April 6, 2023

Big strike in France today.

Opposition to the pension reforms has been maintained through the protests.

• Data released today.

• IMF issues stark warning that friend-shoring might be very bad for liberal capitalism.
• Friend-shoring is where Foreign Direct Investment is focused on countries with policies close to the USA's interests and not China's.
• IMF is concerned that this will be bad for exploiting developing country economies.

Even Post-Keynesian Martin Wolfe seem to believe that the expansion of global free trade had something to do with limiting risk of crises. We are not sure if he has been on the same planet as the rest of us during the previous decade.

While friend-shoring is playing country favourites, there are several reasons to rethink long supply chains for production beyond geopolitics.

The concurrent crises (we still face them) in the economy, health, demographics, climate, and production are all a result of allowing capital to run untethered. The impact has been out-sized risk all landing at the same time.

Part of the solution to this decreased ability to deal with global issues is to strengthen production, regulation, and investment nearer where the people who vote on those things have impact.

But, supporting local production is not necessarily support for "friend-shoring" as outlined by Freeland, Biden, and Trump. Their program has more to do with capital's interests and profit subsidies. The Left's support is for local production is about limiting the risk inherent in not controlling where money is spent.

Capital continues to invest in the most destructive economic project around. Not just anti-climate, but also centralizing investment into single sources of production in the cheapest zones of needed goods.

The economic period that ran for a decade before the pandemic and then through the "poly crisis" must be remembered as a period of self-inflicted harm.

• Shortages of essential components of our current economy
• Lack of progress on transition away from using fossil fuels
• The crushing of our healthcare and other essential front-line workers
• People much nearer their breaking point than fully realized, and
• The full exposure of the inadequacies of our care economy.

On top of this, we should have learned that those who have their hands of the lever of the economy do not understand how it works. So much do they not understand how it works, they did not see their profit subsidy money printing machine creating inflation, they also did not know how to bring that inflation down without trying to crush the (barely functioning) economy.

The attempt to pivot back to "normal" has not been a good experience for most people.

Global supply chains were disrupted quite easily and were not resilient. The push to quickly return to this form of global, just in time production is strange and requires a very short memory.

The supporters of era of neoliberal free trade continue to point to growing economic wealth across the world during that time period. But, as classical/Marxist economists have pointed out again and again, the rise in global wealth (and reduction in poverty) was mostly because of the rise of the Chinese economy. Global wealth fell hard during the pandemic as it turned out that much of the wealth in West was not worth the (money) paper it was written on.

Inflation, in many ways, was simply that reality of pretend wealth reimposing itself.

We must have more sophisticated analysis than simply saying we know of no other way to operate than to spread capitalist-imposed misery as broadly as possible.

It is possible to have solidarity internationally and across generations while at the same time investing in positive production. Indeed, it might actually be the only way to do this.