Commentary on Political Economy

Friday, 10 July 2020


Professor Michael Pettis has a new book out, titled "Trade Wars Are Class Wars", whose main thesis is consistent and consonant with our own discussion of these matters in this Blog. Of course, for that reason alone we strongly recommend it. No need for us to revisit the main components of the overall thesis - we have argued them ad nauseam on these pages. - Just a couple of observations will do here. First, Pettis focuses on China and Germany as national economies (our allusion here is to Friedrich List) that exasperate domestic wage suppression so as (a) to accumulate trade surpluses and hard-cash reserves, and (b) to keep their currencies low through low wage-push inflation and their economies competitive - which leads to greater trade surpluses. The point to be made here is that these domestically autarkic and externally mercantilist policies are mostly adopted by nation-states that are either current dictatorships (China) or recent dictatorships (Japan, Germany, Taiwan, Korea). The reason for this is that the ruling elites and bourgeois classes in each of these "dictatorial or authoritarian or command or dirigiste" nation-states either in the past or still in the present have developed political institutions and legal rules that successfully suppress emancipatory democratic and progressive movements (working-class or liberal middle-class) within their borders. That is why, as Pettis gloriously labels the thesis, "trade wars are [also] class wars".

But our next point concerns this notion of "class wars". Does the sociological notion of "class" still withstand critical analysis in the type of global capitalism that we are experiencing now? This is a moot point that we ought to study and discuss in greater detail. It is important because it is vital to the question of "what is to be done", of how we proceed to emancipate our societies and the entire world: in other words, what is the historical agency that can lead us forward to a better social existence?

That is for a later day. For now, just one last point: Professor Pettis correctly and justly observes that Western bourgeoisies have practised similar strategies to those of the present and past autarkic-mercantilist dictatorships. True. But as Hannah Arendt pointed out in The Origins of Totalitarianism, this is valid for the first phase of "primitive accumulation of capital" (e.g. the enclosure period in Britain) and also to the expansionist or imperialist period of Western capitalist accumulation (the first volume of Arendt's great work on totalitarianism is appropriately titled "Imperialism"). For the advanced industrial capitalist nation-states, this period of "formal empire" is over broadly speaking: "globalisation" or "world-market" capital movements have replaced it. (Incidentally, on many of these themes, we recommend my mentor's Marcello De Cecco's invaluable Money and Empire now mercifully available at Enough for now, but once again a huge "well done!" to our inestimably far-sighted Prof!

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