Blowing out

For the first time in over a century, the United States has a real, serious, ascending global competitor. The British, German, Russian, and Japanese systems never reached that status. The People’s Republic of China now has. No settled US policy vis-a-vis China has proven feasible because of internal US divisions and China’s spectacular growth. Political leaders and “defense” contractors find China-bashing attractive.

Denouncing China serves as popular scapegoating for many politicians in both parties and as support for an ever-increasing defense spending by the military.

However, major segments of large corporate business have invested hundreds of billions in China and in global supply chains linked to China. They do not want to risk them. In addition, for decades, China has offered one of the world’s lowest-cost, better educated and trained, and most disciplined labor forces coupled with the world’s fastest-growing market for both capital and consumer goods. Competitive US firms believe that global success requires their firms to be well established in that nation with the world’s largest population, among the world’s least-costly workers, and with the world’s fastest-growing market.

Everything taught and learned in business schools supports that view. Thus the US Chamber of Commerce opposed former President Donald Trump’s trade/tariff wars and now opposes President Joe Biden’s hyped-up program of China-bashing.

There is no way for the United States to change China’s basic economic and political policies since those are precisely what brought China to its now globally envied position of being a competitor to a superpower like the US Meanwhile, China is expected to catch up to the United States with equality of economic size before the end of this decade. The problem for the US empire grows, and the United States remains stuck in divisions that preclude any significant change except perhaps armed conflict and an unthinkable nuclear war.

When empires decline, they can slip into self-reinforcing downward spirals. This downward spiral occurs when the rich and powerful respond by using their social positions to offload the costs of decline onto the mass of the population. That only worsens the inequalities and divisions that provoked the decline in the first place.

The recently released Pandora Papers offer a useful glimpse into the elaborate world of vast wealth hidden from tax-collecting governments and from public knowledge. Such hiding is partly driven by the effort to insulate the wealth of the rich from that decline. That partly explains why the 2016 exposure of the Panama Papers did nothing to stop the hiding. If the public knew about the hidden resources – their size, origins, and purposes – the public demand for access to hidden assets would become overwhelming. The hidden resources would be seen as the best possible targets for use in slowing or reversing the decline.

Excerpted: ‘Why the Troubled U.S. Empire Could Quickly Fall Apart’

Counterpunch.org