0:10

Welcome, friends, to another edition of

0:12

Economic Update, a weekly program devoted

0:14

to the economic dimensions of our

0:17

lives and those of our children.

0:19

I'm your host, Richard Wolff. Okay,

0:23

why am I devoting this program

0:25

to China? Is

0:27

it because China is extremely important in

0:29

the world today, partly? Is

0:32

it because China is kind of the

0:34

new thing changing the world today? Yep,

0:37

that's another part of it. Is

0:40

it because China is poorly understood,

0:42

particularly in the United States, but

0:44

in the West generally? Yes, yet

0:46

that's yet another reason. China

0:50

is changing and shaking the

0:52

world in ways that are

0:54

going to be central to

0:56

our experience for

0:58

the foreseeable future. It

1:01

deserves a great deal more attention

1:03

than it's getting, or to

1:05

be a bit more precise, it deserves

1:08

attention that is balanced, that

1:10

is trying to understand what's

1:12

going on, and that

1:14

is not propagandistic, painting

1:17

them bad so that we in

1:19

the West look better by comparison.

1:22

It's a childish game, it's dangerous,

1:24

and it's not what we're here

1:26

to do. What we're

1:28

trying to do is get an overview

1:30

that makes some sense, whether

1:33

you then end up supporting

1:35

China, criticizing China, or some

1:37

mixture that's left to you.

1:41

Okay, first of

1:43

all, let's begin by saying it

1:45

really is a phenomena what China

1:47

has done. It

1:50

deserves everyone's awesome

1:53

recognition of

1:55

that fact. What do I mean? Well,

1:58

it's the greatest story of

2:01

economic growth that we

2:03

probably have in the history of

2:05

the human race. Here

2:08

was a country over the last 70

2:10

years, the largest

2:13

by population in the world,

2:17

with well over a billion and approaching

2:19

a billion and a half people, in

2:23

unspeakable poverty, as

2:25

little as 70 years ago, one

2:28

of the great horror stories of

2:30

poverty in the world. And in

2:32

those 70 years, this

2:35

country has raised a billion

2:38

or more of those people

2:41

out of abject poverty and

2:44

into the modern world. With

2:47

that sized population, that's never

2:49

been done before. If

2:52

you take all of Europe together,

2:55

which is a quarter of

2:57

the population of China, it

3:00

took them two to three hundred years

3:02

to do something comparable to

3:05

the economic growth record of

3:07

China in 70 years. It

3:11

is extraordinary.

3:14

Many other features of China are

3:16

less extraordinary. There are good things

3:18

and bad things one can say

3:20

about it. No one is

3:22

denying that. But when

3:24

it comes to economic growth, to

3:27

escape from poverty, to

3:30

produce a modern economic

3:33

reality in terms of

3:35

the production and distribution of goods

3:37

and services, that

3:40

goal, which is

3:42

the major goal of most

3:44

people on this planet and

3:47

has been for the last

3:49

70 years, there's one

3:52

outstanding performer and

3:54

no one else comes close.

3:58

That's the People's Republic. China.

4:01

And whatever else you may

4:03

think about or decide about

4:05

this society, pretending that

4:08

what I just said isn't the case

4:10

is not going to make your understanding

4:12

one with better. It's going to make

4:14

it worse. And how

4:16

is it different and unique in still other

4:18

ways? Well, it's

4:21

not like the competition,

4:23

for example, that the United

4:25

States has with other capitalist

4:27

countries. We are now

4:29

competing with China, we in the

4:32

United States. Western Europe

4:34

and the United States, on

4:36

one hand, China and its

4:38

allies, the so-called BRICS on

4:40

the other, these are the

4:42

two great competing blocks. And

4:44

I mean really competing. China

4:47

out produces the United States

4:49

in many commodities. China

4:52

has achieved levels of

4:54

technological sophistication with which

4:56

the United States really has to struggle to

4:58

keep up. That's why

5:01

President Biden is throwing money

5:03

at semiconductor chip producers.

5:05

That's why we have a

5:07

27.5% tariff against

5:10

the Chinese electric vehicles, because

5:13

they are the dominant electric

5:15

vehicles being produced in the

5:17

world today in terms of

5:19

quality and price. So

5:22

there's stiff competition. But it's

5:24

unlike anything the United States

5:26

has before, because before

5:28

our competition was in other capitalist

5:31

countries. Britain, France, Germany,

5:34

Italy, Japan. Now

5:37

the competition is

5:39

with a society that

5:41

doesn't call itself capitalist, that

5:43

calls itself socialist, that has

5:45

an enormous role for the

5:48

government, and one for a

5:50

communist party that is clearly

5:52

in charge. That's

5:54

new. That's different. That's

5:57

going to produce different outcomes. It's

6:00

also a competition not like

6:02

the one the United States had with the

6:04

Soviet Union. Why? Because

6:06

China has, for most

6:09

of the period of the last 70 years,

6:12

now for more than half of it,

6:15

openly welcomed capitalist

6:18

enterprises to develop

6:20

inside China, both

6:23

those owned and operated

6:25

by Chinese individuals, private,

6:28

capitalist enterprises, and

6:30

those brought over from Western

6:32

Europe, Japan, the United States.

6:36

There is a private sector, roughly

6:39

half the economy, and there is

6:41

a state sector, the other half.

6:44

This is unlike anything that existed

6:46

in the relationship between the United

6:48

States and the Soviet Union. So

6:52

you have a peculiar relationship

6:56

there's really more collaboration between

6:58

the United States and

7:01

China than there ever was economically

7:03

between the United States and the

7:05

Soviet Union. But

7:07

there's also economic competition

7:10

much more profound than existed

7:12

between the United States and

7:15

the Soviet Union. In

7:17

other words, the Chinese experience,

7:21

especially in its relationship to

7:23

the United States and to

7:25

the larger private capitalist world

7:28

of Western Europe, North America, and

7:30

Japan, is unique in

7:32

many, many ways. And

7:35

that has to be understood given

7:37

that China is now the second

7:40

most developed and powerful

7:42

influence on the world economy

7:45

and might very well before the end

7:47

of this decade be the

7:49

number one shaper of

7:52

world economic events. To

7:55

Get us to understand

7:57

this extraordinary achievement, And

8:00

is extraordinary reality that we live

8:02

in. As always we

8:04

need to do some history.

8:07

And. The history I'm gonna be doing with

8:09

you briefly. In. The rest

8:11

of the first half of

8:13

today's program is designed to

8:15

get a sense to understand

8:17

the economics and politics of

8:19

China Said. using.

8:22

Thing deterrent leader in China

8:24

speaks of a hundred years

8:26

of humiliation. Roughly. Eighteen

8:28

sixties Or Nineteen Fifty, a

8:31

hundred years during which China.

8:34

Sells. Itself to the

8:36

then and now humiliate.

8:39

As. Western countries. Particularly.

8:43

Took. Over bits and pieces

8:45

of china. Fighting.

8:47

Wars. taking

8:50

over cities, And.

8:53

Plunging the society. Into.

8:56

Levels Of Poverty. Much.

8:58

Greater than what they had seen before.

9:01

On. The other hand, there never

9:03

was a full colonialism. China

9:06

kept its independence, unlike

9:08

India, Indonesia, on most

9:10

of Africa, and so

9:13

on. So. You have

9:15

a mixture of humiliation and

9:17

independence. There. Were never

9:19

settler colonists. Know

9:21

European settled in to large

9:23

parts of China. Yeah, they

9:26

had places in cities along

9:28

the coast, but they never

9:30

took over the country the

9:32

way for example, they did

9:34

in South Africa or New

9:37

Zealand, or Australia or the

9:39

United States or Canada. And

9:41

I could go on. More.

9:44

Modern. Once the

9:46

twentieth century game. Too.

9:48

Terribly interesting things happen almost at

9:51

the same time. A

9:53

Final Wars defeating the Chinese

9:56

known as the Boxer Rebellion.

9:59

Saw. The Euro. In, you come

10:01

together to deal a pretty devastating

10:03

blow. And to show that

10:05

they were the dominant power even

10:08

if they didn't settle into a

10:10

colonial relationship. And

10:12

not so surprisingly. Very.

10:14

Few years after the Soviet Revolution

10:17

in China, A in Russia, excuse

10:19

me, And and nineteen seventeen a

10:21

few years after that. Chinese

10:24

do a revolution to

10:26

Chinese Communists inspired in

10:29

part by the Russian

10:31

Revolution. Begin. The

10:33

Long March. Begin.

10:35

The movement led by Mile. That.

10:38

Would eventually in nineteen

10:40

Forty nine. Lead

10:43

to the victory of the

10:45

communist Party and it's army.

10:47

Over the. Friendly.

10:50

To the west. Army of Chiang

10:52

Kai Shek. The little

10:55

bit of capitalism that had been

10:57

implanted. In China

10:59

after the box revolution by

11:01

the Western Powers. Who.

11:03

Apparently hold over the

11:06

long run to develop

11:08

a more complacent, subordinated

11:10

capitalism in China. Their.

11:12

Plans were defeated. A

11:15

Civil war brought the Communists

11:17

to victory in Nineteen Forty

11:19

Nine. They. Were an

11:21

alliance with the Soviet Union from

11:23

nineteen Forty Nine two around nineteen

11:26

sixties than the Soviet Union and

11:28

China split. With. Peter

11:31

difficult even occasionally

11:33

military conflict between

11:35

them. The

11:38

Chinese then undertook. A.

11:40

Development of their own.

11:42

Different from. The.

11:44

Soviets in Russia. Yes,

11:48

Socialism as many

11:50

forms. And for the

11:52

last. Sixty. Years.

11:56

china has gone it's

11:58

own way to produce

12:00

it's own did distinctive

12:02

version of socialism or

12:04

communism, depending on which word

12:07

you think fits better. And

12:09

it's in these last 60 years, and

12:11

particularly in the last 40 or

12:14

so, that the

12:16

achievements with which I began

12:18

today's program were

12:21

made. It

12:23

became a powerful country. It

12:26

became a socialism with

12:28

Chinese characteristics. I'm

12:31

about to go in them as soon as

12:33

we go to the second half of today's

12:35

program. But I want to stress

12:38

that it was against the

12:40

humiliation of those hundred

12:42

years that the

12:44

Chinese undertook to

12:47

prioritize becoming once

12:49

again the unhumiliatable,

12:53

powerful enough, rich

12:55

enough, productive enough

12:58

to not be humiliated by the

13:00

West again. That

13:03

is their central theme, and

13:06

that they have achieved.

13:09

Stay with us. We'll be right

13:11

back for the economics and

13:13

politics of this phenomena

13:16

of China. Welcome

13:27

back, friends, to the second half

13:29

of today's economic update. We're

13:32

talking today about the phenomena of

13:34

China. We did some

13:36

overview. We did some history. And

13:38

now we're going to turn to

13:40

the economics and the politics of

13:43

this remarkable phenomena. First,

13:45

the economics of the last 30 to 40

13:47

years. Economic

13:50

growth has been nothing short

13:52

of stupendous. If we

13:55

use the measure known as

13:57

GDP, Gross Domestic Product, a

13:59

rough measure of the total output of

14:02

goods and services in a year.

14:04

Then for most of the last 25 years, if

14:08

you rank the countries of the

14:10

world according to how much they

14:13

were able to grow their total

14:15

output, to grow the wealth

14:18

they were able to produce, then

14:20

number one on that list year

14:23

in and year out was

14:26

the People's Republic of China. No

14:28

one else has a record even

14:31

close to that. Remarkable as

14:33

the last few years are

14:35

of economic development in India

14:38

in terms of the long flow of years,

14:42

not close to what the

14:44

Chinese did. And let me

14:46

be clear, it's not just that the growth

14:48

of output is number one.

14:51

Raising the average wage

14:53

of their people was

14:55

equally stupendous. It's

14:57

gone up between four and

14:59

five times in

15:03

40 years. Let me

15:05

compare that with the United States's

15:07

level of wages, real

15:09

wages we call them, adjusted for

15:11

prices, where the

15:14

Chinese quadrupled or better

15:16

the wages people actually got, the

15:19

real wage of goods and

15:21

services they could consume. The

15:23

real wage in the United States went

15:26

up, I don't know, 10 to 20 percent,

15:29

four to five hundred percent in China, 10

15:32

to 20 percent. Again, understand,

15:34

not even close. If

15:36

you want to understand the

15:38

satisfaction of the Chinese working

15:41

class with its experience, there

15:44

it is, a level

15:46

of economic well-being achieved in

15:48

record time, the likes of

15:50

which have never been seen

15:52

in the world before, even

15:55

taking into account spectacular

15:58

growth that had existed. in

16:00

the United States in the late

16:02

19th and early 20th century, or

16:05

in Japan at the end of the

16:07

19th century, or Germany. The

16:10

Chinese outrank them all.

16:12

The role of China in world trade,

16:15

unbelievably, became the manufacturing center

16:18

for the whole world in

16:20

this period. It

16:23

becomes the crucial player in world

16:25

trade, the crucial carrier of goods

16:27

and services on all the oceans

16:30

of the world. It's

16:32

an extraordinary arrival at

16:36

superpower, in economic terms,

16:39

status, literally bested

16:41

only by the United States

16:44

and then by a shrinking

16:46

amount of difference between China

16:49

and the United States in terms

16:51

of economic growth. The

16:54

uniqueness of China is also

16:56

that it did not go

16:58

either to be overwhelmingly a

17:00

private enterprise economy, the

17:02

way the United States and Britain

17:04

had become, nor overwhelmingly

17:06

a state-owned and operated

17:09

enterprise system, the way the Soviet

17:11

Union had become. That split with

17:13

the Soviet Union in the 1960s,

17:17

as I mentioned before our break,

17:19

had enormous consequences so

17:22

that over recent decades,

17:24

China has become a

17:27

nation, roughly one-half private

17:29

capitalist enterprises and

17:31

one-half state enterprises, with

17:34

both halves sharing the old

17:38

capitalist structure of

17:40

employer-employee, which

17:42

is probably why the Chinese

17:44

wisely don't call their society

17:47

communists. The name of the

17:49

party is communist, but what

17:51

it has achieved they call

17:54

socialism, something that is more indifferent

17:57

from capitalism but not

17:59

yet. communism,

18:01

which is rather an interesting

18:04

way of understanding how China

18:06

literally redefines what the words

18:08

mean by the way it

18:11

has chosen to develop.

18:14

I want to mention some of

18:16

the things that are distinctive about

18:18

China because they follow from the

18:20

way they've organized their economy. Whereas

18:23

in Western treatments, they're often dealt

18:25

with as though they show that

18:27

the Chinese are fumbling or bumbling

18:29

or making mistakes. Let me give

18:31

you some examples. In

18:33

China, because the economy is planned

18:35

by the government and by the

18:38

Communist Party that shapes the government,

18:40

they build housing before

18:43

people need it. So if you see

18:45

a photograph of areas of some city

18:47

where there are lots of apartment buildings

18:49

that are empty, this is not because

18:51

they don't know what they're doing or

18:53

they're making mistakes. They

18:56

plan their economic growth,

18:58

where they want the city to be, how

19:01

big it will be, is all done

19:03

in relationship to the rest

19:06

of the society's growth. So

19:08

they build before people need

19:10

it, so when they can,

19:12

people can then move from

19:14

wherever they are into waiting

19:16

apartments that are all set

19:18

for them. You may not

19:21

like the outcome, that's another question. But

19:23

it's not a mistake, or it's

19:25

not a flaw, it's the way

19:27

they organize things. Likewise,

19:29

they have managed to move

19:32

hundreds of millions of people

19:35

out of the rural

19:37

agricultural parts of China

19:39

to the urban industrial.

19:43

Modern industrialization took

19:45

centuries in Europe. It

19:48

took a century or two in the

19:50

United States. It took

19:52

30 to 40 years in China, and

19:55

they moved a larger population that

19:58

was in a more backward aggregate. culture

20:00

into modern industry, a

20:03

transformation that could have and

20:05

should have and would have

20:07

exploded other societies because of

20:09

the tensions and the difficulties

20:11

and the pain of social

20:13

change. They managed all

20:16

that to become what

20:18

they are today. Again,

20:21

full of mistakes along the way, of

20:23

course, dead ends,

20:25

trials, errors, but achievements

20:28

that have to be recognized

20:30

in what has been produced at

20:33

the end. They really ended

20:35

mass poverty and have been

20:37

recognized by the United Nations

20:39

for having done that. Again,

20:42

all kinds of frictions and

20:44

problems, for sure. But

20:46

ending poverty is no minor achievement

20:49

in a world which still has

20:51

vast amounts of it on

20:54

all the continents remaining.

20:57

And then finally, they committed

20:59

themselves after they

21:02

had developed a basic industrial

21:04

modern society. They

21:06

targeted the United

21:08

States as their model to

21:11

surpass, as their model

21:13

to overcome, and that they

21:15

have worked ceaselessly to do

21:18

so that they are the place

21:20

where the best modern electric vehicles

21:22

are produced. And they are the

21:24

only part of the world that

21:26

can compete with Google,

21:28

with Apple, with Intel,

21:31

with any of the other

21:33

highest levels of technological modernization

21:36

that have been achieved in

21:38

the West. Yes,

21:41

the neocons that control government

21:43

here in the United States

21:45

portray them as the great

21:48

evil. Yes, they have certainly

21:50

surpassed the Soviet Union quite

21:52

long ago in being economically

21:55

more developed and therefore

21:57

with a greater base for whatever military

22:00

they've thought to do. So

22:02

let me turn then to the

22:05

politics of China.

22:07

Yes, China has a dominant

22:10

political reality, and that

22:12

is Communist Party of

22:15

China. It is

22:17

the dominant political party, no

22:19

question. It is against capitalism

22:23

and for socialism.

22:26

But before you rush

22:28

to whatever that might mean to

22:30

you, think about this. In

22:33

the Chinese view, the

22:35

United States has a

22:37

political dominance of

22:40

a pro-capitalist political

22:43

party. For them, it has

22:45

two wings, Republican and

22:48

Democrat. Two different

22:50

wings that agree that

22:52

capitalism should be, could be,

22:54

and must be the

22:58

dominant reality of the United

23:00

States. Well, the

23:02

Chinese argue that's exactly their

23:04

view for socialism. So

23:07

yes, they exclude capitalism, but

23:09

they point to the United States as excluding

23:12

socialism. You could like one

23:14

and not the other, but you can't pretend

23:16

that they're all that different.

23:19

Communist Party in China has one

23:21

wing. The capitalist party

23:23

in the United States, they argue,

23:26

has two. And

23:28

the Americans get to choose between

23:31

those two and nothing

23:33

else. No one else

23:35

is allowed to intrude on that

23:37

monopoly except on the edges, and

23:40

that's where they're kept, and that's

23:42

where they've been for the last

23:44

70 years. Just like

23:47

the monopoly, the Chinese Communist

23:49

Party operates, the capitalist party

23:51

in the United States operates

23:55

the same. The Chinese

23:57

are also proud of having faced

23:59

up to to uneven development.

24:02

The fact that in capitalism, one part

24:04

of a country is developed and another

24:06

part is allowed to languish behind. They

24:09

have focused on overcoming that

24:11

uneven development. Something

24:14

Marx originally understood

24:16

about capitalism. It

24:18

always creates a prosperous area

24:20

over there, a poor area over there, a good

24:23

neighborhood in the city over here, a

24:25

terrible neighborhood over there, etc., etc. The

24:28

Chinese said, no, we are going

24:30

to develop. We're going to give

24:32

special emphasis to the poorest areas,

24:34

either bring the people out of

24:36

there and move them to better

24:38

areas, or transform those areas. And

24:40

basically, they've done a good bit

24:42

of both. It's a

24:44

very interesting new way of

24:47

understanding the task of politics

24:50

to offset the

24:52

uneven development that flows out

24:54

of capitalism. And politically,

24:56

they have tried to build an alliance.

24:59

They didn't want to be isolated the

25:01

way the West wanted them to be.

25:04

And they have been spectacularly

25:06

successful with the Belt and

25:09

Road Initiative of building a trade

25:11

route from China to Europe, replicating

25:13

the old Silk Road. They've

25:16

tried very hard to placate Western

25:18

Europe and the United States, when

25:21

they are discriminated against as they

25:23

have been by Western Europe and

25:26

the United States. They've been relatively

25:28

slow and moderate to respond. They

25:31

have the better quality output at

25:33

the lower price. They've shown that

25:35

for 40 years. That's

25:38

what they use to penetrate

25:40

the route west economically. And

25:43

their politics is therefore to go

25:45

very slow. In case you

25:47

haven't noticed, the Chinese have

25:49

not developed military bases around

25:52

the world. The way the United

25:54

States has, even though they

25:56

have the money, they could, but they

25:58

don't. been engaged

26:01

in any foreign wars, Chinese

26:03

soldiers are not located anywhere

26:06

else the way American soldiers

26:08

are located literally everywhere.

26:11

So it's quite different. The

26:13

BRICS versus the G7 is

26:16

the creation more of China than

26:18

of anybody else. It's

26:20

the way the Chinese express their

26:24

phenomenal economic growth.

26:27

Finally, the future. Well,

26:30

there are two futures that China has

26:32

laying before it, and they

26:34

will probably decide more than anybody

26:36

else, even though the whole world

26:39

will play a role, they

26:41

will decide between these two roads.

26:43

And that's what's going on now, and that's what

26:45

we're going to be living through in the years

26:48

to come. Road number one,

26:50

China becomes the new hegemonic

26:54

empire, just as

26:56

we saw the rise and fall of

26:58

the Roman Empire, the Greek Empire, the

27:00

Persian Empire, the Ottoman Empire, and all

27:03

the others, and more recently,

27:05

the British Empire in the

27:07

18th and 19th century, and

27:09

the American Empire over

27:11

the last century. China may

27:13

become, that's one option, the

27:16

new empire. But there's an

27:18

alternative, and the Chinese talk about

27:20

it, to not do it again,

27:22

not have another empire. Say

27:25

goodbye to the history of

27:27

empire after empire. Maybe

27:29

the BRICS could become not

27:31

the empire of one country, but

27:34

for the first time a global

27:36

collective alternative for

27:39

organizing human society. It's

27:42

been a dream. That's why it was

27:44

called the League of Nations or the

27:46

United Nations. The Chinese

27:48

may make that dream a reality.

27:51

The idea of not another

27:53

empire, of a collective community

27:55

of nations being the next

27:57

phase of human history, is an

28:00

idea that inspired the League of Nations and

28:02

the United Nations. And maybe

28:04

now we actually have it if the

28:07

Chinese were to go in the direction

28:09

outlined by BRICS of

28:12

doing this collectively rather

28:14

than one country

28:17

like the United States. The

28:19

United States dominates the

28:22

G7 in a way the Chinese

28:24

do not yet dominate

28:26

the BRICS. Those

28:28

are the two roads into the future

28:30

that China is now deciding

28:33

between. I

28:35

hope you have understood the value

28:38

and the worth-whileness of this discussion

28:40

of the phenomena of China. And

28:43

as always, I look forward to

28:45

speaking with you again next week.

28:58

Thank you.