The Deindustrialisation of the United States

The situation in which the United States currently finds itself – a lone superpower that lacks true power, a world leader nobody follows and few respect, and a nation drifting dangerously (Wallerstein 2003, 17).

One of the consequences of the supposed ‘end of the Cold War’ in eastern Europe and Russia has been the process of deindustrialisation. With the aggressive ‘shock therapy’ of the 1990s, industries in one country after another in that part of the world were bought up by western European companies and promptly shut down.

On the many occasions I have been in that part of the world, I have passed by former factories, now crumbling and overgrown. Even locals who have no sympathy for communism lament this deindustrialisation. As a consequence, there has been a re-agriculturalisation along with significant temporary or permanent immigration to other parts of the world as people seek work. If the country is large enough, like Russia, it has become a major exporter of raw materials. In Russia at least, there is vigorous debate as to what a re-industrialisation might look like and who would drive it.

But I have a bit slow in picking up that the United States has become increasingly deindustrialised in the last 30 years or so. I do not mean some ‘loss’ – more or less – of manufacturing to overseas locations, but wholesale deindustrialisation. It hit me only recently as I was reading some local Chinese news about the growing trade wars the United States is waging with nearly all countries in the world. As I looked more closely, I saw that the main items exported by the United States are in fact agricultural products. China has been until recently a major importer of soy beans, among other produce. To be sure, there are a few niche industries that continue, such as aircraft manufacture. But Boeing’s main focus is the production of military machines, so it receives significant government support. Further, China – to take one example – has mostly been buying from Airbus, so much so that Airbus has eclipsed Boeing as the leading manufacturer of domestic aircraft in the world. Another niche industry is in some areas of high-technology. Even this is fading, since more new breakthroughs happen in China than in the United States, and China is a net exporter of high-tech products.

There are many angles on this aspect of decline, more than I can mention here. One is the heavy focus in recent years on the ‘financialised market’ (which Marx already foresaw in the third volume of Capital). In this case, money apparently produces more money (M-M1), so much so that wealth is made through speculation and not through actually making anything much. For example, in the first decade of this century a third of manufacturing jobs disappeared, so that now less than ten percent of employment is in manufacture. Meanwhile, financialisation took hold in more and more areas. The catch is that the crucial mediating role of making commodities (M-C-M1) is either concealed or goes elsewhere. By contrast, the Chinese socialist market economy focuses clearly on production, having already been the world’s largest manufacturer for almost a decade. A major feature is significant infrastructure investment and construction. So sustained has this focus become that Chinese technology now outstrips that found elsewhere. No wonder Chinese bids for international projects are usually the best available – blocked occasionally by bumbling politicians elsewhere keen to make themselves look strong.

Another factor is the longer-term decline of the United States. In 2003, Immanuel Wallerstein published The Decline of American Power. It was written immediately in response to the successful attack on the World Trade Centre in 2001, but the idea runs further back. In fact, Wallerstein argues that it began with the defeat in Vietnam, in which the communists defeated the vastly superior United States armed forces. It was not even that someone dared to challenge that power, but that they did so successfully. The decline has been economic, ideological and political. At the time he published the book, many dismissed the suggestion that ‘the eagle has crash landed’, but since the Atlantic economic crisis of 2008, many have begun to take notice. Crucially, it is clear on this matter that Trump simply continues the trajectory since the first Bush presidency: a declining power never does so happily. Increasingly, it uses or threatens to use the only thing it has left: military power.

All of which brings me back to deindustrialisation. Not only is the United States becoming mainly a producer of primary materials, but it also has crumbling infrastructure. The cracks become wider, the worn machinery more and more dinted. The place is literally falling apart – materially, socially and politically. By comparison, even Pyongyang has been able to build a shiny new airport.

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Report on United States human rights abuses in 2017

The Information Office of the State Council in China has published its annual report on human rights abuses in the United States. You can find a full copy of the report here, and a news summary at Xinhua News. While the report details abuses of civil rights, systemic racial discrimination, increasing flaws in US-style democracy, and flagrant abuse of human rights in other countries, an underlying theme concerns the right to economic wellbeing (a basic principle of Chinese Marxist approaches to human rights).

On this note, the following points are relevant:

In December 2017, 52.3 million Americans lived in “economically distressed communities” and 18.5 million were living in deep poverty.

Of those living in poverty in the United States, there were about 13.3 million children – 18 percent of those under the age of 18. The U.S. Urban Institute statistics revealed that nearly 9 million children in the United States (11.8 percent of American children) would grow up in persistently poor families.

The average wealth for white families is seven times higher than average wealth for black families and that median white wealth is twelve times higher than median black wealth. More than one in four black households had zero or negative net worth.

Germany and China surpass the USA in global leadership approval

An interesting survey from Gallup, based on interviews and telephone conversations with 1,000 people in each country.

The result: the global approval of US leadership in 2017 dropped to 30%, behind Germany on 41% and China on 31%. Both Germany and China remained at the same level from the previous year, indicating stability.

Some graphs tell the story:

GL 01

Notably, Russia and the USA are quite close to one another. Now for the disapproval rating, which for the USA sits at 43%:

In the Americas it has shot up to 58%:

I am most intrigued by the last graph, which indicates how much the approval/disapproval rates have shifted in different parts of the globe:

 

In much of Europe, the Americas, central and southern Africa, south and south-eastern Asia (including Australia in this last group), it has plummeted, while parts of northern Africa, eastern Europe and Russia have seen an increase! Not sure it will make much difference in Russia.

However, the danger of such graphs is to enhance the idea that Trump’s USA is an anomaly, in contrast to the ‘golden age’ of Obama et al. All manner of concerted efforts are underway to generate this impression, whether blaming the Russians for meddling, questioning Trump’s mental stability, or indeed asserting that his election victory was the result of purely racist elements. Instead, Trump is merely a symptom of a much longer trajectory.

 

How to buy political influence in Australia

The normal way to do business in Australia is open the cheque book and start handing over dollops of money to politicians and political parties. Soon enough, decisions will go your way and you will make even more cash. Indeed, the vast majority of those who have made their millions and billions in Australian history have done so through the government.

But – and it is a big but – you have to be the ‘right’ sort of person. I usually don’t pay much attention to this corporate news source, but there is one economist – of the neo-classical sort – who has a sharp eye. Michael Pascoe is his name, and he has penned a piece called ‘There’s five rules in the business of buying influence‘. It arose in response to a kerfuffle, in the context of a wave of Sino-phobia, of Chinese influence – specifically the generous Huang Xiangmo who is currently deemed not the ‘right’ person by some (I admire him a lot) .

So Pascoe lists not only a few of the more egregious examples of earlier influence-buying by those deemed acceptable, but also offers the following rules:

1.   Hire lobbyists to do it at arm’s length. There’s a conga line of them waiting for your direct deposit, many of them recently ex-politicians and staffers, all with excellent access to power to push your case. For example, who do you think really formulates our tax policy?

2.   Use industry bodies.  They provide tax-deductable funding for absolutely political ends just when the government is threatening charities with the loss of tax-deductible status if they indulge in “political” (i.e. anti-government) activities.

The Minerals Council comes to mind, or the National Automotive Leasing & Salary Packaging Association – McMillan Shakespeare certainly didn’t like Labor’s policy of abolishing the novated lease lurk, but it was the NALSPA that donated the $250,000 to the Liberal Party. And Labor subsequently fell into line.

3.   China links. Try and not be a successful mainland Chinese with the somewhat inevitable relationships with the Chinese government. It’s perfectly fine to organise and push Israeli or American policy of dubious value to Australia, but not Chinese.

4.  The art of disguise. Adopt an anglicised name and have your PR people start referring to you as “Aussie” e.g. “Aussie Moe” Huang will work better than “Huang Xiangmo” – and you’ll be spared Australian newsreaders being unable to pronounce it.

Become a prominent supporter of such bodies as the American Australian Association and the Australia Israel Chamber of Commerce that ASIO is less likely to be bugging. And sponsor events that no politician can avoid and many will get taxpayers to fund attending – State of Origin, Melbourne Cup, Grand Prix, Grand Finals.

5. Be Rupert Murdoch, or at least own some prominent shock jocks.

Beware of European ‘foreign agents’

There seems to be some concern in Australia over foreign ‘soft power’ and spying, if not influencing social and political processes. Anyone working for, promoting or even speaking favourably about a foreign entity may soon have to register as a ‘foreign agent’. Apart from the problem that Australia has nothing really worth spying upon, the most obvious culprits as ‘foreign agents’ would have to be EU and European Studies Centres. They are directly funded by the EU and foster pro-EU positions. It means, for instance, that any serious assessment of matters such as Brexit find little room, or indeed the treatment of Greece. And it entails a good degree of Russophobia and even Sinophobia.

Liberalism Screws Your Mind

‘How do you deal with slavery in the ancient world?’ Someone asked the person who had just given a paper on class as a ‘reductionist’ category.

‘Well’, came the reply. ‘You need to consider the situation of each individual slave. One slave may be in the mines under brutal conditions, while another may be a slave in a wealthy household, or another may be a skilled artisan. Each individual situation is different, with many determining factors that need to be analysed. So it is not helpful to consider slaves as a class, which is a reductionist category …’

At this moment, I realised once again that liberalism really does mess with people’s minds. The presenter in question had skipped through a number of European philosophers such as Deleuze, Latour and Balibar, claiming some vaguely ‘Marxist’ credentials so as to show how even Marxism had given up on the ‘crude’ category of class. I was waiting to see Margaret Thatcher quoted as well: ‘there is no society’. With this conjuring trick, class had apparently disappeared.

Obviously, class was a real bogey for this person. It had to be fought off and denied any validity. The context of course was the return of class as a way of understanding and acting in the world. We can identify a a wide range of causes: the rise of a range of left-wing movements, even in bourgeois democracies (from Jeremy Corbyn to Bernie Sanders), the strength of angry forces on the right, the decline of the United States and the increasing strength of socialist China with a very different vision for the world. In this context, it should be no surprise that class had returned with a vigour not seen for a while, even in the fraying and disintegrating hegemony of Euro-American practice and thought. Thus, as a desperate rear-guard action, class must be denied any validity, even in the cocoon of intellectual inquiry. It is a ‘reductionist’ category, it is argued, slotting people arbitrarily into ‘boxes’ – standard rhetorical moves you will encounter again and again.

Let me give another example, again in discussions about ancient slavery. Now the emphasis was on manumission and freed persons. In slavery, it was argued, the promise of manumission held a powerful ideological force, ensuring that many slaves ‘behaved’ themselves so as to keep alive the possibility of manumission. And freed persons contributed greatly to ancient Roman society and economics.

Then came the question: ‘But why did the Roman ruling class still see them in terms of slavery?’ I would add that they also viewed peasants, under tenure or not, and even the later coloni (when all were tied to land rather than masters or landlords) in terms of slavery. The answer: you have to consider the individual situations of freed persons. Some became relatively rich and owned houses, while others ended up being poor day labourers. Their individual situations and status differed greatly … By now, the strategy should be obvious: negate class through a thousand qualifications in favour of the private individual. And one can even add a little bit of Max Weber, suggesting that status, if not Weber’s great love of the role a ‘free labour’ (conjured out of thin air), played a role.

This effort to deny class in the name of a pernicious liberalism has a number of levels, not least of which is denying class all round you (I was in the United States, believe it or not, where Trump was president and homeless people crowded the streets). But I would like to stress one point that is directly connected to the examples given: modern liberalism arose in the context of slavery. In other words, liberalism is based on a constitutive unfreedom, the exclusion of many from the category of the free and private individual. The first ideologues of liberalism were either slave owners or strong supporters of slavery. Think of the framers of the American Declaration of Independence, or Hugo Grotius, John Stuart Mill or John Locke.[1] Indeed, they saw what came to be called liberalism as a sober and reasonable position, so much so that abolitionists were regarded as fanatics and extremists who would tear society apart. All in the name of the private individual.

In other words, the power of liberalism is to deny and negate the exclusion and oppression at its heart. If you stress the complexity of each individual situation, class dissipates and you can get on with your individual life in blissful ignorance. Liberalism really does screw your mind.

[1] Tellingly, liberalism arose first and was strongest in three contexts: the revolution of the Dutch against Philip II of Spain (1655-1648), the Glorious Revolution in England (1688) and the American Revolution (1765-83). In each place, the slave trade provided the basis for wealth and power.

A U.S. Cultural Revolution?

I am completely out of things for a while, cycling more than 1,000 km across Germany on the Mittelland Route (d4). But I did notice this intriguing Chinese take on what is happening in the United States, with statues being torn down, violent skirmishes, etc. The People’s Daily notes that more and more people in China are seeing what is evolving as a ‘Cultural Revolution‘, understanding the term as a wave of anger, violence and chaos.