china Original Robert Scheer SI Podcast

Zachary Karabell: China Is Not the Enemy—It Is America’s Indispensable Economic Partner

Author Zachary Karabell pleads that, despite the militaristic noise, China and the U.S. share an economic dependency that would rupture the domestic economy of both nations if severed.
Zachary Karabell. Photo credit: The New America Foundation

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China—along with Russia—shares the attention of an increasingly provocative United States. Confusing rhetoric regarding policy in Taiwan, unsanctioned trips from powerful American political figures to Taipei and other agitating measures point to a new chapter emerging in the relationship between China and the U.S. Author and columnist Zachary Karabell, who has extensive experience in writing about China and doing business there,  joins Scheer Intelligence to remind us of the extensive economic relationship that exists between the two world powers. He focuses on his book “Super Fusion: How China and America Became One Economy And Why The World Depends On It,” and how a souring between them could spell more trouble at home.

Unlike historic attempts and successes by the U.S. to dictate or coerce countries to bend to their will, China has proven that it will not fall under pressure from the American government and the economic interdependence between the U.S. and China plays a huge part in that. Karabell mentions in the podcast, “in spite of all of this incredible negativity and headline after headline talking about a cold war and the end of globalization, bilateral trade between the United States and China this year—even with Trump’s 25% tariffs that the Biden administration has done nothing to alter, even with all of the negativity, even with all of the animosity—bilateral trade is going to be more than ever this year.”

Karabell argues that despite the success enjoyed by both China and American corporations that went to China, the country remains an ideal adversary because of that ability to both resist American influence and stand as a powerful competitor in the market. “We have a national security bureaucracy set up in the late ‘40s to fight a military ideological state based rival,” Karabell says, referencing the Soviet Union and then the fight against Islamic fundamentalism that followed 9/11. Nowadays, “China is so perfectly cast as the adversary for a system that was set up to deal with an adversary.”

Credits

Host:

Robert Scheer

Producer:

Joshua Scheer

Transcript

Robert Scheer:

Hi, this is Robert Scheer with another edition of Scheer Intelligence, where the intelligence comes from my guest, in this case is Zachary Karabell, a man of many talents, but most important, very knowledgeable about China at a time when we may be going to World War III with not just Russia, but also China and threatening world order and what have you. And Zachary Karabell comes at it many different ways as an academic, Oxford, Columbia, every–all major universities, a financial consultant, investor, a Wall Street player, and someone who wrote a really important book that I just have reread was published in 2009 and it’s called “Super Fusion: How China and America Became One Economy And Why The World Depends On It.”

Consider that statement, one economy, in fact, you even have a concept in your book, you refer to China America as one economy. And now there’s all this, there’s sanctions and obstacles and in one of the great ironies, we fought a long war against Communist Vietnam, but now we like Communist Vietnam and we want Apple and other companies to shift their production to Vietnam. So what’s going on, Zachary Karabell? What’s this all about?

Zachary Karabell:

That is a very, very good question. What is going on? I think there clearly is a nascent cold war going on and there’s blame enough to go around and as you know better than anyone Bob, there’s blame enough to go around and to explain the 1950s cold war between the United States and the Soviet Union, each side clearly is culpable and that’s true today. What is so, I think benighted and shortsighted on the part of the United States and frankly on the part of the Chinese leadership as well but I take it as an axiom that I’m a US citizen, I have some right to praise or criticize my own society that is a greater right than I have to praise or criticize another society. So one of the conclusions of my book in 2009 is if you think China’s a threat, if you don’t think China’s a threat, the answer to both is focus on your own society, focus on your own house first.

The kind of the motes in one’s own eye rather than the motes in someone else’s. And I believe that firmly today that China’s going to do what China’s going to do. And that’s another thing the United States seems not to have gotten either the collective or governmental hint about, which is our ability to coerce China to be different is radically limited and our ability to encourage them to be different is radically limited. And that’s not a place that the United States is comfortable occupying. We’re used to be in a position of power and privilege where we can dictate or coerce or do some carrot and stick that does both and I don’t think that works with China. What is so wrong about, I mean in my view, the current rush toward conflict is that where the cold war analogy completely falls apart is the economic interdependence. And that was the subject of my book in 2009.

And in spite of all of this incredible negativity and headline after headline talking about a cold war and the end of globalization, bilateral trade between the United States and China this year, even with Trump’s 25% tariffs that the Biden administration has done nothing to alter even with all of the negativity, even with all of the animosity, bilateral trade is going to be more than ever this year. And that includes US exports to China, not just US imports from China. China remains the fastest growing export market for American goods. A concept that I think would be surprising to most people, and you can go onto the US Census Bureau, this is not a subjective observation on my part, these are statistical realities. The trillion dollars of bilateral interactions in trade that the trillion dollars that China still holds of American treasuries means that any attempt to radically sever that relationship is infinitely more costly.

Nuclear weapons, not withstanding in the 1950s then severing the US-USSR relationship would’ve been, I mean we could pursue a political economic ideological combat with the Soviet Union and with Soviet communism, whatever the hell that meant with very little domestic economic costs because there were so little interaction between those fears. That is, I mean, not the case today at all. Semiconductor supply chains alone would be, you can’t just snap your fingers and build them in Vietnam. It’s taking Apple years to even source some of the iPhones in Vietnam and other places. It takes years and years and trillions of dollars to rebuild supply chains. And maybe we’ll do that by the 2030s and we might anyway. But until then, to act like you can just pursue ideological and military and political conflict and competition without recognizing how profoundly intertwined these economies remained, even though we think they’re not, I just think it’s foolish beyond belief.

Robert Scheer:

In reading your book, it happens that when I was in another lifetime, a half or more than a half century ago, back in 1963, I was a fellow in the Center for Chinese Studies at UC Berkeley, University of California, Berkeley. And the conventional wisdom then was that China could never develop, it would always be a basket, economic basket case. The population was thought to be too large, somewhere between four and five hundred million. They had no petroleum to speak of, they would be wedded to coal. That would get more and more difficult and there was one issue after another. Their ideology of being communists would prevent them from ever embracing any rational market solutions and this was set in stone. And then Nixon of all people did what Biden and Trump don’t seem to want to do, at least Biden met with some of these people, he met with Putin and Xi.

But Nixon, this improbable figure who built a career on red-baiting communism, and Henry Kissinger had the wisdom to go and negotiate with Mao Zedong of all people, probably the fiercest of communist leaders, not probably, unquestionably. And the idea being that we could live in a world and including not bringing up Taiwan and accept them. It seems to me what happened after that was there was an assumption that by becoming partners economically in trade and so forth in normalizing that the Chinese would give up communism. They would have it maybe in name, but it would not be an issue.

And so to fast forward to where we are now, it seems, and I thought was one of the great strengths of your book, written what 12, 13 years ago, which is no, it’s a little more complex than that. And that any leaders of China will have to have some notion of obligation to the whole. And I think that’s one of the issues now. We are threatened by China’s move to high tech. They have to get a bigger share of the pie. They have a billion more people almost than they had before. And they can’t just be the factory for low level production. They need to get into the big game and we find that threatening and I wonder if that is not the source of the tension now.

Zachary Karabell:

I mean clearly in the United States, the conventional wisdom has gone. Clinton and then George H. W. Bush agreed to China, Sorry, George W. Bush agreed to the entrance of China into the WTO in December of 2021. Because the argument was by bringing China more into the sort of capitalist fold global economic community, integrating it into the world trade organization and global trade would be a massive spur toward opening up and liberalizing China’s society, not just their economy. And once it became clear around 2010, 2011, especially with the ascension of Xi Jinping, that wasn’t going to happen. That if anything China was going to manage to pursue this pseudo generic form of authoritarian capitalism or sort of a system that doesn’t really have a name.

The reaction increasingly amongst US elites and policy makers and scholars and public opinion has been, we’d messed up, that was wrong. We should never have integrated China into the World Trade Organization because all they did was steal American intellectual property, use that for domestic gains, develop their own domestic champions as they are called in things like 5G and wireless communication in military and cyber warfare and in sort of surveillance and AI. And then also just stole American IP for everything and that this ended up being a disastrously wrong policy and you should have just confronted China rather than integrating with them. That’s kind of the way the conventional wisdom has gone. And some of that is as adamantly articulated by people who were once considered to be China-files, people who were really adamant about integrating and reaching out to China. People like Orville Schell who I like a lot and have counted as a friend, but I think whose views on China have really hardened intensively over the years who was a Berkeley for a lot of years and a lot of these…

Robert Scheer:

He was a colleague of mine in that China Center, I’ve known Orville forever. But can I just jump in one respect. I happened to interview Richard Nixon after he was president and he was licking his wounds in his office in New York. And it was always a mystery to me the opening to China because it was like a peaceniks wildest dream. This was basically the argument of peace-oriented people around the world who were not thought to be realistic, which is give peace a chance and Nixon did it. And he wasn’t even, people said, well, it was Kissinger, no, Nixon wrote an article for Foreign Affairs magazine before he was president, talking about the need to do this. And then after, when he was in his forced retirement, he wrote books about how you develop peace. And Nixon and I dare say Kissinger has just recently reiterated this notion of realism, which is they’re not going to stop being what they are and what they are is a product of their own culture.

And this idea of Chinese society with Marxism with Chinese characteristics, which is the speech that Xi just gave in 2018 that they say we should all read and now they’re having their party congress in three weeks, which I’m sure he’s going to reiterate this is a very interesting blending. And what he says in that is, look, we had this revolution in the most improbable country, it’s supposed to come in advanced country. Nobody ever told us how to build socialism in a very poor country. We don’t want to go the way of the Russians, that was a failure. And we make mistakes and we try to improve it and reform has a lot of impetus here. And what is so interesting about your book, I rarely recommend you have a more recent book and we could talk about that Harriman and banking and everything, but I would really recommend people read your book that was published in 2009 because you acknowledged that tension.

Yes, they will be more like us. And by the way, one point you make in your book, we needed China. The first companies that went there, Kentucky Fried Chicken, Avon Calling, Federal Express, they needed it. A market back here was tired and old and not particularly receptive to them, particularly as the internet age emerged. They went there and saved themselves and it wasn’t a one way street at all. If we think about the pandemics, my God, the Chinese kept us alive through Amazon purchases during this pandemic, so it was a mutual thing. But the key point that we’re getting from Xi is, listen, we have to deliver on a promise to the masses, archaic as it sounds. And we can’t do that particularly once we had that policy of cutting our population, we don’t have that many women that we can drag in off the farm to assemble your iPhones. We have to develop higher tech, we have to develop bigger profit margins.

I think Nixon and Kissinger understood that and they understood it was going to be a multipolar world. I think that, I know people are going to get very angry at me, but when I talked to Nixon about that, he was very clear, we have to get used to the idea that is not going to be an America centric world. And it isn’t that the big issue right now?

Zachary Karabell:

So there is that, there are a lot of foreign policy people who are kind of Kissingerian realists and recently Graham Allison who is kind of a latter day version of that Harvard Kennedy school, someone I knew for years as well wrote this book called, The Thucydides Trap. And his argument was basically, look, irrespective of all the individual choices that China in the United States governments are making, there’s an inevitability of conflict because rising power always come into conflict with incumbent powers. The United States, the incumbent power, China’s the rising power and therefore they’re going to conflict almost regardless of decisions made. I think that’s way too sort of structurally fatalistic and it misses the fact that it’s always contingent, there’s always a lot of decisions made and this central point that you raised that Nixon was aware of, that there are going to be other centers of power.

And yeah, it’s certainly true that Nixon going to China was also designed as a counterpoint to the Soviet Union to create a different access, something why we wish the Biden administration would learn from now if you really think Putin’s Russia is the great threat to the international order and in many ways Putin’s a much more active threat to the international order than Xi Jinping has been. The fact that China might at some point invade Taiwan hypothetically doesn’t make it a contemporary threat to the international order as opposed to Putin who has actually invaded Ukraine and threat to use nuclear weapons now. If you really want to contain Putin, it would kind of make a lot of sense to work with the Chinese as opposed to we’ll just fight whoever we want to fight, simultaneously. Never a great idea. And yet we seem not to have gotten that memo either.

And I’ve asked people about this. I know a fair number of people in policy, I’m not saying that in a name dropping way. It just happens to be the kind of people I grew up with intellectually and professionally. And how many ships should China be able to have in the South China Sea? What’s the number, what’s the size of its navy that you, if you were an American policy maker, would go, China is a powerful country with one and a half billion people. It makes sense that they would have X number of ships and now it says apparently can have 10 aircraft carrier groups or 11 or whatever the current number is. And we think that’s kind of legit. How many could the Chinese have? And it’d be legitimate, as opposed to, oh my god, they’re challenging us.

And I don’t think American policy makers are really used to thinking this way. How much autonomy and power is China allowed to have if you’re in the United States? And I’ve gotten a lot of pushback when I make these arguments over the past few years saying, Oh you Zachary sound just like what the communist party’s rhetoric is when they’re trying to counter the United States. And it’s true, there are times when the Communist party and their official news organs say the same thing, the United States doesn’t want us to have any ships or doesn’t want us to become a great power.

The fact that it’s said by propaganda agencies in China does not make every single one of those questions incorrect. They’re smart, they’re clever, it doesn’t get them off the hook for all the things they’re doing domestically and internationally that are equally problematic to the United States. But again, I’m an American whose primary sense of responsibility is to hold my own society accountable or to urge my own society to be better not going to shape the nature of the Communist party in China. And that’s not I think what my focus should be.

Robert Scheer:

But let me ask you a basic question because I’m much older than you but still you’ve lived through much of this history. We have these magic words, two of which are democracy and communism. And for a while there we’re able to see it as one is freedom and one is slavery and so forth. At the beginning days of the cold war, India was going to be the free democracy when the Nehru and so forth. And obviously the communist block was always going to be evil. And the fact is these words people had to know in real time mean a whole lot. India has been more or less free at different times depending upon domestic pressures, economic and otherwise and how much dissent they will tolerate. And the irony here is that Nixon was fighting this war as the democrats actually had started it in Vietnam to stop, not Vietnam, Vietnam was never going to be a threat to anybody militarily, but it was aimed at China, which it had a revolution.

And then first we had this opening to Russia. And the irony here with the Russia thing is you are advocating, I think makes perfect sense to somehow put some distance between China and Russia, but Russia is run by the anti communist, whatever his background, he was the guy the US was backing first with Yeltsin and then with Putin against what remained of the communist party. And in fact, we didn’t even like Gorbachev cause he didn’t break with that party. So the experts that you sometimes meet and refer to, they got it all wrong. They thought communism had a real power, no nationalism had the power. China is primarily driven by nationalism. Their whole history reeks of a wounded nationalism. And if the communist party is going to survive as your book points out, it has to deliver.

It has to deliver. And the whole movement of reform was to deliver on consumer goods, on individual opportunity to at least concede consumer sovereignty to some degree of freedom that in many ways it’s a decentralized society, power doesn’t extend. And again, the irony, we now consider Vietnam a very good potential ally and they are run by a communist party that has certainly a long history and one of rivalry. So I’m really, what I liked about your book is a different assertion of realism, of what makes things tick. And you have I never thought I would be cheering on the CEO of Federal Express, for example, or Kentucky Fried Chicken for that matter. And yet your book brings this counter revolution of American capitalism that was incredibly successful in pushing China in a different direction than our military power could push them. The military power, we were isolating them and they were becoming ever more radical, with Kentucky Fried Chicken, with Avon was Federal Express, on and on up through Apple.

They actually developed a society in which hundreds of million, what three, four hundred million have been lifted out of the worst poverty. People can travel more. We have at the school I teach at USC, there’s 6000 Chinese students, they don’t seem to be overly intimidated. They seem to be very alert, questioning, learning a lot. And so it’s been a great success even from a human rights point of view if you actually look at the numbers. And so what I’m really asking about is, do we have adults watching the store? With all do respect to some people you mentioned, what are they doing now? Why do they want to push China or for that matter Putin? Yes, Putin has done reckless wrong things, but Nixon went and negotiated right with Mao, where are we now? And your writing in general, I’m not cursing it, reeks of logic, fact and so forth. Where is that now?

Zachary Karabell:

Yeah, no, I appreciate that Bob and I also, I really appreciate you talking about getting people to really not just rest on these words, democracy and communism, as if they have just clear meaning we use them as labels and they’re supposed to have clear meaning, democracy, good, communism, bad. But then you really need to look at, okay, what does that mean in terms of these specific societies? And look, I’ve been adamant for years about if you’re going to take the moral high ground about human rights and maybe you should take the moral high ground. I mean I think whatever China is doing in Uyghur-land is atrocious, meaning I think it is morally wrong to silence an entire other people just like I think is wrong for the Turks to do it to the Kurds now.

But it was morally wrong for the United States to intern 200,000 Japanese Americans in 1942 to 1945. And I do think that moral equivalency about these things is important. It wasn’t exactly a shining moment of American democracy to invade Iraq in 2003, which many people now point out about Putin and Ukraine. The fact that we did it doesn’t make it better than the fact that he does it. Hundreds of thousands of people died for no good reason regardless and at our hands. And I am not saying this at all from a negative like, Oh, I don’t like the United States. I’m saying we’re a great and flawed society like most societies and we ought to be, our starting point ought to be some internal recognition of that, especially when we’re going to preach about human rights. And I am dismayed at the easy groove that we have now kind of entered this neo cold war and it’s neo because we still remain, as I pointed out at the beginning, unbelievably entwined economically, which I think is a missing fact in a lot of these discussions.

There are almost two separate realities going on here, which is that the economic interdependence continues. It may have leveled off and the pace at which it was going, but it hasn’t contracted. And the sort of political social rhetoric and aspect, which is also intense from Xi Jinping, I mean he is clearly using the nationalism of anti-Americanism as a way of consolidating power, just like he used COVID as a way of vast expanding the digital surveillance state in why the pre COVID they were failing to do. So, they’re taking advantage of their external adversaries, COVID and the United States, to create a domestic sort of security authoritarianism that I would not want to live in and I certainly would not want to export. Although, what’s fascinating about China is they don’t even seem interested in exporting it, so why we are so hell bent on seeing them as an enemy?

I try to get to people to think in what way is China actually a threat? What are they threatening? Are they threatening your job at USC or is there any immediate or even tangential threat of a Chinese authoritarian surveillance state coming to the United States? I mean Trump may be a threat in all sorts of ways, but he is not that kind of threat. He’s a whole other different kind of threat but that has nothing to do with China. And so when it comes to the adults, the one thing I come back to, and maybe this is facile, is that we have, and you know this better than anybody, Bob, is we have a national security bureaucracy set up in the late 40s to fight a military ideological state based rival i.e. the Soviet Union. That after the cold war began to shrink in the 1990s, but never really fully shrunk, then you had 9/11 and that hyper charge, that apparatus except Islamic fundamentalism and kind of decentralized adversaries, non-state actors wasn’t a great fit for the Pentagon and other things.

China is so perfectly cast as the adversary for a system that was set up to deal with an adversary. And I think it’s very hard once you’re in government particularly to not enter that groove and China is so perfect for that groove, even though it totally misses all this other stuff, which is that the economic interdependence was simply a good thing, was a net good thing for the United States, wasn’t a good thing for every American, yes, some Americans lost their jobs, but as many far more Americans benefited from lower cost goods and services that China provided than lost their jobs because of Chinese manufacturing. And a lot of the jobs that were lost to manufacturing were lost to robots and robotization as much as they were lost to China. And that economic integration, as you said, was good for China, it was good for hundreds of millions of Chinese and it remains good. And I just wish clearly in a way that is naive, that we had stayed more with that reality and not slid into this really preexisting groove of, we’re looking for an enemy and we found one.

Robert Scheer:

Well also though I think you’re too kind to America’s role in the world. No, first of all, when I was at that China Center and Orville was there, we mentioned him before, good fellow, the whole argument was that China could never develop because their population was so great. All right? And the fact is their population then was again between four and five hundred million. They now have at least 900 million more. And yet when they’ve done things, for instance their one-child policy, which was the most controversial human rights policy that they did but there were plenty of population controlled people in the world who said, you have to control the population. You have to have family planning, you have to put this pressure. Now of course they have a potential labor shortage because it was overly successful. Whatever you think of its morality. But it’s almost like they can’t win.

And I really wonder because first of all, our history with China, let’s not beat around the bush, we discriminated, we had the exclusion that you couldn’t even get married in this country if you were a Chinese worker who would come to work on the railroad or in the mines. That I mean you mentioned the rounding up of the Japanese, the first legitimate marriage actually in California happened in ‘43, but when they recognize, hey, China’s our ally now, so people should be able to bring their wives over or have wives or whatever. I mean it was grotesque the discrimination against China, the depiction in our mass media and everything. And I would point out by the way, these wars that we fought to stop Chinese communism, Korean War certainly being one in which we leveled every building there, Vietnam, in which McNamara would’ve been considered a war criminal if we didn’t lose what we did lose. And somewhere between three and a half and what five, six million Indo Chinese were killed. And now no one bothers to even think how could that happen.

If we know what we are doing and we’re so well intentioned and democracy works, how do you kill what at least three and a half, four or five million people in war that never made any sense against the country that you said would invade us if we lost that war? We did lose that war, they won. And now they’re the ones that we think are ideal capitalists and they’re the ones we want business to do with. We don’t like China because China’s too independent. So I’m asking basically, isn’t it the independence, whether it’s India now, whether it’s going to be Brazil again under Lulu soon, whether they’re small or big, that the United States cannot stand capitalist competition, which after all was supposed to be the great strength of capitalism. It was international, right? It broke down barriers. It had competitive advantage. Nobody believes that anymore, if the Chinese come up with a better 5G, oh, we won’t let them sell it. They come up with TikTok, we won’t let that practice. So really we’re hypocrites, aren’t we?

Zachary Karabell:

Oh, I do think we’re hypocrites. I mean there’s no question about that. There is the degree to which I think most countries are, and you’ll probably disagree with me on this, but I mean I think most countries are hypocritical about their own past.

Robert Scheer:

First of all, I’m not naive about how bad these, I was in China during the culture revolution just before Nixon went. I was scared out of my mind. I was held by the red guard at the airport for four days or so, lectured about the right. They wouldn’t let me spend my money, it was the evil dollars of capital. I’ve been in totalitarian countries, believe me, I have no kind feelings about them, it’s a horror. That’s not the point. The point is what right do you have to make other people’s history for?

Zachary Karabell:

Oh, I totally agree with that.

Robert Scheer:

And the irony is that in your book, in loving detail, your book is a tribute to capitalism as a pure form, market capitalism. And you have those Avon, for God’s sake, I never thought I would be fantasizing about Avon or Kentucky Fried Chicken. The idea of this huge Kentucky Fried Chicken opposite the memorial to Mao. Mao is buried right opposite the biggest Kentucky Fried Chicken place in the world and somehow that was consistent reform. That is a tribute to capitalism, not that one has to eat Kentucky Fried Chicken, but the recognition that walls will come down because people want choice. They want to make their own decisions, including about what they eat and what they buy and where they travel. And that was the wisdom of Nixon’s opening and we’ve lost that now.

Zachary Karabell:

Totally. And as you know, I mean the most recent book I wrote, which is about this old American private investment firm called Brown Brothers Harriman, is also in many ways a kind of a celebration of capitalism, but it’s a celebration of there are a lot of forms of that capitalism can take other than shareholder capitalism that has become dominant. And I think in many ways, even at Nixon’s sign, that was right before kind of shareholder capitalism became the whole mantra. And back to your point about we use these words, democracy, liberalism, capitalism, communism, they all have a lot of different flavors, they don’t have just static meaning. And we should constantly be looking at what do we mean when we talk about these things. So when I am supportive of capitalism as in it’s a basic assumption that human beings worldwide have always been driven by trying to secure their most basic needs, food, clothing, shelter, health, having some autonomy over their families and their lives and some connection to their communities and whatever ism system helps shape that most effectively tends to have some traction at any given time.

A lot of 20th century capitalism has been better at providing that to more people than a lot of other isms have been over time and that is certainly true of American capitalism, but it could be defined much differently. And again, what I’m so struck by about American policy towards China today is almost how detached from our own domestic economy it’s become. I think, talk about playing with fire that American policy makers in the national security bureaucracy really don’t understand how domestically destructive a rupture with China would be. And I don’t mean the kind of rhetorical cold war that we have, and I think they get how destructive a military conflict would be because that’s their bread and butter. But not understanding that the harm that this conflict can potentially do to everyday Americans, even without a shot being fired. The indifference to that I think is stunning and really, really a massive failing of that group of policy makers.

Robert Scheer:

Well just imagine Amazon without China in the middle of our pandemic.

Zachary Karabell:

Yeah.

Robert Scheer:

What were you going to order? I mean, I asked my students everything that you’re using and wearing and everything else. What if in the middle of that pandemic we had really bought into Donald Trump’s demonization of China and the China virus, neglecting the last great pandemic of a hundred years ago that started in Kansas, we didn’t call it the Kansas virus, but nonetheless, whatever they did in mishandling or how, the idea of demonizing China at a moment when we were so dependent upon them. I mean, you have to really wonder about where’s the practical thought? But that’s all the time we have to ask about practical thought. I want to say, by the way, I would love to come back and do a one on Harriman. I’ve always, Harriman was a central figure, I think on Wall Street before he became a politician, but the Harriman family.

Zachary Karabell:

Yep.

Robert Scheer:

And that’s the book you did a year ago, right?

Zachary Karabell:

Yep. Inside Money.

Robert Scheer:

Yeah, Inside Money. So read Inside Money and maybe we’ll be able to have a discussion about that. But you can still get Zachary Karabell’s book 2009. I hope its reissue, but it’s there. It’s a Simon & Schuster, it’s available. I know I got it again through Amazon’s Kindle. I’m not supposed to say that. I tried to get it from near the vendor store, but I couldn’t get it quickly enough. And the book is called Super Fusion: How China and America Became One Economy And Why the World Depends Upon It. I happen to still believe in that subtitle, although, everybody around me seems to be abandoning it.

But anyway, and so hopefully we’ll have you back to talk about your most recent book. I want to thank Christopher Holland at KCRW, along with led by actually nowadays in posting these things, Laura Congerjin for getting these things posted on KCRW, it is a very strong NPR station in Santa Monica. Joshua Scheer, who is our executive producer and found this speaker and this subject for us. And Natasha Hakimi Zapata, who is the overall editor of the program and the JKW Foundation, which in the memory of Jean Stein, a fiercely independent writer and public intellectual for helping support this. See you next week with another edition of Scheer Intelligence.

18 comments

  1. Before WWII there were many Nazi admirers among the USA wealthy elite who wanted Germany and the USA to be “one economy.” The USA is dependent on Chinese production but it is a customer and not a partner. It’s a tiny wealthy minority of Americans who profit off China. Military violence, state terrorism and economic warfare aside China has eclipsed the collapsing USA. They have been the bigger economy for almost a decade and are pulling away. The outcome of “rules based order” impossibility is that the economy of the USA will merge with the crushed and Nazified economy of rump Ukraine unless the USA chooses nuclear war. Dreamy economists can fantasize about what symbiosis would look like (with China) but the USA oligarchy will never allow it. They’re looking more and more like the bitter Southern losers after the Civil War. But the “south” won’t rise again. Put away the corsets and the hoop skirts.

    1. The Electoral College has inordinate power. The Supreme Court has been compromised. The M I complex dominates the economy. All these factors leads to Confederate advantages. Our Orange hero is a result of the yearnings of middle America. The South has risen and successfully stormed Capital Hill Jan. 6th. More of the same is coming.

  2. When foreign policy is confined to a small coterie of MIC condotieri and administered in the form of Ukases and Fuhrerbefehls, divorced from reality and the daily concerns of its citizens it is bound to hit a brick wall at some point The corporate controlled Media (free press) is a joke and can only regurgitate the trash which the minions of the MIC feeds it and anything deviating from the norm is simply quashed.
    Such is the world in which we live and we can only hope that those that pull the strings will not get us into a dawn full of mushroom clouds…..

    1. David, go to Patrick Lawrence’s new article and tell us who is pulling the strings. Technocrats are just a bunch of Pinochios.

  3. Karabell has an honest assessment of China, but with a particularly twisted view of Xinjiang and Chinese Uyghurs. As a scholar with a favorable view of China, it seems he would reject the idiotic propaganda pursued by the West and its anti-China elements.
    Reasonable people, reasonable scholars, have rejected the insane claims by propagandists like Adrien Zenz that there was a ‘genocide’, literal or cultural taking place. This claim is a preposterous twisting of China’s efforts to contain the very real terrorism practiced by US-supported East Turkestan Separatist Movement. These people killed hundreds of people all over China, but since efforts of education, re-education, and prosperity development in Xinjiang, it has been years since a terrorist attack. I like to contrast the US response to Islamist terrorism where the Americans destroyed entire countries, displaces many millions, and murdered millions more. Instead of criticizing China’s response to Islamist terrorism, the world should learn from China. But, that is the last thing the West will ever do.
    Karabell also voiced a rather strange understanding of the war in Ukraine. Those who decry Putin’s response seem to ignore Ukrainian terrorism augmented by NATO.

    1. I remember seeing news stories, over a decade ago, about China complaining to Turkey. This was at about the same time that Obama and Hillary were launching the Invasion of Syria to Steal The Oil.

      China was intercepting migrants who all had Turkish passports. But, they were from across the middle east, not Turkey. When interviewed, they openly said so. So, China was asking this NATO power why it was that China was intercepting all of these Islamic Radicals from all across the Middle East, all with newly printed, official Turkish passports?

      Those stories can now be seen as the beginning of this. NATO was obviously pumping Islamic Radicals into western China in the same manner they were pumping them into Syria in Operation Steal The Oil.

      1. General Sir: Right you are.
        (Remember that when Bob Keeshan was Clarabell the Clown he wasn’t able to speak, but could only gesture, blow horns and rings bells; and so it is with Zachary Karabell, a man of many talents, but mostly gagged.) Promote that soldier to Captain Kangaroo.

  4. The US is dependent on Chinese low-priced manufacturing, just as Europe is/ was dependent on Russian low-priced oil, gas and fertilizer.
    It is of course incredibly stupid to rupture such a beneficial trading relationship for both sides, and intentionally push trading partners apart.
    So that’s what the US does!
    Censoring all important discussions and dissenting views has left America with the most Covid deaths of any country and the 16th highest Covid death rate in the world (mostly Eastern European countries neighboring Ukraine are the only ones worse. Curious that?) Silencing dissenters is the best possible way to kill innovation (as diverse philosophers as Bertrand Russell and HL Mencken have noted); that exemplifies today’s US.

    1. “It is of course incredibly stupid ”

      For whom? That is a key question to ask.

      Yes, I agree, that for the economic health of the nation, for the well-being of the working and middle classes, it is incredibly stupid. But, as your discussion about the quashing of all dissent in the Land of the Free points to, these decisions are not made for the ‘good of America’ nor for its ‘people’.

      These decisions are made by the American oligarchs and for the American oligarchs. They see their future as Masters of the Universe called into doubt by the rise of Chinese oligarchs. Thus, to them, it makes some sort of strange sense to push the world to Global Nuclear War in an attempt to make sure that they, and they alone, are the Masters of the now smoking, radioactive world outside of their guarded compounds and underground bunkers.

      If the decisions seems ‘incredibly stupid’, but is made by people who have been very successful at gaining power and who can not be assumed to be ‘stupid’, then what is occurring is that the decision is made for their benefit and thus does not appear to be stupid to them. Only to those of us whose role is not to reason why, but whose role is to do and die for Oligarch and Country may think it ‘stupid’ in our dying breaths.

  5. Karabell is right. If push comes to shove, all China has to do is shut down all exports to the US, and we Americans, due to our addiction to their cheap manufactured crap, will be lost. And what will the American military apparatus do in response? Nuke the very country that makes all our crap thereby sealing our economic fate?

    The only reason China is in the position it’s in is because American capitalists put them there. American leaders, both political and business, got extremely lazy and didn’t want to make anything, so we offshored all our labor to them. They in turn end up producing all the value, so therefore they end up reaping all the rewards.

    As Max Keiser correctly pointed out 2 years ago, China is moving from a labor-intensive economy to a capital-intensive one. They are therefore offshoring more and more labor to Vietnam. Which will only enable the Communist Vietnamese to reap economic rewards because they’ll produce all the value that China can give them. Toss in there that India is expected to surpass China as the most populated country on earth, the entire Asian continent is in an increasingly dominating position economically. And there’s nothing America can do about it. Not really.

    Moral of the story: whoever makes stuff end up winning.

  6. I don’t have a high opinion about people who write about the current problems with Russia/Ukraine/China. Mr. Karabell appears to point fingers at all players when the world is witnessing the incredible effort being exhorted by the United States, NATO and the European Union to bash the other side. Intelligence is not at work here. The failure of the principal player–the United States to force a reasonable compromise and the enormous material and military support to fuel the fire of war points the finger only one way.

  7. Trump was wrong.

    I know, not a radical statement. But, Trump assumed ‘China’ was the ‘enemy’ as part of his nationalist, fascist pitch towards workers who had been sold out and abandoned by the American Ruling Class as the Democrats moved away from the old FDR Farm-Labor coalition to the new Clinton Corporate Democrats.

    Yes, the jobs did move to China. But, China did nothing that most American states do to attract capitalist investment. They offered cheap labor and lax regulations. Just like ‘The South’ before them.

    The people who destroyed those jobs were the CEO’s of the corporations who made the decision to move the manufacturing to China for greater profits for the Investor Class. The objections to this actually came from ‘The Left’, with big protests against globalization and the destruction of the American middle and working classes. (see “The Battle of Seattle”). Trump was of course not a part of this, and his supporters were the jerks on the sidelines yelling “Get a Job, Commie” towards the protesters who were actually marching to save their jobs.

    China is not the enemy. Out enemy is in the corporate boardrooms and in the offices of the big, too-big-to-fail, Clinton-created Wall Street Banks. We have met the enemy, and it is us.

    1. General Sir: But the Oligarchs will not hesitate to use Trump and even worse fascists to secure their interests. That’s the definition of Late Stage Capitalism, that bankrolling to elevate fear and insecurity and lawlessness among the population comes from Capitalists. The result is Gangsterism we call Fascism. (So Bertolt Brecht and Kurt Weill got the formula right in Three Penny Opera- something that remains a third rail for SNL. Shows how fascism snuffs out humor.)

  8. americans require enemies—they cannot accept their incompetence—it is no accident that 70-80% express racist attitudes about Chinese and Russians…americans have been conducting racist wars 95% of the nations’ existence…no war—no USA economy…USA officially spends more than the next 12-14 largest militaries combined—required in a military dictatorship. DOD employs more than any organization on earth—this excludes 17 unintelligence agencies—no other nation requires more than 4…the US govt merely expresses the values and will of americans

  9. I wonder how many true believers in China as “indispensible economic partner” buy computer equipment solely for productive work, not gaming. I also wonder how many are old enough to remember when computers were made in the US or Taiwan and were only replaced when technology underwent a major change such that previous-tech parts could not be replaced when they finally failed.

    I write software. I have no interest in gaming. I have motherboards that are 20-30 years old and still work fine. I can’t use them because the requisite peripheral cards are no longer being made. The boards were made in Taiwan.

    I just spent a day trying to debug a system, one of four I bought at about 6 years ago iirc and the only one that was still working. I’ve had to conclude that it is now dead, too.

    Hoping (foolish me) not to have to replace them for at least 10 years, I treated them all with the utmost in TLC, specifically installing many industrial-grade fans (bought from Digikey, not Walmart) to keep them cool (heat is the principal killer of electronics generally and computers specifically). If I hadn’t, they probably would all have died in 3 years, or even been DOA (I have several that came DOA that the sellers refused to replace. The most they would do is send them back to Shenzhen to be repaired, which would only take a few months). They were made in the misnamed PRC by Gigabyte, that used to make their product in their beautiful (really! there are photos, do a search) automated factory on Taiwan.

    Karabell is mistaken: we are *China’s* indispensible nation, but of suckers not partners, who can be made to pay again and again for goods that are not in any way worth the money we pay or the aggro we endure when they fail prematurely, as except by accident they always do.

    But *they* are by no means indispensible to *us*. By mandating that goods be sourced from the country(s) that provide(s) the best working life and service, I’m sure we would find “made in China” only on things like plastic dishpans, not the computer hardware that is *essential* to our national security.

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