Michael Hudson — Ho Hum – More Trade Threats

Longish but excellent. Here are a few snippets.

America was able to outcompete with England and other countries by having subsidized education. We built roads, we built huge infrastructure, and the Internet was basically developed by government and turned over to the private sector. America’s pharmaceutical patents basically were developed by government laboratories and turned over to the pharmaceutical companies.

But when China provides public support for its own economy, America says that’s unfair: You have to privatize everything, you have to tie your hands behind your back by turning China into a Thatcherite economy. It should operate all of its basic public services for profit. That obliges it not only cover its costs of production, it also is supposed to financialize by taking on the cost of credit and borrowing. The basic model is what the British water authorities did with their huge debt leveraging and interest charges.

That would make China so high-cost an economy that America’s subsidized economy could undersell it and make it dependent on U.S. foreign policy. That’s basically what Trump’s saying to them. You can imagine China just laughing....

First of all, it’s not two powers going against each other. It’s one power, the United States, going against China. China has not made any attempt even to reply, because it says there have been no negotiations or discussions with the United States. What Trump says is: America is becoming dependent on China and it’s threatening the American way of life. He’s defined that as a threat to American dominance. By “dominance,” Trump means making other countries dependent on the United States. It means other countries letting the Americans monopolize all the high productivity, high technology, and economic-rent yielding industries, so that we [the United States] can get all the profits.

They are supposed to produce the raw materials and manual-labor goods for us, and serve as customers, but we will be in control so that if we don’t like China we can do what we did in the 1950s and 1960s and suddenly stop exporting to them. America can threaten to starve them if they don’t follow the policies its trade strategists want. That’s what it did in the 60s when Canada broke the U.S. sanctions and exported wheat to China to save it.

This idea that other countries are threatening our ability to strangle them is so perverse and so basically asymmetrical and evil that it’s jaw dropping! They’re not going to be dependent on basic needs on U.S. suppliers because the U.S. can do what it’s doing to Russia or Iran, and did to Cuba for years. It can impose sanctions on basic needs that people must have to survive.

Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism
Michael Hudson — Ho Hum – More Trade Threats
Michael Hudson | President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City, and Guest Professor at Peking University