By Neville Bennett
There have been few periods in global economic history which are as dynamic as those presently shaking and formatting the world system.
The rapid decline of the West is creating a vacuum which the BRICs especially are moving into.
The West in 2007 produced about 55% of global GDP - it now produces only about 45%.
A telling fact is that for the first time emerging market IPOs have attracted more capital than those in industrialised country markets. Emerging markets will grow at about 6.5% while the “West” may reach 2.4%.
Usually a dominant but declining great power resists change by many pressures ranging from financial to political. Political pressures include building up allies and can involve conflict. The US presently seems too involved in the Middle East to confront China but there are signs of a trade war developing.
I think that globalisation is showing signs of wear and there could be rapid change into a world where each nation begins to take special measures to protect themselves.
This is happening in currency markets and has hindered further progress on the reduction of tariffs, especially in agriculture.
Feeling vulnerable
There are signs that many societies feel that some protection is needed against the uninhibited capital flows which, among other things, bring great volatility to foreign exchange markets. Bernard Hickey’s opinion piece is a brilliant example of an intellectual’s dilemma: a nationalist struggling with the consequences of globalisation.
Globalisation has depended on a sense of security.
With the US policing the world, as Britain did in the 19th century, nations and business could assume the continuation of peace, and the orderly working of institutions and markets.
Markets were the most important institution in the sense that nations and business could be certain that they could access resources world-wide at the going price and sell their goods and services on the same basis as most other nations/businesses. There were some anomalies but markets were improving and access was adequate for most nations’ needs. There were risks such as Russia closing its gas pipeline to Europe or renewed conflict in the Gulf disrupting oil supply. But these risks could be guarded against.
But China is a student of history and it knows that the West is in a position to strangle it, just as Japan in 1941 was strangled by the West freezing accounts and denying the sale of strategic materials.
There is too, a shortage of materials, best expressed as “peak oil” or “peak water”.
Commodity suppliers face rising costs as ore grades have declined. Food is also a problem as land for food is contracting as more industrial crops are grown for ethanol etc. More fertilizer is necessary, and climate change has increased the number of climate events which impact on food stocks and supply. There are reports this week that the Amazon is running dry and stocks of soy bean and coffee are not assured. Russia’s wheat crop has been scorched by the worst drought in history. India is very worried about food supply, and South Korea and Taiwan are leasing foreign land to guarantee production.
History's perspective
While I do not see history repeating itself, I am reminded of the 19th century transition from informal to formal empires and the race for control of resources.
Through the 1850-70’s the British and French tended to avoid colonies unless there was a pressing case. Except for strategic harbours and the like, they preferred to benefit from an “informal empire” where they controlled client state’s foreign relations, got trade access, safety for missionaries etc, and then reaped the advantages of trade, banking, insurance and services without the cost of administering a state. As allies in the 1850’s, they attacked both Russia and China to enforce their views.
Britain tried to force low tariffs universally, but matters changed when Germany and the US resisted. Germany demanded colonies too. There were few African colonies, save coastal enclaves in 1870; by 1885 it had been pegged out, and any gain was deeply resented by competitors. Imperial owners placed huge tariffs on their possessions and claimed advantages for themselves.
Some of that dog-eat-dog attitude is reviving.
Trade wars
Today, states are trying to lock up access to key resources.
The obvious push is by China which has made a vast number of contracts on oil and gas. The most significant move may be the construction of a pipeline from Russia to China. This is fascinating in geo-politics: old rivals are burying the hatchet and working to further self- interest by cooperation. China provides the capital and Russia the gas at a contract price. It lessens the threat of the US cutting China’s energy supplies by a blockade in the Malacca Strait.
It may be doing China an injustice to see all of its investments as strategic. A company which bought into Canterbury's Synlait also bought control of a British biscuit maker. The problem is that China is accumulating vast amounts of foreign exchange. For a long time it recirculated that cash through US bonds. Then the yield fell. China has better opportunities elsewhere. So it competes for Canadian potash or Australian iron whenever the resource comes into play. This is competitive; India is also trying to get long-term coking coal access, hence Adani investing US$4 billion in Queensland today.
I have been following the lithium story for some time: it is a deadly battle in which both China and Japan are somewhat insecure about getting regular supply of this essential ingredient in many batteries. I suspect the rare earth minerals war will really hot up. Japan is outraged that China has limited exports. Japan had made contract with Lynas for rare earth mineral supply, but it needs more. Where can it get it? Can it risk not being able to produce cutting-edge goods because of shortfalls in mineral supply? I think not.
Meanwhile, as I foreshadowed in my recent New Normal column, just about every country is trying to increase exports.
The fact the not everyone can win, does not prevent states doing all they can in order to impress their electorates. The Wall Street Journal said in a piece entitled "A fight to be weaker":
At least half a dozen countries are actively trying to push down the value of their currencies, the most high-profile of which is Japan, which is attempting to halt the rise of the yen after a 14% rise since May. ... To counter the yen's rise, Japan sold some $20 billion worth of its currency, which traders said was it’s biggest-ever effort in a single day.
The US has also embarked on a dangerous road. Its House of Representatives enthusiastically passed legislation condemning China’s foreign exchange practices. The measure allows the US to levy tariffs on China. The measures may not become law, but China has indignantly said the measures would breach World Trade Organisation rules.
Observers feel that a trade war would hurt US exporters. I think this reinforces a trend of US-China rivalry that could have serious implications
--------------------------------
* Neville Bennett was a long-time Senior Lecturer in History at the University of Canterbury, where he taught since 1971. His focus is economic history and markets. He is also a columnist for the NBR.
neville@bennetteconomics.com
www.bennetteconomics.com
27 Comments
Great essay Neville, the times they are a changing.
Here's an absolute must read on this from Michael Hudson:
America’s China Bashing: A Compendium of Junk EconomicsSample:
Wall Street’s idea of “equilibrium” is that if only foreign countries would commit financial suicide along the lines that the United States is doing, then global equilibrium could be restored. But the most successful economies have kept their FIRE-sector costs of living and doing business within reasonable bounds, and are not remotely as debt-leveraged as the United States. German workers pay only about 20% of their income for housing – about half the rate of their U.S. counterparts. German practice is not to make 100% mortgage loans, but to require down payments in the range of 30% such as still characterized the United States as recently as the 1980s.
The FIRE sector’s business plan has priced U.S. labor out of world markets. There seems little likelihood of making Chinese and German workers pay rents or mortgage interest as high as the United States? How can American economic strategists force them to raise the price of their college and university tuition so that they must take on the enormous student loans of the magnitude that Americans have to take on? How can they be persuaded to follow the high-cost U.S. practice of adding FICA-type wage withholding to the cost of living to save up pensions, Social Security and medical insurance in advance, instead of the pay-as-you-go basis that Germany quite rightly follows?
Such suggestions are a cover story for America’s own financial mismanagement. The U.S. idea for global equilibrium is to demand that that the rest of the world follow suit in adopting the short-term time frame typical of banks and hedge funds whose business plan is to make money purely from financial maneuvering, not long-term capital investment. Debt creation and the shift of economic planning to Wall Street and similar global financial centers is confused with “wealth creation,” as if it were what Adam Smith was talking about.
http://michael-hudson.com/2010/09/america%E2%80%99s-china-bashing-a-compendium-of-junk-economics/Great article, definitely a must read.
Michael Hudson also says in another article that the gold window was closed in 1971 as a result of the French banks accumulating US$ as a result of the Vietnam war.
"To pretend that China is “manipulating its currency” by doing what central banks have done for over a century is Junk Economics Error #2. Back in the early 1970s, U.S. officials told OPEC governments that if they did not do this, it would be deemed an act of war.) This recycling of foreign balance-of-payments surpluses to finance the U.S. federal budget deficit (by buying Treasury securities) is the essence of the U.S. Treasury-bill standard since 1971. "
And then combine this information with what FOA and FOFOA are saying, but getting through their writing is a bit of a mission.
I think the world is experiencing "Hidden Wars" of unprecedented magnitude already - wars on many fronts, which have literally the potential to destroy most everything.
http://www.guardian.co.uk/technology/2010/sep/30/stuxnet-worm-new-era-global-cyberwar
http://computerworld.co.nz/news.nsf/security/is-stuxnet-an-israeli-invented-attack-against-iran
Excellent article Neville. Its all there.. its a shame that we as a Generation that have had a great ride..are watching the glow behind the doors of Hell as they creak ever wider,its really quite ironic..It needn't have been so..We could have controlled our populations to take the pressures of off resources,we could have done a dozen things.We still could, but i fear the investment in weapon assets will probably be the next share cashed.It always was an option in "The Millitary industrial complex" When a way of life comes under attack.
While the World is changing, so is New Zealand; But by stealth !- read this, it is bad, going forward.
Muriel,
a Member of Parliament for ACT New Zealand from 1996-2005.
Yet another so called "think tank" in reality anotehr thinly discuised far right wing politcal drivel...talking shop.
I have a rule of rule of thumb, anything like this posted on such sites of rightards is good to vote against as it would probably benefit 97% of NZers instead of 3%.
regards
"While I do not see history repeating itself, I am reminded of the 19th century transition......"
We have seen this transition with shift in powers for the last 3000 yrs...Sry Neville, for the 1st time I have to disagree with you....From where I stand, History is repeating...
1 small example is after the '29 crash, things got a bit tough, but the actual depression did not start till around 1933, and was basically caused by protectionism, tariffs and printing money...hitting 3 to 4 yrs after the crisis.
Where are we at now? 2 1/2 3 yrs after the 'big bang' ?
Gong back to the 1870s crash, the change in power, the drawn out recession, and the intermittent manoeuvring, causing on going Depressions right up into the 1890s.
What was the difference between the 1870/90s and the 1929/40 periods? An unprecedented world war...well 2 major interrelated wars on each side of the world at the same time.....If history does repeat, which way will the World go, the long drawn out international manoeuvring of the 1800s or the short brief period of the 1930s.....and if the short breif...then something has to step in such as a world war OR something just as dramatic we have yet to conceive of what it will be.
Once again Neville a great article full of objective common sense.
Sorry guy's I had trouble with the link
The Neoliberal Experiment and Europe's anti-Austerity Strikes:
Governments must Lower Wages or Suffer Financial Blackmail
By Michael Hudson
October 01, 2010 "Information Clearing House" - While Labor Unions celebrate Anti-Austerity Day in Europe, the European Neoliberals raise the ante:
Most of the press has described Wednesday's European-wide labor demonstrations and strikes across in terms of the familiar exercise by transport workers irritating travelers with work slowdowns, and large throngs letting off steam by setting fires. But the story goes much deeper than merely a reaction against unemployment and economic recession conditions. At issue are proposals to drastically change the laws and structures of how European society will function for the next generation. If the anti-labor forces succeed, they will break up Europe, destroy the internal market, and render that continent a backwater. This is how serious the financial coup d'etat has become. And it is going to get much worse - quickly. As John Monks, head of the European Trade Union Confederation, put it: "This is the start of the fight, not the end."
Spain has received most of the attention, thanks to its ten-million strong turnout (reportedly half the entire labor force). Holding its first general strike since 2002, Spanish labor protested against its socialist government using the bank crisis (stemming from bad real estate loans and negative mortgage equity, not high labor costs) as an opportunity to change the laws to enable companies and government bodies to fire workers at will, and to scale back their pensions and public social spending in order to pay the banks more. Portugal is doing the same, and it looks like Ireland will follow suit - all this in the countries whose banks have been the most irresponsible lenders. The bankers are demanding that they rebuild their loan reserves at labor's expense, just as in President Obama's program here in the United States but without the sanctimonious pretenses.
The problem is Europe-wide and indeed centered in the European Union capital in Brussels. This is why the major protests were staged there. On the same day that the strikers demonstrated, the neoliberal European Commission (EC) outlined a full-fledged war against labor. Fifty to a hundred thousand workers gathered to protest the proposed transformation of social rules by the most anti-labor campaign since the 1930s - even more extreme than the Third World austerity plans imposed by the IMF and World Bank in times past.
The neoliberals are fully in control of the bureaucracy, and they are reviving Margaret Thatcher's slogan, TINA: There Is No Alternative. But there is, of course. In the small Baltic economies, pro-labor parties have made it clear that the alternative to government shrinkage is to simply repeal the debts, withdraw from the Euro and break the banks. It is either the banks or labor - and Europe has just realized that this is truly a fight to the economic death. And the first test will come this Saturday, when Latvia holds its national parliamentary elections.
The EC is using the mortgage banking crisis - and the needless prohibition against central banks monetizing the government budget deficit - as an opportunity to fine governments and even drive them bankrupt if they do not agree roll back public-sector salaries. Governments are told to borrow at interest from the banks, rather than raising revenue by taxing them as they have done for half-a century following the end of World War II. And if governments are unable to raise the money to pay the interest, they must close down their social programs. And if this close-down shrinks the economy - and hence, government tax revenues - even more, then the government must shut down even more social spending.
From Brussels to Latvia, neoliberal planners have expressed the hope is that lower public salaries will spread to the private sector as well. The aim is to shrink their economies to roll back wage levels by 30 percent or more - depression-style levels - in the belief that this will "leave more surplus" available to pay in debt service. Governments are to tax labor - not finance, insurance or real estate (FIRE), but to impose new employment and sales taxes while cutting back public pensions and public spending. Europe is to be turned into a banana republic.
This requires dictatorship, and the European Central Bank (ECB) has assumed this power from elected government. It is "independent" of political control - celebrated as the "hallmark of democracy" by today's new financial oligarchy. But as Plato's dialogues explained it, what is oligarchy but the political stage following democracy. We can now await the new power elite making itself hereditary - by abolishing estate taxes, for starters - and turning itself into an outright aristocracy. "Join the fight against labor, or we will destroy you," the EC is telling governments.
One can therefore forget the economics of Adam Smith, John Stuart Mill and the Progressive Era, forget Keynes and forget the early 20th-century social democratic traditions. Europe is entering an era either of totalitarian neoliberal rule. This was inevitable since the Chilean dress rehearsal after 1973. After all, one cannot have "free markets" neoliberal style without totalitarian control. This is what Wednesday's strikes and demonstrations were about, after all. Europe's class war is back in business - with a vengeance!
This is economic suicide, but the EU is sticking to its demand that Euro-zone governments keep their budget deficits below 3% of GDP - and their total debt below 60% of GDP. They must not raise taxes on the wealthy, but only on labor and what it buys (via sales taxes). Yet at the same time they must slash wages and pensions, cut back public spending and employment, and shrink the economy.
When an economic problem is as economically destructive as this, it can only be imposed by economic blackmail. On Wednesday the EU passed a law to fine governments up to 0.2% of GDP for not "fixing" their budget deficits by imposing fiscal austerity. Nations that borrow to engage in countercyclical "Keynesian-style" spending that raises their public debt level 60% of GDP will have to reduce the excess by 5% each year - or else suffer harsh punishment. And unlike central banks elsewhere in the world, Europe's central bank is forbidden from monetizing public-sector governments. These governments must borrow from banks, letting these institutions create their own interest-bearing debt on their own keyboards rather than having their own central bank do it without the cost. The financial privatization and monopoly in credit creation that governments have relinquished to banks is now being made to pay off - at the price of breaking up Europe.
The unelected members of the European Central Bank (ECB, independent from democratic politics, not from control by its commercial bank members) has taken over planning power from elected government. Beholden to its constituency, the financial sector, the ECB has had little trouble in convincing the EU commission to back the new oligarchic power grab. It threatens to fine euro-area states up to 0.1% of their GDP for failure to obey its neoliberal recommendations - ostensibly to "correct" these imbalances. But the reality, of course, is that every neoliberal "cure" only makes matters worse.
Rather than seeing rising wage levels and living standards as a precondition for higher labor productivity, the EU commission will "monitor" labor costs on the assumption that rising wages impair competitiveness rather than raise it. The broad spectrum of neoliberal junk economics is being brought to bear. If members of the euro cannot depreciate their currencies, then they must fight labor - but not tax real estate, finance or other rentier sectors, not regulate monopolies, and not provide public services that can be privatized at much higher costs. Privatization is not deemed to impair competitiveness - only rising wages, regardless of productivity considerations.
This economically destructive policy has been tested above all in the Baltics, using countries such as Latvia as guinea pigs to see how far labor can be depressed before it reacts politically. Latvia gave free reign to neoliberal policies by imposing flat taxes of 51% on employees, while real estate is taxed at only 1%. Public-sector wages have been reduced by 30%. Labor of working age (20 to 35 year-olds) are emigrating in droves. Lifespans are shortening. Disease rates are rising. The internal market is shrinking, and so is Europe's population - as it did in the 1930s, when the "population problem" was a plunge in fertility and birth rates (above all in France). That is what happens in economic depressions.
Iceland's looting by its bankers came first, but the big news was Greece. When that nation entered its current fiscal crisis, European Union officials recommended that it emulate Latvia, which stands as the poster child for neoliberal economic devastation. The basic theory is that inasmuch as members of the euro cannot devalue their currency, they must resort to "internal devaluation": slashing wages, pensions and social spending. So while Europe enters recession it is following precisely the opposite of Keynesian policy. It is reducing wages, ostensibly to "free" more income available to pay the enormous debts that Europeans have taken on to buy their homes, to pay for schooling (hitherto provided freely in many countries such as Latvia's Stockholm School of Economics), transportation and other public services that have been privatized (at sharply, drastically increased rates - which the privatizers justify by pointing to the enormously bloated financial fees they had to pay their bankers and underwriters to buy the infrastructure being sold off by governments that the neoliberals blocked from taxing the wealthy).
The result is economic shrinkage. Europe is creating economic suicide - and demographic and fiscal suicide too. Every attempt to "solve" the problem of this shrinkage, neoliberal style, only makes things worse.
Latvia's public-sector workers have seen their wages cut by 30 percent over the past year, and its central bankers have told me that they are seeking further cuts, in the hope that this will lower wages in the private sector as well. What these cuts are doing, hardly by surprise, is spurring emigration - and also is destroying the real estate market, leading to defaults, foreclosures and a flight of debtors from the country. The emigration is headed by younger workers seeking employment in the shrinking economy. Indeed, Latvia's working conditions also happen to be Europe's most neoliberalized, that is, dangerous, unpleasant and almost neofeudal.
For starters in yesterday's Action Day, there was the usual stoppage of transportation and an accompanying honk concert in Latvia's capital city of Riga for 10 minutes at 1 PM to let the public know that something was indeed happening. What is happening most importantly is the national parliamentary elections this Saturday (October 2), where the leading coalition, Harmony Center, is pledged to enact an alternative tax system and economic policy to the neoliberal policies that have reduced labor's wages and workplace standards so sharply - along with public infrastructure - over the past decade.
Altogether about 10,000 Latvians attended protest meetings, from the capital in Riga to smaller cities as part of the "Journey into the Crisis." Six independent trade unions and the Harmony Center organized a protest meeting in Riga's Esplanade Park that drew 700 to 800 demonstrators, relatively large for so small a city. Another union protest saw about half that number gather at the Cabinet of Ministers where Latvia's austerity program has been planned and carried out.
To highlight the economic issue, a bus tour drove journalists to the victims - schools and hospitals that had been closed down, government buildings whose employees had seen their salaries slashed and the workforce downsized. Crowds were reported to gather, re-igniting the anger expressed early last year in the cold of mid-January when Latvians had demonstrated to protest the start of these cuts.
These demonstrations seem to have gained voter sympathy for the more militant unions, headed by the hundred individual unions belonging to the Independent Trade Union Association. The other union group - the Free Trade Unions (LBAS) lost face by acquiescing in June 2009 to the government's proposed 10% pension cuts (and indeed, 70% for working pensioners). Latvia's constitutional court was sufficiently independent to overrule these drastic cuts last December. And if the government does indeed change this Saturday, the conflict between the Neoliberal Revolution and the past few centuries of classical progressive reform will be made clear.
The Neoliberal Revolution seeks to achieve in Europe what has been achieved in the United States since 1979, when real wages stopped rising. The aim is to double the relative share of wealth enjoyed by the richest 1%. This involves reduce the population to poverty, breaking union power, and destroying the internal market as a precondition for blaming all this on "Mr. Market," presumably inexorable forces beyond politics, purely "objective" rather than a political power grab.
It is not really "the market" that is promoting this destructive economic austerity, of course. Latvia's Harmony Center shows that there is a much easier way to cut the cost of labor in half than by reducing its wages: Simply shift the tax burden off labor onto real estate and monopolies (especially privatized infrastructure). This will leave less of the economic surplus to be capitalized into bank loans, lowering the price of housing accordingly (the major factor in labor's cost of living), as well as the price of public services (by having owners take their returns as a return on equity rather than factoring interest charges into their cost of doing business). The tax deductibility of interest will be repealed - there is nothing intrinsically "market dictated" by this fiscal subsidy for debt leveraging.
No doubt many post-Soviet economies will find themselves obliged to withdraw from the euro area rather than see a flight of labor and capital. They remain the most extreme example of the Neoliberal Experiment to see how far a population can have its living standards slashed before it rebels.
© Copyright Michael Hudson, Global Research, 2010
Interesting.......indeed repealing the debt is an interesting concept....not an un-expected one....of course quite a bit of that debt was created by the ppl who now want to cancel it...created by the services they wanted but were not prepared to pay for via tax....or the debt they took on gambling to make money on housing.....they should get real....they are not blameless.
regards
The modern democratic world is now so decadent, austerity is politically impossible. We will all borrow and spend until we crash. After that, who knows?
I agree with Steptoe, as I read down the comments, I was waiting for someone to raise the issue of war and defence. NZ is just plain nuts to have wound its defence down so far, and insulted its main powerful ally so comprehensively.
It is illustrative of how irrational we are, that we want a small population and low immigration, and want to conserve our land space and our resources while the rest of the world runs out of them - yet we are worse than "doves" on defence, we are ostriches.
Contemplated and discarded, Philbest..
A nation of 4 million - let me guess, your twisted philosophy probably thinks that we would be better with 400 million - cannot defend against a determined China.
The best example of a resourceful, intelligent defence on home ground with advantage, would be Finland in WW11. It's worthy of a lot of homework - they did incredibly well, but they lost.
The main scrap will be between China and the US, an a study of who was going to sign with Iraq before the US invasion, makes interesting reading.
Seems to me, though, that in your unlimited world, there would be no scrap over resources.... seens to me too, that folk arguing as you have done on this site, have done nothing to change that 'politically impossible' situation.
A 'last nation standing' scrap over resources leaves no winners, educating for power-down and polulation-down is the only valid way.
It is probably too late now, and we will probably fail, but that doesn't alter the 'rightness' of the action
The US is ally to no one but itself....better not to have any illusions....Iraq was for oil.....lots of other countries in say Africa that the US would be even more justified in peace keeping....except there is no oil.
In terms of defence, even if we went from 3 frigates to say 20....the other said say china would overwelme those just as surely just a few more casulties for them, a non-event......ditto aircraft....sure have 300 NZ fighters, China mounts thousands....
Therefore an expensive defence makes no economic or strategic sense against a serious foe.....at best its useful as an armed "police".......which is what its sized to do.
If a country invades what do they get? some ur farming land.....they then have to farm it and ship the food back.....
Study the history(s) of trying to hold down ab un-cooperative population by invasion....plus the rise of fuel oil is making that un-economic...
regards
Steven – to prepare NZ for war - first we need a big sandbox and hundred’s, maybe thousand’s of tin soldiers in which we can simulate a war - a few model tanks, helicopters and war ships. We can buy some uniforms in second hand shops to be ready for it. In an old box I still got some antique jumping jacks, different coloured moustaches and a grey cigar. http://www.youtube.com/watch?v=SA8qvEbidcU
The world is changing for ever - even ( serious) wars are very different - one drop - one press - already happening - who ever knew ??? - gone !
This is a 'must read'......: http://www.marketoracle.co.uk/Article23125.html
Are we any different down here?
Hmmmmmm....an interesting comment below.......especially when it is by no means certain that the 'rest' will grow at 1.5%!.......or that China will not have growth pains.
"Meanwhile, let’s keep some perspective, shall we? The COMBINED GDP of China, India, Taiwan, Korea, Vietnam and Brazil total just 15% of the World’s GDP. If 15% of the world grows at 8% and the rest of the world grows at 1.5%, what is the total global growth? Well 8% of 15% is 1.2% and 1.5% of 85% is 1.27%. A total global growth rate of 2.47% is simply not enough to sustain $3.70 copper and $80 oil… Speculators, fortunately for the commodity pushers, cannot do complex math like that – they just hear the words “China” and “growth” and they begin to foam at the mouth and throw all their dollars at shiny bits of metal and black sticky goo"
Or this Wolly:
"Rather than being the new leader of the global economy, China is the bag-holder in global Capitalism's last 'fix": exploitation passed off as globalization"
"From a more clear-eyed perspective, China has been colonized by advanced economies to lower the cost of production and to establish a dumping ground for environmentally unsound production which their domestic citizenry will no longer tolerate. As with all colonies, the profits are extracted and sent elsewhere while apologists are hired to tout the glories of employment for China's teeming millions."
"Now that China's stupendous production capacity exceeds the potential demand of the entire world, including its own mostly impoverished domestic populace, then capital is fleeing China in its usual pursuit of higher returns, leaving behind tens of millions of unemployed workers and a toxic landscape."
"Yet the reality is not so happy-happy: only economies with locally owned productive capacity such as Japan and Korea become wealthy economies. Those former colonies where foreign capital dominates the productive capacity and commodity extraction are in essence still exploited colonies." (He talking about us here in NZ?)
From last year, first class as always from Charles Hugh Smith.
http://www.oftwominds.com/blogjune09/globalization06-09.html
Yes, an interesting essay KiwiDave.....perhaps the endgame for the 'capitalists' is to extend the 'use by' concept....regulate a terminal date on goods forcing users to update all electrical stuff on the grounds that more efficient crap saves energy....the same will be true for vehicles and is already part of Japanese culture otherwise our supply of used cars etc would not exist. Extend this concept into clothing, with cotton garments designed to decay after 2 years....synthetic after one and shoes with glue that craps out after 6 months...oh we already have that.
Houses could come with regulated update and councils would swarm with teams of property reno inspectors...owners forced to spend or be fined! That kitchen foil thick steel roof is only good for ten years....the cladding will dissolve after 15 and the plumbing rupture after 20.
If new whiteware did indeed save energy, then regular updates would be good. Clapped out cars on the road can be recycled. Who would say no. About the only stuff not fitting into the 'big brother' controlling system would be gold and silver. Even the productive vines could be under a time limit. Rhubard pine plantations ordered cut by Law. Bridges blown up and rebuilt every 50 years...a good idea yes!
"That really buggers Hollywood don't it!" You should visit this page: http://en.wikipedia.org/wiki/Firefly_(TV_series)
Try the following links for some contraversial perspectivies from experts like Johan Galtung, Ross Garnaut and Peter Schiff:
http://www.youtube.com/watch?v=NjTtQLUOHcw&feature=related
http://www.youtube.com/watch?v=SfcoNlhxRow
http://www.asialink.unimelb.edu.au/video/politics/test8
http://www.youtube.com/watch?v=Y_OHRJK8xFk
This link relates to an innovative public transport system from China. May be something for Auckland to think about.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.