Don’t say trade wars … say class wars!

“Trade wars, class wars that exacerbate inequality, distort the global economy, and threaten global trade” (Yale University Press – 2020) were published in a timely manner, as they say, when trade disputes between the United States, China, and Germany and the United States have reached a climax that threatens trade wars that harm all parties. So far, I have not found a book that explains the reasons for these differences from the perspectives of China and Germany, as this book looks at the subject from a predominant American perspective, and I do not claim to represent the whole indisputable truth. And when books are published that reflect the views of the Chinese and German parties, I will of course present them in this forum.

Main message from the author: Trade disputes are usually understood as conflicts between countries with conflicting national interests, but the truth is that they are a fundamental struggle between bankers and owners of financial assets on the one hand and ordinary families on the other, that is, between very rich and others. This leads to the fact that trade wars are class wars. Economic commentator Matthew C. Klein and Peking University finance professor Michael Pettis note that it is often an unexpected result of national political decisions that serve the interests of the rich at the expense of ordinary workers and retirees.
The authors trace the roots of today’s trade wars to the decisions made by politicians and business leaders in China, Europe and the United States over the past 30 years, saying: “The rich have prospered around the world, while the workers no longer they can buy what they produce, have lost their jobs or had to duplicate. I borrowed them. In this thought-provoking challenge to dominant views, the author offers an account of how class wars that increase inequality pose a threat to the global economy and peace.
The authors argue that what was happening to trade and finance can only be understood in the context of local diseases in major economies. The result has been severe global imbalances, unsustainable debt, and dire financial crises. This story matters to everyone. The basis of this author is the theory of “under-consumption” proposed by the British analyst John Hobson in 1902.

International problems concern “massive income transfers to the rich”

From the authors’ point of view, the international problems of the last decades have less to do with geopolitics than with “the massive transfers of income to the rich and the companies they control. Ordinary people everywhere are deprived of purchasing power: they are misled by chauvinists and opportunists by saying that their interests are fundamentally incompatible … The growing trade dispute between the governments of China and the United States is the clearest evidence of these risks. ” They add that “the Communist Party of China and its supporters presided over an export-focused money machine has created a wealthy elite that resists change and that the party should pay more attention to its workers and consumers who breathe polluted air and drink water. tainted because many local government officials put the financial interests of politically connected business owners above the welfare of the public.
The opening of the United States to international trade and finance means that the rich in Europe, China and other economies with large surpluses can pressure their workers and retirees to feel comfortable with their permanent ability to sell their products, make their profits and store. your savings in safe assets.
China’s policies not only harm Americans, they also harm ordinary people, Chinese workers, and retirees. Chinese workers are paid little for the value of what they produce and are heavily taxed. They cannot access the goods and services that they should be able to obtain.

Trade wars are class wars: how rising inequality distorts the global economy and threatens international peace. Yale university press 2020. XIV, 288 pages. MATTHEW C. KLEIN, MICHAEL PETTIS

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