Al-USA

Ramping Up China's Domestic Consumption: What's Taking So Long?

It's true, Chinese domestic consumption will never happen, not in a level to replace the consumption lost by the masses of USA or Europe simply because of the per capital argument already mentioned above.

Recall that the masses of the USA enjoyed relative prosperity, and increased incomes, only as a result of successful widespread unionization after the dominance of USA industry with victory of the democratic capitalists vs. the fascists (non-democratic capitalists) of WWII.

Of course, the period after WWII was dominated by the Cold War, with the democratic capitalists of the Western powers vs. the anti-capitalists of the USSR which provided fertile ground for continued successful unionization on the capitalists home ground b/c, to be honest, the Western capitalists were scared to "death" that the masses would, heaven forbid, look towards the anti-capitalists' economies as any proper economic model to aspire to.

It was only under the favorable conditions explained above that the masses were able to achieve and maintain relative prosperity. However, with the decline of the anti-capitalist competitors, the Warsaw Pact countries, the capitalists of the Western democracies were less compelled to allow a greater portion of their profits towards boosting labors' wages so, starting at about 1974 or so, with the opening up of China, the race was on to increase profits at the expense of masses of the working/middle class.

This is always the case, in fact, it is the definition of capitalism, but it intensified by orders of magnitude with the introduction of first, the billion plus workers in China , and later, the hundreds of millions of workers of the collapsed USSR, all paid at "slave" level wages, relative to the working/middle classes of the Western democracies such that, only by the introduction of massive debt was the illusion of wealth able to be maintained for the masses of the Western democracies and allowing economic "game" to continue...

Until now, or rather 2007, where the maximum extent of credit had been met, and in fact, surpassed, since as recently as 2007 the savings of the American consumer were negative, so, the "game was up". The conditions which favored the masses relative prosperity in the Western democracies don't exist in China, so, I see no forces which can compel a similar relative prosperity among Chinese workers, in a scale which would replace, to any appreciable level, that which was lost by the American working/middle class starting with the 1974-1975 opening up of China, and later the collapsed USSR. In other words, it has now come full circle, and the crisis of capitalism, a crisis of over-production, has no fundamental solution, within the limits of the profit system...

If you made it this far, thanks for reading.