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The transference of the U.S. economy to China


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By Lev Navrozov
SPECIAL TO WORLD TRIBUNE.COM

Lev Navrozov emigrated from the Soviet Union in 1972 He settled in New York City where he quickly learned that there was no market for his eloquent and powerful English language attacks on the Soviet Union. To this day, he writes without fear or favor or the conventions of polite society. He chaired the "Alternative to the New York Times Committee" in 1980, challenged the editors of the New York Times to a debate (which they declined) and became a columnist for the New York City Tribune. His columns are today read in both English and Russian.
Lev Navrozov

June 5, 2005

The phrase “Industrial Revolution” appeared in 1848 to denote the introduction of power-driven machinery for mass production at plants and factories, a period that began in England in 1760 and continued all over the West up to 1840.

A thinker with a great following, Rousseau (1712-1778), believed that man is free and happy in the bosom of nature and unfree and miserable otherwise. In a Rousseauist work of letters, a city dweller seduced a rural virgin or fled from “civilization,” where

    Humans live in tombs of stone,
    Never see the sun at dawn,
    Are ashamed of love,
    Are afraid of their own brains,
    And trade their freedom for money and for chains.

So the industrial workers were unfree and miserable if only because they were former peasants torn away from the bosom of nature and thrown into the corrupt, dirty, vice-ridden cities — graveyards for living corpses.

Marx, whose influence in continental Europe was universal, saw a capitalist as a greedy moneybag, who, instead of depositing his money in a bank, invested it in a factory or a plant to get a higher return on his investment by exploiting former peasants, who now had to sweat blood in a stuffy and ill-smelling factory or plant as “prisoners of starvation.” The Internationale, the hymn of Marx, called on the proletariat: “Arise, ye prisoners of starvation!”

Under the threat of “proletarian revolutions” in continental Europe and under the pressure from trade unions and strikes in the English-speaking countries, the wages of the “prisoners of starvation” kept rising, and when I spoke with a crane operator on a construction site next to our apartment building, I found that given full 40-hour-a-week employment, he belonged by his income to the top five percent of the U.S. population.

Another crane operator owns in our neighborhood a house that would have been described in the times of Marx as a bourgeois mansion (with a bar in the basement), and once I met him and his wife (in beautiful furs) as they were about to go (in their very bourgeois car) to the Metropolitan Opera.

But has the efficiency of building construction risen as much as have the wages of the construction workers?

About three years ago, that corporation, building (another apartment house?) next to our apartment house, built around its construction site a 5-feet-high iron fence, usurping the sidewalk, and at the back of its construction site, a very impressive wall of the would-be back yard. This is all, for about three years. Imagine the cost of the future apartment house and its rent!

Since my son graduated from Yale and published, for four years after graduation, “The Yale Literary Magazine,” I know Yale enough to vouch that as far as the humanities are concerned, Yale's “tuition” gave my son — or anyone else — nothing. Yet in 2004-05 the annual tuition costs and fees amounted at Yale to $40,000. In China, the annual university tuition costs have been $1000 to 1200 and a student's annual fees (a novelty!) $120 to $180, depending on his or her exam scores. That is, if a Chinese student has good exam scores and pays $120 a year, a Yale student has to pay 333 times as much!

What has happened in the United States in the past 240 years is a long process of selective inflation: the wages and salaries in some occupations have skyrocketed, and hence some costs and prices have risen beyond the purchasing power of the rest of the population.

Chinese culture is less emotional or sentimental than Western culture. From 1760 to 1840, the Chinese poor were no better off than the poor in the West. Numberless Chinese craftsmen produced works of craft requiring infinitely harder work than did Western works of craft. But no one shed tears over these Chinese craftsmen as over “prisoners of starvation,” deprived of life in the bosom of nature and compelled to sweat blood. China did not have either Rousseau or Marx. In 1925 Mao (coming from a prosperous peasant family) organized — no, not the proletarians, but the peasants, and in 1927 he staged a peasant rebellion. He came to power in 1949 in a peasant war against Japan and then the Kuomintang.

Today the world socio-economic situation is unprecedented.

It had been assumed in the West for 240 years that only the West can be the workshop of the world. Japan had developed as a Western country and became part of the West. The non-West was to supply to the West raw materials or exotica, like “vases said to be Ming,” in exchange for Western “industrial goods.” Or else China was simply plundered — China barely escaped becoming a colony, and was preyed upon by Britain (the Opium Wars), the United States, Russia, and Japan.

Today, China produces goods and services no less scientifically and technologically advanced than does the West. But in contrast to the West, a worker earns about as much as 240 years ago, but, for example, university tuition costs and fees are tiny fractions of what they are in the United States.

The West cannot compete with Chinese goods and services because the Chinese workers work as well as, or better than, the Western workers (the Chinese millennial tradition of unexcelled craftsmanship), but their wages and prices are what they were 240 years ago, while the Western wages and prices have been growing, in an inflationary spiral, hundreds of times, owing to Rousseau, Marx, trade unions, strikes, European “workers' parties,” and last but not least, democracy.

In 2004, the U.S. deficit of trade with China or China's surplus in trade with the United States surpassed $162 billion, that is, grew twice in 3 years!

Of course, the future presumed apartment house built next to our apartment house, cannot be built in China and shipped to our street in New York. As for the shipment of Chinese workers to work on the construction site, the U.S. trade unions will never tolerate it. Besides, given the American prices, they would not be able to live in the United States on their Chinese wages. On the other hand, all the parts of a passenger car or any other vehicle or machine can be manufactured in China and assembled in the United States (“Made in the USA”?).

A bill has recently been proposed in the Senate by Charles Schumer, a Democrat from New York, to impose a 27.5% tariff on goods from China.

How will this help? Chinese 99-cent goods will sell at $1.27. But will the Americans begin buying similar American goods at $30 or $70?

Curiously, “The Economist” is against even such tariffs (see Economist.com of May 14). As a result of the Great Depression the U.S. national debt rose from $16 billion in 1930 to $19 billion in 1932. As of May 15, 2005, the U.S. national debt was $7.8 trillion, and since Sept. 30, 2004, has continued to grow by $1.7 billion a day on the average. Says Economist.com: “Today, America is the world's biggest debtor, with China as an important creditor.” Namely, China has been buying American Treasury Bonds. Is the “supreme leader” of China thus keeping the United States from bankruptcy? Why? Bankruptcy may lead to an unpredictable socio-political mood in the United States. Now, nothing is better for the development of China's crucial geostrategic superiority than the present socio-political mood in the United States of total appeasement of China. But what if the 27.5% tariffs offend the “supreme leader” of China and he stops buying those bonds?

Besides, the tariffs will not prevent U.S. business from moving to China and selling their low-priced goods made in China outside the United States. That is, tariffs or not, except for projects like the building of an apartment house on our street, the Western economy is being transferred to China. Ahead is possibly something compared with which the Great Depression was a minor dysfunction. The Great Depression was the depression (lowering of activity) of the economy, while here we will have the Great Transference of the economy (except for islands like construction sites) to China, a vast dictatorship, aiming at world domination and in alliance with Putin's Russia.

What are the military implications of the Great Transference? The dictator of China acts in the world economy as the CEO of his world capitalist supermonopoly, with Western private enterprise working, in its search of the highest profit, for his world domination. The so-called “Chinese capitalists” are not private persons — they obey the CEO of the world capitalist supermonopoly. On the other hand, Western capitalists are private persons — independent, and they obey only the highest profit law of capitalism or free private enterprise, according to which Chinese in China, not Westerners in the West, should be employed except when a Westerner is a military scientist or technologist of genius.

According to the highest profit law, the strategic segment of the Western economy (as long as this segment is private enterprise) should also be transferred to China. The Western governments are against this as a too obvious suicide, but the question is: what product is strategic? Many products have a dual use, and it is always possible to plead the peaceful civilian use of the production or development. Thus, those who would have wanted, before Hitler had declared war on the United States in December 1941, to transfer the Manhattan Project to Nazi Germany could have asserted that the goal of nuclear research is the peaceful production of nuclear fuel.

The definitions of what is strategic vary from country to country and hence from government to government, and the CEO of the world capitalist supermonopoly can find a government that would have regarded in 1941 even the Manhattan Project as aiming at the peaceful production of nuclear fuel.

To bring the case of the Great Transference to its logical macabre conclusion, it can be said that the U.S. armed forces would be also much cheaper if not only all of their military equipment were made in China, but their personnel consisted of Chinese, who would cost next to nothing to maintain as compared with American volunteers, who have proved to be too expensive even for the war against the Sunni in Iraq, a tiny backward country compared with China in alliance with Putin's Russia.

On the other hand, the CEO of the world capitalist supermonopoly can and will pay all Western uniquely valuable military scientists and technologists more than they can hope to get in their countries. Here he beats high Western salaries by still higher salaries at the expense of traditionally low Chinese wages, and the Great Transference continues by other means.

Lev Navrozov's (navlev@cloud9.net] new book is available on-line at www.levnavrozov.com. To request an outline of the book, send an e-mail to webmaster@levnavrozov.com.

June 5, 2005

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