Capitalism and Economy en Trump’s latest tariffs may make for a gloomier holiday season <p>San José, CA - While most Americans won’t have a ‘white Christmas’ this year, many of us will be looking forward to the displays of lights on many homes and businesses. Now the Trump administration’s escalating trade war with China threatens to dim this coming holiday celebrations - or at least make them more expensive.</p> <p>On July 10 the Trump administration began another round of escalation of its trade war with China. Trump announced a 10% tariff on an additional $200 billion of Chinese-made goods. While the initial 25% tariff on $34 billion of imports from China had very few consumer goods, this broader list, which is almost 200 pages long with some 7000 types of goods, does.</p> <p>One of those listed are Christmas lights. The U.S. imports over $500 million of these lights each year from China. These lights make up over 90% of the total light imports, meaning that U.S. buyers will not be able to switch to other countries to avoid the tariffs. If these tariffs go through they would raise the cost of holiday lighting.</p> <p>There are a number of imports where the U.S. gets 90% or more of its imports from China. At the top of this list are laptop computers, which are valued at almost $40 billion. With 93% of all imported laptops coming from China, and almost no laptops being made in the U.S. (ironically, the only U.S.-made laptops are made by Lenovo, a Chinese company), another round of U.S. escalation is bound to hit more expensive items such as laptops and cell phones.</p> <p>This is exactly what the Trump administration has promised to do when the Chinese government responds to the latest round of U.S. tariffs. China only imports about $150 billion of goods from the U.S., and is already placing tariffs on $50 billion of them in response to U.S. tariffs. But China also imports services such as U.S. movies (half the top-selling movies in China in the first half of this year have been U.S. films) and education (China is the single largest country of origin for international students and about a third of foreign students in the United States). U.S. corporations also have major investments in China, usually with a Chinese partner. General Motors actually sells more cars in China than in the U.S. under this arrangement (China is the world’s largest car market in terms of number of vehicles sold). China could use a variety of so-called “non-tariff barriers” to hit back at the U.S. tariffs.</p> <p>Not only are prices on consumer goods likely to go higher as Trump escalates the trade war with China, but prices of U.S. exports to China are already heading down. Prices of soybeans are near a ten-year low and fell 15% last month alone. China is the single largest market for U.S. farmers exporting soybeans, taking about a third of all exports. The pain for U.S. workers and businesses is growing in the wake of Trump’s trade war.</p> Capitalism and Economy China holidays tariffs trade war Trump Wed, 11 Jul 2018 20:48:27 +0000 Fight Back 6862 at Capitalism’s impact on mental health <p>New York, NY - On June 5, fashion designer Kate Spade died via suicide. Three days later, chef and TV personality Anthony Bourdain also committed suicide. Along with his TV show, Bourdain was a supporter of Palestine and the #MeToo movement, as well as openly criticizing Henry Kissinger for his foreign policy.</p> <p>Both cases resulted in a widespread, mainstream discussion about suicide and mental health, but the solution typically suggested is for individual people to seek help via suicide hotlines, going to therapy, and reaching out to friends and loved ones for help. While all of these may help someone in need at that moment, it doesn’t address the larger issues at hand. Here are just some of the ways in which the U.S.’s monopoly capitalist system affects workers here, as well as how inflicts mental harm upon its victims around the world.</p> <p><strong>Economic basis</strong></p> <p>Band-aid solutions to mental illness only help remedy the symptom, but do not address the system that is at the root of the problem. Capitalism creates conditions for mental illness and suicide to manifest. From a study by the Federal Reserve Bank of San Francisco, people earning less than $34,000 are 50% more likely to commit suicide, and unemployed people are 72 more likely to commit suicide than employed people. According to the Center for Disease Control, suicide rates are higher in rural areas, where Native Americans and Alaska Natives have the highest rates.</p> <p>At the same time that capitalism reinforces mental illness, it also limits the accessibility to mental healthcare in the U.S. Over 6.3 million adults with mental illness are uninsured, and even those who are insured still face high costs, such as copays, treatment not covered by insurance, and providers who do not take insurance.</p> <p><strong>Treating the symptom, not the cause</strong></p> <p>The ability of working class and poor people to access adequate mental healthcare is limited by a lack of time outside of working hours, as well as an economic inability to afford treatment, even with health insurance. For those that do decide to seek treatment, the costs of such are high and the treatment is insufficient in the long term.</p> <p>There is a motive for psychiatrists to prescribe medication instead of providing psychotherapy. According to Dr. Daniel Carlat of Tufts University, a psychiatrist can make two to four times more money by prescribing medication than providing therapy. While psychiatric medication can be a necessary aspect of mental health treatment, it is used in a system that prioritizes profit over people while forgoing longer-term treatment that addresses the individual’s particular conditions.</p> <p><strong>U.S. Imperialism’s effect on mental health</strong></p> <p>Along with conditions in the U.S. contributing to suicide, U.S. imperialism also is a major factor in mental illness and suicide. In May 2018, a Honduran man named Marco Antonio Munoz killed himself in a Texas jail cell after being separated from his family, who crossed the U.S.-Mexico border. Palestine, which is occupied by Israel with financial backing of the U.S., leads in the Middle East and North Africa region in depression and anxiety disorders, including in children.</p> <p><strong>Mental health under socialism</strong></p> <p>Where can we look to in order to find an alternative system to the U.S. healthcare system? Cuba is one example of how socialism can provide solutions to those suffering with mental illness.</p> <p>According to Sandra Soca Lozano from the University of Havana, psychologists are incorporated into all aspects of healthcare, and psychologists and physicians work closely together. A psychologist will assess medical patients for contributing mental factors, and physicians will evaluate psychiatric patients to look for contributing physical conditions. Since no private organizations offer health services in Cuba, everyone has access to public care.</p> <p>Due to the restrictions set on Cuba from the embargo, preventative care is emphasized for mental healthcare. This includes all Cubans having annual mental health screenings as part of their primary care (including home visits if unable to go to the office), the ability to access psychologists and physicians in their neighborhoods, and creating their own technology and techniques for detection of mental illness.</p> <p>A more widespread discussion about mental health and suicide is a positive step, but discussion alone will not solve the problem. In order to fix the broken mental healthcare system, we must fight to overthrow capitalism and ensure that under socialism, everyone will have adequate access to mental healthcare and treatment.</p> People's Struggles Capitalism and Economy Socialism Opinion Capitalism health care mental health Socialism Workers and Globalization Thu, 05 Jul 2018 19:04:50 +0000 Fight Back 6847 at Stock market slumps again on trade war worries <p>San José, CA - U.S. stock markets fell again, June 25, as trade war worries continued to weigh on investors. The Dow Jones Industrial average fell 1.3% or more than 300 points, after regaining some ground from a 500 point sell-off earlier in the day. The NASDAQ index, which includes more stocks of high-tech companies, fell over 2%.</p> <p>The only news over the weekend was that the Trump administration was going to limit the purchases of technology companies. When Secretary of Treasury Steve Mnuchin denied that the investment limit was aimed at China, stocks fell even further. They bounced back on the news that Trump’s trade representative Peter Navarro contradicted Mnuchin and said that only China is being targeted. This is just another example of deep divisions within the Trump administration over trade policy.</p> <p>The report that China’s President Xi promised, in a meeting June 21 with major U.S. companies doing business in China, that China “would punch back” over U.S. trade tariffs gained more media coverage on Monday and may have helped to rattle the market. Other financial news that didn’t help the stock market was the flattening of the so-called ‘yield curve.’ The gap in interest rates on ten-year U.S. government bonds and shorter term bonds fell to the lowest level since 2007. If the gap turn negative (that is, if the interest rates on long-term bonds drops below that of short-term bonds) or what is called an ‘inverted yield curve’ is a very strong predictor of a recession in six months to two years.</p> <p>At the time this article was written, stock markets across Asia continued the sell-off.</p> Capitalism and Economy stock market Tue, 26 Jun 2018 15:34:08 +0000 Fight Back 6808 at Stock markets around the world rattled as Trump vows to escalate trade war with China <p>San José, CA - On June 19, stock markets around the world fell in reaction to U.S. President Trump’s promise to escalate the U.S. trade war with China. The Japanese Nikei index fell almost 2% along with other Asian markets. In Europe, Germany’s export-oriented economy meant its stocks were hit the hardest, with the German DAX index down more than 1%. The world sell-off ended in New York City, with the Dow Jones industrial average down more than 1%, bringing the average to below its starting point for the year.</p> <p>The stock sell-off followed the announcement that Trump would seek to place 10% tariffs on an additional $200 billion of U.S. imports coming from China. Trump thinks that the U.S. can “out-gun” China since U.S. imports from China, at about $500 billion, are much larger than China’s imports from the U.S., which are only about $150 billion. But an hour later, the Chinese Ministry of Commerce that it would respond with its own tariffs. Their statement also implied that China would take other measures, which could include restrictions on U.S. businesses operating in China. General Motors, for example, actually sells - along with its Chinese partner, the SAIC (formerly the Shanghai Automotive Industry Corporation) - more cars in China than in the U.S.</p> <p>Many other countries are afraid that they will be hurt as the U.S. escalates its trade war with China. About 60% of all exports from China to the U.S. are made by multinational corporations, which import a lot of parts from other countries. For example, Apple’s iPhone, which is assembled by the Taiwanese Foxconn corporation in China, actually gets half of its value from parts coming from Japan and Germany and only 5% is value added in China.</p> <p>One result of this is that relations between China and Japan have recently improved. Sino-Japanese relations have long been strained by the first Sino-Japanese war in 1895 where Japan colonized Taiwan (and continue to occupy the Chinese Diaoyutai Islands - called Senkaku by Japan), and the Japanese invasion and occupation of China in the 1930s and 1940s.</p> Capitalism and Economy tariffs Wed, 20 Jun 2018 05:21:02 +0000 Fight Back 6795 at Trump administration’s trade war with China and the fall of U.S. hegemony <p>San José, CA - On Friday, June 15, President Trump signed orders to place tariffs (taxes) on $34 billion of imports from China beginning July 6. The office of the U.S. Trade Representative (USTR) will be imposing tariffs on another $16 billion of imports from China in the near future for a total of $50 billion in imports facing 25% taxes. This represents another turnaround in trade from a few weeks ago, when Trump’s Commerce Secretary Steve Mnuchin said that the trade war was “on hold” after initial negotiation with the Chinese government, which had offered to increase purchases of U.S. goods and further open the Chinese economy to foreign investments.</p> <p>This action against China is another sign of the rising power of trade hardliners in the Trump administration such as Peter Navarro, director of the White House Trade Council. Navarro was recently in the headlines for saying that there was a “special place in hell” for Canadian Prime Minister Justin Trudeau, after Trump refused to sign a statement of the Group of Seven (G-7) meeting of major capitalist countries. This hard line on trade can also be seen in the Trump administration’s imposition of tariffs on steel and aluminum imported from Canada, the European Union and Mexico on ‘national security’ grounds.</p> <p>The Trump administration’s trade policies follow a mercantilist outlook that trade deficits are bad and that a country grows strong through a trade surplus. Mercantilism was adopted by early European colonial powers as they advocated taking colonies, taxing imports, subsidizing exports, and restricting trade to a few government sponsored monopolies. Many of the British colonists’ economic grievances against the King were caused by these policies.</p> <p>The mainstream economic view of free trade was championed by Adam Smith, a British economist who published The Wealth of Nations in 1776. In his work, he used the term “the invisible hand” to describe the virtues of a free market, where small businesses would compete for customers by offering cheaper and better quality goods and services.</p> <p>With free trade, countries would specialize, and Smith saw the British colonies as producing agricultural goods for British factories. While this was embraced by southern American plantation owners, who used slave labor to produce cotton for export, northern manufacturing interests wanted tariffs in order to develop American industries like weaving, with their cloth protected from cheaper British goods. These tariffs were passed in 1862 after the South tried to leave the U.S. over the issue of slavery.</p> <p>As U.S. industries came to dominate the world capitalist economy, replacing Britain as the number one economic power, the U.S. took over Britain’s role as a champion of free trade. Towards the end of World War II, the U.S. set up a number of international institutions to bolster free trade and U.S. economic domination. The Bretton Woods currency agreement, which fixed foreign currency exchange rates where the U.S. dollar was paired up with gold to replace the British-led gold standard. The General Agreement for Tariffs and Trade, or GATT, which developed into today’s World Trade Organization or WTO was designed to lower tariffs and allow for more U.S. foreign investments. Finally, the International Monetary Fund or IMF and the World Bank would make loans to former colonial and oppressed nations to enforce free trade and government austerity in the interests of the U.S. and other former colonial powers in western Europe and Japan.</p> <p>But the decline of U.S. economic hegemony has led to the unraveling of this web of institutions. Bretton Woods was first to go in the 1970s when the U.S. dollar lost its status as being ‘good as gold.’ Since 2005 the World Trade Organization has been deadlocked when developing countries, led by Brazil and China, refused to discuss U.S. demands for more free investments after the U.S. refused to discuss its own trade policies such as subsidies for agriculture. The World Bank is being challenged by a recent Chinese initiative, the Asian Infrastructure Bank, which has started up despite a U.S. effort to prevent other countries from joining.</p> <p>The U.S.-dominated free-trade system is being challenged on two fronts. In the rest of the world, other economies are growing stronger and demanding more equal treatment from the United States, or absent that, setting up alternative institutions. One of the major economic threats to U.S. domination is China’s Belt and Road initiative that seeks to re-establish China-centered trade and investment links throughout the Eurasian continent.</p> <p>The other challenge for the U.S. is that free trade policies have facilitated the export of capital, and along with that, jobs, especially in manufacturing. This is spearheaded by U.S. big business as well as European and Japanese corporations. For example, the United States now imports most of its cars (not including pickup trucks and SUVs) as big auto companies export their factories to take advantage of the North American Free Trade Agreement (NAFTA).</p> <p>The Trump administration is trying to take the widespread discontent with free trade among the working class here, and trying to turn the working class against the rest of the world, painting other countries as the enemy. This is a common theme in the administration’s trade policy, their inhumane treatment of immigrants (such as separating children from their parents), and funding a major military buildup to prepare for more major wars abroad.</p> <p>The challenge for labor movement and other progressive activists to try to build an alliance between workers and oppressed communities here in the United States with the working people in other countries who also do not benefit from corporate-led globalization.</p> Capitalism and Economy China China Donald Trump tariffs trade war Fri, 15 Jun 2018 20:08:46 +0000 Fight Back 6785 at Trump slaps tariffs on imported steel and aluminum from Canada, Mexico, EU <p>San José, CA - On Friday, June 1, new U.S. tariffs of 25% on steel and 10% on aluminum imported from Canada, Mexico and the European Union (EU) went into effect. These countries supply about half of U.S. steel imports. All of the countries responded with counter-tariffs on U.S. exports that will start in a month or less. In addition, the other countries are going to be filing suit with the World Trade Organization (WTO), charging that the U.S. reason of “national security” is just a fig leaf to cover U.S. violation of WTO rules.</p> <p>The Trump administration is preparing for a wider trade war by preparing to put tariffs on imported automobiles. This would affect Canada, Mexico and Europe, as well as Japan, as the U.S. now imports most of its cars (not including pick-ups and SUVs). The Trump administration seems to taking the same path that it did with China, where the Chinese response to U.S. steel and aluminum tariffs was met with even larger tariffs by the U.S.</p> <p>Many commentators have noted that the Trump administration is increasingly at odds with the European Union. This began with the U.S. withdrawing from the Paris Climate accords, followed more recently by the U.S. withdrawing from the Iran nuclear agreement, both of which were strongly backed by European powers.</p> <p>While most economists agree that the direct impact of the tariffs will be small, with any job gains from an increase in prices and production of steel and aluminum in the U.S. offset or more than offset by losses in industries which use steel and aluminum, such as auto, constructions, appliances, etc. This does not take into account the effect of the other countries’ tariffs on U.S. exports.</p> <p>After the end of World War II, the U.S., along with the elites from Europe and Japan, set up a free trade economic structure to counter the Soviet Union and other socialist countries, while at the same time maintain U.S. economic dominance of the rest of the capitalist world. But the growing economic strength of the E.U. and Japan, and the relative decline of U.S. economic power have shaken this system. Then the entry of China into the WTO in 2001 led to the contradiction of having a socialist economic powerhouse inside a capitalist free-trade institution. Rather than giving up more say to Europe, Japan, China and other Third World countries, the Trump administration is moving towards constructing more and more trade barriers while at the same time pursuing a more aggressive military policy.</p> Capitalism and Economy tariffs Sat, 02 Jun 2018 15:57:19 +0000 Fight Back 6771 at NY organizers celebrate Marx’s 200th birthday <p>New York, NY – Around 50 socialists and community organizers gathered on Sunday, May 6 to celebrate the 200th birthday of Karl Marx – the founder of scientific socialism.</p> <p>The event was organized by Workers World Party and featured food, politically agitating posters and banners, along with several panels that addressed different social justice topics and their relation to Marxism.</p> <p>The afternoon was opened with an eloquent introduction by Workers World Party leader, Larry Holmes. Holmes talked about Marx’s contributions, and how we should be putting “revolution back in the demands.” Holmes continued by connecting the different struggles and saying that for the new generation of workers, "Socialism has never been more popular today than any time in history. And capitalism has never been more unpopular."</p> <p>There were several other speakers, including Mike Legaspi from BAYAN USA. Legaspi talked about the history of the CPP and the NPA in the Philippines and their usage of Marxism. He eloquently spoke about the importance of standing the test of time when it comes to utilizing Marxism and revolutionary strategy. Legaspi ended by saying, “We have nothing to lose. And a world to win.”</p> <p>Jessica Schwartz, from the Freedom Road Socialist Organization, gave a speech that covered how to apply Marxism to the practical application of organizing labor. She spoke about how through the utilization of Mao’s concept of the mass line, Marxists can take general demands of the people and create powerful campaigns to win people over to revolution. Schwartz explicitly said, “As Marxists, our role is not to lecture the working class but to join them and fight beside them.”</p> <p>The rest of the afternoon continued with thought provoking speeches that brought up questions regarding how to continue organize in present time.</p> <p>The event ended with the attendees marching over to stand in solidarity with the students and cafeteria workers of the New School.</p> Capitalism and Economy Socialism BAYAN Freedom Road Socialist Organization Karl Marx Workers World Tue, 08 May 2018 16:50:02 +0000 Fight Back 6717 at Marx at 200: A renewed interest in the critique of capitalism <p><em>Editor’s note: Fight Back! will be running a number of articles to coincide with the 200th anniversary of the birth of Karl Marx.</em></p> <p>Karl Marx made enduring contributions to the science of economics. He built upon the work of classical English political economics represented by Adam Smith and David Ricardo. The thought of Smith and Ricardo lives on in mainstream economics and government policies of deregulation and free trade pushed by big business. However the economics of Marx has informed the labor movement and the fight to end the exploitation, giant for-profit corporations, and economic crisis that bear down on the vast majority of working people who struggle to make do from paycheck to paycheck. Marx’s economics still provide insight into the workings of our capitalist economy down to today.</p> <p>First and foremost, Marx built upon the labor theory of value developed by classical political economy. The labor theory of value sees commodities, or goods and services produced for sale on markets, as having value based on the amount of socially necessary labor time needed to produce them. Marx added to this with his theory of surplus value, which explains that what workers sell to their bosses is not their labor, but their labor power, or ability to work. The value of labor power, seen as wages in the labor market, is based on the socially necessary labor time needed to produce and reproduce workers, or the cost of the goods and services that the workers and their families need to survive.</p> <p>What is unique about labor power is that its use in production creates more value than it costs. The difference between value of the goods and services created by labor, and wages (the value of labor power) is surplus value. This surplus value goes to the employer, and is the source of profits. This is Marx’s theory of exploitation that can explain the economic hardships of millions of workers who are living paycheck to paycheck while a handful of billionaires who own the giant corporations get rich.</p> <p>For example, Amazon made almost $2 billion in profit just in the last three months of 2017, while the typical Amazon worker only made $28,446 last year, and half of its workers made less than that. Companies that use a lot of part-time workers can pay even less; the median pay for a worker at Yum brands (which includes KFC, Pizza Hut, and Taco Bell) was only $9111. And companies that offshore their work can pay the least, with toy company Mattel paying their typical worker $6271 a year.</p> <p>According to Marx’s collaborator, Frederick Engels:</p> <p style="padding-left: 30px;">“Ever since political economy put forward the proposition that labor is the source of all wealth and of all value, the question has become inevitable: How is this, then, to be reconciled with the fact that the wage-worker does not receive the whole sum of value created by his labor but has to surrender a part of it to the capitalist? Both the bourgeois economists and the socialists exerted themselves to give a scientifically valid answer to this question, but in vain, until at last Marx came forward with the solution. This solution is as follows: The present day capitalist mode of production presupposes the existence of two social classes -on the one hand, that of the capitalists, who are in possession of the means of production and subsistence, and, on the other hand, that of the proletarians, who, being excluded from this possession, have only a single commodity for sale, their labor power, and who therefore have to sell this labor power of theirs in order to obtain possession of means of subsistence. The value of a commodity is, however, determined by the socially necessary quantity of labor embodied in its production, and, therefore, also in its reproduction; the value of the labor power of an average human being during a day, month or year is determined, therefore, by the quantity of labor embodied in the quantity of means of subsistence necessary for the maintenance of this labor power during a day, month or year.”</p> <p>Engels continued:</p> <p style="padding-left: 30px;">“Thus the worker in the service of the capitalist not only reproduces the value of his labour power, for which he receives pay, but over and above that he also produces a <em>surplus value</em> which, appropriated in the first place by the capitalist, is in its further course divided according to definite economic laws among the whole capitalist class and forms the basic stock from which arise ground rent, profit, accumulation of capital, in short, all the wealth consumed or accumulated by the non-labouring classes.”</p> <p style="padding-left: 30px;">(Quotes from Frederick Engels, <em>On Marx</em>)</p> <p>Marx also built upon classical political economy’s theories of competition. Adam Smith argued that competition among small businesses would make them provide what consumers wanted at low prices - the so-called “invisible hand.” Since competitive markets would be self-regulating, then there is no need for government regulation, leading to the economic policy of laissez-faire, which is the basis for deregulation of industry and free trade policies today. But the reality is that small businesses have been by and large replaced by giant corporations, which can cut costs, raise prices, and even cheat and manipulate their customers, as seen in the ongoing string of scandalous acts of financial and technology giants such as Wells Fargo bank and Facebook.</p> <p>Marx recognized that a more fundamental role of competition was to force capitalists who exploit their workers to reinvest their profits into expanding their businesses. This accumulation of capital, as Marx called it, is behind the rapid economic growth under capitalism as comparative to previous economic systems, where hundreds of years could pass with little change in the ways people produce the goods and services they needed to live. But under capitalism the production process is constantly changing.</p> <p>Hand in hand with the accumulation of capital came the constant development of new technologies: from the water and wind power of medieval times to first steam and then electric power, the development of electronic communications starting with the telegraph, then the telephone and radio, and now of course now the internet. The mechanization of agriculture, the application (and misuse) of science to boost food production - all of these driven by fight for ever larger profits.</p> <p>The accumulation of capital is also behind the rise of giant corporations. This began in basic industry and transport such as iron and steel, oil, and railroads in the latter 1800s and led to the rise of their robber baron owners like Rockefeller and Carnegie. Today this has grown to include retail, restaurants, and the new information technology corporate giants of the internet. Much of the stock market is driven by the so-called FANG stocks of Facebook, Amazon, Netflix, and Google (now Alphabet) and a new group of today’s robber barons are centered around Silicon Valley.</p> <p>Last, but not least, Marx was also the first major economist to develop a theory of the business cycle to explain the periodic ups and downs of a capitalist economy. Marx argued that workers are being exploited, that is, they are not paid for the full value that their labor adds to the production of goods and services, which limits their ability to purchase. At the same time, capitalist businesses take the profits from exploitation and reinvest them in expanding production, new techniques that lower the costs of production, and innovating new products, all of which expands their ability to produce. The contradiction, or conflict between restricting consumption while expanding production leads to periodic crisis of overproduction, or what modern economics calls a recession or depression.</p> <p>This process can be held back by the capitalists lending more and more to their workers, which helps to keep their spending on the rise, but leading to workers going deeper and deeper into debt. At the same time, profits from exploitation can be diverted away from increasing production to lend to workers and to all forms of financial speculation. But this process just shifts the fundamental conflict into the financial realm, ultimately leading to unsustainable build-up in lending and debt and resulting in a financial crisis. We saw this in greatest financial crisis in U.S. history, in September of 2008, and the economic depression that followed.</p> <p>Lenin summed these processes of accumulation of capital and economic crisis as:</p> <p style="padding-left: 30px;">“The doctrine of surplus-value is the corner-stone of Marx's economic theory.</p> <p style="padding-left: 30px;">Capital, created by the labour of the worker, crushes the worker, ruining small proprietors and creating an army of unemployed. In industry, the victory of large-scale production is immediately apparent, but the same phenomenon is also to be observed in agriculture, where the superiority of large-scale capitalist agriculture is enhanced, the use of machinery increases and the peasant economy, trapped by money-capital, declines and falls into ruin under the burden of its backward technique. The decline of small-scale production assumes different forms in agriculture, but the decline itself is an indisputable fact.</p> <p style="padding-left: 30px;">By destroying small-scale production, capital leads to an increase in productivity of labour and to the creation of a monopoly position for the associations of big capitalists. Production itself becomes more and more social -- hundreds of thousands and millions of workers become bound together in a regular economic organism -- but the product of this collective labour is appropriated by a handful of capitalists. Anarchy of production, crises, the furious chase after markets and the insecurity of existence of the mass of the population are intensified.” (Lenin, <em>The Three Sources and Three Component Parts of Marxism</em>)</p> <p>Since the fall of the Soviet Union in 1991, the corporate media has tried to bury Marxism as “dead.” But the economics of Marx (and his other ideas) continues. Marx’s main work on the economy, <em>Capital</em>, published in 1867, continues to be the most highly cited among books published before 1850. The reality of today’s world: the rising gap between the ultra-rich and everyone else, the growing debt and lack of opportunities for more and more young people, the massive financial crisis in 2008, the growing economic influence of socialist China; all point to a renewed interest in Marx’s critique of a capitalist economy.</p> <p>While much of this is showing up in the rise of social-democracy in the U.S. - such as the Bernie Sanders campaign and the explosion in membership for the Democratic Socialists of America (DSA) - these are by and large non- (or in part anti-) Marxist trends of socialism. Activists for social change (including Sanders supporters and those in and around the DSA) need to, now more than ever, seriously study the work of Karl Marx. These include Marx’s view of the capitalist economy, on historical materialism (a scientific view of history and social change), and his views on the fight by oppressed nations and nationalities for liberation, including the U.S. Civil War.</p> <p>But the development of Marxism did not end with Karl Marx or his life-long collaborator, Frederich Engels. While they laid down the foundations for both a scientific view of the economy, history and social change, and the role of nations and national minorities, as well as other issues, others have continued to develop their work. In particular the contributions of V.I. Lenin in the field of economics is often ignored. Lenin’s <em>Imperialism, the Highest Stage of Capitalism</em>, analyzes the modern capitalist economy characterized by giant multinational corporations and a huge financial sector.</p> Capitalism and Economy Socialism Capitalism Karl Marx Thu, 03 May 2018 21:17:40 +0000 Fight Back 6701 at Would slashing the trade deficit with China create jobs in the U.S.? <p><em>This is part three of a three-part interview. Click for <a href="">part one</a> and <a href="">part two</a> of this interview.</em></p> <p><em><strong>Fight Back!:</strong></em> President Trump seems intent on risking on a trade war with China in order to narrow the U.S. trade deficit. Trump thinks the U.S. trade deficit means that the U.S. is a loser, and by bringing down the trade deficit the U.S. economy will grow by the same amount, creating jobs and income here in the U.S. What do you think?</p> <p><strong>Masao Suzuki: </strong>I think that this is wrong.</p> <p>For example, let’s see what would happen if Trump were to cut imports from China by $100 billion over the next year. Instead of tariffs, he could ban the sale of Chinese-made cell phones and personal computers, which came to about $110 billion last year. Would this boost the U.S. economy by $100 billion?</p> <p>It would, but only if Americans spent that $110 Billion on U.S.-made cell phones and personal computers. The fact is that U.S. cell phone manufacturers such as Apple have offshored all of their cell phone production. The same with U.S. computer manufacturers such as Dell and HP. Ironically, the only major computer company still making personal computers in the U.S. is Lenovo, a Chinese company.</p> <p><em><strong>Fight Back!: </strong></em>So what would happen instead?</p> <p><strong>Suzuki:</strong> Some Americans would turn to cell phones made in other countries. For example, the south Korean company Samsung, which is one of the world’s largest cell phone makers, assembles many of its cell phones in Vietnam. So one effect would be to increase imports from Vietnam and other cell phone exporting countries, meaning no net fall in the total U.S. trade deficit.</p> <p>Others would choose to spend their money on other goods and services, although many consumer goods - clothes, shoes, TVs, electronics, etc. - are also imported. But many would just wait the year or two it would take for Apple, Samsung and other manufacturers to move their manufacturing out of China to another country, like Vietnam. So, what would happen in a year or two is that trade deficit would shift to other countries.</p> <p><em><strong>Fight Back!: </strong></em>What about in the meantime?</p> <p><strong>Suzuki: </strong>Apple has only about a week’s worth of inventory, other manufacturers a little more. So, starting in about a week, Apple runs out of cell phones and computers to sell, followed soon after by other companies. The Apple store has more than 30,000 employees in the U.S., many of who would lose their jobs while Apple scrambles to move its production out of China. Add to this the workers at other cell phone and computer companies, trucking and shipping workers.</p> <p>So in the near term the impact of a ban on Chinese imports would be higher prices for cell phones and computers, and job losses. A trade war with China involving higher tariffs could have the same effect - and this is not even taking into account retaliation by China, which has already targeted U.S. soybeans and aircraft after Trump called for tariffs on $50 billion in Chinese imports.</p> <p><em><strong>Fight Back!: </strong></em>The underlying issue is that millions of manufacturing jobs, many of them unionized with decent pay and benefits, have disappeared from the U.S. in the last 20 years. If slashing the trade deficit won’t help, what would?</p> <p><strong>Suzuki: </strong>Some of the job losses in manufacturing are because of automation or other improvements in productive technology. For example, in steel the more labor-intensive open hearth production using iron ore has been largely replaced by electric arc production uses a lot less labor. In auto too, production of cars and light trucks has remained the same while employment has fallen.</p> <p>But it is true that that there has been a large increase in imports of auto sedans, washing machines, etc. as U.S., European, and Japanese corporations shift production to other countries, in particular Canada and Mexico, with NAFTA. But Mexican workers have not benefitted from NAFTA nor have American workers - only the big car companies have. So dismantling so-called free trade agreements like NAFTA, whose real purpose was to ease the ability of corporations to move production and jobs in search of profits, is needed.</p> <p>But it is important to recognize that manufacturing jobs are not inherently ones with good pay and benefits. It took the unionization of basic industry through massive struggle during the 1930s, and then more struggle by unionized workers following World War II, to win higher pay and benefits.</p> <p>During the 1980s many labor leaders adopted the “made in the USA” slogan and targeted imports of Japanese cars. But this did not stem the decline of good union jobs as companies moved production to the non-union South and increased automation.</p> <p>So, I think that what is really needed is for the labor movement to take up their most powerful weapon, the strike, and use it to fight for better pay and benefits.</p> Capitalism and Economy China Masao Suzuki trade deficit Fri, 13 Apr 2018 18:28:00 +0000 Fight Back 6631 at Part 2: Why is the U.S. trade deficit so large? <p><em>This is part two of a three-part interview. Click for <a href="">part one</a> and <a href="">part three</a> of this interview.</em></p> <p><em><strong>Fight Back!:</strong></em> In your opinion, what are the main causes of the U.S. trade deficit?</p> <p><strong>Masao Suzuki: </strong>Well, let start with some of the views that are out there. The Trump administration claims that the U.S. is “being taken advantage of” by other countries. But to me, this is just promoting resentment and a victim mentality, when of course the reality is that the U.S. is still the world’s largest economy and military power. The international trade agreements such as the WTO [World Trade Organization] and NAFTA were set up largely by U.S. initiative.</p> <p>Another view gaining popularity is the so-called “twin deficits” theory. This view holds that the growing U.S. federal government budget deficit, which is large and getting larger with Trump’s tax cuts, means that the U.S. government has to borrow more and more. If the U.S. is not saving enough to feed this borrowing, then it has to borrow from abroad. But where is the rest of the world going to get the dollars to buy U.S. government bonds? By selling more to the U.S. than they buy from the U.S., that is the U.S. trade deficit.</p> <p>This view is backed by the big increases in both the U.S. government deficits and the U.S. trade deficit in the 1980s under Reagan, and again today under Trump. But a problem with this view is in the 1990s, then-President Clinton and the Democrats in Congress raised taxes and managed to balance the federal government budget. In fact, they managed to bring the budget to a surplus where tax revenues were greater than spending. But the broadest measure of trade, the current account that I spoke of in the first interview, saw the deficit triple in size under Clinton.</p> <p><strong><em>Fight Back!</em></strong>: So what do you think?</p> <p>Suzuki: I think that there are two important factors. One is the state of the U.S. economy. When the economy is booming, as it is today, there are more jobs and income. People buy more, which includes imports, which tend to rise during an economic expansion. As imports rise, so does the trade deficit. The opposite happens during a recession - when the U.S. economy goes into reverse, jobs, incomes and imports all fall, as well as the trade deficit. Look at what happened in 2008 and 2009. In the last months of 2008, the U.S. financial crisis made what was up to then a mild recession into the biggest economic decline since the Great Depression of the 1930s. The U.S. trade deficit went from $695 billion in 2008 to $380 billion in 2009 - a drop of 45% in only one year! Then as the economy came back, so did the trade deficit.</p> <p>Another thing that is not mentioned much in the mainstream media is the role of U.S., European, Japanese and other multinational corporations. These companies have been offshoring production for years in search of lower costs and greater profits. The single largest type of goods imported to the U.S. from China is cell phones. But these are not cell phones made by Chinese companies such as Huawei, but rather by corporations of other countries, including Apple of the U.S.. The U.S. now imports most of its cars - not including pick-up trucks and SUVs - many from Mexico and Canada. But these are not Mexican or Canadian car companies, rather they are U.S., Japanese and German companies that have set up shop in Mexico or Canada to produce for the U.S. market.</p> Capitalism and Economy economy Trade United States U.S. Wed, 11 Apr 2018 02:36:47 +0000 Fight Back 6622 at