China: Latest Victim of Classic Capitalist Contradiction

[georgephillip]

Why is it leaders of capitalism rarely grasp its fundamental contradiction?
Answer: they don't read Marx.
"It was Marx who clearly explained in Capital the contradiction capitalism's leaders rarely grasp. Showing how capitalists compete (and survive in competition) by maximizing profits, he focused his readers on capitalists' strategies of 'economizing' on the number of workers they hire (often by substituting machines) and/or replacing more costly workers with cheaper employees.

"The contradiction emerges when their economizing undermines the market for what capitalists must sell to survive..."

http://www.truth-out.org/opinion/it...blame-for-the-current-global-economic-decline

"...China is becoming a victim of the classic capitalist contradiction.

"China's exports flag because consumer demand in capitalism's old centers is falling.

"Wage stagnation in those centers can no longer be offset by credit expansion.

"Nor can it be offset by rising demand among what are still the far lower-waged workers in capitalism's new centers (China's included).

"In simplest terms, capitalism's post-1970s global development substituted lower- for higher-waged workers while it redistributed almost all the wealth created since the 1970s to a top 1 to 3 percent of the world's wealthy."

 

[resident_evil]

Why is it leaders of capitalism rarely grasp its fundamental contradiction?
Answer: they don't read Marx.
"It was Marx who clearly explained in Capital the contradiction capitalism's leaders rarely grasp. Showing how capitalists compete (and survive in competition) by maximizing profits, he focused his readers on capitalists' strategies of 'economizing' on the number of workers they hire (often by substituting machines) and/or replacing more costly workers with cheaper employees.

"The contradiction emerges when their economizing undermines the market for what capitalists must sell to survive..."

http://www.truth-out.org/opinion/it...blame-for-the-current-global-economic-decline

"...China is becoming a victim of the classic capitalist contradiction.

"China's exports flag because consumer demand in capitalism's old centers is falling.

"Wage stagnation in those centers can no longer be offset by credit expansion.

"Nor can it be offset by rising demand among what are still the far lower-waged workers in capitalism's new centers (China's included).

"In simplest terms, capitalism's post-1970s global development substituted lower- for higher-waged workers while it redistributed almost all the wealth created since the 1970s to a top 1 to 3 percent of the world's wealthy."

Nonsense.

Your definition of capitalism leaves a lot to be desired if you include China as a practitioner of the art.

 

[georgephillip]

Nonsense.

Your definition of capitalism leaves a lot to be desired if you include China as a practitioner of the art.

What would you suggest as a more accurate label for China's economy, state capitalism?

"China too is both victor and victim in capitalism's contradiction and its temporary postponement from the 1970s to 2008.

"On the one hand, the stagnation of wages coupled with the expansion of consumer (and government) credit in North America, Western Europe and Japan provided soaring demands there for relatively cheap consumer goods exports from China.

"Having bet its industrialization strategy on those export markets, China achieved economic superpower status by selling into capitalism's contradiction and its postponement via credit. Likewise merchants such as Walmart achieved parallel status by being the retail outlets for Chinese products.

"Financial enterprises in capitalism's old centers perhaps benefited the most as they developed extremely profitable ways to securitize the consumer debt, sell it and insure it (credit default swaps etc.).

"Financial enterprises benefited doubly as they also managed (via hedge funds etc.) the extreme wealth redistributed and concentrated upward by stagnant real wages and the postponement of capitalism's contradiction via credit."

http://www.truth-out.org/opinion/it...blame-for-the-current-global-economic-decline

 

[Days]

Why is it leaders of capitalism rarely grasp its fundamental contradiction?
Answer: they don't read Marx.
"It was Marx who clearly explained in Capital the contradiction capitalism's leaders rarely grasp. Showing how capitalists compete (and survive in competition) by maximizing profits, he focused his readers on capitalists' strategies of 'economizing' on the number of workers they hire (often by substituting machines) and/or replacing more costly workers with cheaper employees.

"The contradiction emerges when their economizing undermines the market for what capitalists must sell to survive..."

http://www.truth-out.org/opinion/it...blame-for-the-current-global-economic-decline

"...China is becoming a victim of the classic capitalist contradiction.

"China's exports flag because consumer demand in capitalism's old centers is falling.

"Wage stagnation in those centers can no longer be offset by credit expansion.

"Nor can it be offset by rising demand among what are still the far lower-waged workers in capitalism's new centers (China's included).

"In simplest terms, capitalism's post-1970s global development substituted lower- for higher-waged workers while it redistributed almost all the wealth created since the 1970s to a top 1 to 3 percent of the world's wealthy."

The only fair trade that takes place on the planet is barter. Currency manipulation has made a mockery of the market place, as practiced today.
China is caught up in the middle of the whole game. They allowed the devil in. The pulse of free trade by currency moves at gigahertz speeds. How many times does someone need to buy basic items? About the only definite turnover is computers because they wear out and become totally worthless in 3-4 years time; while smart phones last only 2-3 years. The rest of that crap in WalMart gets bought once a decade, unless they make the price less than the cost of manufacture and shipping... which they do.

IOW, where's the profit?

Show me one capital based market that makes any sense.

I'm not sure Marx could make heads or tails of today's market. But he would point at the mess and say, "even I didn't think it could get this bad"

 

[georgephillip]

I'm not sure Marx could make heads or tails of today's market. But he would point at the mess and say, "even I didn't think it could get this bad"

He would certainly notice how the Great Recession Lumbers On:

"Yet while asset prices soar, the production of goods and services, employment and workers’ incomes are not recovering and resuming growth.

"Instead, Western Europe, North America and Japan are stuck in a longer, deeper crisis than almost anyone expected.

"Millions have left the labor force.

"Wages, benefits and job security are declining; the so-called 'middle classes' are evaporating.

"Having promised 'recoveries,' desperate governments inject massive new quantities of money into their economies. What they accomplish most are fast-rising asset prices.

"Given their persistent economic problems, consumers cannot borrow or spend more.

"Businesses neither borrow nor productively invest all the new, cheap money because they could not sell the extra output to distressed consumers.

"Instead, the newly injected trillions enable the speculation that drives up asset prices.

"The owners of those inflating assets celebrate a 'recovery' that bypasses most of their fellow citizens.

"The Great Recession lumbers on.
http://www.truth-out.org/news/item/25002-richard-d-wolff-capitalisms-deeper-problem

Capitalism has always regarded human labor as just another commodity subject to market forces. With the advent of automation and artificial intelligence, capitalists think labor has become obsolete.

 

[Days]

He would certainly notice how the Great Recession Lumbers On:

"Yet while asset prices soar, the production of goods and services, employment and workers’ incomes are not recovering and resuming growth.

"Instead, Western Europe, North America and Japan are stuck in a longer, deeper crisis than almost anyone expected.

"Millions have left the labor force.

"Wages, benefits and job security are declining; the so-called 'middle classes' are evaporating.

"Having promised 'recoveries,' desperate governments inject massive new quantities of money into their economies. What they accomplish most are fast-rising asset prices.

"Given their persistent economic problems, consumers cannot borrow or spend more.

"Businesses neither borrow nor productively invest all the new, cheap money because they could not sell the extra output to distressed consumers.

"Instead, the newly injected trillions enable the speculation that drives up asset prices.

"The owners of those inflating assets celebrate a 'recovery' that bypasses most of their fellow citizens.

"The Great Recession lumbers on.
http://www.truth-out.org/news/item/25002-richard-d-wolff-capitalisms-deeper-problem

Capitalism has always regarded human labor as just another commodity subject to market forces. With the advent of automation and artificial intelligence, capitalists think labor has become obsolete.

exactly what's going on.

When we started mass production of goods, we opened a pandora's box.

Today, the needs of the masses are all being produced in the Pacific Western Rim. so, while the manufacturing for the entire planet has shifted there, the rest of the planet is trying to figure out, over night, how to work this industrial coin out in their new service economies.

So far, we can print money, make bubbles, pop the bubbles, and watch our nations turn into homeless hordes of destitute people. I guess that's a start. What we need is an actual good idea. Not that the SOBs running the show would ever listen to such a creature.

 

[Spamature]

Then I guess the powers that be need to start loaning the Chinese people money for the crap they make and don't need and ultimately working that debt into the derivatives pile.

http://money.visualcapitalist.com/all-of-the-worlds-money-and-markets-in-one-visualization/

 

[Days]

Then I guess the powers that bee need to start loaning the Chinese people money for the crap they make and don't need and ultimately working that debt into the derivatives pile.

http://money.visualcapitalist.com/all-of-the-worlds-money-and-markets-in-one-visualization/

IKR?

What about if we stabilized the nations by paying down all the synthetic debt with synthetic issue?

the world would start working again but the NWO would lose their power grip. I say do it anyway.

 

[Spamature]

IKR?

What about if we stabilized the nations by paying down all the synthetic debt with synthetic issue?

the world would start working again but the NWO would lose their power grip. I say do it anyway.

How about we earthlings land on Mars. Claim its value against all the synthetic debt and call the books even.

 

[Days]

How about we earthlings land on Mars. Claim its value against all the synthetic debt and call the books even.

Better yet, show pics taken at the practice sites and claim we are on Mars, plant a few flags, dig up some rust, call it a day and bingo, we just proved it was viable land for living; then we really got some bartering chips!

(The astronauts dug up rust in the moon "dust" that clumped just like Area 51 sand... and they said it like it was no big deal, we just dug up rust on the moon. There you go, the moon has no water or iron, but it does have rust in the "soil" - that's what they called the dust, they called it soil.)

 

[georgephillip]

When we started mass production of goods, we opened a pandora's box.

Today, the needs of the masses are all being produced in the Pacific Western Rim. so, while the manufacturing for the entire planet has shifted there, the rest of the planet is trying to figure out, over night, how to work this industrial coin out in their new service economies.

Maybe we started with the wrong production model?
Top-down, authoritarian capitalism generates massive amounts of wealth that is then distributed according to the whims of a relative handful of all those who were responsible for its production.

There are alternatives

"At Mondragon, there are agreed-upon wage ratios between executive work and field or factory work which earns a minimum wage.

"These ratios range from 3:1 to 9:1 in different cooperatives and average 5:1.

"That is, the general manager of an average Mondragon cooperative earns no more than 5 times as much as the theoretical minimum wage paid in his/her cooperative.

"In reality, this ratio is smaller because there are few Mondragon worker-owners that earn minimum wages, because most jobs are somewhat specialized and are classified at higher wage levels.

"The wage ratio of a cooperative is decided periodically by its worker-owners through a democratic vote."

Democracy

That doesn't sound very capitalistic, to me.

https://en.wikipedia.org/wiki/Mondragon_Corporation#Wage_regulation