Friday, July 28, 2023
Why Capitalism is Leaving the US in search of profit ? It has for 125 years !
It has since the end of the 19th Century/ beginning of the 20th Century when it became an imperialist country by Lenin’s definition in _Imperialism_, specifically exporting _capital_ to the colonies instead of goods ; and reaping superprofits. US has been doing that ever since with the latest phase being termed “transnational capitalism “ and more popularly “globalization “.
Wages are higher in the US than outside the US so transnational corporations seek higher profits outside the US.
OF COURSE !
And
Neo-liberalism is better termed Reaganism in the real political class struggle, which is electoral
On Jul 28, 2023, at 9:00 AM, Bill Totten wrote:
Why Capitalism is Leaving the US in Search of Profit
by Richard Wolff
https://www.counterpunch.org (July 21 2023)
https://www.counterpunch.org/wp-content/uploads/2023/07/IMG_0398-1536x1024.jpeg
Container ship on the lower Columbia River, heading toward the
Pacific. Photo: Jeffrey Saint Clair
Early US capitalism was centered in New England. After some time, the
pursuit of profit led many capitalists to leave that area and move
production to New York and the mid-Atlantic states. Much of New
England was left with abandoned factory buildings and depressed towns
evident to this day. Eventually, employers moved again, abandoning New
York and the mid-Atlantic for the Midwest. The same story kept
repeating as capitalism's center relocated to the Far West, the South,
and the Southwest. Descriptive terms like "Rust Belt",
"deindustrialization", and "manufacturing desert" increasingly applied
to ever more portions of US capitalism.
So long as capitalism's movements stayed mostly within the US, the
alarms raised by its abandoned victims remained regional, not becoming
a national issue yet. Over recent decades, however, many capitalists
have moved production facilities and investments outside the US,
relocating them to other countries, especially to China. Ongoing
controversies and alarms surround this capitalist exodus. Even the
celebrated hi-tech sectors, arguably US capitalism's only remaining
robust center, have invested heavily elsewhere.
Since the 1970s, wages were far lower abroad and markets were growing
faster there too. Ever more US capitalists had to leave or risk losing
their competitive edge over those capitalists (European and Japanese,
as well as US) who had left earlier for China and were showing
stunningly improved profit rates. Beyond China, other Asian, South
American, and African countries also provided incentives of low wages
and growing markets, which eventually drew US capitalists and others
to move investments there.
Profits from those capitalists' movements stimulated more movements.
Rising profits flowed back to rally US stock markets and produced
great gains in income and wealth. That chiefly benefited the already
rich corporate shareholders and top corporate executives. They in turn
promoted and funded ideological claims that capitalism's abandonment
of the US was actually a great gain for US society as a whole. Those
claims, categorized under the headings of "neoliberalism" and
"globalization" served neatly to hide or obscure one key fact: higher
profits mainly for the richest few was the chief goal and the result
of capitalists abandoning the US.
Neoliberalism was a new version of an old economic theory that
justified capitalists' "free choices" as the necessary means to
achieve optimal efficiency for entire economies. According to the
neoliberal view, governments should minimize any regulation or other
interference in capitalists' profit-driven decisions. Neoliberalism
celebrated "globalization", its preferred name for capitalists'
choosing to specifically move production overseas. That "free choice"
was said to enable "more efficient" production of goods and services
because capitalists could tap globally sourced resources. The point
and punchline flowing from exaltations of neoliberalism, capitalists'
free choices, and globalization were that all citizens benefited when
capitalism moved on. Excepting a few dissenters (including some
unions), politicians, mass media, and academicians largely joined the
intense cheerleading for capitalism's neoliberal globalization.
The economic consequences of capitalism's profit-driven movement out
of its old centers (Western Europe, North America, and Japan) brought
capitalism there to its current crisis. First, real wages stagnated in
the old centers. Employers who could export jobs (especially in
manufacturing) did so. Employers who could not (especially in service
sectors) automated them. As US job opportunities stopped rising, so
did wages. Since globalization and automation boosted corporate
profits and stock markets while wages stagnated, capitalism's old
centers exhibited extreme widening of income and wealth gaps.
Deepening social divisions followed and culminated in capitalism's
crisis now.
Second, unlike many other poor countries, China possessed the ideology
and organization to make sure that investments made by capitalists
served China's own development plan and economic strategy. China
required the sharing of incoming capitalists' advanced technologies
(in exchange for those capitalists' access to low-wage Chinese labor
and rapidly expanding Chinese markets). The capitalists entering the
Beijing markets were also required to facilitate partnerships between
Chinese producers and distribution channels in their home countries.
China's strategy to prioritize exports meant that it needed to secure
access to distribution systems (and thus distribution networks
controlled by capitalists) in its targeted markets. Mutually
profitable partnerships developed between China and global
distributors such as Walmart.
Beijing's "socialism with Chinese characteristics" included a powerful
development-focused political party and state. Conjointly they
supervised and controlled an economy that mixed private with state
capitalism. In that model private employers and state employers each
direct masses of employees in their respective enterprises. Both sets
of employers function subject to the strategic interventions of a
party and government determined to achieve its economic goals. As a
result of how it defined and operated its socialism, China's economy
gained more (especially in GDP growth) from neoliberal globalization
than Western Europe, North America, and Japan did. China grew fast
enough to compete now with capitalism's old centers. The decline of
the US within a changing world economy has contributed to the crisis
of US capitalism. For the US empire that arose out of World War Two,
China and its BRICS allies represent its first serious, sustained
economic challenge. The official US reaction to these changes so far
has been a mix of resentment, provocation, and denial. Those are
neither solutions to the crisis nor successful adjustments to a
changed reality.
Third, the Ukraine war has exposed key effects of capitalism's
geographic movements and the accelerated economic decline of the US
relative to the economic rise of China. Thus the US-led sanctions war
against Russia has failed to crush the ruble or collapse the Russian
economy. That failure has followed in good part because Russia
obtained crucial support from the alliances (BRICS) already built
around China. Those alliances, enriched by both foreign and domestic
capitalists' investments, especially in China and India, provided
alternative markets when sanctions closed off Western markets to
Russian exports.
Earlier income and wealth gaps in the US, worsened by the export and
automation of high-paying jobs, undermined the economic basis of that
"vast middle class" that so many employees believed themselves to be
part of. Over recent decades, workers who expected to enjoy "the
American dream" found that increased costs of goods and services led
to the dream being beyond their reach. Their children, especially
those forced to borrow for college, found themselves in a similar
situation or in a worse one. Resistances of all sorts arose
(unionization drives, strikes, left and right "populisms") as
working-class living conditions kept deteriorating. Making matters
worse, mass media celebrated the stupefying wealth of those few who
profited most from neoliberal globalization. In the US, phenomena like
former President Donald Trump, Vermont's independent Senator Bernie
Sanders, white supremacy, unionization, strikes, explicit
anti-capitalism, "culture" wars, and frequently bizarre political
extremism reflect deepening social divisions. Many in the US feel
betrayed after being abandoned by capitalism. Their differing
explanations for the betrayal exacerbate the widely held sense of
crisis in the nation.
Capitalism's global relocation helped raise {1} the total GDP of the
BRICS nations (China + allies) well above that of the G7 (US +
allies). For all the countries of the Global South, their appeals for
development assistance can now be directed to two possible respondents
(China and the US), not just the one in the West. When Chinese
entities invest in Africa, of course, their investments are structured
to help both donors and recipients. Whether the relationship between
them is imperialist or not depends on the specifics of the
relationship, and its balance of net gains. Those gains for the BRICS
will likely be substantial. Russia's adjustment to Ukraine-related
sanctions against it not only led it to lean more on BRICS but
likewise intensified the economic interactions among BRICS members.
Existing economic links and conjoint projects among them grew. New
ones are fast emerging. Unsurprisingly, additional {2} countries in
the Global South have recently requested BRICS membership.
Capitalism has moved on, abandoning its old centers and thereby
pushing its problems and divisions to crisis levels. Because profits
still flow back to the old centers, those there gathering the profits
delude their countries and themselves into thinking all is well in and
for global capitalism. Because those profits sharply aggravate
economic inequalities, social crises there deepen. For example, the
wave of labor militancy sweeping across nearly all US industries
reflects anger and resentment against those inequalities. The
hysterical scapegoating of various minorities by right-wing demagogues
and movements is another reflection of the worsening difficulties. Yet
another is the growing realization that the problem, at its root, is
the capitalist system. All of these are components of today's crisis.
Even in capitalism's new dynamic centers, a critical socialist
question returns to agitate people's minds. Is the new centers'
organization of workplaces - retaining the old capitalist model of
employers vs employees in both private and state enterprises -
desirable or sustainable? Is it acceptable for a small group,
employers, exclusively and unaccountably to make most key workplace
decisions (what, where, and how to produce and what to do with the
profits)? That is clearly undemocratic. Employees in capitalism's new
centers already question the system; some have begun to challenge and
move against it. Where those new centers celebrate some variety of
socialism, employees will more likely (and sooner) resist
subordination to the residues of capitalism in their workplaces.
b>Links:
{1} https://www.counterpunch.org/2023/07/10/its-hard-for-americans-to-engage-in-china-bashing-without-tripping-on-contradictions/
{2} https://www.bloomberg.com/news/articles/2023-04-24/brics-draws-membership-requests-from-19-nations-before-summit#xj4y7vzkg
Richard Wolff is the author of Capitalism Hits the Fan (2012) and
Capitalism's Crisis Deepens (2016). He is the founder of Democracy at
Work.
https://www.counterpunch.org/2023/07/21/why-capitalism-is-leaving-the-us-in-search-of-profit
https://billtotten.wpcomstaging.com/
https://www.ashisuto.co.jp/
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