China’s Belt and Road Initiative
Senate Finance, Subcommittee on International Trade, Customs, and Global Competitiveness
China’s Belt and Road Initiative, June 12, 2019
News reports on this project indicate that China's partners in this endeavor are adopting more authoritarian means to quell dissent. Where, in the American system, the government will provide compensation for land seizure, I doubt that current residents receive compensation, assuming they held title in the first place.
Like the Slave Power in the antebellum South, even speaking out against the project is not allowed. This is an extension of the despotism of Chinese state capitalism. While recent events in China have the appearance of a free market, the reality is that Party Members are at the Center of most enterprise.
This is not terribly different than the progress of economic and political freedom in the Global North of the Western World. While a Marxist revolution has never occurred in a Marxist state, a Marxian analysis (not the elevator speech that Stalin and Mao implemented), society moves forward in largely predictable ways.
Aristocracy (or Party) brings about industrialization under a capitalistic despotism, which includes militarism and imperialism. As the peasantry is forced into slave like conditions in urban factories, they soon acquire skills and savings. Eventually, they demand civil and union rights, which their capitalist masters resist until a consumer surplus is required to match the labor surplus, usually because production exceeds worker income.
Marx posited that this would lead to a boom-bust cycle. We now know that this cycle actually helps the working class, so unionization, social and political democracy exist, despite capitalist resistance. Indeed, it is often the fear of socialism that forces concessions, thus delaying revolution.
Marx was not familiar with how public spending and debt control the business cycle, as opposed to imbalances in production and consumption. Keynes got close and Hayek and von Mises thought that the cycle was a healthy thing, yielding both innovation and removing failed enterprise. Their contention was that aiding failed enterprise let recession linger, the hindmost be damned.
This dynamic still plays out in our polity, where discredited supply side tax cuts fuel a boom bust cycle, while neo-liberal regimes increase taxation to remove excess savings, asset inflation and speculation in questionable investments and channel funds to activities that actually result in increase gross domestic product.
The other alternative is deficit spending, which also limits asset inflation, et al, channeling tax cuts toward bond sales. This usually includes high military spending and the need for global hegemony to justify it.
The current example of this dynamic is the recovery, which really took off when President Obama successfully forced Speaker Boehner and Leader McConnell to accept higher taxes on the savings sector and when the ironically named Balanced Budget Act of 2018 ate the liquidity produced by the Tax Cut and Jobs Act if 2017.
A more robust recovery would have resulted save for neo-liberal limitations on transfer payments, which could be destabilizing to capitalism, as the rise of the Democratic Socialism among the Millennial generation demonstrates. The drive toward employee ownership and cooperatives is another trend toward a more socialistic economy, not by rage but by arbitrage.
This has everything to do with China and the Belt Road. One possible future is that expanding Chinese militarism will face American Hegemony in the same way that emerging Japanese and German militarism (both of which occurred in states with a vigorous industrial middle class) clashed with British and American imperialism, leading to the Second World War (or the Great Patriotic War as it was and is known in Russia – which has replaced political imperialism with economic imperialism and private capitalist and political corruption which would have made Nelson Rockefeller and Boss Tweed proud). Knowledge can help us to avoid another super-power conflict, at least for now. Nuclear weaponry adds some urgency toward finding another alternative.
Resisting the evolution of China will no more work than attempts to preserve our imperialism in the Pacific against Japanese expansion, which was ended through nuclear blackmail (and without an adequate arsenal of such weapons, we were bluffing) and the extension of hegemony absorb Germany and Japan, expanding of late into Eastern Europe, as well as recent wars in the Middle East and South Asia. We have reached our limit and China will anti them, thanks to their new silk road and belt.
At some point, inevitable economic and political change will overcome Chinese authoritarianism. Until them, deterrence, rather than conflict is essential. Indeed, continuing engagement helped bring the Soviet empire to its knees. This is also something we should try in Cuba.
Creating demand for our goods will have Chinese workers and workers in their new client states demand more, leading to either evolution or revolution. It will not be perfect, but neither is the American system, which depends on undocumented labor from the Global south (often with slave-like conditions replacing violence with threats of deportation) and exploitative contracts with farmers to keep food growing and processing cheap.
Oddly, the best alternative is more democracy and ownership in the American workplace. To protect themselves from job loss from their own supply chain and subsidiaries, such firms will assure that overseas workers have the same standard of living and workplace democracy that they enjoy, thus subverting authoritarianism in the Global South and East. Change in American companies cannot come from governmental action.
American workers must seek this for themselves, starting with the cooperative and employee owned sector. As this evolves, personal accounts in Social Security owning employer voting stock will accelerate workplace democratization, which is a measure that this Committee could enact, along with the Subtraction VAT that we have long suggested in our previous comments. In this way, real American cooperative socialism can overcome Chinese state capitalism, which is both faux socialism and faux free market rolled into one.
Attachments: Tax Reform, Employee Ownership
China’s Belt and Road Initiative, June 12, 2019
News reports on this project indicate that China's partners in this endeavor are adopting more authoritarian means to quell dissent. Where, in the American system, the government will provide compensation for land seizure, I doubt that current residents receive compensation, assuming they held title in the first place.
Like the Slave Power in the antebellum South, even speaking out against the project is not allowed. This is an extension of the despotism of Chinese state capitalism. While recent events in China have the appearance of a free market, the reality is that Party Members are at the Center of most enterprise.
This is not terribly different than the progress of economic and political freedom in the Global North of the Western World. While a Marxist revolution has never occurred in a Marxist state, a Marxian analysis (not the elevator speech that Stalin and Mao implemented), society moves forward in largely predictable ways.
Aristocracy (or Party) brings about industrialization under a capitalistic despotism, which includes militarism and imperialism. As the peasantry is forced into slave like conditions in urban factories, they soon acquire skills and savings. Eventually, they demand civil and union rights, which their capitalist masters resist until a consumer surplus is required to match the labor surplus, usually because production exceeds worker income.
Marx posited that this would lead to a boom-bust cycle. We now know that this cycle actually helps the working class, so unionization, social and political democracy exist, despite capitalist resistance. Indeed, it is often the fear of socialism that forces concessions, thus delaying revolution.
Marx was not familiar with how public spending and debt control the business cycle, as opposed to imbalances in production and consumption. Keynes got close and Hayek and von Mises thought that the cycle was a healthy thing, yielding both innovation and removing failed enterprise. Their contention was that aiding failed enterprise let recession linger, the hindmost be damned.
This dynamic still plays out in our polity, where discredited supply side tax cuts fuel a boom bust cycle, while neo-liberal regimes increase taxation to remove excess savings, asset inflation and speculation in questionable investments and channel funds to activities that actually result in increase gross domestic product.
The other alternative is deficit spending, which also limits asset inflation, et al, channeling tax cuts toward bond sales. This usually includes high military spending and the need for global hegemony to justify it.
The current example of this dynamic is the recovery, which really took off when President Obama successfully forced Speaker Boehner and Leader McConnell to accept higher taxes on the savings sector and when the ironically named Balanced Budget Act of 2018 ate the liquidity produced by the Tax Cut and Jobs Act if 2017.
A more robust recovery would have resulted save for neo-liberal limitations on transfer payments, which could be destabilizing to capitalism, as the rise of the Democratic Socialism among the Millennial generation demonstrates. The drive toward employee ownership and cooperatives is another trend toward a more socialistic economy, not by rage but by arbitrage.
This has everything to do with China and the Belt Road. One possible future is that expanding Chinese militarism will face American Hegemony in the same way that emerging Japanese and German militarism (both of which occurred in states with a vigorous industrial middle class) clashed with British and American imperialism, leading to the Second World War (or the Great Patriotic War as it was and is known in Russia – which has replaced political imperialism with economic imperialism and private capitalist and political corruption which would have made Nelson Rockefeller and Boss Tweed proud). Knowledge can help us to avoid another super-power conflict, at least for now. Nuclear weaponry adds some urgency toward finding another alternative.
Resisting the evolution of China will no more work than attempts to preserve our imperialism in the Pacific against Japanese expansion, which was ended through nuclear blackmail (and without an adequate arsenal of such weapons, we were bluffing) and the extension of hegemony absorb Germany and Japan, expanding of late into Eastern Europe, as well as recent wars in the Middle East and South Asia. We have reached our limit and China will anti them, thanks to their new silk road and belt.
At some point, inevitable economic and political change will overcome Chinese authoritarianism. Until them, deterrence, rather than conflict is essential. Indeed, continuing engagement helped bring the Soviet empire to its knees. This is also something we should try in Cuba.
Creating demand for our goods will have Chinese workers and workers in their new client states demand more, leading to either evolution or revolution. It will not be perfect, but neither is the American system, which depends on undocumented labor from the Global south (often with slave-like conditions replacing violence with threats of deportation) and exploitative contracts with farmers to keep food growing and processing cheap.
Oddly, the best alternative is more democracy and ownership in the American workplace. To protect themselves from job loss from their own supply chain and subsidiaries, such firms will assure that overseas workers have the same standard of living and workplace democracy that they enjoy, thus subverting authoritarianism in the Global South and East. Change in American companies cannot come from governmental action.
American workers must seek this for themselves, starting with the cooperative and employee owned sector. As this evolves, personal accounts in Social Security owning employer voting stock will accelerate workplace democratization, which is a measure that this Committee could enact, along with the Subtraction VAT that we have long suggested in our previous comments. In this way, real American cooperative socialism can overcome Chinese state capitalism, which is both faux socialism and faux free market rolled into one.
Attachments: Tax Reform, Employee Ownership
posted by Michael Bindner at 3:00 PM
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