The struggle inside the US is pitting much of the business community against Biden and his “neoconservative” foreign policy advisors.
By Richard D Wolff
The contradictions of the American attack on China begin with how often it is dead wrong.
The Wall Street Journal reports that the “Chinese espionage” balloon that President Joe Biden launched with great patriotic fanfare in February has sent no photos or anything else to China.
White House economists have tried to excuse persistent US inflation by saying that it is a global problem and that inflation is worse in other parts of the world. China’s inflation rate is 0.7% per year.
Financial media stress that China’s GDP growth rate is lower than before. China now estimates that GDP growth will be 55.5% in 2023. However, estimates for the US GDP growth rate in 2023 are around 12%.
The attack on China has escalated into denial and selfdeception it’s like pretending the US hasn’t lost the wars in Vietnam, Afghanistan, Iraq and other countries.
The BRICS coalition (China and its allies) now has a significantly larger global economic footprint (higher aggregate GDP) than the Group of Seven (US and its allies).
China outperforms the rest of the world in spending on research and development.
American empire (as well as its foundation, American capitalism) is no longer the dominant global force it once was in the immediate aftermath of World War II. Since then, the empire and economy have shrunk significantly in size, power, and influence. And they continue to do so.
Putting that genie back in the bottle is a battle against history that America is unlikely to win.
Russia’s illusion
Denial and selfdeception about the changing world economy have led to major strategic mistakes. For example, before and shortly after February 2022, when the war in Ukraine began, American leaders predicted that Russia’s economy would collapse under the impact of the “biggest sanctions of all,” led by the United States. Some US politicians still believe there will be a collapse (public if not private) although there are no such signs.
Such predictions have misjudged the economic strength and potential of Russia’s BRICS allies. Led by China and India, the BRICS countries responded to Russia’s need for buyers for its oil and gas.
The United States has banned its European allies from buying Russian oil and gas amid the sanctions war against the Kremlin over Ukraine. However, US pressure tactics on China, India and many other countries (both inside and outside the BRICS countries) have also failed. They not only bought oil and gas from Russia, but also exported part of it to European countries.
World power configurations were accompanied by changes in the world economy that adversely affected the position of the United States.
the military illusion
War games with allies, threats from US officials, and US warships off the coast of China may lead some to believe these moves are intimidating China. The reality is that military disparity between China and the United States is lower today than at any time in modern Chinese history.
China’s military alliances are the strongest they’ve ever had. Intimidation that hasn’t worked since the Korean War and certainly won’t work since.
Former President Donald Trump’s tariff and trade wars were aimed at persuading China to change its “authoritarian” economic system, according to US officials. If so, this goal has not been achieved. The United States simply lacks the power to enforce the issue.
Research from the US suggests that the media has managed to a) portray China’s economic and technological advances as a threat and b) use this threat to lobby against the regulation of US hightech industries.
The illusion of technology
Of course, even before the rise of China, there was resistance in business to government regulation. However, promoting hostility towards China provides a convenient additional safeguard for all sorts of commercial interests.
China’s technological challenge stems from and depends on a tremendous educational effort based on educating many more STEM (science, technology, engineering, and math) students than the United States. However, American corporations are not in favor of paying taxes to fund education at the same rate.
This apparent contradiction is rarely addressed in media reports on the subject, and politicians generally avoid it as it jeopardizes their electoral prospects.
Scapegoating China joins the scapegoating of immigrants, BIPOCs (Black and Indigenous People of Color) and many other common targets.
The general decline of US empire and the capitalist economic system poses a crucial question for the nation: What standard of living will bear the brunt of the effects of this decline? The answer to that question is crystal clear: the US government will adopt austerity measures (cutting essential public services) and allow price inflation and rising interest rates, which will reduce living standards and jobs.
After the combined economic meltdown of 2020 and the Covid19 pandemic, the majority of lower and middleincome earners have so far borne most of the cost of America’s decline. This is the pattern that failing empires have followed throughout human history: those with wealth and power are best placed to pass on the cost of decline to the general populace.
The true sufferings of this population make them vulnerable to the political agendas of demagogues. They offer scapegoats to balance popular discontent, bitterness, and anger.
Big capitalists and the politicians they dominate accept or tolerate the naming of scapegoats as a distraction from these leaders’ responsibility for the suffering of the masses. Demagogic leaders serve as scapegoats for targets old and new: immigrants, BIPOCs, women, socialists, liberals, minorities of various kinds, and foreign threats.
The scapegoat usually does little more than harm their intended victims. By failing to solve a real problem, that problem persists and can later be exploited by demagogues (at least until the scapegoat’s victims put up enough resistance to put an end to it).
Among the contradictions of the scapegoat is the dangerous risk that it will exceed its original purpose and create more problems for capitalism than it alleviates.
Should antiimmigrant unrest slow or halt immigration (as happened recently in the United States), domestic labor shortages could emerge or worsen, which could push up wages and thus hurt profits.
If racism also leads to disruptive riots (as happened recently in France), profits could fall.
If the attack on China results in the United States and Beijing continuing to crack down on American companies that invest and trade with China, it could be very costly to the US economy. That this could happen now is a dangerous consequence of criticizing China.
Collaborate (coming soon)
Believing it would be in the US interest to do so, thenPresident Richard Nixon resumed diplomatic and other ties with Beijing during his 1972 trip to the country. Chinese President Mao Zedong, Premier Zhou Enlai and Nixon ushered in a period of economic growth, trade, investment and prosperity for China and the United States.
The success of this period prompted China to try to continue it. The same success has prompted the United States to change its attitude and policies in recent years. More specifically, this success has led US politicians like Trump and Biden to now perceive China as an enemy whose economic development poses a threat. Accordingly, they demonize Beijing’s leadership.
Most US megacorporations disagree. They benefited greatly from their access to the Chinese working world and the Chinese market, which has been growing rapidly since the 1980s. That was a big part of what they meant when they celebrated “neoliberal globalization.” However, a significant portion of the US business community still wants access to China.
The struggle within the United States is now pitting large parts of the US economy against Biden and his also “neoconservative” foreign policy advisors. The outcome of this struggle depends on domestic economic conditions, the presidential campaign and the political fallout from the war in Ukraine, and the ongoing upheaval in ChinaUS relations.
The outcome also depends on how the masses of Chinese and Americans understand and intervene in relations between these two countries. Will they be aware of the contradictions of attacking China to avoid war, seek mutual accommodation, and thus restore a new version of the shared prosperity that existed before Trump and Biden?
This article was produced by Economy for All, a project of the Independent Media Institute, which contributed it to Asia Times.
SOURCE: AsiaTimes