Joseph H. Chung (정희수), Ph.D., Professor of Economics at Quebec University in Montreal (UQAM)

(지난 호에 이어)

 Capitalism or socialism is simply a pragmatic tools needed for the realization of political or economic objectives.

 The pragmatism has the advantage of assuring the flexibility of the regime, but it has also the inconvenience of coordinating various parts which make up the regime.

 The American politico-economic regime is rigid and dogmatic. It is inspired by Christianity.

 Christianity has given the socio-economic regime of liberal democracy and the capitalism of free market system. As for the origin of capitalism and free market in Christianity, we find, in several books in the Old Testament (Genesis, Leviticus, Deuteronomy, Psalms, Proverbs and others), such basic notions of capitalism and free market as property right, investment, profit, wage, interest rate and free competition. Moreover, in the book of Amos, we find how the unjust competition can be punished

 Christianity makes it clear that each individual is sovereign, autonomous and free, which requires a regime in which individuals are the master of the society.

 Now, in order that the people can be the master of the society, the regime should be for the people, by the people and of the people. This is how Abraham Lincoln saw the liberal democracy.

 In order that the people behave as the master of the regime, they must have economic means to exercise their rights and duties. But, the survival of such democracy in the U.S. is becoming more and difficult.

 Unfortunately, the family income distribution in the U.S. is one of worst in the developed countries. The Gini coefficient is as high as 45.0 in 2019. In the same year, the Gini in China was 46.5.

 But, we must remember that, in 2019, the per capita GDP (nominal) is $65,000 in the U.S. as against $ 10,000 in China. Thus, in terms of per capita GDP, the U.S. is 6.5 times richer than China. But, the inequality of income distribution is as bad as China

 The Gini coefficient is one of popular measures of the inequality of income distribution. It varies from zero to 100. The higher the Gini, the worst becomes the inequality of the income distribution in favour of the rich. On the contrary, the lower the Gini, the more equal becomes the income distribution in favour of the poor.

 The United States is no longer the liberal democracy as defined by Lincoln. The American people are no longer the master of the country. Christianity once inspired the free, liberal and just democracy. But, now, it is no more. The regime based on the love of neighbours is now replaced by the love of money. The love of God is replaced by the love of money.

3. Impact of Values on the New Global order

 The basic issue we have to deal with here is the question of knowing what kind of global order will come out of the Sino-U.S. Thucydides Trap. Will it be mono-polar order dominated by the U.S. or China? Will it be a duo-polar order dominated both by the U.S. and China? Will it be a multi-polar order dominated by several major powers?

 The United States had, once, a noble vision of global order in which all countries can enjoy peace, prosperity and security.

 The famous speech of John F. Kennedy made in 1963 at the American University of Washington, we could read such vision

"What kind of peace I mean? What kind of peace we seek? Not a Pax Americana enforced on the world by American weapons of war. Not the peace of the grave or the security of slave. I am talking about genuine peace, the kind of peace that makes life on earth worth living, the kind of peace that enables men and nations grow and to build hope and build a better life for their children-not only peace for Americans but peace for all men and women-not merely peace in our time but peace for all time" (John F. Kennedy, 10 June 1963)

 Kennedy gave us the glimpse of the kind of world mankind would have hoped for; it was a noble dream.

 But, this dream was shattered by an extreme-right-wing misleading intellectuals. In 1997, a group of 25 intellectuals signed a document called "The Project for New American Century-PNAC' and it assassinated Kennedy's vision.

 Key members of the PNAC included Donald Rumsfeld and Dick Cheney who would have inspired George W. Bush to conduct the illegal Iraq war. John Bolton, one of key figures of the war-loving Washington oligarchy was a part of the PNAC; he was the one who tried to impose the Libyan model for North Korea denuclearization.

 The strategy of the PNAC was the simple destruction of countries which were not obedient to Washington rule or which might harm the U.S. political and economic interests; it was simply the strategy of "regime change"

 The strategy of regime change proceeds in the following manner.

 First, diplomacy is used to persuade the target country to change the regime into a pro-U.S. system.

 Second, if the diplomacy does not work, various means are taken to divide the country in favour of the U.S. interests.

 Third, if all these tactics fail, brutal military force is used.

 Many countries have been the targets of the regime change policies. Most of the Latin American countries have been the targets. In more recent years, Libya, Iraq, Syria and Iran have been included in the long list of regime change targets.

 North Korea has been the target for last 70 years, but it is maintaining its "Juche" regime. Nobody knows how long the regime of Kim Jung-un will survive.

 The Unites States was, once, considered as the place where the Commandment of Love was flourishing. But, now, it is not easy to find living Christianity in the United States.

 How long would the Pax Americana last? No doubt, the U.S. will remain one of the most powerful countries. But the possibility of the Unites States remaining as a sole leader of the world is becoming more and doubtful. There are several reasons for it.

 First, I wonder how long the U.S. can finance the Pax Americana. It is true that, in nominal terms, the US GDP in 2018 was $ 22 trillion as against $14 trillion in China. But in terms of PPP (purchasing power parity) the Chinese GDP in 2018 was $27 trillion. In other words the Chinese economy has 24% more purchasing power than the U.S. economy.

 The U.S. is financing about 24% of UN, the World Bank, the International Monetary Fund, NATO and many other international organizations. Washington has to finance the operation of 130 US military bases in the world

 The defence budget of the U.S. in 2019 is $716 billion as against $177 billion in China. This means that the U.S. spends 4.0 times more money on defence than China, while its GDP has 24% less purchasing power compared to the Chinese GDP.

 How long can Washington support such heavy financial burden?

 There is another problem. Given the worsening income distribution in favour of the rich and against the poor, the demand for goods and services in the domestic market might shrink. This might provoke decades- long deflation as it has happened in Japan.

 The experience of FTA (Free Trade Agreement) shows that international trade alone cannot guarantee the sustained growth of the economy. The domestic market should also develop. To do that, we need more equal income distribution and lower Gini coefficient. (다음 호에 계속)

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