Capitalist game won’t be over until China plays its hand  


June 25, 2002 Kamloops Daily News

“A capitalist would sell rope to his own hangman,” attributed to Vladimir Ilich Lenin.

In the eyes of some political observers, it was a contest between two giants but the right side won.  The United States, champion of the free world, carried the banner for the capitalists.  On the other side were the Russian communists,  called “the evil empire” by president Reagan in 1983.


The triumph of capitalism, say these observers, was evident in the collapse of  communist USSR and the fall of the Berlin Wall in the 1990.   The lesson is that all things socialist are a lost cause and the marketplace will save us all.

This scenario conveniently ignores the largest country in the world, which is run by communists.  With 1.3 billion people, China is hard to ignore.  Not only is China big, it is about to become the world’s economic powerhouse.   If you have any doubt about this, just read the country of origin on the label of almost everything you buy.

Capitalist adherents will argue that China is using the free market, so it’s not a pure communist country.  While that’s true it doesn’t make China any less communist.   And the purity argument works both ways.

The United States achieved its goals as a superpower, in part, through socialist means.  For example, the U.S. established a state run school system that allowed the brightest, not just the wealthiest, to succeed.  “Our republic cannot long remain ignorant and free, hence the necessity of universal popular education,” said Horace Mann, U.S. educator (1837).  For its time, it was a revolutionary and a socialist idea.

The logic of capitalism demands that goods be manufactured at the lowest prices, even it means exporting jobs out of the country. Not only are capitalists willing to sacrifice the working poor on the altar of profit.  They will also sell the rope that will hang them.

Globalization has not only betrayed the working class, it has meant the loss of industrial sovereignty.   The U.S. has lost the capacity to produce the goods that fuel it’s economy.  Not only have jobs moved out of the country, they have moved out of the company.

One such betrayal is the world’s largest PC maker, Dell computers.   The word “make” has to be carefully qualified because they don’t actually make computers.  Despite the tiny American flag that graces its web site, Dell is nothing but a delivery channel for Chinese and Taiwanese parts.

Asian factories make the integrated circuits, mother boards, video and audio cards, memory chips, hard drives, CD-Rom drives, monitors, power supplies, and keyboards.  Dell puts all these parts in cases and proudly puts their name on the box.

Even Mexico’s industrial slum Maquiladoras are hurting through the loss of jobs to China.  “Taiwan, Japan, Korea, Mexico, all fret about losing core industrial activity to China, and now Beijing pats its lap and winks at the global semiconductor industry,” says Barry Lynn, former executive editor for Global Business magazine.

In China, the western world has found the final solution to the high cost of goods and labour.   Until something goes wrong, that is.  Capitalists have such tunnel vision that they can’t see that they are selling out the foundation of their own success.

At the end of the day,  it doesn’t matter whose name  is on the label of the product.   What matters is where the plants are located that produce the technology and goods, not the label.  China is  the dog that will wag the tail.

What if China decided to cut off the world’s supply of computer parts to force some political goal, such as the annexation of Taiwan?   Do you think they would care what the foreign virtual companies would think?  Having put all their capitalist eggs in one basket, world markets would be thrown in panic worse than post-September 11.   Capitalists might argue that China would not do that since they would be hurting themselves by not selling on world markets.  But this argument assumes that China is a country like most where governments have essentially been bought out by corporations.  China is not such a government.   It is run by communists who think that “national interest” is something more than a political slogan  contrived by a public relations company.

The score might be; capitalists 1, communists 0,  but the game isn’t over yet


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