The Rise of China and the Demise of the Capitalist World Economy

[eridani]

http://www.truthout.org/050109T

Global capitalism, as its backers and detractors maintain, must expand to continue. Within this context, Li holds that the rapid growth of the Chinese economy has stabilized a world system sunk into slow growth since the US-led post-World War II period of prosperity and stability ended in the early 1970s. The rub is that China's development provides a short-term solution only. There is a looming possibility of reversal to world instability, ecologically and economically. An example of the latter is the fragility of US borrowing from China. Its currency surplus helps to fund US deficits. The American penchant for borrowing could well spark a fall in the value of the dollar, the leading reserve currency in the world. Li marshals figures and tables from China, the OECD, US and the World Bank on exchange rates, growth, income, prices, profits and wages to make clear the constraints of each nation in world capitalism for the short and long term.

Li argues that the rise of China heralds the "autumn" of the current global system. He draws on Wallerstein's framework of core, semi-peripheral and peripheral nations locked in competition. The stabilizing role of a core, imperial power such as the US since the end of World War II and Great Britain before it, is to maintain that competitive forward motion. This trend requires nations of the core, periphery and semi-periphery to strike a delicate balance to continue the accumulation of capital for investors. That balancing act is due to the built-in creation and destruction of market relations among and between nations, whose internal class structures are thus in constant flux. By definition, this clash and conflict paves the way for instability. Look no further than the US wage stagnation for the past 35 years. That process propelled the widening gap in income between Main Street and Wall Street and set off repeated asset bubbles, harming working people with job losses state side and abroad.

Li's critique of "sustainable capitalism" is devastating in its breadth and depth. He argues, persuasively, against that notion with proof that requires no more than high school math. His clear prose lays out the costs and benefits for the planet and people under the current social system with respect to nonrenewable and renewable energy, minerals, water, food and climate change. Li reveals, layer by layer, the "laws of motion" of an extractive system of producing and exchanging commodities that is fast careening towards an unsafe future.

[Jeep789]

1. Pure capitalism is a game of monopoly with one winner

and everyone else losers. Why anyone supporting this concept assumes they will be the one is the question.