Liberal bourgeois writers tend to explain the problems that arise under capitalism not by the immanent tendencies of the system but by the capriciousness of particular governments. This way they can continue to believe in their own false theories that prettify capitalism, while putting the blame for the travails it generates on political bloody-mindedness. One such instance of prettification is the portrayal of the system as one where international trade is beneficial for all. Centuries of colonialism which played havoc with the economies of the conquered countries, causing poverty, unemployment and underdevelopment, by forcing an exploitative trade relation upon them, should have left no scope for such prettification, but colonialism alas never figures in bourgeois economics.

Now, one obvious assumption, among many, that underlies the belief that international trade benefits all, is that all countries experience full employment of all “factors of production” (including labour), both before and after trade.

But, far from there being full employment of all factors both before and after trade, capitalism on its own is characterised, as one exceptional liberal bourgeois economist, John Maynard Keynes, had recognised, by an almost perennial demand constraint, that is, by a perennial state of over-production, or what he called “involuntary unemployment”. Trade in such a case becomes primarily an instrument for exporting unemployment to one’s trading partner, by running an export surplus vis-à-vis it; the stronger the demand constraint, and the more acute the situation of unemployment, the greater would be struggle among countries to export unemployment to one another. In this struggle, unemployment would also be sought to be exported to countries which may not themselves be capitalist.

It is the crisis of over-production, which is a result of the immanent tendencies of capitalism, that underlies such protectionism, and not any pure political desire to punish China. There may well be such a political desire too, but to see that alone as giving rise to protectionism in the west is to exonerate capitalism from its immanent contradictions, and to perpetuate the fable that, but for this act of victimisation, free trade would have continued and been beneficial for all.

But even when there is no marked over-production crisis, the persistence of an export surplus vis-a-vis the leading imperialist country on the part of a successful exporting country, which leads both to a loss of jobs from, and greater indebtedness of, the former to the latter, would also invite resistance from the leading country.

Japan, which posed no geo-political challenge to the US, had suffered a similar fate: its great success in achieving export-led growth had eventually led to American resistance to Japanese exports, bringing down Japan’s rate of growth. It is possible to argue that the current American measures in the context of the Ukraine war also constitute an instance of such resistance against Germany’s success in achieving export-led growth: the blowing up of the Nord Stream pipeline which makes any resumption of cheap Russian gas supplies to that country nearly impossible and thereby raises costs of production of German industry, knocks out all prospects of reviving German export success in the foreseeable future.

Of course merely cutting out imports is not enough to generate growth; it raises employment and output but in a once-for-all manner. There has to be a perennial exogenous growth stimulus to generate sustained growth in the economy. Increasing government spending, if financed either by a fiscal deficit or by taxes on the rich, can provide such a stimulus; but globalised finance capital typically opposes both such ways of financing larger government spending.

Editor: Zhong Yao、Liu Tingting

From:https://peoplesdemocracy.in/2023/0910_pd/believing-one%E2%80%99s-own-false-theories（2023-9-10）