I too was surprised about this angle, and I appreciate Jim's posting this important article, which caught my eye when copied into the International Herald Tribune which I get in London.
There it was printed above another article also copied from the NYTimes, by Nicholas Kristof, who doesn't strike me as being particularly left-wing, entitled "Playing into China's hands" [June 28 edn] This starts "The biggest risk we Americans face to our way of life and our place in the world probably doesn't come from Al Qaeda or the Iraq war. Rather, the biggest risk may come from this administration's fiscal recklessness and the way this is putting us in hock to China." My impression from a distance is that various voices are trying to create a liberal consensus, mainly by opportunist shifts of course, that will leave Bush relatively isolated and weak by the midterm elections. This could include appeals to selfish national factors, and even racism. I find Krugman's article more interesting for the details and the picture of how China is moving, almost amoeba-like now, to penetrate, and incorporate the USA into a world system open as much as possible to its influence. Remember China has a culture of continuous highly complex social consciousness, well before any claims to socialism (debatable though that is). It knows its massive inertia and momentum, and is relaxed enough to view its position in the world strategically. Among its cultural strengths is a sophisticated theory of managing conflict. It may use sudden dramatic confrontation or humiliation, as when they dismantled the high technology spy plane screw by screw soon after the start of Bush's first term and the neo-con suggestion that China was the US's main strategic opponent. But there is much in Chinese tradition about the merits of managing relations with significant others without direct confrontation but by careful manoeuvre. Reading Krugman's article it is possible to see the reasonable argument that China now owns so many US treasury bonds that it has successfully ensured itself against anti-Yuan speculation. Unless it is to stop balancing the payments exchanges by continued capital inflow, it must start turning to stocks. And the US would not like China to stop supporting the balance of payments all of a sudden would it?? ... And being Chinese they may think rather carefully about which stocks to buy and they may take the long term view ..... Including in a world in which there will be pressure on natural resources ... There are also interesting echoes in this article updating to my mind some of the arguments Lenin rehearsed in "Imperialism" - yes it is of great strategic importance in the era of finance capital still to secure access to resources and markets. But compared to 100 years ago it is cheaper and easier to do this through finance capitalist companies, than by warfare between states. Especially if Chinese culture anyway fosters a degree of collective cohesion and subtle centralised direction between these companies. China has two millennia of continuous culture without needing to build bourgeois civil society from scratch for purposes of social coherence. This enormous social value would be called by some today "social capital". This, coupled with the massively growing accumulation of *finance capital* by the Chinese, is shifting the balance of forces in the world insidiously more dramatically than any dramatic shift of the tectonic plates can move a continent a few centimeters. And this is happening under the surface, while Bush and Blair posture for the moral ideological high ground over Africa and the environment, These issues are the ideological drapery for the enthronement of some sort of new world government. But who will have control of the money? Chris Burford PS CARTOON The accompanying cartoon in the IHT was particularly apposite, by Danziger. One letter change between Khruschev and Hu Jin Tao - BURY vs BUY Khruschev pounding his shoe at the UN shouting "We will BURY you!!" Hu Jin Tao, smiling like a young smart sales rep with his hands innocently behind his back, in front of a sign "Red China" - "We will BUY you!!" One letter difference, but if the Soviet Union had found a path to economic growth which did indeed overtake the west, and the Soviet Bloc had not collapsed, then we might well have faced this new phase of financial interdigitation by that route. (Of course the compromises the Chinese have made to reach the present remarkable situation are another matter .... And it has taken almost 50 years. But what is that in the lifetime of the human race? CB ----- Original Message ----- From: "Michael Perelman" <[EMAIL PROTECTED]> To: <PEN-L@SUS.CSUCHICO.EDU> Sent: Monday, June 27, 2005 4:35 PM Subject: Re: [PEN-L] PK on China Challenge
The part that surprised me in Krugman's article was the final paragraph in which he revealed his preference for blocking China. In his pre-leftish phase, wasn't Krugman angry with people like Laura Tyson who wanted to manage trade? -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
