Hangzhou, China. Photo by Alessio Lin.
The trade and currency war is on. PBI Chair Ellen Brown writes in her latest article in Truthdig that a currency war is a war without winners:
“The reason American workers cannot compete with foreign workers is not that the dollar is overvalued. It is due to their higher costs of housing, education, medical services and transportation. … More favorable to our interests and values than warring with our trading partners would be to cooperate in sharing solutions, including banking and credit solutions. The Chinese have proven the effectiveness of their public banking system in supporting their industries and their workers. Rather than seeing it as an existential threat, we could thank them for test-driving the model and take a spin in it ourselves.”
On our latest It’s Our Money podcast, Ellen joins co-host Walt McRee to discuss this topic. She also concludes her discussion with the Democracy Collaborative’s Ted Howard about their new book The Making of a Democratic Economy.
Ellen’s Truthdig article has generated much discussion. In it she says that neoliberalism that has met its match.
“Unlike the Soviet communist system, the Chinese system cannot be expected to ‘crumble under its own weight.’ The U.S. cannot expect, and should not even want, to destroy China, Campbell and Sullivan say. Rather, we should aim for a state of ‘coexistence on terms favorable to U.S. interests and values.’
“The implication is that China, being too strong to be knocked out of the game as the Soviet Union was, needs to be coerced or cajoled into adopting the neoliberal model and abandoning state support of its industries and ownership of its banks. But the Chinese system, while obviously not perfect, has an impressive track record for sustaining long-term growth and development. While the U.S. manufacturing base was being hollowed out under the free-market model, China was systematically building up its own manufacturing base and investing heavily in infrastructure and emerging technologies, and it was doing this with credit generated by its state-owned banks. Rather than trying to destroy China’s economic system, it might be more ‘favorable to U.S. interests and values’ for us to adopt its more effective industrial and banking practices.”