An interesting 4200 words article on China and US capitalism. The following is a few of the paragraphs.

"Michael Hudson Well, George Soros’ dream is that China would do what Yeltsin did to Russia – that it would privatise the economy, really carve it up and let US investors buy control of the most profitable heights. In that way, the foreign investors would be able to sort of get the profits of Chinese industry, Chinese labour, and it would become the darling stock market of the world, just like Russia’s stock market was the leading booming stock market of 1994-96. China would be run to benefit US investment bankers. Soros is furious that China is not following the neoliberal policy that the United States is following. It’s following a socialist policy wanting to keep its economic surplus at home to benefit its own citizens, not American financial investors. For Soros, this is a clash of civilisations. His proposed strategy is to stifle the Chinese economy by putting sanctions against it, to stop investing in it so as to force it to do to itself what Yeltsin did to Russia.

Ross Let’s hear it in his words. He says: ‘The BlackRock initiative imperils the national security interests of the US and other democracies because the money invested in China will help prop up President Xi’s regime, which is repressive at home and aggressive abroad. Congress should pass legislation empowering the Securities and Exchange Commission to limit the flow of funds to China. The effort ought to enjoy bipartisan support’. He’s not mincing his words, is he?

Michael Hudson He thinks that China actually needs American dollars to build its factories and invest. He thinks that somehow China’s balance of payments is going to fall apart without the US market, without US investors telling President Xi what to do. The Chinese government won’t have a clue as to what to invest in and how to let the ‘free market’, meaning George Soros and BlackRock and other companies, operate. So he’s living in a dream world where other people need us. It’s like a guy who doesn’t realise his girlfriend doesn’t need him anymore.

Ross There seems to me to be a distinction here that the Chinese are acutely aware of, and it’s between the classical economists and the neoclassical economists. The classical economists have understood the idea of unearned wealth, unearned income. The neoclassical economists actively chase unearned wealth, unearned income, because that is central to their playbook.. Can you just expand on those two ideas? And is it the case that that’s why you talk about a clash of civilisations?

Michael Hudson Well, you put your finger on it, Ross. People think that China’s advantage is its abundant, low priced labour force, or the government building infrastructure. But what’s guiding this is an understanding of the kind of economics that goes back even beyond Marx, to Adam Smith, and John Stuart Mill and the other classical economists. They realise that there’s a difference between earning income and creating wealth by employing labour to produce goods, to sell at a profit and then reinvest these profits and more capital formation, in contrast to simply buying a rent-yielding property, buying land and letting it rise in price without the landlord doing anything, buying a monopoly and just raising the price – charging monopoly prices like the US pharmaceutical companies are doing. China understands the difference between earned income and unearned income, between productive investment and unproductive investment.

In the United States, if they do recognise this difference, they realise that via unearned income you can make wealth by parasitically much quicker than you can actually create real wealth. It’s cheaper to be a parasite than a host. And so most of the financial strategy of Wall Street involves how to get something for nothing. How can we get a free lunch? Well, to do that as a major policy, we have to begin by telling people what Milton Friedman said: There is no such thing as a free lunch. But the whole of Wall Street is looking for a free lunch. They’re looking to grab Chinese assets on the cheap, like Soros has grabbed post-Soviet assets. They’re looking for monopoly rights. They’re looking for lending money and letting China do the work, to pay the interest to the Americans that are going to be providing it with money that the Federal Reserve ends up creating on its computers, or that George Soros already has saved largely by how he got the free lunch from the Bank of England betting against that and driving Sterling down."

https://www.unz.com/mhudson/chinas-fortune-cookie-crumbles/