Search results

Trade relations between China and the USA have been marked by conflict, especially since China’s membership in the World Trade Organization (WTO). These conflicts have been analyzed from a variety of perspectives, including the loss of jobs in the USA due to Chinese imports, competition in high technology sectors and the balance of trade. Conceptual frameworks have employed models of domestic differences as well as models of international power distribution. Among domestic differences examined are the existence of state-owned enterprises in China compared to the domination of the USA economy by private firms, the large role of the Communist Party in China and the influence of labor and environmental and labor groups in the USA. Power distribution theories focus on the systemic effects of the distribution of power on trade openness and on the pattern of intra-bloc versus between-bloc trade. This paper aims to examine the role of macroeconomic policy factors in China and the USA, in particular, the role of national patterns of savings, investment and consumption (both private and government). The paper concludes that insofar as the balance of trade is an important component of the trade conflict, domestic macroeconomic factors continue to be important. The resolution of the conflict will have to take into account the respective macroeconomic policies of China and the USA.

The design is an analytic case study of US–China trade relations with a particular focus on the balance of trade. The conceptual framework employed involves an analysis of macroeconomic policy categories, especially the overall pattern of savings (household, firm and government), investment and consumption. Process tracing over time since China's membership in the WTO is carried out with an eye toward the relationship between the balance of trade and macroeconomic policy.

The main findings are that there is a strong relation between the respective macroeconomic policies of the USA and China and their trade relations. The domestic political economy of the USA encourages consumption and a low rate of savings. The opposite is true of China where household income is low by design and national savings are high. China depends on the USA to consume what is not consumed domestically. The USA depends on Chinese imports for additional consumption encouraged by its low rate of savings. The two economies are locked in a mutual dependence.

Key research implications are that there should be more focus on domestic macroeconomic policies since these are the root causes of the trade imbalance. This is not to say that trade frictions centering on jobs, subsidies and competition in high technology are unimportant. However, without the resolution of differences in the management of macroeconomic policies, trade conflicts between the USA and China will continue.

Practical implications are huge, in some ways much more important than the academic implications. Macroeconomic policy differences in savings, investment, government spending, taxation and infrastructure are important. Furthermore, there are available tools in both China and the USA to manage the macroeconomy, particularly, monetary and fiscal policy.

One implication of this paper is that satisfaction or dissatisfaction of workers is dependent on income distribution which in turn affects trade. Treatment of people in different socioeconomic categories, such as the elderly, the young, and those at working age are a function of macroeconomic policies.

Many people have written about macroeconomics. It is a conventional subfield of economics. The originality of this paper lies in its advocacy of a shift of focus and attention and in the argument that traditional macroeconomics is related to trade. Despite its importance, macroeconomics has not been the center of attention for most political scientists, though economists have made it more central.

The goal of this chapter is to reexamine the nature and structure of the military–industrial complex (MIC) through the works of John Kenneth Galbraith. MIC, or military power as he prefers, is a coalition of vested interests within the state and industry that promoted the military power in the name of “national security” for their interests. Galbraith’s theory of giant corporations helps us understand the role of military corporations in the MIC. Moreover, he is a critical scholar in examining this topic because he was a political insider in the Roosevelt, Kennedy, and Johnson administrations and a prominent public intellectual against the Vietnam War. Against this background, this chapter has three parts. After explaining the development of military Keynesianism with respect to the main economic thoughts, it examines the history of the MIC and its impact on economic priorities during and after the Cold War through Galbraith’s works. Finally, this chapter discusses MIC’s relevancy today and evaluates Galbraith’s prophecies.

This chapter offers a Marxist analysis of forms of value in capitalist economies, and their implications for accumulation, (in)stability, and economic policy. The study focuses on seven key categories: money, capital, credit, interest-bearing capital, fictitious capital, the domestic public debt, and macroeconomic management through monetary and fiscal policy. It argues, first, that there is an intrinsic tendency toward the growing complexity of value forms in capitalism. Its examination helps to locate the contradictions of accumulation at increasingly complex levels, and the emergence of specifically financial forms of instability. Second, state management of accumulation through fiscal and monetary policy and the domestic public debt are essential for the stabilization of the economy, but their effectiveness remains limited. Third, monetary and financial structures, their relationship with production, and capacity to stretch, transform, and (de)stabilize accumulation are historically and institutionally specific. Fourth, public policy can influence the level and composition of output and employment, and the distributional and other outcomes of accumulation. Examination of the capital relation from this angle can shed light upon the drivers and modalities of accumulation of real and financial assets, and the imperatives, forms, and limitations of state regulation of accumulation.