China is rising, but the United States is destroying itself. Neoliberalism is really harmful

Translated from the Headlines (Toutiao 头条新闻)

Author: Bao Ming Shuo(包明说)

In 1975 of the last century, the United States ended the Vietnam War briefly and entered a stage of reflection and adjustment. With Reagan coming to power, the United States seemed to regain its vitality and finally won the Cold War in the late 1980s and early 1990s, forcing the disintegration of the Soviet Union. The United States has also ushered in another golden age in its own history. In the summer of 2021, the United States experienced another defeat in Afghanistan. So, will the United States become more powerful as it did after the Vietnam War, and even defeat China?

George Marano, an Australian research scholar, believes: I am afraid that it is impossible for the United States today to repeat history. Because there is still hope for the United States in 1975. Today, neoliberalism has emptied American finances, undermined America’s reputation, and exacerbated social inequality and ethnic tensions. Therefore, it is difficult for the United States to rise again.

From 1975 to the present, nearly 50 years have passed. The United States in 1975 can still be counted as an emerging power. But since Reagan’s advocacy of neoliberalism came to power, the situation in the United States has changed a lot. Back then, the harm of neoliberalism could not be seen in a short period of time, but to this day, neoliberalism has corroded the body of the United States so severely that it cannot be undone.

The so-called neoliberalism is an economic thought that was introduced to the United States in the 1970s. The basic principle of this kind of economic thinking is to increase efficiency as the goal, find the place with the greatest return on investment in the world, and invest capital in it. It is said that this is the origin of globalization. Under the principles of neoliberalism, the U.S. government and large companies increasingly prefer to outsource work. The government not only outsources general business but also outsources war business. One-third to one-half of the military expenditures used by the United States in the war in Afghanistan were given to various private military contractors. Needless to say, there is corruption in it.

The biggest goal of neoliberalism is to make money, and the most important means is to stimulate personal greed, and to make this kind of behavior efficient and legal. This greed has made American companies no longer loyal to American national interests. A position of “capital is higher than the state” was formed. In the past ten years, even though the US government is struggling to seek the return of manufacturing, US companies’ investment in China has been increasing year by year. After Trump launched the trade war in 2020, US companies’ investment in China has reached 123.88 billion U.S. dollars.

From 1975 to today, the manufacturing industry in the United States has been worsening every day. During this period, the U.S.’s share in the global economy continued to decline, from 28% in 1975 to 15.9% in 2020 and is expected to drop to 14.76% by 2026. However, Americans owe more and more debts, and their ratio to GDP has risen from 32% to 125%. This means that Americans spend all their output value in a year to pay off their debts, which is not enough.

Under neoliberalism, the famous “revolving door rule” was also created. Some people can jump back and forth between the three roles of government officials, lobbyists, and private sector executives to help capital groups maximize their profits.

Three major events have changed the balance of power in the United States and have truly put capital above politics. The first is that the United States repealed the “Glass-Steagall Act” in 1999, which prohibits commercial banks from merging with investment banks. After the bill was repealed, the capital group was like a wild horse that had taken off its reins, which finally led to the global financial crisis in 2008. The second is China’s accession to the World Trade Organization. The third is the “war on terrorism” initiated by the United States after the September 11 incident.

Neoliberalism completely controls American politics, and the result is that the United States has fallen into a state of dysfunctional chaebols. The corrosive effect of money in politics makes the ruling elites less and less concerned about the lives of ordinary people. Professor Richard Alston pointed out in the 2017 “American Poverty Report” that 40 million Americans are already living in poverty, of which nearly 18.5 million are in extreme poverty.

Partisan politics is intertwined with increasing social inequality, leading to increasingly serious racial and class contradictions in American society. The Capitol riots, “black life is also fate”, and the rise of anti-fascist movements are all concrete manifestations.

The most extreme example of neoliberalism in the United States is the addiction of the American public to painkillers, also known as the opioid crisis. The depravity of enterprises, the flattery of the government, and the betrayal of the medical profession have all contributed to this consequence. In 2020, the opioid crisis caused more than 70,000 overdose deaths and has become a major factor in the decline in life expectancy in the United States. However, the Trump administration has tried to shirk the opioid crisis in China.

Some research scholars pointed out that although many Americans are talking about the Thucydides trap between the United States and China, the discussion about whether China and the United States will inevitably move toward confrontation. But the more pressing issue is that the United States is slowly destroying itself. The United States must work hard to solve its own structural problems in the next ten years. This is not only related to the stability of the United States but also related to the stability of the global order.

Can the United States heal and redeem itself? Can’t do it. To make the United States abandon neoliberalism is tantamount to subverting the basic national policy of the United States in the past 50 years. Such subversion is basically impossible without a large-scale hot war. The United States is afraid that it will continue to move forward on the road of destruction.