US’ industrialization is impossible

Another reason, and perhaps most important of all, is that reindustrialization is incompatible with Wall Street finance capitalism because raising the wages of labor will reinvigorate the trade unions and workers movement, as the working class in the Imperial Core becomes re-proletarianized again instead of being a neofeudal debt slaves as they have been driven into after 50 years of neoliberalization.

If you’re interested in the theory I recommend reading up 贾根良‘s work (Marxist/MMT/Listian economics professor at the People’s University). After reading so much material, I found his stuff to make the most sense, and is a major source where much of my theory is derived from.

I kind of dismissed his “warning” back in 2018 Trump’s trade war when he said that the real goal of Trump’s tariffs were to eventually force China into opening up its financial market, because I thought the trade war didn’t really go anywhere, so I thought it was rubbish.

The thesis was that the contradictions built up by the hyperfinancialization of the US i.e. the growing of MAGA movement (or the disgruntled working class of Bernie Sanders’s movement) due to the persistent trade deficit over the years that led to a huge loss of domestic jobs needs to be resolved somehow. By transitioning the export of dollar from running trade deficit gradually into entering China’s financial market as investment, the US gets to retain its dollar hegemony while allowing trade deficit to be partially reduced (limited scale reindustrialization), thus preventing the lid to be blown off.

Honestly I wasn’t paying much attention until it started to make sense after the Ukraine war and Europe’s economy is now blown into pieces, as the US has reshaped a new geopolitical situation where Europe in austerity can no longer absorb the rest of the world’s exports, and that means the US becomes the world’s only and biggest consumer market that carries the export economies of the world (doesn’t even matter what currencies the trades are settled in).

This is why China is scared of US’s tariffs because they haven’t built up their consumer market enough to absorb the loss of trade with the US, and Europe/Japan are already out of the game to pick up that role.

in the events that the USD stays hegemonic in the near and mid future. Is there a way to transform the USD into a Bancor like currency?

I don’t think so. Bancor is a clearing currency that is used only by central banks to settle balance of payments, so the US dollar cannot become that.

However, in constructing an alternative financial system, bancor is ideal to prevent the situation we have today where the US can run a huge trade deficit without contributing anything, and China can accumulate huge trade surplus. The concentration of the world’s productive capacity into China was a pre-requisite for the US to deprive the rest of the world of their industrial capacity and rendering them vulnerable to US imperialism. A bancor system will punish both the US and China for running such huge trade imbalances.

So we now end up in a situation where the world’s two largest economies are reluctant to give up the status quo, and the sheer size of their economies completely eclipse the rest of the world’s. This is why the way out is for China to transition into a domestic consumption economy, as it will ease their ability to give up this advantage since it no longer has to accumulate so much trade surplus, and hence can allow industrial capacity to be distributed more equally to the rest of the world while China focuses on giving free healthcare, education and various utilities to its people and pioneering high tech sector.