Physical Capital, Human Capital, Technology, and Productive Work—These Drive the Real Economy

The managed decline of America is being accomplished with the financialization of the Western economy and the globalization of production, both offshoring and mass immigration (legal and illegal). This is not only hurting America’s working class, but shifting the balance of global power in a dangerous direction. Besides the threat of corporate bureaucratic control at home, the danger to human dignity and liberty to Americans comes as a rising China, a totalitarian state capitalist nation that has no regard for individual freedom and human rights. In this essay, I briefly explain and make recommendations for addressing the situation.

Financialization aside, four things drive growth in the real economy: physical (constant or fixed) capital, e.g., machines; human capital, e.g., engineers and scientists; technology and innovation, including methods of organizational rationalization; and productive work, which creates not only the value added in production, but also the aggregate demand that completes the circuit of capital, that is, that realizes surplus value in profit, without which there is no wealth accumulation and capital for investment. All this requires a national economic strategy to avoid crises of class polarization, unsustainability, including land and resource misuse and unchecked population growth, sectoral disproportionalities, and overproduction and underconsumption.

Why is China—the modern-day analog to national socialist Germany, replete with large-scale genocide, concentration and slave labor camps—rising while the West is in decline? Unlike the West, which is controlled by corporate power, a force bereft of loyalty to the nations that charter its constituents and subsidize and defend their material and ideological interests, the Chinese Communist Party has a nationalist agenda. I hasten to emphasize that the problem is not with nationalism per se. The problem is with a nationalism that that does not represent the interests of the people it purports to represent. The problem of China’s authoritarian nationalism comes with the problem of weak civic nationalism in the West. The melding of Chinese state capitalism and the transnational corporate establishment, both sharing the unfreedom of bureaucratic collectivism, is fueling the rise of a totalitarian nightmare.

For the purpose of advancing its imperialist ambitions, the Chinese Communist Party is powering China’s economic development by leveraging capital markets opened to them by Western governments, primarily the United States, the world’s largest economy (for now); inducing the relocation of industrial (including agricultural) production from the West to its vast industrial plantations, for example the Special Economic Zone (SEZ), established in the 1980s following negotiations with the Carter Administration (staffed by globalists) to inject foreign capital and technology into China and expand capacity for exporting goods to Western markets while leaving intact the Communist Party; stealing Western intellectual property by funding Western R&D and infiltrating the corporate-university apparatus; establishing and controlling supply chains across the planet, as well transportation routes via Xi Jinping’s One Belt One Road initiative, a global infrastructure development project that will allow China to control most of the Eastern Hemisphere; and building a vast military apparatus with which China will wage kinetic war against its neighbors and the West—all this financed by the working classes of the West and of China.

China is now the fastest growing economy in the world. This has been true for a number of years. And none of this would be possible without the transnational corporation and its political establishments in the West, in the United States largely represented by the Democratic Party, betraying the citizens of their respective countries.

Rank-and-file progressives and social democrats in the trans-Atlantic space have a weak grasp of economics, let alone international political economy. Moreover, the rank-and-file have been conditioned to accept a politics of globalism and Western-loathing. We see this in the resistance to a national economic strategy and educational policy emphasizing domestic industrial production and the development of human capital in the United States. This is a tragic development. With technological advancements in production, with the rising organic composition of capital (i.e., the capital-intensity of production), investment in human capital has become more important than ever.

This fact is not lost on the CCP and the state capitalist oligarchy of China who have, as I showed above, focused a nationalist economic strategy on the development of domestic industrial capacity and pursued educational policies that develop their human capital. By focusing on human capital, China provides transnational corporations with armies of low-wage high-skill labor. Thus China has engaged in a conscious strategy to import capital and invest in the training and education of its citizens. Meanwhile, the United States, its high-tech manufacturing work progressively offshored, has shifted the focus of education away from human capital development towards social justice curriculum, which not only ill-prepares students for work in a technologically-advanced society, but conditions them to reject a world that requires such preparation. At the same time, open borders import cheap but high-skill foreign labor, while native workers are idled in urban ghettos and deindustrialized cities and towns. China’s success depends on the West abandoning nationalism as the principle of political and legal organization.

Globalism is wrecking America (and the West) and the establishment wings of the two major parties, controlled by transnational corporate and financial power, are swinging the wrecking ball. Our own elected leaders are betraying us. The solution is closing the border, disinvesting in China (temporary switching to India and other allies where we cannot ramp up domestic production ourselves), depriving China of access to our capital markets, punishing China for its human rights violations, and reinvesting in human capital at home on the basis of national economic priorities.

Economic nationalism is the way the save America and what America represents and that means marginalizing the corporate and political establishment that is now running our lives and revising our history. But we don’t have a lot of time. The Biden Administration, in coordination with the transnational elite, is preparing the ground for a massive top-to-bottom transformation of America that will foreclose opportunities to push back against the global neofeudalism they seek to establish. The meddle they desire is China-lite.

Published by

Andrew Austin

Andrew Austin is on the faculty of Democracy and Justice Studies and Sociology at the University of Wisconsin—Green Bay. He has published numerous articles, essays, and reviews in books, encyclopedia, journals, and newspapers.

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