Australia Will Always Choose The United States

https://www.abc.net.au/news/2020-07...ollision-course-lessons-from-history/12415316

This is a concern. But history never lies. Why is man so greedy for power?

 

China has this advantage: even if all her area neighbors who fear China band together in war against her, they would face problems of working together which would involve surrendering some power and sovereignty to a leader country, such as the US, for the purpose of coordinated action. China, meanwhile would be fighting as a monolithic force and have a jump start against a fragmented group of allies.

My solution to lessening the possibility of war would involve.much of the rest of the world banding together to reduce China's power and influence. This would entail transferring much of the wealth of the international financial elites back to.sovereign nations. The global financial cartel makes its money from a high level of trade and by pursuing the cheapest world labor, wherever that may be.

Some people express admiration for China for dramatically increasing the wealth of a huge number of people who were living in meager circumstances. Yet the real.situation is this: that huge number of people did NOT see a dramatic increase in wealth. That huge number of people went from being very, very poor to being only a slight bit less poor. If that were not so, China's advantage in cheap labor would not still exist because her supposedly more middle class swath of workers would no longer work for wages that offered nothing more than simple survival. The really cheapest labor would be elsewhere in the world.

If sovereign countries were to capitalize their own economies with native wealth instead of foreign wealth they could institute high tariffs against goods manufactured abroad. They could restore their own manufacturing and other production. This would cause a lower level of trade ( a good thing in this case) as each country would just be making more of what they need themselves. I maintain that a high level of trade is not a dependable source of real national wealth itself but that it mostly profits international finance.

These things would remove much of the attraction of the world's capital to to the very cheapest labor in the world, much reducing China's huge advantage in this.A caveat: China doesn't have to have the VERY cheapest source of labor in the world because their cheap labor is highly coordinated by the communist party and monopolistic national manufacturers. They don't compete with each other within their own boundaries as other countries do and so can still underbid production from most other countries.

I'm not an economist. These are just my best observations and guesses. I hope some of them make some kind of sense.

 

Good reply, John. I enjoyed it. Do you refer to yourself or consider yourself a libertarian? If so, you'd probably think me a radical socialist. We'd find much to differ with each other on in issues of economics and government.

Both of us disclaim being experts. However you seem to possess greater in-depth knowledge and detail of our own and China's recent economic history than I. I defer to you on many, though not all, of your points. Exactly which ones I'll detail in a later post because I'm a little tired now.

 

"Seeking the lowest rents happens within any system. That's where capital naturally flows. It happens within nations, and it happens between nations in our global economy. From a materialistic perspective, at least in this country, having goods available from the lowest cost producer has elevated the standard of living for people at every economic level. (Yup, it's been at a cost.) "

That is part of capitalistic dogma.. Of course, taken as an isolated factor it is true that anyone would seek the lowest price for anything but that doesn't reflect the realities of a system with many other factors operating.. The arguments refuting why this a universal good would take books to expound and can't be done by brief internet posts.

"Regarding China's continued status as the low-cost producer as evidence of continued repressed wages: I thought I read several years ago that China's "industrial revolution" spun through rather quickly, and that they were already outsourcing because their labor costs had gone up. Of course, China is a nation of nearly 1.5 billion people, so valid generalizations about the population don't exist. Again, memory serve that any workers from the rural areas migrated to the manufacturing centers, rather than having the jobs be regional (to further my "industrial revolution" analogy.)"

If you are right in that China began outsourcing labor relatively soon in their economic resurgence, then I stand partially corrected in my generalizations.

"I'm not certain that Protectionism is a net good. We bemoan the loss of manufacturing jobs, but there were way more factors other than cheap labor that caused the loss:
1- American workers' preference for service jobs when that sector arose
2-Declining education system that produces "graduates" who can neither read, rite, nor 'rithmatec
2a-At any given point in this nation, there are 500,000 vacancies in manufacturing do to a lack of literate candidates
2b-We recently hit record levels of unemployment (before COVID.) Where would these factory workers come from?
3-If each nation went into a protectionist mode and only manufactured for their peoples, prices would skyrocket due to strengths in respective currencies and the huge loss in economies of scale. All citizen's lifestyles would suffer.
3a-Competition is a net good. Protectionism kills choices, trashes quality, and makes us lazy. Russia is protectionist. All you have to do is walk through their meager markets or assess the quality of their products, and it's highly apparent there's no competition."

To concentrate on one thread.of your assertions ( not that I agree with all of the rest ), 1) Protectionism preserves the technology and skills needed to produce in a specialized arena. Otherwise. those skills might be lost to foreign producers who could then charge extortionate prices for their non-competively produced product..2) Even if protection resulted in higher prices for certain products, the overall effect of having the vast majority of people being productive as opposed to supporting a permanent idle class cannot help but increase the overall standard of living. 3) Russia's problems in this area are caused by lack of internal competition, not by a a lack of competition with other countries production. That exists but is not the major factor.

"I agree that global trade puts money in the hands of our enemies. But quite frankly, capitalism can (and does) do the same thing domestically. I personally believe that "keeping your friends close and your enemies closer" is a smart strategy. Being connected economically is a great tool of diplomacy and of national security, when it's properly managed. I think one reason China has amassed so much power is because it has been given to her by the "leaders" of other nations. In this case it's through "improperly managed" trade. But if such power were not transferred this way, it would be given through (or taken by) other means."

Agreed.

"Just as a side note, when we say "international financial elites" are a problem, I'm not certain I 100% agree. To the extent that markets are free and open (yeh, there's a long and depressing conversation), capital not only flows to where it's most efficiently and effectively used, we all have the means to invest and benefit."

Capital flows to its where it gets its greatest return but that is not necessarily where its most efficient and effective, unless you define .that efficiency as that which produces the greatest mass unemployment. In past centuries or decades investors expected and were satisfied with returns of 4 or 5% and were satisfied with that. Today international capital seeks enormous returns ( 15.-25%? ) suppressing the less rapacious returns of fundamental production within a country and sending that production to wherever in the world is found the poorest labor force.

John, we will certainly not resolve these issues here or probably do much to change each other's minds. Still, it is kind or fun to try.

 

That is my solution too. Reduce their power by bluntly ceasing to trade with them. The Commies have built their economic power by trading with the west and selling us their 'second class sweat shop' produce. Make them a pariah so they have to go it alone. Yes there are many western companies that do business in China and would be reluctant to dump the goose that lays the golden egg. But they must as Beijing will run ruffshod over smaller Asian countries if it retains its current power and influence. Specially those they see as recalcitrant over these disputed islands in the South China Sea and elsewhere. Australia is already looking at reducing China trade. We have to find alternatives such as South Korea, Japan and the emerging economic power India.

Good point and one I believe Australia is eyeing off. This trade level playing field has destroyed manufacturing in my country and I expect so in the States. Up till the mid to late 70s almost everything in Australian shops was made in Australia. We even exported far more than we do today as a result. Then this tariff-free trade system came into being and suddenly cheaper imports flooded onto our markets. We lost at least a half of all our manufacturing within a decade and with it thousands of jobs.

 

Craig, we have similar opinions on this. A libertarian would disagree with us. They believe all unprotected trade is universally good.

Dwight I am not a far leftie either. I only want what is best for the country I love and will defend. I hate it when I see it being trashed by whomever. I hate it when I see some trying to keep us in our colonial past and denying us a place in an exciting future.