Adam Smith and China

This video from the USA says about itself:

Is US power in decline? What are we to make of the rise of China? Will a possible equalization of North-South relations herald a more brutal capitalism or a better world?

Giovanni Arrighi, Joel Andreas, and David Harvey give their perspectives in this forum, for a discussion of Arrighi‘s 2007 book Adam Smith in Beijing (Verso), filmed in Baltimore, MD, in March of 2008. The event was organized by the Red Emma’s collective (www.redemmas.org). Discussants: Giovanni Arrighi is professor of Sociology at Johns Hopkins University. His books include The Long Twentieth Century (1994), Chaos and Governance in the World System (w/ Beverly Silver, 1999), and Adam Smith in Beijing (2007). Joel Andreas is professor of Sociology at Johns Hopkins University. He is the author and cartoonist of Addicted to War: Why the US Can’t Kick Militarism (2004). David Harvey is is professor of Anthropology at the Graduate Center at City University of New York. His many books include Spaces of Hope (2000), The New Imperialism (2003), A Brief History of Neoliberalism (2005), and Limits to Capital (new ed, 2007).

From British daily The Morning Star:

Adam Smith in Beijing
by Giovanni Arrighi (Verso Books, £14.99)

Sunday 19 April 2009

by Dan Glazebrook

A welcome new appraisal of Adam Smith‘s free-market view

When Adam Smith’s head first appeared on the £20 note, presumably as some kind of triumphalist homage to the dominance of unfettered capital, it struck me just how far the symbolism of this man has drifted from what he actually said.

While he was, as we all know, in favour of free markets, what is usually forgotten by the bourgeoisie in their eulogising is that he also argued that there should be a strong state to oversee these markets.

He also believed in a monopoly of land ownership to ensure that the fruits of the free market result in rising standards of living for its citizens.

Which state is closest to this ideal today? Not the states that cast Smith as their prophet, which long ago conveniently forgot the qualifications to Smith’s argument, but their arch-nemesis – China.

Smith was writing in the late 18th century, at a time when China was not only the most advanced economy in the world but, according to Smith, one whose development had followed a more “natural” – and preferable – economic path then that taken by most of Europe.

China’s economic development was based on increasing agricultural yields, which facilitated a higher division of labour and thus enough of a surplus to trade on foreign markets.

Europe followed an inverted and “unnatural” trajectory, beginning with foreign trade – and slavery and plunder – and the growth of foreign markets, which then prompted technical advance at home. In other words, the Chinese path in reverse.

Smith argued that, although the path taken in east Asia was economically superior, the monopoly of advanced firepower acquired by the west had allowed them to dominate the east.

But a dominance based solely on such a monopoly, Smith believed, could only ever be short-lived, after which “the inhabitants of all the different quarters of the world may arrive at that equality of courage and force which, by inspiring mutual fear, can alone overawe the injustice of independent nations into some sort of respect for the rights of one another.”

Giovanni Arrighi’s thesis is that, with the fast erosion of the West’s monopoly of advanced weaponry, the “equality of courage and force” prophesied by Smith could well be almost with us.

The failure of US attempts to preserve its world hegemony through military onslaught has merely served to perpetuate and deepen its economic malaise, thus opening the door for a truly multipolar world.

The real achievement of this book is its ability to put the rapid changes we are currently living through in their broad historical and economic context – demonstrating just what a short blip the West’s economic dominance of the world really is or was.

China and Japan’s share of world GDP was actually higher than the combined share of Britain and the US until shortly before the dawn of the 20th century.

Today, the West’s two main projects for maintaining global inequality – neoliberalism and military aggression – both lie in tatters.

The increasing confidence and unity of the Third World, led by the BRIC countries of Brazil, Russia, India and China, look set to rewrite the rules of international relations.

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