The New "Yellow Peril"?

If you were under the impression that 1920s-style racism went out with the Stock Market Crash of October 1929, think again. As I write the first draft of this posting on August 17, 2008, the CBS television show Sunday Morning has just finished a segment combining the worst of economic fear-mongering and American guilt. According to the various experts interviewed, the Peoples' Republic of China will soon overtake America economically and displace the United States as world leader. The message seemed to be that the people of the United States consume too much (especially oil), don't produce enough of what we consume, are bullying warmongers, and probably deserve, like the British Empire, to fade gradually into obscurity. (That last does not represent this writer's opinion, but is a slight paraphrase of a statement made by one of the experts.) The message seemed clear: fear the Chinese, for their takeover of the world, especially of the United States through our desperate need for foreign investment and the advance of globalization, is inevitable.

So much for the bad news. Now for the worse news. The only thing allowing the Chinese or anybody else to displace the United States is our own refusal to correct the flaws in our system — flaws that the Chinese (following the lead of the Japanese and other "Asian tigers") are busily copying. The fact is, if things continue as they are, the Chinese economy will overtake that of the U.S. and enjoy a brief period of dominance before the flaws inherent in both capitalism and socialism bring them down, and everybody else with them. No economy in the world, including that of the United States, embodies the "Four Pillars of a Just Economy" that provide the underlying philosophy of the Just Third Way and the foundation of a stable economic order:

1. Limited economic role of the State,

2. Free and open markets,

3. The full rights of private property, and,

4. Widespread direct ownership of the means of production (the fatal omission).

The United States attained its economic preeminence for a simple reason: the tradition of widespread ownership. This does not mean ownership of consumer goods, including houses. Even Karl Marx "permitted" ownership of such things. Direct and widespread ownership of the means of production is the key to lasting and meaningful economic prosperity. Abraham Lincoln can take credit for being the only president, perhaps the only leader in history, to save his country three times: preserving the union, freeing the slaves, and pushing the Homestead Act.

Consumption

It may sound paradoxical, but Americans don't consume enough. People in the U.S. are losing their homes and jobs and lowering their standards of living, and all at a time when there are millions of Americans in want, to say nothing of multitudes throughout the world. By consuming more, Americans would "create demand," thereby spurring capital investment and job creation - ownership and jobs desperately needed by other Americans to supply the production that, in economic "law," equals income. If anyone is truly worried about American consumption of oil, then he or she should immediately begin to demand a "Manhattan Project" scale initiative to develop and implement alternative energy . . . an initiative that would, in and of itself, create thousands of jobs, especially needed to replace those we are going to lose in the petroleum industry.

Production

According to the politicians and the experts on Wall Street, only massive infusions of foreign investment can save American industry . . . at the same time foreign investors undermine the economy by purchasing our industrial base. This results from our massive trade deficit, caused in turn by our increasing costs of production, especially labor. Other countries don't buy from us because they can produce goods and services better and cheaper, taking advantage of the wage arbitrage.

This is, to put it bluntly, insanely ludicrous. The commercial banking system and the Federal Reserve system have the potential to supply the United States with as much financial capital as is required to rebuild and sustain America's industrial base, even the entire economy. This is, in fact, precisely what the Federal Reserve was designed and intended to do. It was never meant to monetize government deficits — and is still technically prohibited from doing so. A program of expanded capital ownership to make owners of the means of production out of Americans who currently own nothing, collaterialized with capital credit insurance, and financed by discounting financially feasible qualified loan paper at the Federal Reserve banks would end the alleged need for foreign investment. Foreign investors will be forced either to build up their own economies, or (better), spend their income, thereby increasing effective demand, spurring investment, and creating jobs.

American Warmongering

If the United States continues to ignore the obvious — end the war in Iraq by instituting CESJ's Iraq oil proposal — then, yes, the only logical conclusion (given the otherwise incomprehensible conduct of the war) is that we must have gotten into the mess because we like to fight just to fight, lose lives senselessly, and spend billions of dollars achieving absolutely nothing. Since Americans don't like to fight just to fight, lose lives, or spend money without getting value for it, then that conclusion is patently absurd. Why, then, is the Iraq oil proposal treated with such open contempt, possibly even fear by those in the U.S. Department of State and the military who have heard of it?

If the United States wants to carry on a war, it should be a war of ideas. Anything else is shortsighted and self-defeating. America's "secret weapon" in the war of ideas is CESJ's Capital Homestead proposal, which would, ultimately, benefit everyone on earth, regardless of color or lack thereof.

The Solution

Step one: go to the CESJ web site and read up on Capital Homesteading, the Iraq oil proposal, the Abraham Federation, and anything else that catches your interest. Step two: read The Capitalist Manifesto (1958) and The New Capitalists (1961), both of which can be downloaded free from the Kelso Institute via the CESJ web site. Step three: write letters to your Representative in Congress, both your Senators, and the presidential candidates. Step four: post to your blog or write letters to your local newspapers — and the Wall Street Journal, which seems locked into a self-defeating and ultimately senseless economic paradigm. Step five: ignore the implicit racism stirred up by the constant references to the growing Chinese economic menace. We have more to fear from our own stupidity than we do from a country bent on making the same mistakes that got us where we are today.

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