"Most People Have No Idea What's Coming" — Richard Wolff's Last WARNING

the People's Republic of China over the last 20 years has increased its output of goods and services faster than any other country on this planet this is not an exercise in we're good they're bad that comes from the Cold War which was supposed to have ended in 1989 90 but clearly hasn't or at least the cold war is alive and kicking in the minds of some of our fellow citizens which is too bad because it prevents the kind of balanced approach looking at the pros and the cons that a mature intelligent conversation ought to be

about capitalism has strengths and weaknesses socialism is an alternative and it has strengths and weaknesses and we'd all be better off if we were able to talk about all of that without resorting to Childish invocations of how we're good and they're bad let me begin by talking about what economists often talk about when comparing different kinds of societies comparing different countries you might remember that Adam Smith's great work The Wealth of Nations published back in 1776 was about explaining why some nations are wealthy and some nations are not to account for that to understand it

and part of that was a very generous impulse Mr Smith understood that poor countries would like to not be poor and want wanted to learn what the rich countries might be able to teach them about how to get to that situation well China was one of the poor countries at the time Adam Smith wrote and it got poorer after that so that by say the 20th century the last 100 years or so the Chinese people were not only the most numerous people of any country on Earth they remain today the most populous country on this

planet by far but also because they were very poor that the capitalist part of the world had grown much richer in the intervening couple of centuries so they were even further behind as well as being absolutely poor so they were focused like most of the people in the world on overcoming poverty so that's been their major goal and it's a reasonable place to start to assess how well they've done and if these numbers trouble you then please understand it's because you did not know about them before not because there's any anything wrong with the numbers

over the last 20 years the People's Republic of China has increased its output of goods and services faster than any other country on this planet and in the case of the comparison say between the People's Republic of China on the one hand and the United States of America on the other they're not even close let me explain with some numbers the rate of growth of output of goods and services the productivity of the economy if you like in 2005 was 11% in 2017 it was 15% in one year in 2010 it was 12% and it

has slowed down since then and over the last year it was a mere 6.4% so in other words if you wanted to average it out it was probably in the neighborhood of 10 11% over the last 10 15 20 years by comparison let me give you the numbers for the United States of America its average growth rate in the 1950s and 60s was 4% in the 70s and 80s it fell to 3% and in the last 10 years it has averaged 2% in the latest period the lat this year it was 3.2% half of what

it was in China but for most of the last of 20 years the rate of growth of China has been two to three to four times that of the United States and that in a simple way tells us something number one it explains why we're reading and hearing so much about China because they have become the second most important economy in the world because they have achieved AED these extraordinary rates of economic growth number two it'll help you understand something else about the people of China they are not about to be pushed around neither by

Mr Trump nor anybody else because they have the economic strength to resist and number three if you're the government of the People's Republic of China and that is a government in which the Communist Party of China is dominant you are hardly about to change the way you organize your economy given how well it has been doing governments change either willingly or under pressure when they're doing badly for their people it makes people bitter angry critical and liable to push for change this is something Americans no doubt understand since it's the situation we face here in

American capitalism or in Europe with their capitalism that's not doing real well for an enormous number of people and as a consequence criticisms are rising you see a rediscovery of socialism for example here in the United States you see the yellow vest movement demanding fundamental changes in France and you see all kinds of other movements but this is already enough to explain to you why the People's Republic of China is the economic phenomena of our time let me turn next to the second most typical statistic to look at if you're comparing countries and you're trying

to understand what's going on with the development or not of wealth and poverty this number is called the real wage here's what it means how much can people afford to buy with the average wages they get and to understand that we look at two numbers first how much money is given to people per hour for the work they do and on the other hand what are the prices of the things they buy with the wages they get in other words if your wage goes up by 10% but so do all the prices you face you're

not one wit better off yeah you got 10% more money but it doesn't buy you anything but the same quantity of things it bought you before so when we adjust the wages workers get for the prices they have to pay we get What's called the average real wage what you can afford with the money you get so let's compare the last 20 years in the United States that is this Century so far in the United States with that in China so here we go in the United States real wages the actual average wage of the

American worker has stagnated it has gone nowhere that's true not only for the 20 years we're talking about of this Century it's true for the last 25 years of the 20th century here's a statistic for you to think about as an American if you're watching this program from the United States or listening to it on the radio here in 1973 the wage of the United States average wage of an American was able to buy here we go now more things than it was in 2018 the real wage in the United States is less today than

it was then it's not less by a lot but it means that over the last 40 to 45 years Americans who have worked harder than ever who have been more productive than they ever were across that time have not shared in their greater productivity their real income their real wages have not gone up the real hourly wage in the United United States is lower today than it was in 1973 and that is something to think about but now comes the Chinese story over the same period of time just counting the last 20 25 years real

wages in the People's Republic of China have quadrupled let me tell you that again the basket of goods and services that an average worker gets in China for an average average hour of his or her work is four times greater today than it was 25 years ago yes Chinese wages remain below the average in the United States because they were and they still are a poor country when you divide their total economy by the enormous number of people that live in that country but if you want to understand why the people of China support their

government here's a clue their real wages went up four times over the last 25 years in a society led by a government in which the Communist party is the dominant political force let me pause to let all of this sink in this is not about whether you like these numbers or don't this is not about whether you're critical of many aspects of Chinese Society or you're not I myself find things in China I admire and things in China I would like to avoid I try to look at the strengths and weaknesses but when it comes

to the economics of their socialist system and I compare it in its performance over decades to this moment there is no contest about which system has served its people better in terms of economic growth of output the economy as a whole and the real wages of the average worker in that Society is China an example of equality no it has a great deal of inequality there the United States and China have something in common High inequality that's actually getting worse having shown the remarkable success of their economic growth program in both those ways I want

to turn now to how they did that how do they organize their economy and particularly in what ways differently from that of the United States or Western Europe that might help us account for their extraordinary performance first and perhaps most important for many of you that are watching and listening is to understand that the Chinese economy for quite some time now has had a mixture of privately owned Enterprises and state-owned Enterprises you might think of it as a mixed economy between private and state it is also true over the last 20 25 years that the

role of the private sector has been enlarged relative to the role of the state sector however that has to be made a little more complicated by noting that the Chinese in managing this balance between the state and the private give the dominance to the state they say that the the state-owned Enterprises will always be the leading sectors the main industrial groups within the Chinese economy there's plenty of room for private Enterprises but the leading part of the economy will be the state why are the Chinese doing that first and foremost they are doing it because

it's their way of learning from the experience of the Soviet Union when the Soviet Union's kind of socialism in which the state was overwhelmingly dominant and the private sector was really quite restricted when the Soviet Union collapsed in on itself in 1989 it went through an extremely quick transition from a overwhelmingly State industrial sector to an overwhelmingly private one this was pushed by the folks in Russia who wanted these changes it was pushed by Foreign advisers led by Jeffrey saaks now of Columbia University it was called a kind of cold shower treatment or sometimes shock

therapy as a way of fixing what was understood to be wrong the Chinese analysis is that the suffering of the Russian people in the 30 years since then the failures of the Russian economy in the 30 years since then had largely to do with the excessive speed and the excessive EX ENT of what happened in the Soviet Union and they have been determined not to repeat that mistake in other words their communist party's plan is to make the transition slow and limited yes foreign Enterprises can come in if they're private capitalist Enterprises and many have

yes Chinese people can set up private Enterprises as many have but the leading sectors of the economy will remain state-owned Enterprises running the program of economic development that the state organizes under the leadership of the Chinese Communist party it's important to understand that the Chinese kind of socialism is itself a learning process in which what happened to the Soviet system is playing a major role in this case of what not to do in the way that happened in the Soviet Union but it is not the only Factor that's involved to continue the comparison with the

Soviet Union because the Soviet Union was the first socialist country and completely isolated after the 1920s surrounded by a world that hated what they were doing they couldn't and didn't find a way to build their economy by exporting they could not produce for the rest of the world make a lot of money that way and use it to develop their own economy they had to do it pretty much on their own the Chinese have taken a different path there as well early on the Chinese decided the end of the last century the beginning of this

one to Hitch their economic wagon to the World Market to become the producer of goods and services for sale around the world and in order to do that they had to build industries that produced what the rest of the world did either at a higher quality or at a lower price or both and basically they've done that which is why Chinese automobiles Chinese appliances Chinese clothing Chinese you fill in the blank is everywhere most of what you will see in an average Walmart is made in China and there's a reason why Walmart stocks up on

Chinese good and they're not the only compan of course so they hitch their wagon to the World Market and they've done very very well because of it the Russians couldn't do that and the Chinese could and they did here's another thing private capitalists didn't go into Russia hardly at all but they have been rushing stumbling all over themselves to get into China and the Chinese understand that and they offered Western capitalist Enterprises the following deal we we need your technology the Chinese said we need your money your Capital to be invested so here's the deal

we offer you we will provide you with welld disciplined efficient hard-working workers at a very low wage the one that we have here in our poor country and we will build the roads and provide the supports for you to be able to make a lot of money producing here in China more cheaply than you could ever produce in America or Western Europe or Japan Etc all we ask in exchange is that you share your advanced technology cuz that's why we're doing this with you you will have access to our workers and you will have access

to our customers to sell your product but we want your technology and your Capital nobody put a gun to any capitalists Enterprises head they made the decision to accept the offer of the Chinese because it was profitable for them to do so if it meant that they laid off workers in their home countries these capitalist Enterprises they could care less they did that they abandoned whole Industries they abandoned whole communities that's how capitalism has always worked only this time this destruction of working people in the West Was a boon to the workers of China which

is why I gave you the numbers about the average real wage so the Chinese used the World Market the deal they struck with private capitalists and the lessons they learned from the Soviet Union to organize what they call a special Chinese kind of socialism that allows for private Enterprise a considerable amount allows for Market dealings a considerable amount but controls from the top through the state-owned Enterprises the leading or dominant sectors of the Chinese economy China is an old civilization and a quite homogeneous civilization the Han people are the dominant ethnic group and other ethnicities

are small and Scattered the Chinese are a proud people with a long history of a pretty well-developed civilization which at various times over the last couple of thousand years was much more developed than civilizations in the west were so for them it was doubly embarrassing humiliating is the word they used to fall under the control of foreign colonialists in the 17th 18th 19th century from Britain from France from Germany from the United States it culminated in a horrible moment of rebellion called the Boxer Rebellion at the end of the 19th century when a futile effort

by the Chinese authorities to push back against the Western imperialists was defeated China was never made into a colony they're very proud of that but they had to give away Hong Kong and parts of their country to The Foreigner who controlled them who settled their merchants and other companies in these special territories where they didn't find themselves subject to Chinese Authority or Chinese law and the Chinese as a people made a commitment to find their own way to break led by sunat sen at the beginning of the 20th century and when that wasn't sufficient and

when they were added the humiliation of the invasion of their country by the Japanese in the 1930s a Revolt of a much deeper sort took place in China they were successful at first it was an alliance between the nationalists who wanted to build up a capitalist China and the Communists who wanted to build up a socialist China but they worked together to push the Japanese out and by 19 45 they had done so together with the fight of the United States and its allies against Japan and as soon as World War II was over the

alliance between the capitalist nationalist Chinese under their leader Chang Kai Sheek ended up in a civil war with the Communists their former allies led by Mao and a civil war broke out from 1945 to 1949 ending with a decisive and complete victory of the Communist Red Army the Chang kek people left the mainland of China and went to Taiwan where their descendants still live and still imagine that they on the little island or China whereas the vast mass of people on the mainland are something else no one hardly is left in the world who shares

this delusion from 1949 to now 70 years historically not a long time but from a decimated poor colonialized country China is now the number two economy in the world and it is an incredible achievement and not to understand that not to understand what this means in the minds in the feelings and in the pocketbooks of the Chinese people not to understand that it has involved moving 4 to 500 million people off of the poverty stricken Countryside into the urban industrial jobs along the coast of China these are misunderstandings that make no sense you are not

helped in understanding let alone fixing the problems of the World by living in the delusion that the things I've tried to get across today are not the case don't have to be taken into account and somehow don't matter unfortunately in the mainstream media of the United States and in other parts of the West most most of this is simply not reported on not covered evaded that doesn't do anyone a service unless it's the people who run the kinds of society China isn't who are afraid of the model and the example China offers