October 12, 2017

Over the last forty years China spectacularly lifted hundreds of millions from poverty, a stunning achievement by any measure.

In contrast, during the same time frame the United States created more billionaires –it has more than any other nation- and plunged the middle class into or near poverty. Today’s lack of well-paying jobs and job security for the working and middle classes –men in particular- has created a sense of hopelessness and despair, with alarming consequences.

For the first time in American history life expectancy for white people is declining due in no small measure to the ongoing deadly opioid epidemic. New construction of single family homes and condominiums priced for young, low and middle-income single buyers, who are burdened with enormous non-dischargeable student loans, is practically nonexistent. And that’s just for starters. Our infrastructure –dated and in disrepair- urgently needs to be upgraded and modernized. We have no bullet trains, and with the exception of New York’s subway –not the cleanest or safest in the world- mass transit in most of the country is, to put it mildly, primitive. And then there’s health care, a for-profit industry, not a constitutional right. Americans pay far more and get far less than comparable societies. Suffice it to say that the Clark County Commission Chair in Las Vegas had to set up a website asking for donations to help the victims of the recent horrific events that took place in that city pay for their emergency medical costs.

For better or worse climate change -unstoppable and unrelenting- will transform the world over the next two generations. Already the Yuan, backed by gold, is being used by countries like Russia, Iran and Venezuela to pay for oil, and several major countries –including China, India, Germany and France- have announced they will ban gasoline and diesel-powered automobiles. This spells trouble for oil-dependent economies, particularly the U.S. The dollar, no longer in great demand, will lose its status as the preferred reserve currency of the world. Investors will severely curtail or cease buying Treasuries at low rates and the government will have to compete in the open market for the funds it needs to finance its perennial deficits. If it resorts to printing money with abandon as it previously did, inflation will spike. In any event, it simply will not be able to spend on the same scale as in the past, with grave implications for the military.

Ironically, China –a country believed ruled by a Communist Party- is already infected with the same strain of inequality that has decimated the middle class in the U.S., and the contagion is spreading. It already has the second highest number of billionaires and the situation will likely get worse as robots and artificial intelligence eliminate more jobs than they create. Accordingly, if China wishes to avoid the divisive, dangerous consequences currently afflicting America, it must find a way to redistribute its wealth in a more egalitarian manner.

It all boils down to one’s point of view. If the ruling elite believe they are unassailable come what may, they will continue to do whatever they must to maintain the status quo –their wealth and power. On the other hand, if they conclude that their best bet to survive is to introduce Aristotelian democracy –the rule of the majority- throughout the world and to create a system that guarantees without preconditions a minimum universal income to every human being everywhere, then there’s hope.

As noted in a previous essay, one way to do so is to make the production of hydrogen a universal means to acquire SDRs’ (Special Drawing Rights) the quasi currency currently set to become the de facto global trading medium. Low-grade technology that cannot be monopolized by a small minority of the population exists that would allow even the smallest, most indebted nations to emerge from poverty. Thus, they too would have renewable income to consume manufactured goods from surplus countries, to everyone’s benefit.