.

And those differences cause irritations.

Instead of heads of government trying to plow forward with their challenges and issues while ‘yoked’ to dissimilar and dissimilar-sized partners, why not make it easier on everyone and ‘put like with like’ to gain a more comfortable fit?

It’s so obvious this should be done and the latest G7 meeting proves that the problems in that organization are systemic problems and are the sole cause of divisions between the oddly mismatched countries of that group.


The ‘Big 5’ followed by the ‘Next 20’

Every country stuck in a trade or political grouping that doesn’t match it’s particular talents will suffer. Therefore, the Big 5 must form into a group of their own, and the G20 (minus the by-then departed ‘Big 5’ members) must attract ‘the Next 20 nations’ to their refashioned N20 organization.


Helping Every Country and Individual to Become All That They Can and Should Be

In that way, the top 25 countries in the world can finally become all that they can and should be instead of being held back by arbitrary, mismatched, or outdated groupings.

And, isn’t that what it’s really all about?

!!!

 

Brexit? Or Brexit + Enhanced Commonwealth?

by John Brian Shannon | April 22, 2016

When a thing isn’t working, it’s time to quit. Whether it’s a marriage or a political union there comes a time to say a respectful ‘goodbye’.

And it appears howevermuch joining the EU has propelled the UK economy, the social cost of millions of eastern European economic migrants and Levant refugees streaming into the UK is higher than British citizens are comfortable with.

The raison d’être for the creation of the EU is quite wonderful — inspired even. But there can be a difference between the theory of a thing and what has actually occurred.

Sir Winston Churchill information courtesy of Gov. UK

Sir Winston S. Churchill was an inspirational statesman, writer, orator and leader who led Britain to victory in World War II. He served as Conservative Prime Minister twice – from 1940 to 1945 and from 1951 to 1955. Gov.uk

Scary statistics have been trotted out in order to push Brit citizens into voting to stay in the EU, but when analyzed turn out to be speculative at best.

It looks like the EU project is in trouble. I wish them well, and I hope they solve their problems.

In the meantime, the UK must do what is best for the UK. And in my opinion, that means they should get out now, and invite the Scandinavian nations and Ireland to join The Commonwealth with the goal of increasing economic and social integration with those sovereign northern European nations. (The Scandinavian nations are gone anyway as far as EU membership is concerned. As soon as the first opportunity appears that meets optics standards, they’ll quit the EU)

If the UK, the Scandinavian countries, and Ireland form a loose economic and social cooperative union (or become members of a re-energized Commonwealth) it will immediately boost economic and social metrics across those nations, without the downsides of EU membership.

Without wishing any harm to the EU; The European Union can better concentrate on southern European issues with Germany and France leading the way, and without northern European concerns to complicate things.

I wouldn’t rule out a future UK/Scandinavian nations/Ireland bid (as one bloc) to accede to the EU once things have stabilized there.

But for now, the United Kingdom and northern European countries can do better by joining The Commonwealth and working towards interdependent socio-economic success.


The question is; Do we choose ‘safe’ or do we choose ‘Carpe Diem’?

The European Union is deep in it’s own problems for the foreseeable future, and in that context I make the case for the UK to leave the EU. As there’s no precedent for the Brexit situation it could now become anything the UK government wants it to become.

How about this?

  1. The UK leaves the EU and adopts a similar relationship to the EU, as Norway presently enjoys.
  2. The UK invites all Scandinavian nations and Ireland to become part of The Commonwealth.
  3. The UK institutes a 1% Tobin Tax, keeping one-quarter of one percent for administrative purposes, and remits the remaining three-quarters of one percent to the IMF — to be held in a special account that only the UK government can spend on the UK and other Commonwealth nations.
  4. Every Commonwealth nation should phase-in a 1% Tobin Tax over a 5-year period. And just as in the UK, one-quarter of one percent would be retained by each Commonwealth nation to cover collection and administration costs of the Tobin Tax.
  5. It’s obvious that perhaps a trillion pounds of Tobin Tax revenue would accrue quickly — and be available to each Commonwealth nation to spend in any other Commonwealth nation. (Need a new SASOL headquarters with a London address? Perhaps you need to double the export capacity in the port of Accra? Or, with the proper funding you can finally build that 1 GigaWatt wind farm and export billions of dollars/pounds/rands worth of electricity to neighbouring countries. Now you have instant funding!)
  6. If you’re the UK there’s one thing you want, countries lining up to join The Commonwealth! And within 5-years of joining The Commonwealth, beginning to contribute their own Tobin Tax revenue to the special IMF account which is only used to strengthen trade links with other Commonwealth economies.
  7. The ultimate goal of course, would be for the entire Commonwealth to copy the Norwegian economic model (as uniformly as possible) in order to attain Norway’s enviable statistics — such as the world’s highest per capita income, among the world’s highest productivity, free university for all citizens and residents, free universal healthcare ranked almost as highly as the UK healthcare system, and so much more. (Keep in mind Norway’s #1 ranking on the Social Progress Index (SPI) and very high ranking on the UN Happiness Index. And remember, all positive indicators flow from those two stats, not the other way around)

The question would then become; “Which country wouldn’t want to join The Commonwealth?”

Commonwealth countries, plus Scandinavian countries 2016

A UK exit (Brexit) from the European Union could now become anything the UK wants it to become. Commonwealth countries (in green colour) plus Scandinavian countries and Ireland (in blue colour) Image courtesy of maproom.org

In this, the 21st-century, it should never be a case of looking at a glass, half-full. It should always be about creating a massively better system; One that is a whole order of magnitude better than the presently sputtering economic model.

Previous generations of politicians rose to meet the challenges of their time, and likewise the UK government must also rise to the so-called challenges of our time.

But meeting the challenges of our time must be considered passé as the UK is sufficiently advanced that it should blow past the challenges of our time — in the same way a Bentley Mulsanne Speed blows past a Trabant on the M6 motorway.


Who Should Lead an Economically-Empowered Commonwealth?

Whomever is the most recently dismissed Prime Minister of any Commonwealth country should (within 180 days of losing office) be given the top job — Secretary General of The Commonwealth.

In that way, a flow of different approaches from highly empowered and knowledgeable people will lead The Commonwealth of Nations and each former PM will undoubtedly leave their stamp on the broad policies of that organization.

A former Indian Prime Minister sitting as Secretary General might advance the cause of microgrid power generation across all developing Commonwealth nations, while the next SecGen (from the UK for example) might take up the cause of getting resources from all Commonwealth nations to China and other major markets. And during the time of an African Secretary General of The Commonwealth, the preferred cause might be improvement of all Commonwealth port facilities in order to dramatically expedite trade — getting Commonwealth goods to every market, faster, fresher, and better.

What matters to me, is that each Secretary General leaves a positive impact on The Commonwealth using his or her unique worldview, experience, contacts, and ability.

It will be this synergy that will make The Commonwealth all that it can and should be.


The Commonwealth of Nations is a group of interdependent countries.

“The Commonwealth is a name for countries which were part of the British Empire before they became independent. This group of states works together on many important matters, like business, health and the fight against poverty.” — Wikipedia


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