This Is What ALWAYS Happens Before A Superpower Falls | Richard Wolff

over the last 30 to 40 years we've been witnessing an absolutely unique phenomena the People's Republic of China whatever you think about it and I'm not really here neither to condemn nor to endorse anything about it but if you have eyes to see you will see Economic Development achieving things nobody thought were possible nobody understood in those days what the Chinese were doing and in those days it was only the beginning and you could be excused for not paying all that much attention they were one of many very poor countries in the world who were

trying to stop being poor countries in the world Americans might have read the novel by Pearl Buck The Good Earth if you ever did read that book we had to in high school well you learned what the poverty was like it was for a Suburban kid like me it was hard to get my head around what that kind of poverty is like in the the last 30 to 40 years the Chinese achieved a level of economic development that took several centuries in Western Europe and it took a good century and a half counting conservatively here

in the United States we've never seen anything like it what the Chinese did was to mobilize borrow from the rest of the world no question but put all that together in a successful mix if your measuring Rod is economic growth lifting people out of poverty and let's remember 1.4 billion people four to five times the population of the United States they were able to do it not only that they now compete with the United States at the highest levels of Technology what we get from Intel or apple they have their equivalent and in some cases

they're already ahead of us I'll give you an example 10 or 15 years ago every major car producing company in the world undertook a program to develop the electric car the electric vehicle to replace the fossil fuel burning oil and gas vehicle and we have many examples of that being produced however one example outranks everybody else the electric cars of China are better and cheaper than anybody else's they won the competition that happens all the time other companies in other countries at other times On's equivalent competitions the response of the United States has been to

impose a tarff to make the better cheaper electric car from China unaffordable the current rate of tariff applied by the Biden government is 100% so for example if the electric car from China cost you $330,000 that have to be sent to China to pay for the car you've got to give them to the car dealer 30,000 to pay off the Chinese and another 30,000 100% goes to Uncle Sam so that the cost to an American would be $60,000 for that $330,000 car okay there are no electric cars from China on the road in the United

States a quarter of the electric cars on the road in Europe are the Chinese cars the greatest producer the most successful the most rapidly growing car company in the world most Americans have never heard of it has three initials B is in boy why and D is in dog byd Corporation the response of the United States is to freeze them out this is self-defeating and to be an economist for a moment stupid why everywhere else in the world as the transition to electric vehicles is underway every competitor of the United States across all Industries will

be able to buy the best car at $30,000 with which to compete with the American company whereas the American company is going to have to pay more than $30,000 for the non-tariff equivalent which will cost you $40 to $50,000 for an inferior vehicle when I went to school and they taught me economics this is somewhere between self-defeating and stupid and a little bit of both when I got my PhD in economics at Yale years ago my classmate was a woman I remember her she was unusual her name was Janet yellow okay she's now the Secretary

of the Treasury in the United States government I know that she knows it's self-defeating she knows it's stupid she's out there advocating it because that's the position of the government the United States is losing the competition with China this is a self-defeating Behavior typically of somebody who's desperate instead of out competing the Chinese coming up with a plan to try at least to do that you are you know lifting up the barriers they tell themselves in Washington that they're isolating the Chinese they're not they're isolating themselves the rest of the world looking at the United

States and they see an Empire going down and they get the pleasure that comes from that and we ought to wake up as a nation and figure this out every part of the poor world and the poor world is the vast majority of Asia Africa Latin America for sure plus large parts of North America and Europe too they all wanted 40 years ago to do something but the Chinese actually did it that's the question that has to be did they build on what went before absolutely absolutely they did the Chinese for example and this is

misrepresented in the west again for defensive reasons people say that Chinese built on on the West's technology that's true of course that's true but the Chinese didn't do that in any mysterious way 25 years ago they made a decision that they would say to the developed World whom they hoped to imitate United States western Europe Japan and so on we will give you a deal we understand your capitalists we understand that profit is the bottom line blah blah blah and here's what we're going to give you two things number one an educated disciplined incredibly cheap

labor force and number two the bigest growing Market in the world in a business school we tell budding young entrepreneurs if you want to know where to go and focus your energy go where the labor is cheap and the market is growing okay they went to China and they went because they did exactly what we told them to do they made a ton of money that forced all of those who were not yet ready to do that to realize if you don't go to China too these guys are going to out compete you they're going

to bring that stuff back made with cheaper labor and they have their own the Chinese market you know General Motors now sells more cars in China than it does in the United States these are the developments and everybody wanted to do it but the Chinese did it and the whole organization called The Bricks is an organization that is internationalizing the Chinese model and that too ought to worry the United States a great deal more than it currently does the 20th century bequeaths to us you know let's call it the anglo-american mostly private economic system private

Enterprise private capitalist profiting all of that and Beque the Soviet Union the attempt as an alternative to build it with government-owned and operated Enterprises at least in the industrial sector not so much in agriculture but there too let's call them for lack of better a polar opposite then it's not surprising given how human beings things work that along would come a group of people who have something they don't like about the first one and something they don't like about the second one and so they conceive the idea would we get from a hybrid something that

would capture the best of the one the best of the other and get rid of discard the parts of both of them that we don't like you could I think make a very good case that that's what Mong the Chinese Communist part that's what they are people forget but they shouldn't that in the 1960s Soviet Union and their proteges in China came to war with one another they did not agree on things that would make them shoot at each other's people and hurt each other I mean the divisions were very profound so no one should

be surprised that the Chinese made the decision to welcome foreign Enterprise bring us your technology cuz you are ahead of us in a dozen ways which they said if you read Chinese journals they've been full of that for years much of what those Chinese journals did was to take from the United States and try to figure out how to do the same thing a little bit better but 90% of what they did was learn from the United States and they paid for that in all the ways they normally nobody stole the T that's childish nobody

put a gun to the heads of the American companies that went over and made the deal we will give you our technology we will show it to you we'll teach it to you you got to give us the labor you got to give us access to the market we're getting profit out of it you're getting technology that was the deal that was a deal on the table crystal clear to represent it now is really cheating it's like my saying I'm going to give you $5 you give me your shirt and we make the exchange you

have my five bucks I got your shirt and then I start screaming he stole my shirt no stop you didn't steal my shirt we had a deal you may have changed your mind you may regret it that's another matter but nobody stole anything from you and the Chinese you know they resent that because for them that's the 100 Years of humiliation again because what they hear is the subtext you're too stupid you're too backward you're too Chinese to figure these things out and so you must have stolen it you couldn't have done it without you

know we are the center and I know where it comes from for a good long while the United States was the center of innovation was the great breakthrough Tech technology Silicon Valley deserves part of the reputation it has I get that but so do the achievements on the basis of that and if you're honest about Silicon Valley you'll know that a lot of what they did there was also borrowing things that had been developed elsewhere in the world as it has always been if you have a society that arises on the decay of another one

one of the things that often happens is a kind of for lack of a better term shavinism that is the winner in the game rewrites the history and in that history their own people their own communities or the dynamic or the Breakthrough or the or the are the and the achievements of others are second rate or they're downplayed and then it's not a big step until they're forgotten altogether for me the example is baseball when I was young I was in love with American baseball and I was in love with a sport that I understood

was white and I remember occurring to me why are there no black people in the baseball and the answer was they don't do that or they can't do that I was around early enough that I remember the importance of Jackie Robinson as the Breakthrough black player nowadays we understand that black people to be as mild about it as I can are very good at sports and are very important in our professional sports like overwhelmingly so and that they were now you get the idea they were not out of of the game because of their athletic

skills there were other reasons and the same thing I think applies here if you're a economy is based in a certain way of making decisions then your civilization Rises and falls on that basis the collapse of the Chinese empires of the past were that they were built on to use the language of Economics a feudal class structure a class structure of Lords and surfs like what we had in Europe you know in the Thousand Years between the end of Rome and the Renaissance or however you want to date it it doesn't matter but that system

which enabled European feudal society to achieve remarkable things also was the seeds of their own downfall and why do I say that because it's directly applicable to what's the China story China wants to cash in on all the achievements of private capitalism which are significant modern industrialism ation all of that but they are also aware partly because of their ideology that what can carry you forward can also drag you down and you've got to be careful to understand that possibility to be alert for it and not to miss it when it comes and here's how

it came to United States and China we innovate in this country in so far and when it is profitable to somebody to develop it somebody sees oh I can make a ton of money doing it this way or this new way we celebrate that we are proud of it and it achieved a lot I'm the last one to deny it I teach that material to my students what did the Chinese do they said yes yes but if you make that the key if the only inovation program you undertake is the one that is privately profitable

you are going to miss opportunities you are going to underfund Opportunities and it's going to drag you down we in China This Is How They explain it we in China say half the economy you do that private profit driven technological do it and we'll let you become milliona though after the United States China is a second country in terms of the number of private Millionaires and billionaires that they have so they've allowed that to happen but in the other half of the economy we're not doing that we're going to make decisions about Economic Development including

technological change based on the social objectives the Communist party and its government Define so for example we want to be ahead of the United States in certain new areas we didn't have private Enterprise to undertake it who cares we'll do it we'll do it maybe the private will catch on later and they'll do it okay then we'll do something else but as as long as we're going to make decisions and there's the solution they are able to say we're going to invest in things that Americans don't is it because Americans can't no do we lack

the technology no do we have the scientists who can do it yes but we have an economic system that is so set up that those opportunities that aren't now privately profitable get the short end of the stick they're not never there but they are the ones that we dream about but we don't invest in they don't do that when they talk they say is profit important to us yes is it the beginning and the end of the conversation oh no not the bottom line it is one among a set of objectives and our strategy is

focused on all those objectives not the prioritization of private profit by the way that's what they mean when they say socialism that's what they mean