This interesting article describes the writings of the French historian Fernand Braudel. In the third volume of his epic “Civilization and Capitalism,” published in 1979, Braudel explored the forces that made one city at a time the economic center of the Western world, from Venice to Amsterdam to London, and then inexorably lifted up another in its place. He wrote that cities rose as centers of commerce, and then, as they prospered, they began to invest their surpluses in building new centers, engineering their own declines. Commerce moved on, leaving a financial hub behind.
The prosperity started with manufacturing and successful trade. After a profitable period, merchants become bankers and begin to seek better returns in new markets. Amsterdam bankers invested in London which rose and displaced Amsterdam as the world center of capitalism. Eventually London invested in NYC which displaced London as the center.
https://www.nytimes.com/2025/05/07/magazine/trump-economy-finance-history.html
Can Trump Turn Back the Economic Clock?
The president thinks he can return America to manufacturing glory — but the cycles of economic history are hard to break.
By Binyamin Appelbaum, The New York Times, * May 7, 2025
…
Amsterdam, Braudel wrote, became “a society of rentier investors on the lookout for anything that would guarantee a quiet and privileged life,” a society that had moved on “from the healthy tasks of economic life to the more sophisticated games of the money market.”
Braudel noted that London, too, eventually ceded its role, underwriting the rise of New York in the early 20th century. And in the late 1970s, he judged that New York was entering the “autumn” of its era as the center of the global economy. Commerce and industry were fleeing the city, leaving behind a thriving financial center — a sure sign in Braudel’s view that New York, and the nation it anchored, were on the edge of decline…
The center of global industry now sits somewhere in southeast China, and perhaps the most powerful argument for radical efforts to reclaim manufacturing supremacy is that the United States — and other nations that have prospered under its hegemony — ought to fear the consequences of ceding power to an illiberal and increasingly hostile country… [end quote]
When I first heard the expression “post-industrial economy” I was shocked. How could there be a “post-industrial” society when people continued to use manufactured goods?
American sociologist Daniel Bell first coined the term postindustrial in 1973 in his book “The Coming of Post-Industrial Society: A Venture in Social Forecasting,” which describes several features of a postindustrial society. I didn’t hear about this until the 1980s when factories were closing all around me in the NY/ NJ area.
How long can a country maintain its high standard of living and global pre-eminence when it is sinking further and further into debt?
The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000, by Paul Kennedy, first published in 1987, explores the politics and economics of the Great Powers from 1500 to 1980 and the reason for their decline…
Great Power ascendancy (over the long term or in specific conflicts) correlates strongly to available resources and economic durability; military overstretch and a concomitant relative decline are the consistent threats facing powers whose ambitions and security requirements are greater than their resource base can provide for… [end quote]
The U.S. has made both mistakes over the past 40 years. The economy shifted more from manufacturing toward financial management, abandoning a large part of the population from well-paid manufacturing jobs to low-paid service jobs. At the same time, the U.S. poured trillions of dollars into fighting foreign wars while neglecting to maintain (let alone expand) our manufacturing base and infrastructure. While other nations in history (like us) wasted money on warfare, none has spent money on unproductive humanitarian assistance like the U.S. Some have called our government “an insurance company with armed forces.”
The Chinese have a 5,000 year history. They are well aware of the cycles of history and the “mandate of heaven” which comes and goes. They are playing a long game. China has always considered itself the “middle kingdom” with world hegemony. They are clearly working to regain that position.
How long will the U.S. be able to maintain its world dominance while sinking further into debt?
The Macroeonomic trends will be hard to reverse.
Wendy