In a message dated 8/16/2009 10:03:21 P.M. Eastern Daylight Time, [email protected] writes:
read more at: http://michaelperelman.wordpress.com/2009/08/17/china-vs-the-us-class-warfar e/ Comment Did read the articles at the above and must admit that I was somewhat surprise at the response of the state - rather than government, but not totally surprised. Not really! China has the political means to literally double wages and employment in the state sector of the economy. Political means are the political institutions - of which you speak, in the above articles. In the context of the unfolding crisis the government of China has no choice but to invest in the domestic economy. Heck, capitalist America has no choice but to effect government intervention into the economy from different directions with different results being sought. China's economy problems lend themselves to an immediate practical solution in a country with political institutions legally empowered to express the political will of dynamic sections of the working class. As members of the working class face crisis and read books professing class rights, the workers and intelligentsia say, "we have rights and supposedly public property." Then change occurs. A similar movement is being fought out in our country in real time. China has something we lack; legal institutions with a working class bias. China problems are not that hard to understand. "The structural problem of the Chinese economy can be described in one sentence: China produces from plants financed by foreign investment that operate with low domestic wages for foreign markets that pay with dollars that cannot be used in the domestic economy. The solution to this structural problem can also be summed up in one sentence: China must finance plants with sovereign credit to produce for the domestic market where consumer purchasing power will come from high wages, with sovereign credit repaid from increased tax revenue from a vibrant domestic economy. The adverse impact from the current global financial crisis on the Chinese economy originates from the export sector financed by foreign capital." _http://henryckliu.com/page177.html_ (http://henryckliu.com/page177.html) Sovereign credit means forgetting all economic theories and issuing legal tender that allows one consumption rights in exchange for labor input. Expansion of the state sector and doubling of wages in this sector, would allow China to leap beyond it's miserable 15 % growth rate and leap to 25 - 30% growth rate with a perpetual shortage of goods driving expanded reproduction. And, the doubling of wages in the state sector would draw huge reserves of labor into the state sector of the economy. This includes "smart labor." The solution - and there is only one, is doubling of wages to increase domestic consumption to fill the void created with the layoff of perhaps a 100 million people. There is no other solution. Increasing wages would deepen the density of the market but not expand it. Expanding the public sector would expand the domestic market. This will take place with the only questions being to what degree and for how long. Attacking the workers will only prolong the crisis and distort the political struggle and plunge China back into its disgraceful role as "sick man of Asia." A role imposed on it for 100 years by imperialism. Today, resolution of China's domestic economic problems cannot be laid at the door step of foreigners or imperialism. Expanding the public sector and the doubling of wages in the state sector of the economy is a practical policy solution that will not drive inflation, provided price control is enforced over those sections of the consumer economy seeking a fast buck and taking advantage of what should rightfully be a more than less perpetual shortage of consumer goods. . Interestingly, such a shortage and function in price would soak up individuals savings which is actual harmful to economic growth. Every dollar saved is a dollar withheld from reproduction. Yea, I have been trying to study economic for about 7 years now. Give me another 10 and things are going to really make sense. Good article. WL.
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