First-rate video journalism. China has seen 20 million migrant workers from the countryside lose their jobs in the past year and slip away back into the countryside. Factory owners seem typically to run away leaving only a paper notice that the business has closed. Stratfor has opined that disparities between city and countryside are the Achilles heel of the Chinese polity, and this video confirms that social unrest may be rising in the form of greater demands for “human rights.” Workers from the countryside are alleged to “forfeit their civil rights” when they migrate to the cities. As with America, the problem of collapse of effective demand is distributional in the near term. How is Chinese capitalism any different from the American variant, and why should the tendency toward neo-feudalism be any less--if not pronouncedly greater? This is the problem posed by “the end of history,” or the “triumph” of neo-liberal-conservative sometimes “democratic” capitalism.
Growth theory tells us that a dollar or Yuan saved is not necessarily lost to final demand—it may be spent on capital formation. The Chinese need only to use their savings internally instead of loaning them to us to achieve massive amounts of capital formation. The government is firing up big infrastructure programs to do just that, while blowing some of its other bucks on energy and resource deals worldwide while the greenback is still worth anything.
I taught in Taiwan about a dozen years ago in an executive MBA program. The buzz in that part of the world then was incredible. I was surprised at the attitude of the Taiwanese toward the mainland, which at that time was beating up on Taiwan verbally pretty badly, with all kinds of threats of taking them over.
“We are all Chinese,” they said.