I think a lot of people were surprised to find out just how much more industrially advanced Iran and Russia are than the west. Who knew that financial capitalists completely gutting domestic industry would become a serious problem for the west.
The west now has one choice: they can continue to uphold neoliberal capitalism, in which case their capitalists will continue to deindustrialize them in search of profit, leaving the west utterly unable to compete; or, they desperately try to catch up to stay on top, which would necessitate to abandon neo liberal capitalism and any form of “free market” capitalism and implement not merely regulations, but outright central planning.
The latter would be the smartest decision but would require setting aside short term profit for a few decades at least, which we know capitalist can’t stand.
I still love that Jake Sullivan talk where he admits that the whole free market bullshit they’ve been promoting can’t actually compete with what China is doing. It’s an absolutely incredible read, Sullivan claims that the American economy lacks public investment, as it did after World War II. And that China is actively using this tool.
last few decades revealed cracks in those foundations. A shifting global economy left many working Americans and their communities behind.
The People’s Republic of China continued to subsidize at a massive scale both traditional industrial sectors, like steel, as well as key industries of the future, like clean energy, digital infrastructure, and advanced biotechnologies. America didn’t just lose manufacturing—we eroded our competitiveness in critical technologies that would define the future.
He also opined that the market is far from being able to regulate everything, and “in the name of overly simplified market efficiency, entire supply chains of strategic goods, along with the industries and jobs that produced them, were moved abroad.”
Another problem he identified is the growth of the financial sector to the detriment of the industrial and infrastructure sectors, which is why many industries “atrophied” and industrial capacities “seriously suffered.”
Finally, he admitted that colonization and westernization of countries through globalization has failed:
Much of the international economic policy of the last few decades had relied upon the premise that economic integration would make nations more responsible and open, and that the global order would be more peaceful and cooperative—that bringing countries into the rules-based order would incentivize them to adhere to its rules.
Sullivan cited China as an example:
By the time President Biden came into office, we had to contend with the reality that a large non-market economy had been integrated into the international economic order in a way that posed considerable challenges.
The People’s Republic of China continued to subsidize at a massive scale both traditional industrial sectors, like steel, as well as key industries of the future, like clean energy, digital infrastructure, and advanced biotechnologies. America didn’t just lose manufacturing—we eroded our competitiveness in critical technologies that would define the future.
In his opinion, all this has led to dangerous consequences for the US led hegemony:
And ignoring economic dependencies that had built up over the decades of liberalization had become really perilous—from energy uncertainty in Europe to supply-chain vulnerabilities in medical equipment, semiconductors, and critical minerals. These were the kinds of dependencies that could be exploited for economic or geopolitical leverage.
Today, the United States produces only 4 percent of the lithium, 13 percent of the cobalt, 0 percent of the nickel, and 0 percent of the graphite required to meet current demand for electric vehicles. Meanwhile, more than 80 percent of critical minerals are processed by one country, China.
America now manufactures only around 10 percent of the world’s semiconductors, and production—in general and especially when it comes to the most advanced chips—is geographically concentrated elsewhere.
At the same time, according to him, the United States does not intend to isolate itself from China.
Our export controls will remain narrowly focused on technology that could tilt the military balance. We are simply ensuring that U.S. and allied technology is not used against us. We are not cutting off trade.
That means replacing a singular approach focused the oversimplified assumptions that I set out at the top of my speech with one that encourages targeted and necessary investments in places that private markets are ill-suited to address on their own—even as we continue to harness the power of markets and integration.
Called it! Well sort of, he is advocating some level of government subsidizing to key industries, so essentially a semi market planning system.
Yup, but it’s not clear what the actual path towards that would be in US. Seems that such level of government intervention in the economy would be a complete political non starter.
Yea, there is no way they will convince American capitalists to accept that.
The only way I see the American ruling class accepting that is when the US is at the end of it’s end, has lost every oversea influence they had and in a desperate attempt to protect their national bourgeoisie, has gone full fascist and is trying to take over Mexico in the name of manifest destiny or something.
In his opinion, all this has led to dangerous consequences for the US led hegemony
Who could have guessed that having your entire industrial base in other countries could be a problem.
At the same time, according to him, the United States does not intend to isolate itself from China.
It’s not like they realistically can anyway. Not before they spent a few decades planning a repatriation of American capital and industrial base back to America anyway.
I think a lot of people were surprised to find out just how much more industrially advanced Iran and Russia are than the west. Who knew that financial capitalists completely gutting domestic industry would become a serious problem for the west.
You mean moving money around does not create wealth? Surely you jest.
Are you telling me double-counting mortgage payments as imputed rent isn’t real production?
The west now has one choice: they can continue to uphold neoliberal capitalism, in which case their capitalists will continue to deindustrialize them in search of profit, leaving the west utterly unable to compete; or, they desperately try to catch up to stay on top, which would necessitate to abandon neo liberal capitalism and any form of “free market” capitalism and implement not merely regulations, but outright central planning.
The latter would be the smartest decision but would require setting aside short term profit for a few decades at least, which we know capitalist can’t stand.
I still love that Jake Sullivan talk where he admits that the whole free market bullshit they’ve been promoting can’t actually compete with what China is doing. It’s an absolutely incredible read, Sullivan claims that the American economy lacks public investment, as it did after World War II. And that China is actively using this tool.
He also opined that the market is far from being able to regulate everything, and “in the name of overly simplified market efficiency, entire supply chains of strategic goods, along with the industries and jobs that produced them, were moved abroad.”
Another problem he identified is the growth of the financial sector to the detriment of the industrial and infrastructure sectors, which is why many industries “atrophied” and industrial capacities “seriously suffered.”
Finally, he admitted that colonization and westernization of countries through globalization has failed:
Sullivan cited China as an example:
In his opinion, all this has led to dangerous consequences for the US led hegemony:
At the same time, according to him, the United States does not intend to isolate itself from China.
Called it! Well sort of, he is advocating some level of government subsidizing to key industries, so essentially a semi market planning system.
Yup, but it’s not clear what the actual path towards that would be in US. Seems that such level of government intervention in the economy would be a complete political non starter.
Yea, there is no way they will convince American capitalists to accept that.
The only way I see the American ruling class accepting that is when the US is at the end of it’s end, has lost every oversea influence they had and in a desperate attempt to protect their national bourgeoisie, has gone full fascist and is trying to take over Mexico in the name of manifest destiny or something.
Who could have guessed that having your entire industrial base in other countries could be a problem.
It’s not like they realistically can anyway. Not before they spent a few decades planning a repatriation of American capital and industrial base back to America anyway.