The U.S. Economy and China: Capitalism, Class, and Crisis
by Martin Hart-Landsberg
The U.S. economy is in bad shape and people are understandably seeking solutions.
Many, encouraged by mainstream media and politicians, believe that Chinaâ€™s trade policies bear primary responsibility for the structural decay of our economy and that recovery will require, above all, pressuring the Chinese government to implement â€œmarket-freeingâ€ policy changes that will bring the U.S.-China trade relationship into balance.
Despite its popularity, this nation-state approach to understanding the dynamics of the U.S.-China relationship is seriously flawed.
It encourages people to see U.S. industrial problems, falsely, as the outcome of a contest between China and the United States, in which the Chinese government has boosted the well-being of its citizens at U.S. expense, through â€œunfairâ€ practices. As a consequence, it leads to counterproductive policy recommendations.
In this paper, I offer an alternative approach to understanding the U.S.-China trade relationship; one that relies on a class-based analysis of (global) capitalist dynamics.
It leads, not surprisingly, to very different economic insights and political challenges.
For example, it reveals that the threat to U.S.-based manufacturing activity comes not from China, but from the operation of a transnational, corporate-shaped, regional production system, in which China serves as the regionâ€™s final assembly platform.
It also reveals that, while both transnational capital and elites in China have greatly benefited from the operation of this system, Chinese workers have paid a high cost; in fact, Chinese workers experience many of the same negative consequences from its operation as do workers in the United States.
It also explains why both the Chinese and the U.S. governments have responded to the current world crisis with strategies designed to maintain the status quo, despite the negative effects of this decision on working people.
In short, my analysis reveals that it is capitalismâ€”not competition between China and the United Statesâ€”that is the source of our economic problems.
Our challenge, then, which I briefly address in the conclusion, is to draw on the above insights to develop a strategy capable of both illuminating and contesting capitalismâ€™s destructive logicâ€”a task that puts U.S. workers in solidarity, rather than competition, with workers in China.
Martin Hart-Landsberg (firstname.lastname@example.org) teaches economics at Lewis and Clark College, Portland, Oregon, and is the author with Paul Burkett of China and Socialism (Monthly Review Press, 2005).
Read the full article at Monthly Review Press.