We must re-industrialise our economy
The lesson for the Western political and ruling elites from China’s economic success story is that we have to actively decide what sort of economy and society we want, and promote it with appropriate government policies, just as China has successfully done. Otherwise, left to the free market alone, the deadly combination of ‘ponzi-financialisation’, deindustrialisation and consumerism, comprising the most significant downsides of neoliberal economics, mean that we are precipitating our own decline and facilitating the rise of China at the expense of our economic security and foreign policy.
The ultimate price that we will pay in the West, especially in the U.S. and Australia, for allowing ourselves to become economically weakened is for China to increasingly dominate the Asia-Pacific region, in a foreign policy sense, as a corollary of its economic strength. Numerous authors have been documenting this increasing foreign policy shift, involving both soft and hard power. Joshua Kurlantzick has noted that the rapidly growing economic power of the Chinese economic model has enabled it to flex its foreign policy muscles to the extent that “it may already be the pre-eminent power in parts of Asia and Africa”.
Therefore, there is an imperative to reverse deindustrialisation in the Anglo economies.
One only has to read the item posted on the increasingly popular economic blog, The Economic Collapse, entitled “19 Facts About the Deindustrialisation of America” to get a feel for how the deindustrialisation process wrought by ‘Millennial Capitalism’ is now rapidly accelerating, and to understand why this is exacerbating the ‘break point’ between the mainstream voter and the neoconservative and neoliberal elites. Indeed, these 19 facts about deindustrialisation summarised by The Economic Collapse should be compulsory reading for all members of the elites, so as to put them in touch with the ‘real world of Main Street’ where the mainstream voter lives, works and struggles.
The highlights, set out below, from “the 19 Facts”, are cause for great concern, not only in the U.S., but also in Australia, Canada, the UK and Western Europe, where a similar deindustrialisation phenomenon has been occurring to various degrees since the advent of ‘Millennial Capitalism’ in the 1980s:
• The United States has lost approximately 42,400 factories since 2001. About 75 percent of those factories employed over 500 people when they were still in operation.
• The United States has lost a total of about 5.5 million manufacturing jobs since October 2000.
• As of the end of 2009, less than 12 million Americans worked in manufacturing. The last time less than 12 million Americans were employed in manufacturing was in 1941.
• In 1959, manufacturing represented 28 percent of U.S. economic output. In 2008, it represented 11.5 percent.
• Manufacturing employment in the U.S. computer industry is actually lower in 2010 than it was in 1975.
• In the United States today, consumption accounts for 70 percent of GDP. Of this 70 percent, over half is spent on services.
• The United States has lost a whopping 32 percent of its manufacturing jobs since the year 2000.
• In 2008, 1.2 billion cellphones were sold worldwide. None of them were manufactured inside the United States.
• If the U.S. trade deficit with China continues to increase at its current rate, the U.S. economy will lose over half a million jobs this year alone. As of the end of July, the U.S. trade deficit with China had risen 18 percent compared to the same time period a year ago.
• Between 1999 and 2008 employment at the foreign affiliates of U.S. parent companies increased 30 percent to 10.1 million. During that exact same time period, U.S.-based employment at American multinational corporations declined 8 percent to 21.1 million.
• Printed circuit boards are used in tens of thousands of different products. Asia now produces 84 percent of them worldwide.
• The United States spends approximately $3.90 on Chinese goods for every $1 that the Chinese spend on goods from the United States.
• The U.S. Census Bureau notes that 43.6 million Americans are now living in poverty and that is the highest number of poor Americans in the 51 years that records have been kept.
It is imperative that we reverse the process of deindustrialisation and ‘offshoring’ that has been wrought by neoliberal globalisation. And because it is a phenomenon that began with the United States as the epicentre of the neoliberal ethos, for the rest of the advanced economies, especially the Anglo-economies, it is literally a case of “where goes America, so goes Australia/Canada/the UK”.
[This is an extract from Steve Barber’s The New Pragmatism – the way forward for Anglo economies.]
Steve Barber, based on the Sunshine Coast, has more than 25 years’ experience internationally in law, finance, operational risk management and counterterrorism issues. Until recently he was an active member of the Liberal National Party’s Policy Standing Committee and the Chairman of the LNP’s Federal Trade & Resources Policy Committee. The views expressed here are his own. Steve can be reached by email at email@example.com