Chapter 19. A New Hope for the World

In 1988, China opened to outside investors coastal economic zones that encompass a population of 200-million cheap laborers. Leading-edge technology started flowing to China. Initially there were great profits for foreign investors as the latest technology, in tandem with China’s cheap labor, took over others’ markets.

However, most investment capital in China is internally generated (a fact that is studiously ignored) and, once she is developed and this labor force learns modern skills, the scene will change. Like Japan and South Korea while under Cold War protection, and before their financial meltdown when that protection was withdrawn, China will manage her economy to export a surplus. The price charged for products on world markets will drop to just below that of the competition, an ever-increasing amount of the world’s consumer products will be produced by Chinese-owned industry, and an ever-increasing share of production costs will be paid to Chinese labor which will, in turn, accumulate ever more capital in China. With that increased capital, China can produce more for export. If this is allowed to reach its logical conclusion, much of the wealth of the United States, Japan, and other countries will then be siphoned to China. It will become the equivalent of 10 Japans competing on world markets.

China’s trade surplus with America continues to climb while net imports from Japan and the Asian tigers continue to fall. If mainland China were to achieve the same per-capita trade surplus as Taiwan ($567), the United States would have an annual trade deficit of an obviously impossible $750-billion with China alone.1 If India, Malaysia, South Korea, Pakistan, Bangladesh, and Indonesia were to achieve similar success, the U.S. trade deficit with Asia’s NICs (Newly Industrializing Countries) would rise to between an even more impossible $1.5-trillion and $2-trillion annually.

Before China agreed to limit increases to 3% per year (free trade is avoided when it becomes dangerous), their textile exports to the United States were climbing 19% a year. Though China’s trade surpluses with all countries was close to zero, their trade surplus with the United States climbed from $3-billion in 1989 to $33.8-billion in 1995, to $60-billion in 1998, to $84-billion in 2000, to $162 billion in 2004.2 Simultaneously its trade surplus with the EU rose to $80 billion.

China has the resources, population, and internal cohesion to, by example if it so chooses, force honest trade upon the world. That same economic strength and cohesion can permit it to weather the economic storm that has arrived as the Cold War fades into history and corporate imperialism permits the “law of wages” to operate with full force and drive down the wages of both the developed and developing worlds.

Four Powerful Economic Weapons available for Developing World use

There are four powerful economic weapons the impoverished developing world can use:

1. They can form alliances (better yet a full federation) and barter their resources to the developed nations in trade for technology, finance capital, and access to markets;
2. Create regional trading currencies;
3. Manufacture their own consumer products for trade within that alliance; and
4. Until the imperial centers negotiate honestly, collectively refuse to mine the ore, cut the timber, drive the trucks, run the trains, or load the ships for export. (This is nothing more than a reverse of the embargoes that have been imposed upon weak nations for years.)

If the 1997-2003 economic collapses on the periphery return and deepen, there will be idle natural resources, idle industry, and idle labor. To employ those idle elements of production, a coalition of trading nations can create their own trading currency.a Currency is only the representation of wealth produced by combining land (resources), labor, and industrial capital. By combining their resources, the developing nations have all three of those foundations of wealth.

Trade agreements with China, India, and/or Russia which include industrial development of the weaker nations will outflank corporate imperialism. If the developing world allies to create their own trading currencies, corporate-imperialism’s financial warfare weapons will have been rendered harmless. Further protection can be gained through tying their currencies’ values to a market basket of commodities as outlined in Chapter 26.

With their own trading currencies, the developing world can then barter their resources to the developed world in trade for the latest technology for their industries. Bartering avoids hard money monopolization and the resultant unequal trades between weak and strong nations. The developed world needs developing world resources just as badly as the developing world needs technology and finance capital. Except for the superior military power of imperial-centers-of-capital, the undeveloped world has the superior bargaining position. The imperial center’s superior military forces maintaining control of the world exposes military might as the final arbiter of law.

Barter was how Germany was breaking the financial blockade put in place to strangle her, and World Wars I and II settled that trade dispute. The imperial-centers-of-capital own most those factories and patents. If barter is again tried, then residual-feudal exclusive title to technology—and thus monopoly control of others’ resources—will be clearly visible. Financial warfare, diplomatic warfare (embargoes), covert warfare, or open warfare to prevent those barters will expose the subtle monopolies even further.

If against all pressure an allied region refused to dig ore, cut timber, run trucks and trains, or load ships, the imperial nations would have no choice but acceptance of equality in trade.

Developing World Regional Trading Blocs to Attain Equal Negotiating Power

If there is no “countryside” to maintain in dependency, there can be no imperial-centers-of-capital enforcing unequal trades. The Soviet Union fought so long and so hard that after WWII America (the only remaining intact imperial-center-of-capital) was forced to share its capital with Western Europe, Japan, Taiwan, and South Korea to retain them as loyal allies to contain fast expanding socialism. Before the Soviets collapsed, while they were thus still a threat, China and Southeast Asia moved under that sharing protectionist umbrella and, until the Southeast Asia financial meltdown, were rapidly developing. China, just as every other powerful nation in history, will not accept inequality in world trade without a struggle. A powerful and fast developing China that does not fully incorporate Western beliefs is now the new threat to historic imperial-centers-of-capital. So long as China can maintain its independence, industrial technology is now so diffuse that the subtle-monopoly power of capital has eroded.

Up until the economic and financial collapses on the periphery in 1997-2003, managers-of-state were losing control of technology (industrial capital). The next few years will tell us whether the financial power of the wealthy world has reinstated control (Mexico’s and Southeast Asia’s 1997-98 implosion, Latin America’s 2002-03 collapse); whether the attempt to reclaim control will collapse the world economy; whether fear of a flight from the old beliefs will result in a central plan to re-capitalize those collapsed emerging economies; whether a fascist combination of financial, political, and military power will organize and maintain firm control of the world economy through financial, economic, and/or military warfare; or whether the impoverished world will gain more equality (freedom).

If China can maintain its independence it will be impossible to embargo technology from her and a new “framework of orientation” with a powerful China as the new enemy will not work while China is rapidly developing and the rest of the world is stagnating. If China (or any other powerful trading bloc) retains the ideology of rights for all the world’s people, if it is sincere in that belief (all nations, especially the imperial-centers-of-capital, preach that philosophy but none follow it), if it is strong enough to not be subverted and too strong to be attacked, and if this blend of power and sincere caring for others results in all regions of the world gaining access to technology and markets with equal pay for equally-productive work, the world will then have the opportunity for the 50 years of peace it would take to develop the world to a sustainable level and alleviate world poverty.

If China, or any other country, installs a Wi-Fi communication system at maximum efficiency, the cost of phones, Internet service, TV, Radio, and movies would drop to 10% the current norm. That nation’s citizens could bombard with rational guidelines for sustainable world development outlining the quality life that could be had for all if that were society’s goal. One child per family would shrink a nation’s population by 50% in three generations while doubling the amenities of life for each citizen. A steady increase in technological efficiency during the same time span could double the amenities of life again and all that gain would be without increasing the hours of labor, consumption of resources, or pollution of the environment.

We use China as an example because it has the necessary social cohesion. If China succeeds and the lowering of its population results in a rapid rise in her per-capita living standards, others will take note, adopt the same policies, and their living standards will also rise rapidly.

Such a rapid expansion of rights will be a threat of the first order to corporate imperialism. They know well that, once resources on the periphery are turned towards the care of their own impoverished, those resources will not be available for the high lifestyles in the imperial centers. The goal of the allied-imperial-center-of-capital is to co-opt the powerful within China so as not to be threatened by such expansions of rights, or to prevent such gains by containing China’s access to technology and finance capital, which in turn will contain China’s access to world resources and its economic development. Thus, reducing its population and rapidly increasing its per-capita wealth without expansion of resource use is China’s, and the world’s, best hope for gaining its economic freedom.

Footnotes

1. To understand the enormous power the dollar has at this time over other nations’ currencies and America’s fear of those nations trading in their own or other currencies read W. Clark, “The Real Reason for the upcoming War with Iraq, http://www.ratical.org/ratville/CAH/RRiraqWar.html. Back to text

Endnotes

1. Walter Russell Mead, “The Bush Administration and the New World Order,” World Policy Journal (Summer,1991), p. 404. Back to text
2. Wu Yi, “China-U.S. Trade Balances: An Objective Evaluation,” Beijing Review, June 10-16, 1996, pp. 10-13; John Yochelson, “China’s Boom Creates a U.S. Trade Dilemma,” The Christian Science Monitor, March 1, 1994, p. 19; “China Maneuvering Around Quotas to Market Textiles to United States,” The Spokesman-Review, January 10, 1989, p. B6; CNN Headline News, June, 28, 1990, Jim Mann, “China’s Response to U.S.: Slow, Slow,” Los Angeles Times, October 28, 1998, p. A5. Back to text

This is a chapter from the book, Economic Democracy; The Political Struggle for the 21st Century. Visit that link for more information about the book.