Dominance
Are people looking at the world the wrong way? I interview Sean Kenji Starrs.
“National power is important—I talk about it all the time, including US hegemony—but the issue is how to measure it. And I see transnational corporations (TNCs) as functionally integrated with national state power—these corporations are still beholden to ‘their’ nation-state even if they have transnational operations.”
“The US maintains its global corporate dominance, especially at the technological frontier—there’s no serious competitor to American corporate dominance at the pinnacle of global capitalism.”
“Today’s transnational corporations are a function of national state power—it very much matters for American power whether American corporations are globally dominant, especially at the technological frontier.”
“How this will pan out over the next couple decades will depend on the choices and actions of millions of people—the outcome is therefore impossible to predict, which means that there’s still hope for a better world.”
Sean Kenji Starrs is a Lecturer in International Development at King’s College London—Starrs has an upcoming book for which Noam Chomsky wrote the following blurb:
Conventional estimates of economic power rely on national accounts, primarily GDP. But these measures have lost their significance in the new age of globalization, this compelling study persuasively argues, showing that by the more realistic measure of ownership of the global economy, US power has reached astonishing heights. These carefully documented conclusions undermine laments about American declinism and the rise of China. A major and original contribution to understanding the actual distribution of power in the world order.
You hear an enormous amount about “American declinism and the rise of China”, so it’s interesting to consider the possibility that people are looking at the world in the wrong way.
Everyone should check out Starrs’s following papers, one of which he coauthored with Julian Germann of the University of Sussex:
These are important papers—everyone should download the PDFs and take a look. The 2014 paper argues that the story about “Western decline is misleading” and that there’s a very rocky and uncertain “road towards convergence between the West and the Rest”, while the 2021 paper looks at how American and German elites have responded to Xi Jinping’s Made in China 2025 plan.
Everyone should also check out Starrs’s fascinating 2014 dissertation—download the PDF and take a look:
It’s an excellent dissertation. And Chomsky has helped to bring Starrs’s scholarship to a wider audience—for example, Chomsky has a 4 August 2022 commentary where Chomsky refers to Starrs’s “important studies” and links to Starrs’s 2014 dissertation.
I was honored and thrilled to interview Starrs—see below my interview with him that I edited for flow, organized by topic, and added hyperlinks to.
General Questions
1) What’s the most exciting scholarship that you’re working on and that others are working on?
Next year I hope to publish my book, which brings together three new and unique datasets in order to empirically analyze national corporate power—the datasets have to do with national corporate rankings by revenue share, profit share, and ownership.
I’m also excited about my next research grant proposal with my coauthor Julian Germann of the University of Sussex—we’re researching the resurgence of techno-nationalism in the West, especially in relation to China. We’ll particularly look at semiconductors—which are all over the news—as the key battlefield for technological dominance in the 21st century.
2) What are the most consequential insights from your work and the most convention-challenging insights from your work?
My work tries to reconceptualize how we think about national economic power.
For decades, most analysts have equated national power with national accounts—especially GDP but also balance of trade and balance of payments, as well as share of world manufacturing and so on.
But this assumption no longer makes sense when production and finance have become so transnationalized and when so many foreigners own and profit from this transnationlized production and finance.
China assembles the most iPhones in the world by far—that assembly contributes to the growth of Chinese GDP. But you can look at the profit extraction and see that most of the profit goes to an American company and to its predominantly American shareholders. And the US state—not China—can leverage Apple’s leadership in advanced technology in order to project power.
This generalizes more broadly—foreign firms export over 80% of the value of China’s high-tech manufacturing. This situation of transnationalized production stands in stark contrast to Japan’s earlier rise in the 1970s.
So this new globalized era has made national concentration of ownership and profit more important than the separate issue of where the GDP happens to be nationally concentrated in the world—just looking at national accounts will prevent us from seeing important and massive transformations in the nature of structural power itself. And regarding the most consequential power competition of the 21st century, national accounts will overestimate Chinese economic power and underestimate American economic power.
National power is important—I talk about it all the time, including US hegemony—but the issue is how to measure it. And I see transnational corporations (TNCs) as functionally integrated with national state power—these corporations are still beholden to “their” nation-state even if they have transnational operations.
3) To what extent have things changed since you published your 2014 New Left Review article?
There have been some huge changes.
It was still unclear in 2014 which direction Xi Jinping would take China—we’ve now seen historical transformations where China has become much more internationally expansive and assertive.
I’m not worried—like I was in 2014—about an imminent Chinese financial collapse. But I do think that there will be crises in—for example—real estate, though likely manageable.
And I certainly didn’t predict the whole Trump era and the opposition toward “free trade” that came with Trump’s rise to power.
I’m surprised to see the alliance between the liberals and the neocons—most liberals today are 100% behind the proxy war against Russia, whereas most liberals vehemently opposed W. Bush’s aggression against Iraq and his “War on Terror”, so that’s a shocking alliance to witness. And unfortunately, I think that this alliance—between the liberals and the neocons—will bring us closer to World War 3 than we’ve been in decades.
My datasets show that US dominance has increased in some sectors but also decreased—or stagnated—in other sectors. China has also experienced a combination of increase, decrease, or stagnation.
The US maintains its global corporate dominance, especially at the technological frontier—there’s no serious competitor to American corporate dominance at the pinnacle of global capitalism.
And Japan and Europe have continued their relative decline, except in some sectors like auto.
Take a look at the following points from my latest research, which analyzes the world’s top 2000 TNCs based on the Forbes Global 2000:
in the “Aerospace and Defense” sector, US firms’ profit share went from 66% in 2014 to 92% in 2021
regarding firms’ profit shares in the “Auto, Truck, and Parts” sector, US firms were #3 in both 2014 and 2021, albeit declining from 15% to 12%—Chinese firms went from #5 in 2014 (with 6%) to #4 in 2021 (with 11%)
Japan and Germany remain the clear world leaders in the auto sector
it’s important to remember that the top Chinese auto firms make the overwhelming share of their profits from joint ventures with foreign firms, especially with Volkswagen and General Motors
regarding firms’ profit shares in the banking sector, Chinese firms were #1 in both 2014 and 2021, increasing from 33% to 45%—US firms were #2 in both 2014 and 2021, albeit declining from 15% to 13%
regarding firms’ profit shares in financial services, US firms maintain their supremacy with 66% in 2013 and 67% in 2021
in the “Computer Hardware and Software” sector, US firms remained supreme with 89% in 2014 and 77% in 2021—Chinese firms went from #4 in 2014 (with 1.3%) to #2 in 2021 (with 11%)
the impressive Chinese gains in the “Computer Hardware and Software” sector are now under threat due to increased US efforts at technological containment
regarding electronics firms’ profit shares: US firms increased their dominance from 37% in 2014 to 46% in 2021; Chinese firms went from #7 in 2014 (with 2.8%) to #4 in 2021 (with 7.8%); South Korean firms went from #2 in 2014 (with 28%) to #3 in 2021 (with 16%); and Taiwanese firms went from #3 in 2014 (with 7.5%) to #2 in 2021 (with 17%)
in the media sector, US firms increased their supremacy from 73% in 2014 to 81% in 2021
US supremacy in the media sector is very important for global ideological influence and for soft power
So we can see that American dominance is still very apparent if we look at profit shares instead of national accounts. And that there are no competitors—including China—on the horizon.
US Corporate Power
1) What does it mean to refer to “US economic power” or US-based multinationals’ “global power” or US-based multinationals’ “global reach”? And why does it matter so much whether a multinational happens to be US-based or German-based or Switzerland-based?
First a quick note. I always put “market” in scare quotes, since I don’t think it’s ever been a real thing in the way that liberals have—for centuries now—been imagining it.
Adam Smith drew two conceptual distinctions in 1776—one between state and “market”, but also a more general one between politics and economics. And I think that these distinctions are the original sin of political economy. Even in 1776, giant joint-stock companies were straddling politics and economics—this straddling had already been going on for centuries at the time that Smith wrote. Just take a look at how the British East India Company depended on its royal charter and on the Royal Navy—it wasn’t at all subtle.
In my opinion, virtually everyone since Smith has repeated this same error of bifurcating politics and economics.
Today’s transnational corporations are a function of national state power—it very much matters for American power whether American corporations are globally dominant, especially at the technological frontier.
To take a current example, a number of American firms have a chokehold in the global semiconductor supply chain—Washington can leverage this situation to constrain and possibly even abort Chinese technological competitiveness in semiconductors, which are a crucial component in many of the most advanced technologies, including those that are crucial for military power.
And the US state can—thanks to the nature of American hegemony in global capitalism—pressure European, Japanese, South Korean, and Taiwanese firms in a way that further expands and deepens American global structural power.
So you have to look at TNCs’ nationality—that nationality very much matters for global power competition, for avoiding World War 3, and for averting the ongoing global ecocide.
2) To what extent have wealth-concentrating neoliberal policies in the US expanded US-based multinationals’ “global power” and “global reach”? And to what extent can we say that this expansion—of US-based multinationals’ “global power” and “global reach”—has contributed to “US economic power”?
I argue that American power has globalized thanks to American TNCs’ increasing globalization.
Since the 1940s, many policies have been pursued that have gradually allowed this process to consolidate. You can look at the battle against global communism during the Cold War; the International Monetary Fund’s pursuit of structural adjustment; the 1995 establishment of the World Trade Organization; the concessions that were involved in China’s 2001 entry into the WTO; huge corporate subsidies; huge policies of welfare for the American capitalist class; and many others.
Neoliberalism did consolidate in the 1980s—that was certainly part of the story, but US capitalist imperialism has been paving the path since the 1800s.
3) To what extent does US multinationals’ current global dominance exceed what US planners in the 1940s anticipated was possible?
Look at what key elite thinkers like Henry Luce, Dean Acheson, and George Kennan were writing in the 1940s—it’s clear that they wanted a world that would be safe for American corporations’ global expansion.
But I don’t get the sense that they anticipated how successful their vision would be.
In 1949, the bulk of the Eurasian landmass was independent from—or even hostile to—American influence and penetration. And until the 1970s, there were many movements in Africa, Asia, and Latin America that were struggling for national independence, even socialist revolution.
So it’s remarkable that—by the turn of the century—only Cuba and North Korea reject integration into global capitalism. And I doubt that Luce and others could’ve imagined that level of success.
There was also a process of “international development” that took place over more than 50 years—this process grew the “emerging markets” in a way that expanded American TNCs’ overseas operations, while this process also forced more peasants into the global working class than ever before in a way that expanded American TNCs’ highly exploited labor force. And Luce and others couldn’t have imagined how successful this process would be—it’s remarkable that most of the world’s population has now been functionally integrated into global capitalism.
China’s System
1) To what extent can we trust the economic numbers that come out of China?
We should maintain skepticism—it’s important to be clear about what your sources are and give any necessary caveats.
I always try to use data from the UN, the OECD, or the World Bank, since I’ve found discrepancies—sometimes huge—between the data from these sources and the data from the Chinese government. But sometimes I have no choice and have to use their data.
2) Where and to what extent has China surpassed the West and what accounts for that Chinese superiority? According to Vijay Prashad, China has “far surpassed” the US and Europe in areas including robotics, telecom, and green technology—Prashad says that Huawei and ZTE are “perhaps a generation ahead” of US telecom. It seems relevant to point out that Noam Chomsky argues that Japan overtook the US in various areas in the 1980s due to the fact that the Japanese state-coordination system was more efficient than the US’s inefficient military-based state-coordination system—according to Chomsky, it wasn’t a matter of state coordination versus the free market but was instead a matter of efficient state coordination versus inefficient state coordination.
A very broad question—it depends how you measure things.
I admire Prashad’s work and his commitment to Global South solidarity, but I definitely disagree with the idea that China has “far surpassed” the West in any advanced technology.
Germany and Japan are far more advanced than China when it comes to robotics.
And my research shows that—regarding telecom firms’ profit shares in 2019—US firms were #1 (with 26%), Japanese firms were #2 (with 20%), Hong Kong firms were #3 (with 14%), and Chinese firms were #7 (with 2.7%).
Huawei used to be the clear global leader in 5G production, but the US banned Huawei from using US technology, so Huawei’s latest smartphones have to use 4G—Washington was able to implement this ban because the US dominates the advanced technology that’s used to design and produce 5G.
The category of “green technology” is too broad to allow for precise comparison. And it’s true that China is now the global leader when it comes to production of solar panels and wind turbines, but that’s because this production isn’t particularly technologically advanced, which means that China can compete on the basis of its huge and cheap labor force.
And you have to look at corporate profits and at corporate ownership structures. So for example, China is the world’s largest exporter of electric vehicles, but the biggest exporter of electric vehicles from China is Tesla!
So it’s mostly Westerners who own—and profit from—advanced Chinese production.
As for Japan’s rise, it’s true that Japan began to challenge the US in certain sectors like automobiles and semiconductors, but Japan never did challenge the US in things like software and biotech.
And the US has maintained world supremacy in advanced military production ever since the 1940s, so I don’t think that we can say that the US state-coordination system is necessarily always less efficient than the Japanese one. Or that the US state-coordination system is necessarily always less efficient than today’s Chinese one.
President Reagan implemented industrial policies—and protectionism—in order to combat Japanese competition. By the 1990s, that effort had successfully defeated Japanese competition regarding semiconductors.
And let’s not forget that one of the most successful state-coordinated projects that the world has seen over the past few decades happened under Trump—Operation Warp Speed developed Covid vaccines in record time.
Regarding the comparison between the Japanese and American systems of technological advancement, I think that we can say that the Japanese system is more efficient in terms of catching up—especially when it comes to hardware—but less effective at pushing the technological frontier, which is where the US always leads.
Japan was effective at catching up based on an already existing blueprint that Japan could follow and could mobilize resources around. But the better way to advance the technological frontier seems to be the US way of throwing resources at scientists, letting them go off and do their own thing, and seeing what happens—the US system certainly involves more waste than the Japanese system, but the US has the massive resources necessary for a system that lacks the clear targets that the Japanese system has.
China has spent decades pouring billions and billions of dollars into their effort to advance automobile and semiconductor technology. But Western brands—including Japanese, South Korean, and Taiwanese—still dominate those areas, so the Japanese system isn’t necessarily succeeding in China.
Regarding the US system of innovation, there’s an interesting recent example where researchers at MIT—which receives a huge amount of government funding—demonstrated that a certain material might turn out to be a better option than silicon when it comes to semiconductors. The Office of Naval Research supported the research; the National Science Foundation supports the facilities that the research used; and the research relied on laser technology, which in general traces back to places like Lawrence Livermore National Laboratory.
An MIT scientist who helped discover this new material is China-born and was under investigation for not disclosing Chinese affiliations when applying for grants—the fact that the scientist is working at MIT illustrates how the US can attract the best scientific talent from all over the world even if China happens to have a larger population.
3) How would you distinguish the threat that China poses to US corporations from the threat that China poses to the US population? It seems like it’s important to distinguish the two threats.
In short, capitalists want higher profits and workers want higher wages and more benefits—this isn’t always contradictory, but it’s often contradictory, especially at the micro level.
China’s capitalist rise has been a great boon to the American capitalist class. And will continue to be as long as (1) American corporations can operate in the Chinese “market” and (2) the US state is able to prevent Chinese firms from technologically surpassing American firms.
In fact, China’s capitalist rise has—in certain respects—made the US more powerful.
Most American TNCs are opposed to the US state preventing them from operating freely in China. There are some sectors—like American steel production—that have fallen behind the Chinese competition, so these sectors do support increased US protectionism.
The US state has allowed American firms to decimate so much domestic industrial production—that’s been rough for the American working class.
Companies like Amazon and Walmart have annihilated so many small businesses across the US—these giant American oligopolies were arguably only able to become so competitive and powerful through reliance on cheap Chinese production.
As for the professional–managerial class, we’ve benefited in a narrow sense from cheaper consumer prices that have resulted from the super-exploitation of Chinese labor. But we live in a much more corporatized and generic urbanscape as a result of the destruction of independent businesses.
4) To what extent do people who claim to love the free market contradict themselves when they complain about China’s state-subsidized successes?
A “free market” has—in the history of capitalism—never existed. People who profess a love for it—and think that it has actually existed—lack an accurate understanding of reality and history.
Regarding China, I agree with Noam Chomsky that it’s ironic that “free-market fundamentalists”—who say that the state is inherently inefficient—don’t happily wait for China to collapse instead of berating them for having “unfair” government intervention.
But the US is also state capitalist, of course—the countries that are called “capitalist” are always actually “state capitalist” in reality, so we have to overcome Adam Smith’s bifurcation between politics and economics.
5) To what extent are the major Chinese firms more efficient or effective or dynamic than the major US firms? And how does the superiority—insofar as it exists—relate to state subsidy?
It depends on how we want to conceptualize and measure this.
I don’t think that it’s relevant whether the firm is state-owned or private—China has firms of each type that are highly inefficient, but also has firms of each type that are highly efficient.
China has a world-leading high-speed rail system thanks to massive state subsidies, but the Chinese auto and semiconductor sectors are much less competitive than Western firms despite decades of massive state subsidies.
State-owned enterprises are clearly superior if we have goals other than making huge profits—state-owned enterprises can prioritize state directives like maintaining millions of decent jobs, whereas the imperative of pursuing profit could involve eliminating millions of decent jobs.
6) To what extent does Huawei offer superior value to what Huawei’s competitors offer? And what accounts for that superiority insofar as it exists?
It depends on whether you’re talking about workers’ interests, elite interests, the environment, or some other interest.
Huawei’s most competitive product is—thanks to decades of cheap labor and of R&D—installation of 5G infrastructure. But the US is now challenging this—successfully, I think.
7) How badly has Washington’s opposition to Huawei wounded Huawei? There’s a 30 December 2021 article about Huawei’s troubles.
Washington has banned Huawei from accessing the most advanced semiconductors, so I think that they’ve successfully reduced Huawei to a mostly domestic player.
Huawei has particularly been hurt when it comes to smartphones, both inside and outside China—this decline is partly due to Washington’s components ban, but it’s more importantly due to the fact that Huawei can no longer use the Android operating system. Very few people outside of China would want to use a Chinese operating system—even inside China, Google and Apple have a duopoly.
8) To what extent is China’s economic system superior to the US economic system in terms of efficiency and effectiveness and dynamism? And isn’t it an obvious point that no amount of efficiency and effectiveness and dynamism could ever justify China’s undemocratic system?
I can’t give a simple answer to a question as broad as this.
Every domestic political economy is embedded in an unequal way in a global capitalism that US hegemony underpins.
So “China’s economic system” does not—and cannot, as presently constituted—exist without its integration with the US-led world order, which means that it doesn’t make much sense to judge the two systems independently.
But to try to answer the question, I think that the Chinese—and East Asian—developmental state has proven to be very effective at catching up and at achieving middle-income status.
It remains to be seen whether China can join the ranks of the advanced capitalist world—in my opinion, China won’t be able to do this in the foreseeable future.
And in terms of what’s best for humanity, both the US and Chinese political economies are capitalist and are therefore massive contributors to industrial ecocide.
So for future human survival, it’s essential to have a democratic socialist revolution in both the US and China. And it’s especially important for a revolution to happen in the US, since the US is much more powerful and globally influential.
China’s Future
1) What are the prospects for Chinese democracy and Chinese freedom? China is a brutal and oppressive autocracy.
All capitalism is “brutal and oppressive”. And it’s impossible for capitalism and meaningful democracy to coexist, since class hierarchy is antithetical to democracy—no capitalist country can ever be meaningfully democratic.
The US is actually a plutocracy or oligarchy; the US has massacred far more people around the world than China ever has; and the US is a vastly greater threat to human civilization because of its vastly greater capitalist power.
Having said that, there are all kinds of human rights abuses within Greater China—including in Hong Kong, where I lived from 2014 to 2021 before I was kicked out.
For example, China has far fewer protections for labor rights than the US does.
There are only dim prospects for greater freedom and democracy in China as long as Xi Jinping remains in power and also as long as China remains a single-party dictatorship.
I was involved in exciting labor activism in southern China that Hu Jintao’s administration permitted more than Xi’s has—Xi came to power in 2012, began to crack down on various elements of civil society, and centralized more power within his own rule in particular and within the Chinese Communist Party (CCP) in general.
2) What economic and political transitions will China experience in the future? And what’s on the other side of these future transitions?
China’s rapid growth will continue to slow, which will present more and more problems for the CCP—China’s economic problems include a high rate of youth unemployment, rising debt at the consumer and corporate and state levels, an especially serious debt crisis when it comes to real estate, and the possibility that China has been locked into a middle-income trap.
And the US will continue to push Cold War 2 in a way that will constrain Chinese technological advancement and even threaten military conflict over Taiwan.
3) What can China do about pollution?
China can do the same thing that any other country should do: increase environmental regulations; promote green investment; promote green infrastructure; and democratize both state and capital so that society isn’t profit-driven and elite-controlled.
But this requires challenging China’s power structure, which profits from the status quo and from hydrocarbon production.
4) How likely is it that China will expropriate firms and property within China at some point?
This could happen if there were an all-out war between the US and China or if China had an anti-capitalist revolution to overthrow Chinese capitalism.
I think that both conditions are unlikely in the foreseeable future, though I think that war is more likely now than even just a few years ago.
China’s Geopolitical Ambitions
1) What can be done about the various geopolitical threats that China poses? For example, take a look at Chomsky’s 2021 warning about rare-earth metals.
This question assumes that (1) the US is the world police and must deal with “threats” around the world; (2) the US has any legitimacy in countering other powers’ “threats” when the US is far and away the biggest terrorist state in the world; (3) China poses more threats to humanity than the US does; (4) threats are class-blind such that a threat to the American capitalist class is the same as a threat to the American working class; (5) Americans should be more concerned about China’s threats to humanity than about America’s threats to humanity; and (6) inter-imperial rivalry is legitimate instead of being something that we should fight against.
I reject all of these assumptions. I think that the most important thing that Americans can do for world peace is to fundamentally transform the power structure in the US—the American ruling class is far and away the biggest threat to humanity in human history and has no right to try to counter perceived “threats” from other countries.
I think that the US presents a far bigger threat to humanity’s future than China does and that it’s most important for there to be a successful democratic socialist revolution in the US. That revolution would—because of US power—have all kinds of positive spillover effects in China. And would help to change the US’s current imperialist posture toward China.
But unfortunately, American liberals have demonstrated in both 2016 and 2020 that they weren’t even able to handle a social democrat like Bernie Sanders.
Sanders isn’t even a serious challenger of capitalism like Kshama Sawant—I think that she’s the most inspiring politician in the US.
2) Regarding Taiwan, how can conflagration be avoided? There’s an interesting video that explains the dangers regarding Taiwan.
Easy—China and the US can both let Taiwan be free and independent.
But China and the US both refuse to do this.
Unfortunately, the US is adamant about inaugurating Cold War 2 against both Russia and China.
And regarding Taiwan, I think that an increasing level of conflict is basically inevitable both because of that alliance in the US between the liberals and the neocons and because of surging Chinese nationalism that defines “reunification” with Taiwan as a core part of Chinese national identity. Hopefully there won’t be an all-out war—I think that Xi knows that the Chinese military is nowhere near powerful enough to defeat American military power. But after Nancy Pelosi’s visit to Taiwan, I think that it’s probable that China will eventually use its military to implement a blockade of Taiwan—who knows how that would turn out.
3) How much danger is there that China will invade Taiwan and expropriate firms and property within Taiwan?
I think that an all-out invasion is unlikely.
China doesn’t yet have the capacity to transport hundreds of thousands of troops to Taiwan.
And most Taiwanese are opposed to reunification on the CCP’s terms—a long-term Chinese occupation would be extremely difficult. The Taiwanese have witnessed the implosion of “one country, two systems” in Hong Kong—I don’t see the majority of the Taiwanese people peacefully accepting a CCP takeover in the foreseeable future.
Taiwanese semiconductor production depends on American technology, so China wouldn’t be able to take over that production even if an invasion and occupation did take place.
And semiconductor fabs are highly sensitive, so you’d have to completely rebuild the fabs if a war damaged them—China wouldn’t be able to rebuild those fabs without American technology.
4) Isn’t it a dangerous and precarious and fragile situation for the entire global economy to be so dependent on Taiwanese semiconductors?
I think that a blockade is highly likely and would be very disruptive.
Taiwan accounts for over 90% of the world’s advanced semiconductor production. But it’s important to remember that firms like Samsung and Intel also produce advanced semiconductors—it’s also important that the Taiwan Semiconductor Manufacturing Company is setting up some production both in the US and also in Japan.
5) What’s China’s long-term geostrategic aim in subsidizing firms like Huawei and getting firms like Huawei to capture a bigger and bigger market share around the world?
China subsidizes its firms for the same reasons that any other capitalist power does—the aim is to increase national wealth and power relative to rivals, but also to weaken the working class at home.
The Chinese elite also want to reduce their dependence on US-centered global capitalism and maintain geopolitical independence—in contrast, many countries’ elites are perfectly happy with US hegemony.
The Chinese elite will—without a revolution to overthrow them—never submit to American hegemony. And the American elite will—without a revolution to overthrow them—never submit to China fundamentally challenging America’s structural power.
How this will pan out over the next couple decades will depend on the choices and actions of millions of people—the outcome is therefore impossible to predict, which means that there’s still hope for a better world.
Extra Questions
1) I heard that the West poured investment and jobs into China in the 1990s on the basis of an expectation—though a self-interested expectation—that China would democratize. To what extent is this true?
Corporations invest in order to accumulate profit, have a legal responsibility to prioritize profit accumulation over all other possible goals, and aren’t concerned about destroying people—or the planet—during their quest for profit.
Corporations are totalitarian top-down institutions—we shouldn’t expect any totalitarian institution to somehow want to promote democracy.
And like I mentioned, democracy and capitalism are incompatible. Capitalism means—by definition—that there’s a capitalist class that has the power to pursue their interests and subordinate everybody else’s interests, which is happening before our eyes as the American capitalist class pursues profit accumulation even as that pursuit moves us all toward climate disaster and probable civilizational termination. So the capitalist West isn’t democratic—we therefore shouldn’t expect the West to promote democracy.
And the fact is that the West has been the most powerful barrier in the world against real democracy. The US supports dictatorships militarily and their very violent efforts to suppress political and economic democracy—the US also acts as global dictator when the US warns African countries not to import Russian oil, steals the Afghan Central Bank’s funds, gives itself the right to invade or bomb other countries, commits crimes against humanity including torture and extrajudical killings, generally ignores international law and the United Nations, and so on. So we shouldn’t expect a country with this attitude toward the world to promote democracy.
Having said that, I think that Western elites would actually prefer liberal political democracy in China instead of a single-party dictatorship, since that would give Western elites more influence regarding the CCP, which—unlike Saudi Arabia and the UAE and other dictatorships that primarily serve the interests of capital—prioritizes their own single-party power.
There are unprincipled reasons why Western elites don’t like the CCP’s infringement on freedom of speech. For one thing, that infringement prevents financial analysts from freely assessing firms’ business prospects—financial analysts have to self-censor any criticisms that the CCP might regard as politically sensitive.
And Western capitalists prefer capitalist rule of law because they want to be able to fairly and predictably settle their contracts and disputes without any CCP interference—the judges in China must all pledge loyalty to the CCP.
2) Doesn’t China rise—and gain—as a result of the economic activity that goes on in China even if TNCs like Apple capture most of the profits?
China’s integration into global capitalism has certainly benefited the Chinese elite and the rising Chinese middle class, but it’s more complicated for the rest of Chinese society.
This integration has happened on the backs of hundreds of millions of super-exploited migrant workers.
There’s pollution on a scale that’s difficult to imagine—millions of Chinese die every year just from air pollution alone, but there’s also pollution of both soil and water.
Millions of Chinese peasants are forcibly relocated every year at the whims of state-backed developers of both infrastructure and real estate.
And millions of workers suffer from industrial accidents—these workers often have little legal recourse or access to healthcare.
As inequality soars, you see much more petty crime.
The CCP could deal with these problems—there’s no lack of capacity or resources. But China’s integration into global capitalism depends on a super-exploitable labor force, so the CCP wants to maintain a permanent underclass in order to maintain China’s stability as the world’s factory.
3) How much agency have Western CEOs had in terms of moving Western jobs to China? I suppose that a given CEO’s level of agency depends on the decisions that that CEO’s company made in the past.
In one sense, Western CEOs have 100% agency—or at least they share agency with their board of directors.
But after the 1990s, there was a structural logic where TNCs had to move jobs to places like China—and exploit those places’ lower environmental costs and cheaper labor—just in order to stay competitive with other TNCs. So I think that the focus should be on changing government policy, which is what the West has increasingly been doing—at least in key sectors like semiconductors—since 2016.
I should point out that China’s integration into global capitalism hasn’t been good for much of the Chinese population—people are living under horrible conditions. Social welfare has been cut; guaranteed employment has been removed; foreign capital has been permitted to extract Chinese wealth; there’s massive inequality; there’s huge inflation in health care, education, real estate, and other areas; and there are at least 65 million “left-behind children”. There’s a reason why there’s so much nostalgia for Mao now in China—Xi is trying to present himself as the new Mao in order to gain from that nostalgia.
4) Does China have any sort of ultimate coercive power—or ultimate coercive leverage—in terms of ultimately being able to do something drastic like take over TNCs’ factories?
In theory, yes—China could decide to reverse course regarding decades of integration into global capitalism.
But that would require China to have a revolution against capitalism, which I don’t see happening any time soon.
The CCP benefits from integration into global capitalism—they’ll protect the goose that lays their golden eggs.
Expropriation isn’t as relevant when it comes to higher-value production sites, since those production sites rely on advanced Western technology that would stop flowing in the event of any expropriation.
5) What do you think about the notion that Japan—or some other country—will be next if we let Taiwan fall?
The US shouldn’t be World Dictator—the US should instead support freedom and democracy, which means allowing the Taiwanese and Japanese to decide what they want to do.
The US should support the Taiwanese and Japanese only in the way that they want to be supported. And many South Korean and Japanese people actually want US troops out of their country.
There’s zero evidence that Chinese elites have any interest in invading and conquering Japan—very few Japanese people are concerned about this even if you’re “just” talking about Okinawa, so I don’t see why Americans should worry about it.
And generally speaking, I don’t think that China has any desire to violently conquer the world like the West has been doing since 1492. Military occupations are very costly and inefficient, whereas it’s much easier to just compete for profit—and for resource extraction—within global capitalism.
Taiwan is—at least in the foreseeable future—the only country that needs to worry about Chinese military occupation.
China will continue to have clashes—including violent clashes—with most of its neighbors over territorial disputes, but that’s very different from China wanting to expand a territorial empire in East Asia or anywhere else.
Wow! Excellent stuff. I didn't know about Starrs' work but now I do...
Great interview! Learned a lot from Starrs’ insight. He dispels much conventional wisdom about capitalism, democracy and the relationship between the two. Bravo!