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Thirty Years After Tiananmen Square, the U.S. is Still Trying to destabilize China

Last month marked three decades since the conclusion of the 1989 Tiananmen Square demonstrations in China. The anniversary is opportune for Washington and its Western partners to ramp-up their Sinophobic smear campaign while recycling the hoax they have propagated ever since the June Fourth incident occurred. Coverage of the commemoration has been wedded with the ongoing propaganda and wild accusation that the People’s Republic has currently detained up to 1 million Turkic Uyghur Muslims from the autonomous Xinjiang province in “concentration camps.” Simultaneously, opposition marches have erupted in the former British colony of Hong Kong with the financial backing of astro-turfing NGOs against a controversial extradition bill with the mainland. Like Tiananmen Square thirty years ago, the “pro-democracy” gatherings in the self-governing territory have become increasingly violent as rioters have stormed legislative buildings while hoisting the colonial-era dragon and lion flag as their emblem. The adoption of the Union Jack is reminiscent of the Syrian opposition’s appropriation of the French Mandate-era flag as its ensign — and we all know how “peaceful” those protests turned out to be.

In August of last year, the United Nations Committee on the Elimination of Racial Discrimination (CERD) performed a routine analysis of China’s accordance with the International Convention on the Elimination of All Forms of Racial Discrimination. The only member to include the charge of Uyghur ‘internment camps’ was the committee’s American vice-chair, Gay McDougall, who did so based on allegations made by a shadowy opposition group located in Washington, D.C., known as the Network of Chinese Human Rights Defenders (CHRD). In other words, the UN did not officially make this determination but was only the interpretation of one American representative based on the conjecture of a dubious and biased “human rights” organization. Nevertheless, Western corporate media reported this unquestioningly second-hand under the assumption that the CERD committee consisted of UN internal sources when it is actually comprised of “independent experts” like McDougall.

Unsurprisingly, CHRD is directly tied to the highly politicized Human Rights Watch (HRW) NGO, which despite its name could not be more at odds with its declared vocation given its shared personnel and history of policies in lock-step with the world’s greatest violator of human rights, especially against Muslim countries, in the United States government. A Turkish scholar recently claimed that as many as 12.5 million Muslims have died in wars in the past 25 years, the vast majority a result of American foreign policy. Not to mention the fact that the U.S. still operates a very real concentration camp for Muslims in its naval base on the coast of Guantanamo Bay, Cuba, which President Donald Trump has signed an executive order to keep open indefinitely. For seventeen years, GITMO prisoners have been held and tortured without trial in total violation of international law. At the end of the day, “human rights” is a weapon to manipulate credulous liberals into supporting hawkish foreign policy whereby minority groups like China’s Tibetans and Uyghurs become pawns on the geopolitical chess board to undermine Washington’s adversaries.

An investigation showed that CHRD gets most of its sums from government grants which is safe to assume comes from the U.S.-government bankrolled National Endowment for Democracy (NED) NGO that is also subsidizing the Hong Kong protests. The paradoxically named CIA slush fund was created in 1983 as a front for the intelligence service to conceal its operations after the agency’s standing was disgraced following the revelations of illicit crimes in the prior decades sabotaging democracies around the world to install U.S. puppet regimes. Founded by Ronald Reagan, the NED has poured money into programs related to Xinjiang such as the World Uyghur Congress. In March, Secretary of State Mike Pompeo met with four Uyghur representatives, though it turned out that at least one of those he convened with was a reporter for the U.S. government-owned Radio Free Asia which is the equivalent of the CIA’s Radio Free Europe in the continent. Just two months later, Pompeo would make a clean breast of his previous tenure as CIA director in a speech at Texas A&M University:

Having said that, not all tough places are the same. They each present a different set of challenges. I — it reminds me, you would know this as — it’s a bit of an aside. But in terms of how you think about problem sets, I — when I was a cadet, what’s the first — what’s the cadet motto at West Point? You will not lie, cheat, or steal, or tolerate those who do. I was the CIA director. We lied, we cheated, we stole. It’s — it was like — we had entire training courses. It reminds you of the glory of the American experiment.

The fact that Pompeo admitted spinning the CIA’s yarn just a short time after meeting with the Uyghurs hasn’t prevented many on the left from lining up behind mainstream media in spreading the West’s disinformation without verification of the camp’s existence. The Intercept, a popular progressive news publication known for its coverage of leaks by NSA whistleblower Edward Snowden, published an article calling for “global outrage” in response. The piece was written by Mehdi Hasan, a journalist who also works for Al-Jazeera, the state news network of Qatar’s ruling emirs whose government co-sponsors much of the Islamic terrorism plaguing Xinjiang that has been the basis for China’s policies regarding its Uyghur question. The Intercept is also owned by First Look Media, established by e-Bay co-founder Pierre Omidyar, whose investment firm financed many of the NGOs in Ukraine which organized the Euromaidan protests which ousted Kiev’s democratically-elected government in 2014. It is possible the billionaire has a similar conflict of interest in China.

A Reuters journalist who gained rare access to the facilities was interviewed and his on-the-ground observations were rather banal in comparison to such sensationalized vicarious reporting. The Chinese government acknowledges that what does exist in the energy-rich Northwestern province are re-education centers training and rehabilitating individuals with links to Turkic separatism, Uyghur nationalism and ISIS/Daesh to combat the spread of jihadism into the Uyghur community by U.S. ally Saudi Arabia. For fifty years, the Gulf State kingdom has propagated an intolerant and ultra-conservative strain of Islam while evading any consequences as the source of international terrorism. This long believed association was confirmed in a leaked Hillary Clinton email from 2014 published by WikiLeaks:

While this military/para-military operation is moving forward, we need to use our diplomatic and more traditional intelligence assets to bring pressure on the governments of Qatar and Saudi Arabia, which are providing clandestine financial and logistic support to ISIL and other radical Sunni groups in the region.

The embattled Saudi Crown Prince Mohammed bin Salman admitted that the previously obscure and fundamentalist Wahhabi sect of Islam was deliberately exported at the West’s encouragement during the Cold War to undermine Soviet influence in Muslim countries. ​Today, Saudi-trained imams around the world are preaching the supremacy of Sharia law and waging jihad, from Kosovo to the Philippines. The Turkic-speaking Sunni minority concentrated in Xinjiang have not avoided this contamination as the region has been infested with terrorism since the 1990s with violence committed overwhelmingly by radicalized Uyghurs, from suicide bombings to knife attacks. It is notable that China’s dozens of other Muslim ethno-religious groups such as the Hui people are relatively well assimilated into Chinese society and have been immune to such ills, casting doubt on the West’s characterization of China as anti-Islam.

Meanwhile, the Uyghur extremism problem is so abundant that many were recruited in Syria to fight alongside al-Qaeda in the U.S.-Saudi proxy army rebranded as “moderate rebels” that unsuccessfully sought to overthrow the secular government of Bashar al-Assad. As only American exceptionalism permits, Washington is now simulating outrage at the PRC’s crackdown on the very religious fanaticism its allies have instigated, in the hopes that a separatist uprising could balkanize Xinjiang and halt China’s development of its new silk road, the Belt and Road Initiative (BRI), through the region connecting its trade routes with Africa and Europe. The feigned outcry of the West toward any unsubstantiated human rights abuses rings hollow given that which is taking place in GITMO and numerous U.S. black sites around the world.

The American “human rights expert” who made the assertion, Gay McDougall, is an advisory board member of the Open Society Foundation NGO founded by the controversial international financier George Soros. It is ironic that Soros has become so hated on the political right in the West when it was his “philanthropic” agencies that were instrumental in the collapse of communism in Eastern Europe and attempted the same in China. During the 1980s, his nonprofits partnered with other CIA soft-power intermediaries to destabilize the Eastern bloc and foment “pro-democracy” movements behind the Iron Curtain, from Poland’s Solidarity to Czechoslovakia’s Velvet Revolution. Later, Soros would invest heavily in Serbia’s Otpor! movement which ousted the last bastion of semi-socialism in Eurasia in the government of Slobodan Milosevic following the breakup of the former Yugoslavia after the end of the Cold War.

The success of Otpor! became the formulaic blueprint for the Western-engineered Color Revolutions in Eastern Europe against Moscow-backed states in the years to come, even after the reinstatement of the free market. Otpor! (“Resistance!”) became Georgia’s Kmara (“Enough!”) in the Rose Revolution, Kyrgystan’s KelKel (Pink or Tulip Revolution), Ukraine’s Pora (“It’s time”) in the Orange Revolution and many others which used the same protest tactics, slogans, and vexillography to transform peaceful protests into regime change operations. The anti-war movement should be deeply suspicious of Soros’ recent reported venture in an unlikely partnership with right-wing billionaire Charles Koch to establish a think tank whose aim is to “end America’s forever wars”, considering the Hungarian-born hedge fund tycoon has played an enormous role in US foreign policy for decades.

The methodology behind Color Revolutions takes inspiration from the writings of Gene Sharp, aka the “Machiavelli of non-violence”, a little known political scientist whose doctrine on strategies of non-violent resistance became useful to the Western establishment in training activists to incite unrest in order to topple governments in countries it seeks to dominate. Sharp’s work, From Dictatorship to Democracy, was used as a training manual in Otpor! and later became pivotal in the Arab Spring uprisings, another instance where what were presented as authentic, spontaneous protests quickly transformed into U.S.-friendly insurrections. Sharp’s theories became the modus operandi in depersonalizing political movements in order to manipulate them to suit the ends of regime change puppet masters in the Anglosphere.

What a coincidence that Gene Sharp himself was reportedly present in Tiananmen Square, aka the Gate of Heavenly Peace, back in 1989. Meanwhile, Soros was busy establishing the Fund for the Reform and Opening of China, aka the China Fund, which was shut down by the PRC after it suspected the foundation of connections with the CIA in the ensuing months that year. There is little doubt that the China Fund was attempting the same as what was done in Soros’s native Hungary, as well as Czechoslovakia and Poland. In hindsight, Tiananmen Square was one of the first attempts of what would become known as Color Revolutions, albeit a failed one. While Washington was successful in unseating communism in the Eastern Bloc it was unable to do in Beijing, though it was an enormous victory in the propaganda war of forever cementing the Chinese government as synonymous with authoritarianism in the impressionable minds of Westerners.

To this day the story according to the yellow press is that the People’s Liberation Army (PLA) opened fire indiscriminately and massacred “thousands” of “non-violent” demonstrators when it finally cleared the city square after nearly 2 months of student-led protests. This was accepted as orthodoxy even on much of the left until this version of events was revealed to be contradicted by the U.S.’s own embassy cables published in 2011 by Wikileaks which divulged that the U.S. government had knowingly been allowing to the media to recount a fictitious narrative for decades. The confidential telegrams summarized the eyewitness account of Carlos Gallo, a Chilean diplomat, who was present during the June Fourth incident and told a very different story.

“8. GALLO EVENTUALLY ENDED UP AT THE RED CROSS STATION, AGAIN HOPING THAT TROOPS WOULD NOT FIRE ON THE MEDICAL PERSONNEL THERE. HE WATCHED THE MILITARY ENTER THE SQUARE AND DID NOT OBSERVE ANY MASS FIRING OF WEAPONS INTO THE CROWDS, ALTHOUGH SPORADIC GUNFIRE WAS HEARD. HE SAID THAT MOST OF THE TROOPS WHICH ENTERED THE SQUARE WERE ACTUALLY ARMED ONLY WITH ANTI-RIOT GEAR — TRUNCHEONS AND WOODEN CLUBS; THEY WERE BACKED UP BY ARMED SOLDIERS. AS THE MILITARY CONSOLIDATED ITS CONTROL OF THE SQUARE’S PERIMETER, STUDENTS AND CIVILIANS GATHERED AROUND THE MONUMENT TO THE PEOPLE’S HEROES. GALLO SAID WOUNDED, INCLUDING SOME SOLDIERS, CONTINUED TO BE BROUGHT TO THE RED CROSS STATION.”

“10. ALTHOUGH GUNFIRE COULD BE HEARD, GALLO SAID THAT APART FROM SOME BEATING OF STUDENTS, THERE WAS NO MASS FIRING INTO THE CROWD OF STUDENTS AT THE MONUMENT. WHEN POLOFF MENTIONED SOME REPORTEDLY EYEWITNESS ACCOUNTS OF MASSACRES AT THE MONUMENT WITH AUTOMATIC WEAPONS, GALLO SAID THAT THERE WAS NO SUCH SLAUGHTER. ONCE AGREEMENT WAS REACHED FOR THE STUDENTS TO WITHDRAW, LINKING HANDS TO FORM A COLUMN, THE STUDENTS LEFT THE SQUARE THROUGH THE SOUTHEAST CORNER. ESSENTIALLY EVERYONE, INCLUDING GALLO, LEFT. THE FEW THAT ATTEMPTED TO REMAIN BEHIND WERE BEATEN AND DRIVEN TO JOIN THE END OF THE DEPARTING PROCESSION. ONCE OUTSIDE THE SQUARE, THE STUDENTS HEADED WEST ON QIANMEN DAJIE WHILE GALLO HEADED EAST TO HIS CAR. THEREFORE, HE COULD NOT COMMENT ON REPORTS THAT STUDENTS WERE AMBUSHED AND SLAUGHTERED IN THE ALLEY JUST WEST OF THE SQUARE NEAR THE BEIJING CONCERT HALL.”

The communique corroborates the account of the Chinese government that the injured and deceased included many unarmed soldiers and police. While there is no evidence or footage of the “thousands” of alleged corpses of CIA-trained student demonstrators, there is ample documentation of the armed thug participants setting fire to and even lynching PLA troops from buses during the confrontation. It was only on the final day that some police and soldiers were equipped with weapons as during the weeks prior the government had unsuccessfully attempted to put down the gatherings sending in defenseless PLA troops who were then attacked by the mobs. Not only were the riots brought under control mostly without lethal force, Gallo’s testimony upheld much of the PRC’s side of the story. The truth seems to be much closer to the Chinese government figures of around a few hundred fatalities, not thousands, during what were violent clashes and not any one-sided massacre.

It’s no wonder the anonymous ‘tank man’ in the internationally circulated iconic footage isn’t surrounded by the “thousands” of presumed corpses in the streets of what was then the largest public space in the world. Then again, the infamous stand-off between the unidentified protester and the tanks didn’t actually occur until June 5th, the following day after the protests concluded, a significant detail that has been curiously suppressed. That is to say, the image associated by most people around the world with the events — and one of the most universally recognizable of the 20th century — did not even occur during it. Not to mention that the unknown man was actually preventing the tanks from leaving, not entering, the city square. Nevertheless, the mysterious incident became the perfect extract for Western propaganda to put its spin on the crisis. If only the tanks had not exercised such restraint and run him over like the Israeli Defense Forces when they crushed the body of activist Rachel Corrie with a Caterpillar bulldozer in the Gaza Strip — then China would be considered a ‘democracy.’

Recently, former President Jimmy Carter reportedly phoned Trump to discuss China about their mutual concern that it will soon exceed the U.S. as a superpower on the world stage. While Trump nixed the Trans-Pacific Partnership (TPP) trade deal which excluded China and could have kickstarted WWIII, he has launched a protectionist trade war with tariffs on Chinese imports in an ill-fated attempt at stimulating domestic manufacturing and industry. Carter noted that while the U.S. is spending hundreds of billions on defense instead of redeveloping its crumbling infrastructure, China is using its productive power to help its people and leading the way in constructing high-speed railroads. He contrasted the wasteful Pentagon budget with the PRC “which has not wasted a penny on war” which he attributed to his own credit in “normalizing diplomatic relations with China in 1979.”

While these days Carter seems to lean towards social democracy, his critique is ironic considering a path can be traced from today’s obscene military budget back to his administration’s decision in 1979 to arm the mujahideen in Afghanistan to undermine the Soviet Union and divide Eurasia at the direction of his National Security Adviser Zbigniew Brzezinski. So too can the Uyghurs falling prey to the spread of Wahhabism during the 1980s when China relaxed its policies and radical Islamist groups from neighboring Central Asia and Pakistan infiltrated the region. Meanwhile, the breakup of the Soviet Union resulting in the independence of former Soviet and Muslim-majority Central Asian republics like Kazakhstan bordering Xinjiang only increased the resurgence of Uyghur separatism. While the PRC may not be squandering on endless war, an enormous portion of the U.S. defense budget in recent years has been in the Pacific with the deployment of naval and missile systems in close proximity to China which was part of the Obama administration’s ‘Pivot to Asia’ foreign policy shift, a regional strategy akin to Imperial Japan’s encirclement of the mainland in the lead-up to WWII.

The strategy of the empire’s information warfare is to invert reality and depict China as a regional tyrant and surveillance state persecuting its religious minorities while seeking colonial dominance and polluting the environment. It’s hard to imagine a clearer case of imperial projection, where the U.S.’s own signature wrongdoings are being displaced onto its chief rival. Leaving aside the obvious in regards to American hegemony militarily, within its own borders the U.S. has more people incarcerated despite the fact that China has a population three times as large. Even more startling, China has less people living in poverty despite its exponentially bigger populace. Then there is the hysteria over Apple’s tech rival Huawei and the completely baseless espionage allegations by the CIA against its 5G technology. The irony that Washington is trying to bully Germany for installing the cellular network when it was the U.S intelligence services that were caught red-handed tapping the personal phone of Chancellor Angela Merkel. It is is clear that the U.S. is in pathological denial of its own sins while attributing them to China.

The demonization of China has been so successful that it has become commonplace on the Western ‘left’ which characterizes Beijing and Washington as an ‘inter-imperial rivalry’ of equal footing. Yet China’s development and aid in the continents like Africa is regarded by their leaders as one of mutual benefit, not plunder like its debt crisis manufactured by Western financial institutions. Unfortunately, this hasn’t stopped much of the left from agreeing with the likes of John Bolton in characterizing China’s assistance as ‘neocolonial.’ Liberalism is supplanting internationalism and anti-imperialism in many ‘leftist’ circles and it is especially disappointing to observe many who may be innately skeptical of corporate media narratives of a crisis in the Middle East or Latin America suddenly abandon their suspicions to rely on the very same sources as dependable in their coverage of China.

This failure shows the residual effects of post-WWII reinterpretations of Marxism in the West that is institutionalized in the academic canon, such as the Frankfurt School hybrid that prioritizes using Marxism only as a theoretical lens in their corresponding disciplines of examining culture and critiquing the arts. While there is no denying that ‘socialism’ is ascendant since the 2008 financial crisis which a recent Gallup poll shows that 40% of Americans support in some form, the version budding leftists are encountering is a variety that strongly demonizes all previous historical attempts at putting Marx’s theories into practice whereby the first requisite is to denounce all existing revolutions and achievements by socialism in the last century as totalitarian failures. For this reason, China is dismissed as a “state capitalist” or ‘Stalinist’ deformation. Michael Parenti warned of this in Blackshirts & Reds:

[R]eal socialism, it is argued, would be controlled by the workers themselves through direct participation instead of being run by Leninists, Stalinists, Castroites, or other ill-willed, power-hungry, bureaucratic, cabals of evil men who betray revolutions. Unfortunately, this ‘pure socialism’ view is ahistorical and nonfalsifiable; it cannot be tested against the actualities of history. It compares an ideal against an imperfect reality, and the reality comes off a poor second. It imagines what socialism would be like in a world far better than this one, where no strong state structure or security force is required, where none of the value produced by workers needs to be expropriated to rebuild society and defend it from invasion and internal sabotage.

The hesitancy to defend China can also be ascribed to the widespread misconception that because of its market-oriented reforms, the People’s Republic is no longer socialist. The truth is much more complicated. The Tiananmen Square protests occurred at a time when China was undergoing economic liberalization not unlike glasnost and perestroika in the USSR under Mikhail Gorbachev. The demonstrations themselves even consisted of many Maoists who opposed the reforms under Deng Xiaoping such as the privatization of agribusiness and the social safety net, as the participants were not all united under the same demands or political tendencies. Still, Deng was no Gorbachev as he oversaw the ratification of the most recent constitution which maintained much of the socialist system. Through all its many significant faults, the People’s Republic has lifted nearly a billon people out of poverty since 1949 and while it is true there are still tens of millions who are poor, the Communist Party continues to organize the economy to eventually raise those remaining to a higher standard of living under the guide of its self-professed ‘socialism with Chinese characteristics.’

Despite its market economy and the adoption of some outward capitalist features, its public and state-owned enterprises are of much greater prevalence. The state sector has a bigger share in everything from transit to energy while virtually all land and property is still owned by collectivities or the state. There is not a single private bank in China which includes the world’s largest that is state-controlled, as are virtually all major media outlets from television to newspapers. Fundamentally, its advances on the world stage are more attributable to a planned economy than the free market. That Beijing is increasingly in the crosshairs of imperialism is only a further sign of the inevitable decline of the American empire. As for the fact that China is not only producing more cars than the West but many of the world’s billionaires is indeed an internal contradiction — but only an inherent one to those who have been duped into believing that socialism is about making everyone equally poor. If you believe that, there is a proverbial bridge in Brooklyn to sell you.

Why is the Ruling Class Putting Up With the Idiot-King?

Mass complicity

Wilhelm Reich, in both The Mass Psychology of Fascism and The Function of the Orgasm argued that socialists do not understand mass psychology. He said that the biggest problem in Germany was not Hitler or even the economic system of capitalism. Rather he asked what is it about the masses of people who supported Hitler? His answer was that Hitler wouldn’t have existed if there wasn’t a little bit of Hitler in a whole lot of people. The problem is why masses of people are so passive. He gave answers to these questions, but his answers aren’t as important to me as the question he posed. Even in his later books (Listen Little Man and The Murder of Christ), when Reich was clearly paranoid, he remained lucid when it came to insisting that masses of people are ultimately responsible for whatever political body has power.

Group Complicity

In my experience teaching courses in group dynamics, I ask my students to discuss problems they are having in the groups they are members of outside of school. My greatest problem is to get them to go beyond a) blaming the leader of the group or b) identifying some jerk in the group who is obnoxious, crabby, recalcitrant, needy and then blaming them. The assumptions of both blaming leaders and individual group members is that: a) if only we got a good group leader, everything would be fine; b) if only we could get rid of a couple of pain-in- the neck group members, the group would be fine; or c) the rest of the group members are neutral witnesses with little responsibility. What this doesn’t take into account is that when the majority group members are passive, they are producing both bad group leaders and obnoxious individual members. Again, the most interesting question to me is the complicity of most group members.

Don’t follow the bouncing ball

Another way to describe this ignored perspective is to use an analogy from football. The easiest and most self-evident way to watch a football game is to follow the ball. The quarterback gives the ball to the running back, we follow the running back. The quarterback passes to the wide receiver, we follow the wide receiver. But what neither the cameraman nor the fans do is follow a) what is going in the offensive defensive lines away from the ball and b) what is going on between the defensive secondary and the offensive ends when they are not part of the immediate action. What is going on away from the ball might hold the key to understanding which team may ultimately prevail.

But what does this mass and group complicity and watching football have to do with the subject of the relationship between the ruling class and the Idiot King?

The political economy of ruling class complicity

My questions do not have to do with mass psychology, group dynamics or watching football. My question is why the ruling class in the United States is putting up with the Idiot King. To use the analogies in the previous sections, blaming the Idiot King for the state of the political economy in Yankeedom is like blaming Hitler alone for fascism or blaming only the leader for problems in group dynamics. In the football analogy, it is like following Trump’s tweets or actions (the ball in football) and thinking that counts as following politics. What is missing is why the ruling class, that has had power long before the Idiot King and will have power after he is gone, has put up with him for 2 ½ years.

In this article I ask some very simple questions. They are questions that have bothered me for over two years now. I have not found any articles that answer my questions, so I will pose them to you in the hopes you may have some answers. I am not an expert in ruling class machinations, though I have studied the work of William Domhoff, Robert Michaels and Gaetano Mosca. Hopefully a few good answers will lead us to deeper, more penetrating questions.

Network Revisited

About three-quarters of the way through the great film 1976 Network by Paddy Chayefsky, there is a showdown between Mr. Jensen, representing the forces of global capitalism, and Howard Beale who in some ways resembles Trump in his instability and economic nationalism. Here is the exchange:

Jensen: You have meddled with the primal forces of nature, Mr. Beale, and I won’t have it!! Is that clear? You think you’ve merely stopped a business deal. That is not the case. The Arabs have taken billions of dollars out of this country, and now they must put it back! It is ebb and flow, tidal gravity! It is ecological balance!

You are an old man who thinks in terms of nations and peoples. There are no nations. There are no peoples. There are no Russians. There are no Arabs. There are no third worlds. There is no west. There is only one holistic system of systems, one vast and immanent, interwoven, interacting, multivariate, multinational dominion of dollars. Petro-dollars, electro-dollars, multi-dollars, reichsmarks, rins, rubles, pounds, and shekels.

It is the international system of currency which determines the totality of life on this planet. That is the natural order of things today. That is the atomic and subatomic and galactic structure of things today! And YOU have meddled with the primal forces of nature, and YOU WILL ATONE!

Am I getting through to you, Mr. Beale?

You get up on your little twenty-one inch screen and howl about America and democracy. There is no America. There is no democracy. There is only IBM and ITT and AT&T and DuPont, Dow, Union Carbide, and Exxon. Those are the nations of the world today.

What do you think the Russians talk about in their councils of state – Karl Marx? They get out their linear programming charts, statistical decision theories, minimax solutions, and compute the price-cost probabilities of their transactions and investments, just like we do.

We no longer live in a world of nations and ideologies, Mr. Beale. The world is a college of corporations, inexorably determined by the immutable bylaws of business. The world is a business,

Assuming that Mr. Jensen is the ruling class of today, how well have his predictions turned out? For well over two years, Howard Beale (Donald Trump) has gotten the better of the Mr. Jensen and the ruling class. The purpose of this article is to explore why.

The ruling class has no clothes

For the last two and a half years much has been written about the psychology of the Idiot King, his immorality, his crassness, his lack of impulse control, his political reversals and his inability to follow normal political procedures. Others have written about the failings of the capitalist economy and the rise of strikes. To write about those things make sense. But my purpose is to draw your attention to the absence of articles on how the ruling class has allowed the Idiot King to go on and on.

Why are the Christian Fundamentalists putting up with him?

Mike Pence, Christian fundamentalist must at least be partly sickened by Trump. Faithless in religion, patron of prostitutes, a squanderer of money, how can Pence stand next to this guy? He takes it – and he smiles. The Christian fundamentalists who are the base of Pence’s following must do cognitive compartmentalization handstands trying to square the Idiot King with their Christian beliefs. But they are managing. Why don’t they rebel?

Is Trump doing the will of the ruling class?

For some, the answer to my question is that the idiot king is simply doing the will of the ruling class. After all, some may say fascism is the last stage of capitalism. The ruling class is frightened that more people are calling the economic system “capitalism,” and a new generation is interested in socialism. They need fascism to rule by a visible fist rather than an invisible hand. I don’t buy this and I’ll explain why.

When I bring up the ruling class, I am talking about the Council of Foreign Relations, the Trilateral Commission and the whole Rockefeller apparatus. I am thinking about Kissinger, Brzezinski, the CIA, NSA and the military elites. I am talking about the liberal think tanks, the foundations and the media. I’m thinking of the New York Times, the Guardian , CNN, MSNBC. All these groups have a stake in the long-term success of capitalism and Yankee world domination. They all like to have a long-term plan and they don’t like surprises. Trump is full of surprises. Why are they putting up with him?

Maybe the Neocons have gained power at the expense of the Neoliberals?

It is a mistake to think that Trump was simply a creature of the neocons. Before the elections, the neocons, any more than anyone else, knew what Trump was going to do. It was only after the elections that they seized the opportunity. One possible exception to this is Steve Bannon who, even before the elections, saw the political possibilities. The presence of Tillerson, Bolton and Abrams affecting policy must have involved the hand of Bannon. The neocons can give the Rockefeller ruling class a run for its money. After all Cheney ruled for eight years. But so what?

A corresponding concern for the ruling class has to be Trump’s rabid followers. I suspect that many workers who voted for Trump might not vote for him again because he has not instituted policies that have improved their lives. We must remember the research done by labor historian Kim Moody, that many working-class people who voted for Trump in 2016 voted for Obama in 2008. They switched sides after they found out Obama didn’t give a hoot about the working class. They could shift again or simply not bother to vote at all. However, there are rabid racists among Trump supporters who will not go quietly if the Idiot King is not crowned. The ruling class does not want a civil war on their hands.

Ruling class incompetence before the elections

What is far more important than Trump winning the election is that Hillary Clinton lost. The queen of the Council of Foreign Relations, hand-picked, “It’s my-turn” Clinton, lost to a reality TV host and bad businessman. All the money of the ruling class was put on Clinton and she lost anyway. How can that be? What is the ruling class doing wrong?

Ruling class incompetence after the elections

As we know, the Idiot King is full of surprises. If you were a member of the ruling class would you be pleased with his performance? In the space of less than two years Trump has alienated Europe as Italy, Germany and even England are turning towards Russia and China for resources. He has wrecked relations with China. The Yankee ruling classes have Israel, Saudi Arabia, Australia, England and perhaps India on their side, along with assorted dictators they’ve installed on the periphery of the world-system. However, the number of countries they can count on is dwindling. It this what Rockefeller and Kissinger wanted? Why hasn’t the idiot King been stopped? The CIA has tried assassinations all over the world. The CIA works for the Rockefellers. Draw your own conclusions.

Look at the neoliberal press. They work for the ruling class. Yet day after day they respectfully report on his escapades, treat him with respect in public even though they loathe and despise him. Journalists are upper middle class people, many of whom have PHDs. Going toe-to-toe with the Idiot King, they could easily humiliate him in public. They are far more knowledgeable than Trump, yet they put up with him. There is no reason why journalists could not unite as a group, walk out of his press conferences and shout him down together publicly. But they don’t. The editors of most every neoliberal newspaper probably hate Trump. But day after day, week after week Trump’s stupid opinions are trotted out and his moronic mug appears constantly in the news. These papers are the organs of the ruling class. Why don’t they refuse to print what he says?

The instability of capitalism

There is one other factor I want to consider and that is the instability of capitalism. The ruling class has never understood the system from which their wealth derives. Capitalism has been in a decedent phase since the 1880s or so. If we follow the work of Michael Roberts in his book, The Long Depression, capitalism is haunted by the tendency of the rate of profit to fall. In the last 150 years it has used investment in the military and finance to forestall this decline.

But now, all around the world the limits of the system are showing. Ecological forecasters say at this rate the earth will be unlivable in 30 years. Countries on the periphery of the world-system, taken as a whole, have been in hell for at least 50 years. Even Europe, the home of capitalism, is in big trouble. Southern Europe is swamped with debt. The EU is on its last legs and the centrist parties have taken a beating. Macron had been stung by Yellow Jackets for six months. Even Germany, the mighty jewel of Europe, has ceased to develop its manufacturing sector. World-systems theorists have said that relative to world-capitalism, the US has been in decline for 50 years. Strikes around the world have been increasing. Even the World Economic Forum has been worried about the potential for world rebellion.

The capitalists who run the world are cannibalizing their own infrastructures and their working class and all they can do is invest in wars and finance capital. They have no answers. It used to be that a capitalist would say to a socialist, triumphantly, “name one country where socialism works?”. We can now say without any hyperbole or dogma “name one capitalist country that works”. You know – the way Adam Smith described it and the way economics professors in the United States teach it.

Is the ruling class finally drawing a line in the sand?

Up until now, the ruling class has benefitted from Trump’s “policies” of tax cuts and deregulation. But these are both domestic policies. His relationship with the ruling class around international issues is another story. In his trade war with China and now Mexico, Trump has been disrupting supply chains all over the world. The companies affected include General Motors, Delphi, Constellation Brands, Cummins, Black & Decker and Fiat-Chrysler (partly American). Not exactly small potatoes. Some companies are switching suppliers to countries not affected by Trump’s tariffs like Vietnam, Taiwan and Korea, according to Capital Economics. The patience of the heads of these corporations with Trump must be wearing thin. There are the costs of pulling out and setting up shop in a new place with no guarantee of a better deal than China, and for what?

The Idiot King is allowing his hatred of CNN, the NYT and the Washington Post to get in the way of international capital. He is on a collision course with the ruling class. His has encouraged a boycott of AT&T which owns CNN. He is considering Antitrust proceedings against Google, Facebook, Apple and Amazon, owner of the Washington Post.

Has the ruling class lost its capacity to rule?

Even if the ruling class finds a way to stop Trump, this doesn’t account for why it has taken them so long. The self-assured silkiness of Mr. Jensen of Network is gone. The calm inevitability of capitalism is gone. The ruling class the world over is fumbling. Their efforts seem to be focused on how to climb higher and higher up the mountain to avoid the rising flames below. The ruling class is lost.

For those of us who are revolutionaries, the most important question is to understand why the ruling class is so weak and how we can exploit those weaknesses. We cannot expect to overthrow capitalism if we don’t understand where the ruling classes are weakest and act accordingly. I welcome your thoughts.

• Originally Published in Planning Beyond Capitalism

Trump: From China to Iran to Venezuela, Threats and Sanctions Everywhere

As of May 10, Mr. Trump has arbitrarily increased tariffs on Chinese goods imported into the US, worth about 200 billion dollars, from 10% to 25%. It is an action without any foundation. An action that makes no sense at all, as China can and will retaliate – and retaliate much stronger than what the impact of the US’s new “sanctions” may bear – because these arbitrary tariffs are nothing else but sanctions. Illegality of such foreign interference aside, there is hardly any serious economist in this world who would favor tariffs in international trade among “adults” anywhere and for any reason, and, of course, least as a punishment for a nation. All that such sanctions do is pushing a partner away. In this case it’s not just any partner; China is a key trading partner of the United States.

The new tariffs will hardly harm the American consumer. There are huge profit margins by US middlemen and importers of Chinese goods. They are competing with each other within the US  and the consumer may not even notice a thing. However, the US economy will likely suffer, especially from Chinese retaliatory actions.

A spoiled child, what Trump is, doesn’t get his way – and goes into a tantrum, not quite knowing what he is doing, and knowing even less what he may expect in return. Mr. Trump, himself, has not only reached a level of incompetence and ignorance which is scary – but he has also surrounded himself with inept, preposterous people, like, Pence, Bolton, Pompeo – who, it appears, have no other means left than running around the world amok, dishing out threats left and right and spending billions on moving aircraft carriers around the globe to make sure people are afraid of the great-great United States of America.

Back to trading with China. China has a million ways (almost) to retaliate. China can devalue her currency vis-à-vis the dollar, or China can dump some of their almost 3 trillion dollars-worth of reserves on the money market – just take a wild guess about what that would do to the hegemony of the dollar which is already in dire straits – with ever more countries departing from the use of dollars for international trade.

And just hypothetically, China could stop altogether exporting all that Walmart junk that American consumers love so much just for a while. Or China could stop making iPhones for the US market. Guess what kind of an uproar that would trigger in the US?  Or China could, of course, levy herself high tariffs on US imports, or stop US imports altogether. China being part of the Shanghai Cooperation Organization (SCO) – actually the co-founder of it – has many alternatives to cover her demand. No need to depend on the west.

Let’s not forget, the SCO which also counts as its members, Russia, India, Pakistan, most of Central Asia, and Iran poised to become a full-fledged member, covers about half of the world population and a third of the world’s economic output, or GDP. No need to look to the west for ‘survival’ – those times are long gone.

But more importantly, what all this looks like to me is the desperate thrashing around of a dying beast, or in this case a dying empire.

We have the US and Venezuela – threats after threats after threats – Maduro must go, or more sanctions. Indeed, according to a study by the Center for Economic Policy Research (CEPR), these horrifying, totally illegal sanctions or blockages of imports, most of them already paid for by Venezuela, have killed some 40,000 people in Venezuela. Of course, Washington doesn’t care about legality and killing, also typical for a fading mighty power – no respect for law and order, no respect for human rights and human lives. One only has to see what type of psychopaths are occupying the tasks of “Foreign Minister” and of “National Security Advisor” or of Vice President, for that matter – they are all sick, but very sick and dangerous people.

Well, in Venezuela “regime change” didn’t work out – so far. Pompeo has been clearly told off by Mr. Lavrov during their recent get-together in Helsinki,  and China is in the same line of supporting the government of Nicolas Maduro.

Next – Iran. Attacking Iran has been a dream of Bolton’s ever since the US 2003 “Shock and Awe” invasion of Iraq. Bolton and Pompeo are of the same revolting kind: They want wars, conflicts, or if they don’t get wars, they want to sow fear, they enjoy seeing people scared. They want suffering. Now they didn’t succeed – at least so far – with Venezuela, let’s try Iran. Pompeo – “Iran has done irregular things” – not saying what in particular he means – so Iran has to be punished, with yet more sanctions. And any argument is good.

The entire world knows, including the Vienna-based UN Economic Energy Commission, and has acknowledged umpteen times that Iran has fully adhered to the conditions of the Nuclear Deal from which the US exited a year ago. Of course, no secret here either, this at the demand of Trump’s Big Friend Bibi Netanyahu. The European Union vassals may actually turn for their own business interests, not for political ethics, but pure and simple self-interest – towards respecting the Joint Comprehensive Plan of Action (JCPOA), or Nuclear Deal. China and Russia are already holding on to the Deal, and they are not impressed by Washington’s threats. So, there is very little Trump and his minions can do, other than saber rattling.

Therefore, the nefarious Pence-Pompeo-Bolton trio must invent another warning: Iran or any proxy of Iran shall attack an ally of the US, and Iran will be devastated. In fact, they consider the Houthis in Yemen who fight for their sheer survival against the US-UK-France – and NATO supported Saudis, as a proxy for Iran. So, the US could start bombing Iran already today. Why don’t they?

Maybe they are afraid – afraid Iran could lock down the Strait of Hormuz, where 60% of US oil imports have to sail through. What a disaster that would be, not just for the US but also for the rest of the world. Oil prices could skyrocket. Would Washington want to risk a war over their irrationality? Maybe, Mr. Halfwit Trump might, but I doubt that his deep-dark state handlers would. They know what’s at stake for them and the world. But they let Trump play his games a bit longer.

Moving the aircraft carrier USS Abraham Lincoln, loaded with war planes, close to Iranian waters costs hundreds of millions or billions. Just to enhance a threat. A show-off. Bolton and Pompeo will entertain their sadism, enjoying seeing scared people. But the cost of war doesn’t matter – it’s just more debt, and as we know, the US never, but never pays back its debt.

Next, or simultaneously, is China. The trade war with China that started last year, then had a respite to the point of the recent joint negotiations and suddenly the Trumpians are veering off again. They must smash China, wanting to appear superior. But why? The world knows that the US is no longer superior by a long shot, and haven’t been for the last couple of years, when China surpassed the US in economic strength, measured by PPP – Purchasing Power Parity – which is the only parity or exchange rate that has any real meaning.

Guess what!  All these three cases have one common denominator: The dollar as a chief instrument for world hegemony. Venezuela and Iran have stopped using the dollar for their hydrocarbon and other international trading, already some years ago. And so did China and Russia. China’s strong currency, the Yuan, is rapidly taking over the US-dollar’s reserve position in the world. Sanctioning China with insane tariffs is supposed to weaken the Yuan; but it won’t.

All of these three countries, China, Iran and Venezuela are threatening the US dollar’s world hegemony and without that the US economy is dead, literally. The dollar is based on thin air, and on fraud.  The dollar system used around the globe is nothing but a huge, a very big and monstrous Ponzi-scheme, that one day must be coming crashing down.

That’s what’s at stake. New FED Board member, Herman Cain, for example, is pledging for a new gold standard. But none of these last resort US measure will work, not a new gold standard, not a trade and tariff war, and not threats of wars and destruction and “regime change”. The nations around the world know what’s going on, they know the US is in her last breath; though they don’t quite dare saying so, but they know it, and are waiting for the downfall to continue. The world is waiting for the grand fiesta, dancing in the streets, when the empire disappears or becomes utterly irrelevant.

• First published in New Eastern Outlook (NEO)

It Is a New Era, But China’s Balancing Act Will Fail in the Middle East

Although ties between Washington and Tel Aviv are stronger than ever, Israeli leaders are aware of a vastly changing political landscape. The US’ own political turmoil and the global power realignment – which is on full display in the Middle East – indicate that a new era is, indeed, in the making.

Unsurprisingly, this new era involves China.

China’s Vice President, Wang Qishan, arrived in Israel on October 22 on a four-day visit to head the fourth China-Israel Innovation Committee. He is the highest-ranking Chinese official to visit Israel in nearly two decades.

In April 2000, the former president of China, Jiang Zemin, was the first Chinese leader to ever visit Israel, touring the Yad Vashem Holocaust Museum and paying diplomatic dues to his Israeli counterparts. At the time, he spoke of China’s intentions to cement the bond between the two countries.

Wang Qishan’s visit, however, is different. The “bond” between Beijing and Tel Aviv is much stronger now than it was then, as expressed in sheer numbers. Soon after the two countries exchanged diplomatic missions in 1992, trade figures soared. The size of Chinese investments in Israel also grew exponentially, from $50m in the early 1990s to a whopping $16.5bn according to 2016 estimates.

China’s growing investments and strategic ties to Israel are predicated on both countries’ keen interest in technological innovation, as well as on the so-called “Red-Med” Railway, a regional network of sea and rail infrastructure aimed at connecting China with Europe via Asia and the Middle East. Additionally, the railway would also link the two Israeli ports of Eilat and Ashdod.

News of China’s plan to manage the Israeli port of Haifa has already raised the ire of the US and its European allies.

Times have changed, indeed. Whereas in the past, Washington ordered Tel Aviv to immediately cease exchanging American military technology with China, forcing it to cancel the sale of the Phalcon airborne early-warning system, it is now watching as Israeli and Chinese leaders are managing the dawn of a new political era that – for the first time – does not include Washington.

For China, the newfound love for Israel is part of a larger global strategy that can be considered the jewel of China’s revitalized foreign policy.

Qishan’s visit to Israel comes on the heels of accelerated efforts by Beijing to promote its mammoth trillion-dollar economic project, the Belt and Road Initiative (BRI).

China hopes that its grand plan will help it open massive new opportunities across the world and eventually guarantee its dominance in various regions that rotated, since World War II, within an American sphere of influence. BRI aims to connect Asia, Africa, and Europe through a “belt” of overland routes and a maritime “road” of sea lanes.

The China-US competition is heating up. Washington wants to hold on to its global dominance for as long as possible while Beijing is eagerly working to supplant the US’ superpower status, first in Asia, then in Africa and the Middle East. The Chinese strategy in achieving its objectives is quite clear: unlike the US’ disproportionate investments in military power, China is keen on winning its coveted status, at least for the time being, using soft power only.

The Middle East, however, is richer and, thus, more strategic and contested than any other region in the world. Rife with conflicts and distinct political camps, it is likely to derail China’s soft power strategy sooner rather than later. While Chinese foreign policy managed to survive the polarizing war in Syria through engaging all sides and playing second to Russia’s leading role at the UN Security Council, the Israeli Occupation of Palestine is a whole different political challenge.

For years, China has maintained a consistent position in support of the Palestinian people, calling for an end to the Israeli Occupation and for the establishment of an independent Palestinian state. However, Beijing’s firm position regarding the rights of Palestinians, seems of little consequence to its relationship with Israel, as joint technological ventures, trade and investments continue to grow unhindered.

China’s foreign policymakers operate with the mistaken assumption that their country can be pro-Palestine and pro-Israel at once, criticizing the Occupation, yet sustaining it; calling on Israel to respect international law while at the same time empowering Israel, however unwittingly, in its ongoing violations of Palestinian human rights.

Israeli hasbara has perfected the art of political acrobats, and finding the balance between US-western discourse and a Chinese one should not be too arduous a task.

Indeed, it seems that the oft-repeated cliché of Israel being “the only democracy in the Middle East”, is being slightly adjusted to meet the expectations of a fledgling superpower, which is merely interested in technology, trade and investments. Israeli leaders want China and its investors to think of Israel as the only stable economy in the Middle East.

Expectedly, Palestinian priorities are wholly different.

With the Palestinian struggle for freedom and human rights capturing international attention through the rise of the Boycott, Divestment and Sanctions (BDS) movement, more and more countries are under pressure to articulate a clear stance on the Israeli Occupation and apartheid.

For China to enter the fray with an indecisive and self-serving strategy is not just morally objectionable, but strategically unsustainable as well. The Palestinian and Arab peoples are hardly interested in swapping American military dominance with Chinese economic hegemony that does little to change or, at least challenge, the prevailing status quo.

Sadly, while Beijing and Tel Aviv labor to strike the needed balance between foreign policies and economic interests, China finds itself under no particular obligation to side with a well-defined Arab position on Palestine, simply because the latter does not exist. The political division of Arab countries, the wars in Syria and elsewhere have pushed Palestine down from being a top Arab priority into some strange bargain involving “regional peace” as part of Trump’s so-called “Deal of the Century”.

This painful reality has weakened Palestine’s position in China, which, at least for now, values its relationship with Israel at a higher level than its historical bond with Palestine and the Arab people.

US Trade Sanctions Against China

PressTV Interview – Transcript

Background

New Trade Sanctions by the US in the form of tariffs on US$ 200 billion Chinese exports to the US – China in a tit-for-tat move imposed new tariffs on 60 billion of US goods to China

China’s prime minister speaks out about the rise of unilateralism, saying the approach to trade will not solve any problems.

Li Keqiang made the comment at the World Economic Forum in the Chinese city of Tianjin. He said multilateralism should be upheld and the basic principle of free trade should be maintained. The Chinese premier said the trend of globalization is unstoppable, even though there are flaws in the process. Li’s comments come amid heightened trade tensions between China and the United States. Beijing imposed tariffs on 60 more billion dollars-worth of American imports in a tit-for-tat response to Washington’s levies on 200-billion dollars of Chinese goods.

PressTV: What is your take on this?

Peter Koenig:  These are indeed “trade sanctions”. US-imposed trade sanctions.

Of course, the Chinese are right. In a world that strives for free trade – unilateralism as demonstrated by the Trump Administration’s-imposed tariffs – is working in the opposite direction.

Two comments, if I may:

First, personally, I have been doubting from the beginning that globalization — and especially globalization in terms of “free trade” — is a good thing. There is nothing FREE.

Free trade among equals is one thing, but “free trade” American style, where they call the shots is, of course, not what is intended. The weaker always suffers, and I am not referring to China.  China doesn’t really suffer, they dominate the entire Asian market, having overtaken the US in Asia about three years ago, but I’m talking in general about developing countries that have to accept highly subsidized US and EU goods in order to stay within these “free trade deals”.

And we see that the west cannot be trusted; i.e., President Trump. He is making his own rules. Therefore, free trade and the related globalization is in my opinion not a good thing. It has hurt too many people of mostly poor countries over the past 30-some years, when neoliberalism started driving the agenda of “globalized free trade”.

Trading among friendly nations, nations that share the same objective, the same political and economic ideology, would be a much preferable alternative. There, nobody can bully another nation into accept his conditions.

This is something we may want to move back to — trading among friendly and culturally aligned nations, where trading is a win-win for both parties.

The second point I wanted to make is maybe more important: These tariff impositions have nothing really to do with trade. The Chinese know it and the US Administration knows it.

They, the tariffs, have everything to do with pulling down, weakening the Yuan, the very strong Chinese Yuan, and by doing so, the Chinese economy. The Yuan is an officially declared reserve currency recognized by the IMF and is fast replacing the dollar as the key reserve currency in the world.

That is what Washington is afraid of — and rightly so. Once the dollar ceases being the main reserve currency, the demand for the dollar will decline, and the hegemonic role for the dollar is gone – which may mean the collapse of the dollar-empire — and in the end the end of the empire altogether.

Already the biggest hydrocarbon producers and consumers in the world, China, Russia, Venezuela and Iran are no longer using the dollar for their trade deals, but local currencies or the gold-convertible Chinese Yuan.

So, the end of the dollar hegemony is coming sooner or later, but Washington wants to delay it as long as possible, hoping for a miracle, or actually even preparing for a military intervention to save the dollar.

Trump Threatens WTO Exit

Transcript: PressTV Skype Interview with Peter Koenig
31 August 2018

Introduction

U-S President, Donald Trump, has threatened to withdraw from the World Trade Organization.

Trump, in an interview with Bloomberg News, said he will pull out from the organization if it “does not shape up”. The U-S president warned that he could even take action against the WTO. Trump has complained that the US is being treated unfairly in global trade and has blamed the World Trade Organization for allowing it to happen. Regarding tariffs, Trump said he will enact import duties on 200-billion dollars-worth of Chinese goods as early as next week. Following his remarks, Asian stock markets dropped and partially erased gains made in this week’s global rally. Trump has ignited a global trade war by slapping sharp tariffs on goods from the EU, Canada, Mexico, and China.

PressTV: What is your take on this?

Peter Koenig: Well, it looks like this latest threat to exit WTO goes into the same direction as his trade war with the EU and with China, and also with the new NAFTA Agreement – which so far was negotiated only with Mexico and does not include Canada; it eventually would have another name.

The new trade agreement with Mexico was negotiated like all trade agreements with the US, behind closed doors. Canada was invited to also join, but as far as I know, no decision has been taken yet. At the outset it looks like the new “draft” agreement with Mexico is worse than the original – with all the rights and benefits going to big US corporations.

In the case of Mexico, it is really only a “draft”; nothing has been accepted yet. It will be subject to Mexican approval once the new President, Andrés Manuel López Obrador is sworn-in in December 2018.

What Trump is doing – or attempting to do – with tariffs and with sanctions is dividing the world, breaking up alliances; i.e.. trade alliances in the case of WTO. It’s the old rule: “Divide to Conquer” – and conquer in this case means that when alliances like WTO, in the creation of which – by the way – the US and the EU were instrumental, are broken up, the US will engage in bilateral agreements with individual nations, like in the case of the “new NAFTA”, negotiating with Mexico alone, dictating her terms to weaker nations. If Canada will be ready again for a NAFTA-like agreement, the process will be similar, with Washington in the driver’s seat.

What transpires from these negotiations, or tariff impositions – like China and the EU, or even the reneging of the Iran Nuclear Deal – is Make America Great Again, meaning really American Corporatism, not the people.

New bilateral trade deals will continue to allow bilateral outsourcing to cheap labor countries, for example, between the US and Mexico, and the export of highly subsidized US goods. In the case of agriculture, NAFTA killed hundreds of thousands of small farming businesses in Mexico which was one of the key reasons for the massive increase of illegal migration to the US.

This will hardly be different in a new agreement. That’s why nothing is done yet. The progressive new President, López Obrador, may not easily submit to a flagrant one-sided agreement.

The case of tariffs on China for 200 billion worth of merchandise – has a different purpose, namely, to degrade the value of the Chinese currency, the Yuan, which is emerging rapidly as one of the world’s foremost reserve currencies, to the detriment of the US dollar. The Trump move is meant to discourage countries to adopt the Yuan among their reserve currencies. Some success was indeed registered by Trump’s announcement – the Asian markets dropped drastically wiping out much of the gains made during last week’s rally. This, however, will be short-lived, as investors realize the hot air behind the threat and that these tariffs will really make hardly a dent in China’s economy which is dominating the Asian market and doesn’t really depend on exports to the US.

If the US would indeed exit WTO – which is by no means sure, since Trump likes to play god, threatening, fearmongering – and then negotiate under conditions of intimidation and coercion – so, if the US would actually get out of WTO, they – the US – might set themselves up as sort of a competitor to WTO, negotiating individual bilateral deals with nations, especially weaker ones. They would no longer be under the oversight of WTO – and as with the International Court of Justice – to which the US does not belong – complaining would be meaningless.

But we are not there yet.

Why China will not Back Down from a Trade War

On Tuesday (4/3/2018) the US published a list of Chinese imports, set to be hit with a $50 billion tariff increase. This is the latest in an escalating trade skirmish between the US and China, that could escalate into a war. On Monday (4/2/2018) China implemented a $3 billion tariff hike on several US imports including fruits, pork and steel. This was in response to Trump’s tariffs on Chinese aluminum and steel one month ago. Back then, he was tweeting, “trade wars are good and easy to win,” but now it appears he is getting a dose of his own medicine.

Xi is unlikely to back down since, several facets of the Chinese economy bolster it against the vicissitudes of a possible trade war. First, China has built up its internal economy. China’s “township village enterprises” (TVEs) helped rural incomes rise by 300% between 1989 and 2005, fueling domestic demand. Moreover, China’s internal markets received an unprecedented boost in 2008, when the government launched its $586 billion stimulus plan in response to the financial crisis. China has also maintained record high levels of investment in infrastructure and built a world renown high speed rail system that has greatly reduced transport costs to the interior. Correspondingly, exports as a percentage of GNP have been falling steadily since 2006, and with them reliance on trade with the US.

Second, South-South economic ties have been strengthened by China’s one-belt one road project and Asian Infrastructure Development Bank. Just this January, China invested $2.28 billion in the one-belt countries, and $1 trillion is the target investment for the entire project. Increased south-south trade would substitute for lost trade with the States. Third, China holds $1.2 trillion in US debt, which will not only provide a stream stream of income in the event of a trade war, but will militate against Trump escalating it to the point of a trade war in the first place. And finally, China’s housing guarantee, land guarantee, and constitutional right to a job, imply that as bad as any trade war gets, people will have a roof over their head, and either a job, or a plot of land, from which they can draw sustenance. The same cannot be said for the United States.

There are also at least two facets of the Chinese political system that militate against Xi backing down to Trump’s proto-imperialist aggression. First, although Xi is a member of the ‘elitist’ faction of the CCP, which has among its base urban, coastal entrepreneurs who are likely to prefer taking a short-term loss than see an escalation to an all-out trade war; capital is subordinated to the CCP in the Chinese political system. Two of the three primary means of production (land and capital) are controlled by the state. Real estate developers must obtain use rights for land from local party officials, rather than local party officials needing to obtain campaign funds from real estate developers. The power that the CCP has over Chinese capitalists, while incomplete, is significant. In 2008, real estate developers were compelled to invest in 36 million subsidized housing units to counteract rising urban housing prices, which were largely the product of their speculative behavior.

Second, the CCP operates based on the principle of democratic centralism, which stipulates that the minority concede to the majority, once ample debate has been undertaken. This would imply that even if, entrepreneurs opposed a resolute stand against Trump, they would be compelled to accept the dictates of the majority, who presumably would act in their own interests and support strong resistance to Trump’s policies.

It is notable that the legacies of Chinese socialism, are today enabling Chinese state capitalism, to stand resolutely against Trump’s protectionist salvoes. For instance, the 2008 stimulus package that so greatly bolstered China’s internal markets, was made possible by state ownership of the banking sector, which allowed the government to not only inject an unprecedented amount of capital into the Chinese economy, but inject it in the interior regions of China, for the express purpose of building up the domestic market.

Similarly, state banks were instrumental in facilitating the technology transfer necessary for China’s high speed rail system. State lending to “national champions” allowed these champions to leverage their monopsony buying power to force US companies into transferring their technical know-how.

China’s investments in infrastructure were greatly facilitated by the relative abundance of semi-skilled labor (welders, machinists, engineers etc.), themselves a product of the broad based approach taken to education in the Maoist era.

Rural China’s TVEs would not have been possible without state ownership of land, which allowed the state to prevent de-collectivized farmland from being ‘grabbed’ by global agribusiness and turned into vast monocrops which would not have stimulated internal markets in the slightest. TVEs were also, at least in the beginning, state-owned enterprises.

Subordination of the entrepreneurial minority would not be possible without state ownership of two of the three means of production – land and capital, as mentioned above, and of course, China’s various social safety nets: housing guarantee, right to work, land guarantee etc. are a product of the “people’s war.”

China’s socialist legacy is the backbone of its current “sovereign project” – the only such project in existence today. This sovereign project rejects both the dominance of the triad (US, EU, Japan) and the dominance of the neoliberal model propagated by this triad. The power of this triad stems from their control of the five oligopolies of twenty first century capitalism: finance, technology, information, natural resources, and WMDs. The triad’s corporations are disproportionately represented on the top 10 lists of banks, tech companies, media companies, oil companies, and nuclear powers.

International organizations like the WTO have also been regularly biased in favor of the triad. For instance, Trump’s steel tariffs against China were in conflict with existing WTO rules. Trump justified breaking these rules by alleging that China had stolen intellectual property and obtained WTO authorization to implement intellectual property tariffs. The speed with which the WTO protected the intellectual property of 25 US billionaires, and its absolute resistance to protecting the livelihoods of 2.5 billion peasants in the global south who were decimated by the Doha round agreements, reflects the institutional bias of the WTO toward the interests of the triad.

China is making inroads on the five oligopolies of the triad. It is, moreover, presenting an alternative, nationally oriented, state-capitalist model of development, that is fundamentally in conflict with the logic of the dominant neoliberal paradigm. The emerging trade war, is yet another episode in the ongoing battle. China however, seems poised to mount a resolute stand against Trump’s proto-imperialist protectionism. On account of the strength of China’s internal market, the growth of south-south trade, China’s ownership of US debt, and China’s social safety nets, China’s economy looks ready to withstand the shock of a trade war. Its political system moreover, due to the subordination of capital, and the principle of democratic centralism, seems poised to nip elite co-optation in the bud. These bulwarks are in large part, the result of China’s socialist legacy.