Summary
The book, “Adam Smith in Beijing,” was written by Giovanni Arrighi. In his work, Giovanni portrays how China has extraordinarily risen over the years hence inviting the reassessment of the concept of “The Wealth of Nations”. In the eighteenth century, Adam Smith made predictions that eventually there would be equalization of power existing between the West and the territories conquered by the West. The book vividly explains the growth of capitalism from the days of Iberian Peninsula, Genoa, Venice, the Dutch Empire, the Spanish empire to today’s United States. Thus, the book provides a detailed explanation of the interconnections existing between the treaties, many wars, and also other historical events. It also highlights the United States continued reliance on China for its power and wealth. Thus, this is because China typically imports products from the United States and because China has also been steadfast in purchasing the United States treasury bonds. The book also highlights the international relations existing between the two countries e.g. US and China. In a nutshell, the book provides in-depth information on the progression of the capitalist system in the world. Conversely, the masterpiece offers an interpretation of the continuing shift in the epicenter of the world’s global political economy to East Asia from Northern America. Also, this is in light of Adam’s Smith’s economic development theory.
Book Report
In 1776, Adam Smith commonly referred to as the father of Economics defined the Economics discipline as an “inquiry into the nature and also the causes of Wealth of Nations”. The book “Adam Smith in Beijing” is indeed a development of two earlier works. Namely: the “Governance and chaos in the modern world” and the “Long Twentieth Century”. The book seeks to put into perspective various critical issues regarding the society, politics and also the economy. According to Giovanni, the capitalist states and also the United States are faced with a crisis resulting from the vertical competition evident between capitalists and the workers and horizontal competition between different capitalist states. Such crisis can be attributed to a number of factors including mismanagement of the country’s economy, the capitalist production methods as well as poor governance.
In addition, Giovanni suggests that the Iraq war jeopardized the political power, the military as well as the economic stature of the United States significantly. As a result, this enabled China to triumph and emerge a winner in the war. The US government failed in its mission to propel the neoconservative imperial project hence paving way for China to become a prosperous economic hub. Consequently, China has managed to assume the distinguished role of the world’s superpower owing to its achievement in both the internal as well as the external factors. The external factors include the war whereas the internal factors entail factors such as astute foreign policies and financial strength. Subsequently, China strives to become an economy that is capable of transforming the entire world and one that embraces cultural diversity. However, China has limited natural resources hence this may be a limiting factor to its economic growth rate.
Financial expansion significantly contributes to the country’s economic growth and development since it minimizes unemployment and encourages the commencement of various crucial projects. Financial expansion enhances financial inclusivity hence increasing a country’s Gross Domestic Product (GDP). However, Giovanni affirms that capitalism is controversial. On one hand, capitalism can enable a country to overcome overproduction and over-accumulation whereas on the other hand it can spur capital system’s instability and hence destabilize the economy. Most importantly, Capitalism should enable the attainment of economic growth.
Further, Giovanni argues that the United States massive financial expenditure on the Iraq war was a major setback to the country’s economy. In addition, the United States foreign borrowing increased due to the Iraq war and hence this has increased its indebtedness. Consequently, this took an adverse toll on its economy and also undermined the United States Currency. Giovanni also claimed that the East Asian Countries should continue lending the United States their surpluses in order to allow the US to finance its trade deficit. Failure to lend the US their surpluses meant that the US would lose its importing capacity and in turn, the East Asian surpluses would equally disappear. It is imperative to note that countries depend on each other in order to realize sustainable economic development and hence should, therefore, support one another. The downfall in the economy of one particular country may significantly affect another country hence countries need to collaborate in unity. In this case, Giovanni stipulates that the East Asian Countries do not have a choice but to continue financing the US imports.
Giovanni also argues that China has a market-based development structure that is vibrant and seeks to expand education, social division of the labor, and encourage inter-capitalist competition. Also, China puts forward the country’s national interest hence subordinating the capitalist interests. Thus, this is not in line with the Marxian perception of capitalist development. According to Marxism, the government does not necessarily act in the interest of the bourgeoisie when it separates the means of production from the direct producers. Further, Marxism argues that the interests of the bourgeoisie are not taken into account when the government shifts the competition pressures away from the capitalists onto the workers.
Giovanni establishes that China has exhibited a series of given contradictions. For example; on one hand, China’s growth is a process that entailed “accumulation with no dispossession” and, on the other hand, China exhibits much social unrest and even exploitative treatments of its workers. Giovanni asserts that there is indeed intense competition between businesses and also recurring overinvestment in some distinct sectors of China’s economy. Therefore, this is a clear sign of the government’s attempt to promote inter-capitalist competition. Additionally, Giovanni owes the clear manifestation of the worker’s self-management to the absence of appropriate scientific management systems. It is also evident that the Chinese government normally bargains with its foreign investors on the conditions of their entry hence this is undoubtedly an important exercise. The Chinese government is obliged to come up with viable trade regulations in order to protect its economy from scrupulous investors. Nevertheless, Giovanni has underplayed the influence that the foreign capital has on investment. Giovanni apparently ignores Burkett’s and Harvey’s claim that China indeed embraces Neo-liberalism. Giovanni thus affirms that China might eventually become a non-capitalist market economy as envisaged by Adam Smith. If this happens, then the global balance of power and also the world trade might end up being reconfigured.
Existing Gaps in the Book
In addition, Giovanni is also ambiguous in a number of critical aspects and hence does not provide detailed information. First, he does not expound whether the market reforms such as privatization can cause the formation of a capitalist class. Secondly, he does not explain whether the existing capital class is capable of seizing power over the Chinese economy and also the society as a whole. Additionally, Inasmuch as Giovanni insists that China emerged victorious in the war, he however does not provide a detailed explanation of the manner through which China won or the mechanisms that were employed. Additionally, Giovanni articulates to issues relating to the decline of the west countries and highlights issues about the rise of the East countries. Nevertheless, he does elaborate on the reasons why it is specifically China that rises to the center and not other countries such as India or Germany.
Conclusively, Arrighi Giovanni’s book is undoubtedly an enriching masterpiece that provides useful information on critical International relations. It also encompasses a wealth of knowledge regarding the evolution of the capitalist system in the world. It is clearly evident that International relation is indeed imperative since it enables countries to attain economic growth and development. Therefore, Countries need to work together in unity so as to spur economic growth. Additional countries should avoid negative activities e.g. wars since it contributes to an economies downfall. Investors tend to shy away from warring countries hence resulting to a reduction in the country’s GDP in the long-run. Nevertheless, Giovanni should have provided more in-depth information on the gaps existing in the book. The book is indeed significant and can be used by various academic scholars to undertake extensive research.
