[...] despite very low wages for the vast majority of its labour-force, Chinese savings rates are very high. This is probably a function of both cultural norms [...] and the low wages and export-orientation of Chinese industry. High saving propensities and low incomes mean that until very recently, China's domestic consumer markets were relatively underdeveloped. These conditions produced a glut of savings in China. Much of it, at the firm level, is in US dollars (because they sell to Americans). These savings purchase US debt, making China the largest holder of that debt (Japan is second).

This political economic strategy has drawbacks that render it potentially unstable. While it ideally has the capacity to prop up international consumer spending, China's own pretensions to geopolitical leadership are hindered by playing a supporting role in global political economy. If Chinese capitalists and the Chinese state want to assume a leadership role, China must divest itself, at least to some degree, of its dependence on the US in particular. But this would entail putting its own economic engine at risk.

Speculative currency shorting (usually) targes a weaker nation in the global political economy, because stronger nations can fight back by using reserves to purchase their currency on those same markes, thereby maintaining demand and protecting the currency's exchange rate. [...] Thailand had little capacity to defend the baht, and its value plummeted. The ensuing panic engendered similar attacks on other "Asian tiger" currencies, and the frantic flight of hot capital from the whole region. This only drove currency values down further, because as money leaves a country, unless it is the US dollar, it almost always changes form--the money-owner exchanges it into US dollars or some other "trustworthy" currency. This floods the market with (for example) baht, which accordingly falls in price.

[...] The biggest problem for finance capital, and almost anybody else who wanted to borrow to invest, was not where to get the money but where to put it all [...]. Idle money is not capital; it is not accumulating [...]. [...]

[...] (Investment bankers like to say "distribute" the risk, since they see their primary social function, the "good" they do in the world, as that of "distributing" risk to those who can bear it. We can see now how well this works, and how valuable this "social function" is. In practice, it is merely a variation on "privatize the gains, socialize the losses.")

[...] the main ideologues and beneficiaries of neoliberalization managed, amazingly, to spin the collapse they precipitated into a story about the profligate irresponsibility and unrealistic expectations of workers, students, and the unemployed. The massive holes in every capitalist nations public and private finances were perfuntorily redefined as the result of popular desire to "live beyond our means," from which the masses must be weaned once and for all. The answer elites proposed, and proceeded to impose, looked a lot like an IMF structural adjustment plan--austerity, privatization, liberalization--with an emphasis on austerity, a program of vicious cuts in public subsidies and state retrenchment designed and managed by exactly the same individuals and institutions who created the crises in the first place.

[...] to listen to Euro-American austeritites talk, you would think austerity is how capitalists say the rosary, a market-imposed penance for "our" sins.

[...] remember that southern Europeans are often "racially" subordinated in Europe, similar to the way in which African Americans are positioned in the US: they are coded as lazy, dishonest, and biologically inferior even and sometimes most in their own countries [...]

On the contrary, the explanation is far more straightforward: capital won. Sometimes with armies, sometimes with persuasion, sometimes with money, and sometimes by accident, but it won. For at least the last thirty or forty years, and this is increasingly true in nominally "noncapitalist" nation-states like China also, capital has proven richer, more powerful, more expansive, more convincing, and more real than any other political economic force on the planet. It is not a myth, it is not an elaborate hoax, and its wealth and dominance are not fictitious or illusory. Unsurprisingly, therefore, it has written the political economic rule book by which the world plays, and defined the terms and means by which one might "legitimately" break those rules. Socialists may have lost their ideological fire, or they may have read the writing on the wall and decided that given the options available to them, and the ultimate political and economic objectives to which socialism aims, i.e., the long-term betterment of citizens' everyday lives, their constituencies had to play by the rules, and the rules rule against being socialists.

[...] however "radical" we might imagine our politics, we must recognize ourselves in it. If we cannot see in it the actual material and social constraints experienced by real living individuals and groups in their everyday attempts to make and remake a way to be in the world, then we will never find a way out of it. If we cannot understand that capitalism, and the agency of the billions of people who have little "choice" but to embrace it, is a product of far more than the trickery and ill-will of a few, an effective mass-based anticapitalist politics is in my mind a pipe-dream.

[...] Capitalism so saturates everyday life, particularly in the global North, that even many who actively oppose its power reproduce its hegemony in many of the acts necessary for merely being in the world. It determines the ways and means through which we live, and consequently, we live it into being. [...]

Of course the will to change will be a key component of the tools for change, but there are also structural, historical, and contingent forces at work that militate against a naive plan to "build a dream" that does not emerge from and build upon the world in which we live. We cannot start with an idealized Utopia at the end of history and work backward to figure out how we get there. History is filled with evidence of the failures of utopianism, whether it takes the macro-form of the Bolshevik revolution, or the micro-form of escapist "international communities." Mark and Engels' critique of utopian socialists, those who believe history can be readily broken or dismissed, still stands. We must begin from where we are.

[...] If all we want is noncapitalism, then it seems to me the surest way to get there is to leave it to the capitalists--the terrible knowledge of this truth is in fact the fundamental premise of Keynesianism. [...]

[...] I think that strategy would be disastrous. Capitalism may be undone this way, but the costs will be borne disproportionately by those who benefit least from the existing system. [...]