24.03.2010
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Introduction: 

In military terms, the US are still the only superpower and can act as you have described. But economically there was a major break-down in 2008 and they had to spend trillions to bail-out Wall Street and even without money from China …

Guests: 

Noam Chomsky, Professor of Linguistics at the Massachusetts Institute of Technology (MIT),Cambridge/USA and political activist

Transcript: 

Fabian Scheidler: In military terms, the US are still the only superpower and can act as you have described. But economically there was a major break-down in 2008 and they had to spend trillions to bail-out Wall Street and even without money from China …

Noam Chomsky: Well, people talk about money from China. But actually most of U.S. debt is hold by Japan which illustrates that it's not much of a weapon. Japan happens to hold much of the debt but they can't do anything about it. And China can't do much either. There is a lot of talk about the trade deficit with China. And it's true, it's big. On the other hand the German current account surplus is much greater than China's, not in actual numbers but per capita. It's far higher. Other countries talk about it. But it's not a headline issue.

Furthermore the trade deficit with China is substantial but what's less discussed is that the trade deficit with Japan, Taiwan and other surrounding countries has declined very sharply. And the reason is the way the regional production system is taking place. China is basically an assembly plant. The surrounding countries which are technologically much more advanced provide parts and components and high tech and so on and China uses cheap labor and land to assemble them and send them out to the United States mostly. In fact the U.S. producers do the same thing. They send parts and components to China, it gets assembled there and sell it back here. So yes, there is a trade deficit with China and a declining trade deficit with the others because they are pouring in the parts and components to China. In fact the U.S. is too. It's by now part of a global system of production.

There is a lot of talk about a shift in power in the world. So will China replace the United States. That's mostly ideological extremism. I mean, states are not the actors in world affairs. To some extend they are but not completely. The actors in world affairs are the people who run the states. Adam Smith pointed that out. It's not a radical insight. And if you look at the people who own the world and set the policy, well there is a global shift in power then away from the global workforce. So the global workforce is getting a declining percentage of capital. And in China it's extreme. It's one of the worst cases. And there are interactions among the transnationals and financial institutions and states to the extend that they basically serve them. And that's a real global shift in power. But not the one that's in the headlines. You can read about it in the business press. Like you read the Financial Times. They describe it that way. But it's not the scare stories.