Why the Global Economy is a Trap – Prof. Jiang Xueqin

TLDR;

This video discusses the historical roots of the global system that incentivizes corruption and the pursuit of wealth over other values, particularly focusing on the roles of the British and American empires. It highlights how this system, while leading to short-term gains and dominance, ultimately results in long-term corruption, inequality, and societal decay.

• The British Empire created a system that incentivized local elites to cooperate through finance, schooling, and military power.
• This system evolved into a covert financial and legal structure that continues to operate today, facilitating the flow of wealth from the developing world to the developed world.
• The pursuit of wealth and success within this system leads to corruption, immorality, and societal decay, ultimately undermining the long-term well-being of nations.

Introduction: Strange Behaviors and the Global Game [0:00]

The speaker begins by observing what he considers strange behaviors among some people, such as prioritizing learning English over their native language, obsessing over making money (particularly US dollars), and aspiring to immigrate to Western countries like the United States. He argues that these behaviors are counterintuitive, as individuals often hold higher status and have better opportunities in their home countries. The speaker suggests that these behaviors are driven by a global game constructed by the British Empire and inherited by the Americans, which incentivizes the pursuit of wealth and status through cooperation with Western powers.

The British Empire's Strategy: Incentivizing Local Elites [2:44]

The British Empire was able to establish its dominance by creating a system that incentivized local elites to cooperate. This was achieved by offering them the opportunity to accumulate wealth and power through collaboration with the British, protecting them from local conflicts, and allowing them to transfer their assets and children abroad. This strategy involved mechanisms such as finance, schooling, and military power.

Mechanisms of Control: Finance, Schooling, and Military Power [4:23]

The British Empire employed several key mechanisms to maintain control and incentivize cooperation. Firstly, they established a global money laundering system through offshore financial centers like Hong Kong and Singapore, allowing local elites to transfer and disguise wealth obtained through corruption. Secondly, they implemented a schooling system that indoctrinated elites with British culture and values, offering opportunities for mobility and integration into the British system through programs like the Rhodes Scholarship. Finally, the British Navy ensured military dominance, deterring resistance and enforcing British interests worldwide.

The Modern Legacy: Covert Control and Financial Systems [7:56]

Even though the British Empire no longer exists in its overt form, its influence persists through a covert system of financial and legal control. This system facilitates illicit activities like the drug trade by providing a means to launder and protect the profits. Offshore financial centers, many of which are located in former British territories, play a crucial role in this system by offering secrecy and legal protection for illicit funds.

The Demonic System: Immorality and Corruption [10:30]

The speaker argues that the global financial system is inherently immoral, as it facilitates corruption and undermines societal values. He uses Hong Kong as an example of a wealthy city with a depraved and unethical culture, where the pursuit of money has eroded morality and community. This system is described as "demonic" because it not only promotes evil but also corrupts the souls of those who participate in it.

Over Financialization and Societal Decay [12:47]

The speaker contends that the excessive accumulation of wealth in the Western world has led to over financialization, resulting in corruption, laziness, arrogance, and insularity. This has created significant inequality, where a small percentage of the population controls the majority of the wealth, and the political system serves the interests of the rich rather than the people. The speaker suggests that this system is unsustainable and will eventually collapse.

The Short-Term Game: Success and Its Consequences [14:26]

In response to a question about the meaning of success if it leads to corruption and downfall, the speaker explains that the current global game incentivizes the pursuit of wealth and power in the short term, even though it leads to long-term consequences. This is because, in the short term, it allows nations to be more energetic, open, and cohesive, giving them an advantage over others. However, this system ultimately leads to unhappiness, corruption, and immorality. The speaker concludes by mentioning that the next class will discuss how the American Empire changed this game by adding US dollars to it, making it universal and easier to play.