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OpEdNews Op Eds    H1'ed 11/15/20

Why the U.S. Will Never Compete Successfully with China

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Readings for the 33rd Sunday in Ordinary Time : Proverbs 31: 10-13, 19-20, 30-31; Psalms 128: 1-5; 1st Thessalonians 5: 1-6; Matthew 25: 14-30

Don't get me wrong. I'm happy that Joe Biden won the presidency and that the reign of Donald Trump is more or less behind us. However, a Biden presidency is not going to cure what's wrong with the U.S. economy.

That simple truth was underlined for me by Paul Jay's interview of the brilliant economist and former Wall Street analyst, Michael Hudson who has written the insightful . . . And Forgive Them Their Debts about debt elimination and the biblical Jubilee Year.

Hudson and Jay discussed the de-industrialization of the United States whose economy has become dependent not on producing goods and services, but on the financial sector - on investments, banking, debt, stocks and bonds.

Industrialization vs. Financialization

Meanwhile, China, our country's chief competitor, has a far healthier economic system that actually provides manufacturing jobs and a rising standard of living for its people. In our globalized economy, that's possible, because industries are drawn to China by wages that are much lower than in the U.S.

Yet, even with low wages, the Chinese working class is prospering, because of the country's centralized economy that provides health care gratis and free education for its people along with subsidized housing, food and transportation. Besides that, the nationalized Chinese banking system (absent the profit motive) can easily remedy any debt problems by simply writing down debts should that sector develop problems.

According to Hudson and Jay, catching up with China will be impossible for the United States as long as it continues embracing the neo-liberal capitalist model. For one thing, that arrangement finds it unthinkable to engage in long-term planning; it can't see beyond projected returns on a quarterly basis. Among other liabilities, that makes it impossible, for example to cope with climate change, that demands anticipating weather events decades from now.

In fact, to actually compete with the centrally planned elements of China's economy, the U.S. would have to follow systemic suit. However, its program of privatization, deregulation and tax reduction has America moving in the exact opposite direction.

Again, according to Michael Hudson, course correction would include the ideologically "impossible" steps of taming of wage spirals by:

  • Taking de facto central planning away from Wall Street and returning it into the hands of elected government officials
  • Raising taxes on the 1%
  • Nationalizing the banking system
  • Enacting a green new deal to provide productive, environment-saving jobs for the unemployed and under-employed
  • Providing free tuition for all post-secondary students
  • Forgiving the $1.5 trillion that students still owe for their educations, thus freeing them to actually buy homes, automobiles and other necessities
  • Nationalizing health care thus relieving both employers and employees from the burden of meeting the costs of medical treatment and pharmaceuticals

Both Jay and Hudson agreed that without some apocalyptic catastrophe and without transcending our hamstrung two-party system, the chances of taking such measures (even if Democrats had control of both houses of Congress) are nil. Consequently, China will continue to outstrip the United States economically and socially. Simply put, its system is more flexible than the neo-liberal model.

Today's Readings

I bring all of that up because today's readings contrast economies (like China's) that prioritize the needs of people with those that primarily serve the already wealthy. The first type centralizes the role of women. The second is condemned in Jesus' famous Parable of the Talents.

Here are my "translations" of the readings. You can find the originals here.

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Mike Rivage-Seul is a liberation theologian and former Roman Catholic priest. Retired in 2014, he taught at Berea College in Kentucky for 40 years where he directed Berea's Peace and Social Justice Studies Program. His latest book is (more...)
 

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