"Long Depression" of 1873-1879

[FarCenter]

1. Yes, the US is currently in a process similar to Britain from 1873 - 1896

US = Great Britain
China = Germany

There was an investment bubble in railroads and iron-hulled steamships in the late '60s and early '70s that parallels the dotcom and real estate bubbles that collapsed in 2001 and 2008. Think of Bessemer steel as parallel with silicon, steam with digital information, and transportation innovations with communications.

Great Britain was the major victor in the Napoleonic Wars and prospered greatly until the 1870s when it became uncompetitive with the new upstart economies, especially the newly unified Germany and the newly opened up United States. The situation of the United States is similar, although it also parallels to some extent Austria-Hungary another victor in the Napoleonic Wars. Austria hosted the Congress of Vienna which established the "new world order" of the nineteenth century, just as the US hosted Breton Woods and the San Francisco conference establishing the UN. Like Austria, the US suffers from a old, complex, unreformed governmental system which is becoming progressively more sclerotic.