Xinhua Publishes Freeman’s Critique of the Post World War II “Rules Based Order”

July 22, 2026August 17, 2026 Lawrence Africa, Belt and Road Initiative, China, development, Infrastructure, manufacturing, rules-based order, US

July 22, 2026

Below is my article published by Xinhua news service on July 21, 2026

Column: Those who conjure up so-called “China Squeeze” ignore historical reality

Source: Xinhua-2026-07-21

A train stops at the Nagad railway station along the Ethiopia-Djibouti railway in Djibouti, Sept. 19, 2022. The Chinese-built 752.7-km-long Ethiopia-Djibouti standard gauge railway, also known as the Addis Ababa-Djibouti railway, is the first fully electrified trans-boundary railway on the African continent. (Xinhua/Dong Jianghui)

by Lawrence Freeman

A recent article published by the Peterson Institute for International Economics (PIIE) conveniently ignores the historical burden imposed on low- and middle-income countries (LMICs) under the United States-led “rules-based order” following World War II.

The paper is riddled with historical distortions in a deliberate attempt to prove the authors’ presumption: China’s exports are responsible for crowding out space for the LMICs to develop their local manufacturing capacity. As a specialist in the political economy of sub-Saharan African nations and China-Africa relations, I can provide some light on this misleading narrative. While it is true that Africa-China trade reached a historically high level of 348 billion U.S. dollars in 2025, with African countries running a trade deficit of 102 billion dollars, the more important question is: how did this imbalance emerge?

Here the historical weakness of the paper under review is revealed. The opening sentence begins with a falsehood: “In the United States, President Donald J. Trump’s tariffs have drawn political force from the view that China’s surplus hollowed out American manufacturing.”

This is completely untrue. The U.S. willfully destroyed its own manufacturing sector beginning in the 1980s, when it adopted the policy of becoming a post-industrial society. The U.S. establishment decided at that time it would move away from being a manufacturing-based industrial society in favor of becoming the center of the financial world, with an expanding service sector, except for the production of armaments.

This was advertised in the Council on Foreign Relations magazine, Foreign Affairs, and implemented by then-Federal Reserve Chairman Paul Volcker. At that time, China had no strong manufacturing capability. It neither possessed the ability to challenge the United States nor contributed to the shrinkage of America’s once powerful manufacturing sector.

Let us keep in mind the reality of the world economy: in the 1960s, the United States functioned as the world hegemon, leading the “rules-based order,” with a GDP around 10 times that of China’s. This only started to change in the late 1970s and early 1980s with the reform and opening-up drive led by Deng Xiaoping, which kicked off in China over the next forty years the greatest economic miracle that our planet has seen.

Again, taking Africa as an example, the United States and the West were in total control of the so-called free markets. The United States and the West had total control over the nations of Africa both politically and economically, as they did over much of the developing sector. China did not emerge as a major player in African economies until the 2000s. During the 1960s, 1970s, 1980s, and 1990s, the United States and the West ruled the financial institutions, including the IMF and World Bank, and they did nothing to build up the manufacturing capability of Africa. This is the truth, and this is egregiously absent from the PIIE report.

During that time there was no leader, except President John F. Kennedy, who was concerned to develop manufacturing capabilities in less-developed countries, especially Africa. What was done by the West, by the U.S., by the “rules-based order” was to extract wealth from African nations. Looting their natural resources, not development. This cannot be blamed on China.

Workers arrange clothes at a textile factory in Maseru, the capital of Lesotho, on July 30, 2025. Lesotho is a small southern African country and one of the world’s least developed countries. Its economy is heavily dependent on textile exports. It exports over 50 percent of its garment products to the United States. (Xinhua/Wang Guansen)

Western policy never genuinely aimed to integrate Africa into the global manufacturing supply chain. Consequently, African economies today account for only about 3 percent of globally traded manufactured goods. This outcome is not a result of China crowding out lower-income countries’ industrial space. Rather, it is an uncomfortable reality that the PIIE and its ideologues are unwilling to confront, as acknowledging it would undermine their anti-China narrative, which is precisely why this factor is conspicuously absent from their report.

Africans suffer, actually die, from the lack of electricity, due to the willful decision not to invest in infrastructure by the West. This is what has prevented African nations from developing manufacturing capabilities. The lack of railroads is another element that is holding back the economic growth of African economies. Not China.

The failure to invest in the most critical component of an economy: infrastructure. This is the cause of the economic deficiency of African nations. Without infrastructure, you will not have a manufacturing sector. You will not have an industrialized economy. It is not the result of China squeezing Africa out of the market. The problems we have today in the LMICs, especially in Africa, are a result of willful decisions by the West not to develop these nations. This cannot be covered up by using mathematical formulas or refusing to report on what actually happened to the developing sector during the decades from 1960 through 2000, before China’s economy began to be a serious actor in the world economy.

“When the United States was the world’s economic hegemon after World War II, it created manufacturing and export space for others — first Japan, then the Asian Tigers, and eventually China itself,” claimed the authors in the conclusion part. However, there was never any intention by Western financial institutions to develop manufacturing capacities for low-and middle-income countries, and little to no investment in vital categories of infrastructure, which are necessary to build a robust manufacturing sector.

The most irreconcilable historical reality that the authors failed to address in the narrative accusing China of preventing the development of the LMICs is this: From the 1940s until the year 2000, when China began to emerge as a successful economic power, the Western political-financial oligarchy had dominant control over the world economy. They, not China, failed to promote economic development in the LMICs for six decades.

China, to its credit, has advanced infrastructure development across our planet through its Belt and Road Initiative (BRI). It is unarguably the case that in Africa, without the BRI, the conditions of life for the majority of Africans would be much, much worse. To this day, no American president has joined or agreed to participate in the BRI, the largest global infrastructure program the world has ever undertaken.

Editor’s note: Lawrence Freeman is a U.S. political-economic analyst for Africa, who has been involved in economic development policies for Africa for over three decades. He is also a geopolitical analyst of U.S.-China relations.

The views expressed in this article are those of the author and do not necessarily reflect those of Xinhua News Agency.■

Read below my earlier posts:

Will China’s Global Governance Initiative Replace The West’s Failed “Rules Based Order?”

Rules Based Order in Crisis: Losing Global Domination

Rules Based Order Is Dead, But Trump Didn’t Kill It. Beware of Mark Carney’s Alternative

Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in economic development policies for Africa for 35 years. He is a teacher, writer, public speaker, consultant on Africa, and an analyst of global strategic relations. Mr. Freeman strongly believes that economic development is an essential human right. He is the creator of the blog: lawrencefreemanafricaandtheworld.com, also publishes on: lawrencefreeman.substack.com, “Freeman’s Africa and the World, and on X @lkfreemansafrica

Manufacturing-Industrialization Must Become Reality For Africa

June 12, 2026June 12, 2026 Lawrence Africa, China, development, Gyude Moore, industrialization, Infrastructure, manufacturing

June 12, 2026

Mr. Gyude Moore, in his essay below, has highlighted the most important challenge for African nations in determining their future. Will African nations create robust manufacturing industries? Manufacturing and infrastructure, especially railroads and power generation, are the two most essential elements to maintain a healthy physical economy. In order to feed the population and provide a quality standard of living, African nations must become industrialized. To achieve peace and prosperity, the level of the physical economy must be sufficiently developed to meet the material needs of its population. This requires eradicating poverty, eliminating hunger, and providing citizens with meaningful productive employment. Without a manufacturing sector and a density of infrastructure, nations will not survive, and the people will suffer undue hardships.

President Franklin Roosevelt defined freedom from want as the universal right to basic economic security: having enough food, shelter, jobs, and free from the threat of extreme poverty. No nation has attained prosperity nor has it become economically sovereign, without a robust manufacturing sector. Until recent decades, manufacturing thrived in the the United States, China has achieved this in the last two generations.

As Mr. Moore writes, now is the time for African nations to fulfill that goal.

How China Forced Europe to Reconsider Africa’s Industrialization by W. Gyude Moore, May 28, 2026

Excerpts below. Emphasis added.

Europe’s retreat from slavery was not driven by moral enlightenment alone. Religious and philosophical objections to slavery had existed for centuries. They became politically decisive only when changes in production, power, and elite incentives made abolition compatible with Britain’s national interest. Societies often tolerate moral critiques for long periods until material conditions shift the coalition structure around them. A similar inflection point may now be emerging in the economic relationship between Africa and Europe.

For decades African leaders – Kwame Nkrumah, Amilcar Cabral, Julius Nyerere – and academics like Samir Amin, made a simple argument to Europe and the broader industrialized world: a continent cannot sustainably develop if it participates in the global economy primarily as a supplier of raw materials and a consumer of finished goods.

That argument was often dismissed as ideological, or just nostalgia from the independence era. African calls for beneficiation, industrialization, and value addition were treated as economically unsophisticated or politically protectionist. The global division of labor was presented as natural and efficient. Africa would export ores, cocoa, timber, tea, oil, and agricultural commodities. Others would process, refine, manufacture, brand, finance, and capture the overwhelming share of value. That arrangement persisted for decades because it worked for those already occupying the commanding heights of the global economy.

When manufacturing migrated from Europe and North America to Asia, many African policymakers hoped this would create space for industrial activity on the continent. Instead, the old hierarchy largely relocated. Africa still exported raw materials. The processing, branding, financing, and technological learning moved elsewhere. Today, iron ore and bauxite still leave as direct shipping ore and concentrates. Cocoa leaves as raw beans. Timber leaves as logs or rough-cut lumber.

The argument African leaders made repeatedly was not complicated. A continent that exports low-value commodities while importing expensive manufactured products will eventually encounter structural limits to prosperity. It will remain vulnerable to commodity cycles, deteriorating terms of trade, foreign exchange instability, and persistent external dependence. More fundamentally, it will never accumulate the industrial capabilities that generate durable national wealth.

That argument rarely found receptive audiences in Europe because Europe occupied the advantageous end of the arrangement. Until now.

Europe is increasingly confronting a version of the same vulnerability African states have warned about for generations. China’s extraordinary industrial rise has altered the geometry of the global economy. Europe no longer faces merely a low-cost manufacturing competitor. It increasingly faces the prospect of strategic industrial dependence.

Chinese firms dominate or threaten dominance across sectors central to the next industrial era: batteries, solar, electric vehicles, refining, rare earth processing, steel, consumer manufacturing, and increasingly advanced industrial machinery. Europe now worries openly about deindustrialization, supply chain vulnerability, and excessive dependence on external manufacturing ecosystems.

That means Liberia should not remain an exporter of direct shipping ore if pelletization can be done near Buchanan. Guinea should not remain primarily a bauxite exporter if alumina refining can be financed. Zambia and the Democratic Republic of Congo should move beyond copper and cobalt concentrates into semi-fabricated products and battery precursor materials. Cocoa producers should export more cocoa liquor, butter, cake, and powder rather than raw beans. Kenyn tea, Ethiopian and Ugandan coffee tea should be exported as branded and semi-processed products rather than bulk commodity. Timber should leave as furniture, panels, flooring, and engineered wood products, not merely logs or rough cuts. African industrial policy should focus less on immediately replicating East Asian electronics manufacturing and more on systematically climbing value chains already rooted in African comparative advantages.

This does not require autarky. It does not require hostility toward Europe or China. And it certainly does not require pretending Africa can industrialize in isolation. The goal is not sudden industrial transformation, but a steady rise in the complexity and value of what Africa already exports. Every successful industrial region in history protected, financed, subsidized, and nurtured its movement up the value chain. Europe did. The United States did. East Asia did. China certainly did.

Africa now has leverage it has not possessed in decades. Europe needs diversified industrial partnerships. The whole world needs African minerals. Europe needs alternative processing ecosystems.

The test of Europe’s seriousness beyond the rhetoric of Macron in East Africa or Meloni and her Mattei Plan, is whether Europe is willing to support the difficult conditions required for African industrialization alongside African governments. Lower-cost capital, energy infrastructure, technology transfer, market access, logistics systems, and tolerance for African industrial policy will matter far more than speeches about sovereignty.

Read Moore’s entire article: how-China-forced-Europe-to-reconsider

Read below, my earlier posts on this topic:

Ending The Legacy of Colonialism: Eliminate Poverty With The Industrialization of Africa

Energy Poverty Is Killing Africans & Preventing Industrialization

We Can Eliminate Poverty & Hunger in Africa in One Generation With A “Credit Bank”

With Manufacturing, Modern Farming & Energy From GERD, Ethiopia Can Be A Leading Economy in Africa: Interview

Freeman Tells Xinhua: Xi-Trump Summit Should Focus on Economic Cooperation

May 29, 2026May 29, 2026 Lawrence China, decoupling, Donald Trump, manufacturing, US, win-win, Xi Jinping, xinhua, zero-sum

*An aerial drone photo shows U.S. carmaker Tesla’s Megafactory in Shanghai, east China, Feb. 8, 2025. (Xinhua/Fang Zhe)*

Below is from an interview with Xinhua regarding Xi-Trump May 14-15 summit in Beijing.

Source: Xinhua, Editor: huaxia, 2026-05-28

Interview: China, U.S. have shared interests for cooperation, says U.S. economist

U.S. economist says stronger trade, infrastructure and manufacturing ties would benefit both countries and support global stability. Xinhua reports on interview with Freeman

by Xinhua writer Liu Yanan

NEW YORK, May 28 (Xinhua) — China and the United States can have economic cooperation and collaboration on multiple fronts, and there is no objective reason for antagonisms to exist between the two countries, a U.S. economist has said.

As the world’s two largest economies, both nations can benefit from increased trade and the exchange of ideas, said Lawrence Freeman, a U.S.-based physical economist, in a recent interview with Xinhua.

“If the United States partners with China, which there is no reason not to, the rest of the world will react positively,” Freeman told Xinhua.

He noted that China’s Belt and Road Initiative has been a vital source to African and other nations in providing vital infrastructure.

The world needs physical, not monetary, economic growth to end poverty and hunger, which are the primary causes of instability, the economist said.

Stability and peace can be achieved by improving the living conditions of all nations and all people, he added.

Freeman also spoke highly of China’s “win-win” approach to foreign policy and criticized the harmful “zero-sum game” approach.

“Each nation benefits from the growth and development of other nations. The more nations that are industrialized, the more their economies will require capital goods produced in other nations,” he said.

China’s prowess in manufacturing could also serve cooperation between the two nations, Freeman said.

“China has become a model of how to achieve manufacturing and industrial growth, which should be emulated by the United States instead of being maligned,” he added.■

Excerpts from Freeman’s response:

China’s “win-win” approach to foreign policy is far superior to the diseased “zero-sum game” approach. The world is not fixed; it is not governed by survival of the strongest. Our planet, our universe, is constantly growing and expanding, propelled by human creativity. Each nation benefits from the growth and development of other nations. The more nations that are industrialized the more their economies will require capital goods produced in other nations. Stability and peace can be achieved by improving the living conditions of all nations and all people. nations should understand and adopt what was stipulated at the 1648 Treaty of Westphalia: the benefit to the other is a benefit to thyself.

China is the leading manufacturing nation in the world. Only the combined manufacturing output of the U.S. and Europe is more than China. This speaks volumes about China’s approach to building up their economy over the last forty-five years. Massive investments by China, in categories of hard infrastructure; energy and rail transportation in particular, have been indispensable to its growth.

The U.S. has lost almost five million manufacturing jobs in this century, over 100,000 since President Trump took office in January 2025. Foolish leaders of the U.S. did this to America, not China. The U.S. destroyed its own economy by shrinking its manufacturing sector and failing to invest in infrastructure. A robust manufacturing sector is essential for the prosperity of a nation. China has become a model of how to achieve manufacturing and industrial growth, which should be emulated by the U.S. instead of being maligned. It is also a model for the rest of the world in how to achieve manufacturing superiority in approximately two generations.

People who talk about “de-coupling” the U.S. from China are dangerous fools, who understand nothing about physical economics. Despite the bravado of some, the U.S. would never survive this severing, but China would. China dominates supply chains of refined critical and rare earth minerals. China understood the need to develop these resources decades before the U.S. It cannot be reversed by the U.S. simply ordering China or other nations to acquiesce, or by U.S. bullying other nations by threatening them with abusive tariffs.

China has succeeded because it understood that to develop its economy and provide for its people, it needed: a strong manufacturing sector; extensive infrastructure; a commitment to scientific research, particularly space exploration; and discovering new valuable natural resources. This “full-set economy” approach is not unique and can be replicated by other nations. The U.S. once understood this and can again.

Below, are earlier posts on this topic.

Can U.S. Compete With China? Washington Establishment Has Serious Qualms

U.S. Establishment Admits Truth Of China’s Economic Superiority, But They Don’t Understand It

Chinese Pres Xi is Correct: Rules-Based Order Is In Decay, But We Once Looked to the Stars

May 11, 2026May 11, 2026 Lawrence China, creativity, Donald Trump, manufacturing, NASA, rules-based order, space exploration, US public debt, Xi Jinping

Chinese President Xi Jinping meets with Spanish Prime Minister Pedro Sanchez, who is on an official visit to China, at the Great Hall of the People in Beijing, capital of China, April 14, 2026. (China Daily)

May 11, 2026

President Xi Jinping is widely reported to have told Spanish Prime Minister Pedro Sánchez that the international order is crumbling into disarray, during their meeting last month in Beijing. Both leaders have condemned President Trump’s unprovoked war against the nation of Iran and rejected the desperate pleas by President Trump for support of his reckless military actions. Their discussion on April 14, at the Great Hall of the People, acknowledged the conditions of the world are fraught with danger, and pledged increased cooperation between the two nations. Keep in mind that President Trump was to meet President Xi for a summit on March 31, before he postponed it due to his self-imposed quagmire in Iran. That summit has been rescheduled for May 14-15, which appears will occur.

President Xi’s description of the crumbling and disarray of the Western orchestrated rules-based international order goes beyond previous statements by the Chinese President, regarding the failure of Western policies. The Chinese translation of this phrase reveals that President Xi’s remarks were more perceptive and discerning than one might think. The literal translation is an idiom: the rites have crumbled and the music is ruined, which conveys moral decay.

This astute observation is absolutely correct. The decadence of the West, with its moral, cultural, and economic rot is there for all to witness, if they desire. One has to look no further than the contorted responses by western leaders for their involvement with the morally depraved Jeffrey Epstein. Or what passes for political (un)thinking in the United States. It is absolutely clear to any astute and honest thinker that survival of humanity requires an escape from the rules-based morally decayed order to a more advanced set of principles (not rules) guiding relations among nations.

China will undoubtedly be a leading nation in creating a new paradigm. U.S. officials and poorly informed Americans have little to no understanding of China’s history, culture, or the thinking propelling their unparalleled economic growth over the last forty-five years. The U.S. government and its citizens have been conditioned to think of “politics” in terms of what provides immediate gratification in the seconds, hours, or days ahead. By contrast, the Chinese think of what policies today, will result in benefits to society, decades, and centuries into the future. For example, President Trump is obsessed in securing supply chains for critical and rare earth minerals, with China controlling the refinement of 90% of these resources. Should China be accused of nefariously controlling these precious resources needed for computer chips, AI, and military munitions, because they understood their importance a generation before the West? Should we discriminate against China because they are smarter than us?

*Society’s culture should emphasize nurturing a child’s creative potential to discover the laws of the universe. (Courtesy of communityplaythings.com)*

The clearest evidence for the indictment of the crumbling and disarray of the Western orchestrated rules-based order is their lack of vision for the future of humanity. Their gross failure to recognize that human creativity, the uniquely human creative imagination, is the single most powerful resource in our universe. Not money, not power, not military might, not the glitz and glitter of opulent wealth: but the human mind housed inside the human body. A nation should not be governed on a “business model.” It should be led by a statesman, who is guided by a vision for the advancement of humankind.

Thus, the physical development of human beings and the nurturing of their creative powers should become the principle of a new paradigm replacing the morally and culturally doomed rules-based order.

The U.S. Economy Is Bankrupt

The U.S. federal debt has surpassed 100% of GDP, marking a significant fiscal milestone. As of March 31, the debt reached $31.265 trillion, slightly exceeding the GDP of $31.216 trillion. It is now official, the U.S. owes more in federal debt than our GDP, which itself is terribly flawed, because it does not accurately measure the real physical wealth of an economy. We should also acknowledge that total U.S. federal and private debt exceeds $100 trillion, once we include consumer credit debt, mortgage debt, school debt, state debt, and corporate debt. And all of this debt exists within a financial system loaded with two quadrillion dollars of speculative derivatives.

The U.S. economy exists on increasing amounts of debt that will never, ever be repaid. Without this almost tenfold increase of debt during the last quarter of a century, the U.S. economy would not exist in its present state. It would not be able to pursue its goal of dictating policy to the rest of the world as the super hegemon. The U.S. economy exists on a mountains of debt at the expense of an increasing number of Americans struggling to survive.

While all categories of U.S. debt have been growing exponentially, the goods producing sector, i.e., productive component of the U.S. economy, has been shrinking since the end of World War II. Simultaneously, employment has increased in the service sector, which employs five times as many workers. This trajectory, which has existed for generations is destroying the U.S. economy and is one of the primary causes of economic suffering by the vast majority of Americans. Service sector jobs do not produce wealth, they consume wealth

Manufacturing jobs are the most essential category of employment for every economy. The manufacturing sector, which produces the physical wealth of the economy, is the pillar that sustains real economic growth and provides for the material standard of living of citizens. Not only has the U.S. employment in the manufacturing sector collapsed precipitously in this century, from 17.32 million in 2,000 to 12.69 million today, but in the last 16 months, the U.S. has lost upwards of an additional 100,000 manufacturing jobs.

For 100 years, the US led the world in manufacturing. Then, in 2010, China surpassed the U.S. And the lead has kept increasing.

The most resounding indictment confirming the crumbling and disarray of the rules-based order is the failure of the U.S. to continue the cultural and economically uplifting determination to explore space, led by President John Kennedy. While I am happy to see the success of the Artemis 2 mission in April 2026, the last moon landing mission was Apollo 17 in 1972. That was over a half-century ago, and astronauts may not land again on the moon for several more years. During this same period, U.S. culture has suffered greatly, absent a true leader over the last fifty-four years, who would lift the minds of the population upwards towards the stars.

The proposed White House budget for NASA in 2026 represents a 24% cut. This would be the lowest amount of money for NASA since 1961, when President launched his “Man on the Moon” program.

Humankind was created to colonize space, and in the process master the laws of the universe. A robust space program emphasizes the importance of nurturing human creativity, by focusing the minds of our citizens on the discovery of new physical principles, which govern the universe. Our young adults and children have been denied the excitement of watching human beings land on an object in space, 250,000 miles from earth.

The collapse of our space program from over 4% of the U.S. budget to approximately .5%, is criminal, and beyond economic stupidity. It demonstrates the utter lack of any understanding of physical economics. Investments in space explorations upgrade scientific research, and lead to new technologies and materials that propel an economy forward. It is estimated that there was a fourteen cent returned to the economy for every one cent spent on Kennedy’s space program, producing a giant leap in productivity.

President John F Kennedy visits Cape Canaveral, Fla. on Nov. 16, 1963.
(Courtesy of stateline.org)

The source of wealth is the creative human mind. Over thousands of years, humans have contributed to the development of our planet through our creative-noetic intervention into the universe. All so-called natural resources are made useful by human discoveries and deployed to benefit the propagation of the human race. There is no independent source of wealth. New technologies, discoveries, the by-products of space exploration, are the drivers of a successful economy.

Continuous scientific discovery is responsible for producing robust economic growth, unlike stock trading or monetary gains from speculative financial bubbles. By its practice over recent decades, the U.S. and the rules-based order, have condemned themselves to crumbling and disarray, as President Xi has stated.

Read below my earlier posts related to this topic:

Can U.S. Compete With China? Washington Establishment Has Serious Qualms

Why Is US-Africa Policy So Bad? Decline of American Culture!

Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in economic development policies for Africa for over 35 years. He is a teacher, writer, public speaker, consultant on Africa, and an analyst of global strategic relations. Mr. Freeman strongly believes that economic development is an essential human right. He is the creator of the blog: lawrencefreemanafricaandtheworld.com, also publishes on: lawrencefreeman.substack.com, “Freeman’s Africa and the World, and on X @lkfreemansafrica

Tariffs Do Not Create Economic Wealth: Trump Is Wrong!

February 13, 2026March 26, 2026 Lawrence Alexander Hanilton, American System, credit, First National Bank, Jamieson Greer, manufacturing, President Trump, tariffs

*President Trump’s so called “Liberation Day” reciprocal tariffs, April 2, 2025.*

February 13, 2026

President Trump’s administration has at times associated its economic policy with that of Alexander Hamilton’s American System of Political Economy. Last month, at the Davos World Economic forum, U.S. Trade Representative, Jamieson Greer, presented a fairly accurate history of the application of tariffs from the President George Washington to President Franklin Roosevelt. However, his presentation was disingenuous for what it omitted.

Hamilton’s American System

Most people do not know that Alexander Hamilton’s establishment of the First National Bank was an ingenious invention to reorganize the huge debts of the colonies to fund, supply capital, for a national credit facility. The establishment of this new credit capability was critical to the development and unification of the thirteen bankrupt fledgling colonies. Hamilton, insisting on the creation of a manufacturing sector had to fight against the backwardness of those, who intended for the United States to remain an agrarian based economy. Hamilton knew that for the United States to become an industrialized economy, internal improvements (infrastructure) were essential, which required the issuance of credit backed by the federal government. These were the key pillars, along with tariffs to protect (nurture) indigenous manufacturing, which comprised Hamilton’s American System.

Hamilton’s economic principles are explicated in his four reports (listed below) approved by President George Washington, which transformed our young nation into an economic powerhouse.

Provision for the support of Public Credit, January 9th, 1790
Provision necessary for the establishment of a Public Credit (Report on a National Bank), December 13^th, 1790
Opinion on the Constitutionality of the Bank, February 23rd, 1791
Report on Manufacturers, December 5th, 1791

Trump’s Tariff Fraud

U.S. Trade Representative, Jamison Greer, obscured Hamilton’s American System byconspicuouslyrefusing to discuss Hamilton’s bank, and his policy to issue inexpensive credit for manufacturing and infrastructure. He intentionally only discussed tariffs. Tariffs by themselves do not generate new economic wealth nor generate growth in manufacturing. Hamilton and his students/followers, who spread his new American System school of economics to Europe, Russia and China, would have vehemently opposed President Trump’s misuse of tariffs, especially employing tariffs as a political weapon.

No one in the circles of President Trump, including Jamison Greer, will discuss the central feature of Hamilton’s American System, a national bank for issuance of credit to generate economic growth, especially in manufacturing. Greer et al are frauds, who are attempting to cloak their wrongheaded tariffs as Hamiltonian.

While Hamilton’s American System succeeded in building a mighty industrial Republic, President Trump’s tariff policy has been a miserable failure. Those of us, who have studied and understand Hamilton’s principles of economic science, predicted that President Trump’s senseless tariff regime in isolation, would fail.

*John Trumbull’s portrait of Alexander Hamilton courtesy of themagazineantiques.com*

Trump’s Tariff Failure

A just released report by the Federal Reserve Bank of New York, refutes President Trump’s claim that Americans are not paying for his reckless tariff policy. According to the bank, from January to August 2025; U.S. importers paid a whopping 94% of the increased price of imports due to President Trump’s tariff. For the months of September and October it was 92%. Therefore, it should be clear to everyone, that it is American businesses and citizens, who are absorbing the cost of President Trump’s failed, anti-Hamiltonian tariffs.

According to a new Gallup polling, Americans are more pessimistic about their future. Less than 60% of Americans surveyed in 2025, the first year of President Trump’s return to office, thought their lives would be better in five years. Those satisfied with their current lives is the second lowest in U.S. history.

The US trade deficit in goods for 2025 is projected to reach $1.26 trillion, an increase from 2024.

Paul Gallagher of EIR magazine exposes more failures of Trump’s tariff policy:

One year later, we can say that that policy has failed. Although tariffs did generate revenues amounting to some $250 billion, a study published on Jan. 19 by the Kiel Institut für Weltwirtschaft, shows that that money did not flow from abroad into the United States

But were the conditions created to allow U.S. manufacturers to replace those imports, which had become more expensive? Were industrial jobs created? Not quite. Manufacturing employment sank for 11 of the 12 months of 2025. Manufacturing activity ended the year at its lowest monthly level: Global demand for U.S. products (new orders) was declining, all the while that global manufacturing production was increasing,

But what has grown is debt: government debt, corporate debt, household debt and banking debt—although the latter is hidden behind “assets.” At this point, 20% of the government budget goes to pay debt service. Corporate debt increased by several billion dollars in one year, while household debt in Q3 2025 was at $18.9 trillion, an increase of $642 billion year-on-year. That amounts to the entire budget of a major industrialized country such as Germany.

Read below my earlier posts on this topic.

Remembering Nancy Spannaus, Historian & Advocate for American System of Economics

Hamilton versus Wall Street: Relevance to Ethiopia & Africa

Nations Must Study Alexander Hamilton’s Principles of Political Economy

Alexander Hamilton’s Credit System Is Necessary for Africa’s Development

Energy Poverty Is Killing Africans & Preventing Industrialization

July 2, 2025July 15, 2025 Lawrence Africa, development, electicity, energy poverty, industrialization, manufacturing, SDG 7 report, value addition

*Picture of the Earth from space at night depicting electricity distribution around the globe. (Source: Wikimedia Commons)*

July 2, 2025

I am posting below, the latest article by Gyude Moore, because I concur with his insightful analysis. He articulates well, the failure of energy policy for Africa, which must be changed for the survival of African nations.

Electricity is the life blood of an economy; when that lifeblood does not exist, the economy fails to be healthy and livable, and human beings die.

Let me be as blunt as possible.

All the NGOs, human rights organizations, good governance activists, charitable foundations, Western nations and their financial institutions, so called environmentalists, and even the United Nations itself, either out of ignorance or malice, refuse to advocate for the quality and quantity of energy required to end poverty, hunger, and unnecessary deaths in Africa. Solar energy, the latest craze, can light a light bulb or charge a phone, but it is too diffuse an energy source to power an industrial economy. As Moore correctly emphasizes, African nations need abundant powerful forms of energy to industrialize their economies and build their manufacturing sectors.

It is the height of arrogance and moral hypocrisy, for people whose lives and nations exist due to the exploitation of carbon based fossil fuels, to deny that right of exploitation to others. Every aspect of modern Western life depends on manufacturing and electricity. A robust program of utilizing all forms of energy, including small nuclear reactors, should begin immediately to secure Africa’s industrialization. It is the lack of economic development that drives instability and insecurity in African nations.

Key excerpts from Moore’s article:

“But for all its strengths, the report is silent on one of the most critical aspects of Africa’s energy future: the productive use of electricity—particularly for industrialization. This omission is more than an oversight. It matters. It reflects a broad pattern about how development practitioners think about energy in Africa: too often as a social good to be distributed, instead of a strategic input for economic transformation.

“If Africa is to industrialize, we need a new energy narrative—one that links energy to human development. One that counts kilowatt-hours for steel mills and assembly lines, not just solar lanterns. One that sees energy as the foundation of wealth, not merely well-being.

Access Without Power: The SDG7 Report’s Silent Gap on Africa’s Productive Future

by W. Gyude Moore from the Africa Project <gyudemoore@substack.com>

Every year, the Tracking SDG7: Energy Progress Report provides a necessary but sobering update on how far the world is from achieving universal energy access. The 2024 edition is no different. It confirms what many of us working in African development already know: that energy poverty in Africa remains an existential problem and the region of the continent south of the Sahara remains the epicenter of global energy poverty.

The report draws much needed attention to the stagnation in global electrification, the widening urban-rural divide, and the increasingly indispensable role of decentralized renewables. The analysis rightly highlights that solar home systems and mini-grids must do the heavy lifting if we are to reach the most remote and vulnerable communities. In doing so, the report provides a valuable, evidence-based foundation for governments, investors, and donors to coordinate their efforts.

But for all its strengths, the report is silent on one of the most critical aspects of Africa’s energy future: the productive use of electricity—particularly for industrialization. This omission is more than an oversight. It matters. It reflects a broad pattern about how development practitioners think about energy in Africa: too often as a social good to be distributed, instead of a strategic input for economic transformation.

Energy as Survival, Not Development

The report measures progress by counting connections and households with basic access. That is essential—access to light, refrigeration, and clean cooking saves lives and lifts burdens, especially for women and girls.

But energy is more than light. It is an indispensable precondition of industrialization. You cannot process cocoa without reliable electricity. You cannot operate a textile mill on a solar lantern. You cannot build the factories, agro-processors, or logistics cold chains that Africa needs if the electricity system is engineered only to power bulbs, not businesses.

What Kind of Access Are We Measuring?

The SDG7 report congratulates progress in off-grid solutions—but it doesn’t ask whether those solutions can support productive livelihoods. There is no mention of voltage stability, grid reliability, or the cost per kilowatt-hour for small and medium enterprises. In most African countries, industrial users face:

· High prices per unit cost

· Frequent outages or load shedding

· Absence of power in designated economic zones

If we are serious about structural transformation, then not all connections are equal. Counting connections without considering quality risks creating a hollow narrative of progress. And this is one of my worries about Mission 300 – that given the self-imposed limits of reaching its goal in 4.5 years, the measure of success will focus on counting connections.

Sub-Saharan Africa manufacturing output for 2023 was 234.69 billion US dollars, a 3.05% decline from 2022.

Industrialization Needs Its Own Energy Track

Africa’s population is young, urbanizing, and growing. Every year, millions more enter the labor market. Where will the jobs come from?

We know the answer: manufacturing, processing, value addition. And we know what those activities require: abundant, reliable, and affordable power. Yet the report offers no analysis on industrial energy use, no insight into how to extend abundant power to rural agro-processing clusters, no discussion of the energy implications of the African Continental Free Trade Area (AfCFTA). That’s not just a gap. It’s a blind spot. And this blind spot is reflected in the kinds of solutions offered for the continent’s energy poverty problem.

To be clear, household access must remain a priority. But Africa’s energy strategy must also be judged by its ability to empower—not just individuals, but entire economies. That means:

· Powering industrial parks in the Gambia, Sierra Leone as well as Cote d’Ivoire

· Supporting cold storage and irrigation in Senegal and Malawi

· Energizing green manufacturing zones in Nigeria and South Africa

I would thus recommend a second track in the SDG7 framework—one that focuses not on access alone, but on abundance.

Reframing Energy for Africa’s Future

As noted in the beginning of this blog, the report is a necessary account of what progress is being made on this goal. However, having seen as many “plans for Africa” as any one person should see over a lifetime, I worry that this line of thinking ends up mistaking motion for momentum. The SDG7 report shows us where we are, but I find its proposed solution of where we need to go, incomplete. It tells us how to keep the lights on. It doesn’t tell us how to power prosperity.

If Africa is to industrialize, we need a new energy narrative—one that links energy to human development. One that counts kilowatt-hours for steel mills and assembly lines, not just solar lanterns. One that sees energy as the foundation of wealth, not merely well-being.

The world’s energy agenda for Africa must not be satisfied with lighting our homes while leaving economies in the dark. Read: energy poverty in Africa remains an existential problem

Read below my earlier posts on this topic.

Energy poverty sustains poverty because electricity is the foundation of all economic development ͏ ͏ Energy Poverty Is Killing Africans-Renewables Are Insufficient

͏ Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in economic development policies for Africa for 35 years. He is a teacher, writer, public speaker, consultant on Africa, and an analyst of global strategic relations. Mr. Freeman strongly believes that economic development is an essential human right. He is the creator of the blog: lawrencefreemanafricaandtheworld.com, also publishes on: lawrencefreeman.substack.com, “Freeman’s Africa and the World, and on X @lkfreemansafrica ͏

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Ethiopia Has A Commitment To Build Up Its Manufacturing Base

June 7, 2025June 7, 2025 Lawrence agriculture, employment, energy, Ethiopia, garment factories, industry, manufacturing, steel, youth

Government providing support for rapid transition from agriculture to manufacturing

(I visited Ethiopia from May 12 to May 25, and examined important aspects of Ethiopia’s economy)

Printed by THE ETHIOPIAN HERALD FRIDAY 6 JUNE 2025, BY ABEBE WOLDEGIORGIS

Ethiopia is an agrarian economy where agriculture plays a dominant role. The sector is subsistence, vulnerable to the extreme climate conditions, utilizes less inputs that results less output and experience little irrigation practices.

Even if agricultural inputs are utilized to enhance production and productivity, due to the fragmented nature of the land modernizing the sector should still go a long way ahead.

The history of the emerging economies and the industrially advanced countries tells us that they attain structural change and transformation through reducing the role of the primary economic activities, which is agriculture in the economy, and promoting the secondary and tertiary economic activities, which are industry and service sector.

This approach helped them to change the economy from lower production in to an advanced one. In our context, economists have reached consensus that manufacturing plays crucial role to change agriculture led economy in to industrial one.

The sector plays vital role in creating job opportunities to thousands, links with the agriculture sector through utilizing products as inputs, attracts both foreign and local investment, boost export, substitute imports and paves the way for the emerging of private sector led self-sustained economy based on innovation and creativity.

Recently, State Minister of Industry, Tarekegn Bululta underscored that significant reforms have been implemented aimed at stimulating the manufacturing sector. These reforms include macroeconomic adjustments and policies focused on import substitution and export growth, the state minister said.

The manufacturing is one of the critical sectors that will determine the future prosperity of Ethiopia. The sector is currently undergoing massive reforms. The government has already introduced new sound policies and procedures and the sector has witnessed a transformation.

He further said that, the reformist leadership of the country has placed a strong emphasis on the industrial sector and is diligently striving to enhance the sector’s competitiveness while fostering a more conducive environment for manufacturers and significant results have been achieved over the last three years.

A renowned American Political-Economic analyst for Africa Lawrence Freeman on his part told local media that Ethiopia has been building up its manufacturing sector while currently registering remarkable progresses in this sphere of the economy.

The American Analyst who visited textile garment factories, steel complexes, sugar factories and other manufacturing sites, said Ethiopia is clearly making progress in the sector.

He also said that the government is committed to industrialize the nation and various measures have been taken. Among others, constructing infrastructures such as industry parks, providing working places to investors with fair price, supplying energy and piped water to industry sites, providing banking services, introducing new laws to ease bureaucratic hurdles in public offices and adjusting exchange rates can be mentioned.

The new homegrown economic reform program for Ethiopia essentially makes the growth of the manufacturing sector one of its top priorities and is now delivering tangible outcomes.

“I think this shows that Ethiopia has a commitment to build up its manufacturing base, which is essential for any economy to truly function and this is very weak throughout Africa. But Ethiopia is clearly trying to make progress in this area,” Freeman said.

The analyst added that he has observed an increase in the number of people employed in Ethiopia’ manufacturing sector over the past few years.

The sector plays crucial role in creating employment to the youth

He emphasized that producing tangible products is essential for economic expansion, stating that this is the direction Ethiopia is currently pursuing and should continue to pursue more vigorously.

This is how the United States was built by emphasis on manufacturing. It is not replaceable by any other sector of the economy. “So I’m very pleased and also to see the optimism that I’ve seen in all the factories that I’ve been at today” he underscored.

There is a real optimism and enthusiasm growing in Ethiopia, and that, along with other accomplishments such as the GERD, Ethiopia is making progress, and that makes me happy to see Ethiopia make progress.

He underlined that the expansion of manufacturing needs reliable energy supply and in this regard the accomplishment of GERD and other electric power dams will bring a dramatic change in the nation’s energy landscape.

As to him, in many developing countries particularly in Africa, the manufacturing sector is not reached to the full-fledged level because of power outage and interruption which again affects the production volume. Currently most industries in Africa produce below their average capacity due to power outage.

Hence, Ethiopia should draw lesson from other countries challenges and should give due attention to mitigate power interruption.

Freeman argues that because of the colonial and neo colonial policy, Africa has a very tiny manufacturing sector in the Sub-Saharan base, and the contribution of manufactured goods in global trade by African nations is very small.

For him, Ethiopia has a lot of light manufacturing by far, such as a textile industry. He acknowledged that textile and garment industry is labor intensive and can create job opportunities to tens of thousands. It utilizes local raw materials as inputs and can create market to the agriculture sector and boost export playing vital role in garnering hard currency which is badly needed by the nation.

He also said that Ethiopia is the most populous country in Africa with more than 120 million and out of it 70 percent is below the age of 30 and this implies how the nation has prudent labor potential which have the capacity to mitigate poverty and the expansion of manufacturing can absorb this excess labor force.

Having confidence that manufacturing is the most important sector to achieve prosperity, Freeman urged Ethiopia to further accelerate its transition in this regard.

The State Minister of Industry also said that, following the new policy reform introduced in the manufacturing sector, the production capacity of industries in Ethiopia has now jumped from 46 percent to 61.2 percent.

Acknowledging the current contribution of the sector to the Gross Domestic Product (GDP) stands at less than 6.8 percent, the state minister pointed out that concerted efforts are being exerted to boost this to 17.2 percent.

He noted that the manufacturing sector has achieved a significant milestone in its import substitution strategy, generating goods valued at 3.1 billion USD during the first nine months of this fiscal year.

According to the World Bank manufacturing can help provide quality jobs for 2 million plus youth who enter the labor market every year.

The manufacturing sector is nascent and represents only 6 percent of GDP and contributes 5 percent of total employment in 2023 compared to 6.8 percent of GDP in 2022. While it is true that the Ethiopian manufacturing sector has enjoyed steady growth over the last decade it accounted for less than seven percent of GDP in 2023, according to the World Bank, and continues to face a host of challenges.

The main characteristics of the manufacturing sector inherited from the past included: a predominance of foreign ownership and foreign managerial, professional, and technical staffing; great emphasis on light industries; inward orientation and relatively high tariffs; capital-intensiveness; underutilized capacity.

In terms of regional distribution, 39.9 percent of the MSEs were located in Oromia followed by Amhara (34.5 percent), SNNPR (7.2 percent), Addis Ababa (6.7 percent), Sidama (6.5 percent) and Somali (3 percent) regional states.

In the history of global development, industrialization is considered as the most important role player. For this reason scholars and ordinary persons use development and industrialization interchangeably. This idea emanated from the world experience in that all advanced nations had achieved their development goals through industrialization. Consequently, most developing countries view it as their chief development strategy.

Read below my earlier posts:

Ethiopia Prioritizes Growth in Manufacturing

With Manufacturing, Modern Farming & Energy From GERD, Ethiopia Can Be A Leading Economy in Africa: Interview

Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved ineconomic development policies for Africa for 35 years. He is a teacher, writer, public speaker, consultant on Africa, and an analyst of global strategic relations. Mr. Freeman strongly believes that economic development is an essential human right. He is the creator of the blog: lawrencefreemanafricaandtheworld.com, also publishes on: lawrencefreeman.substack.com, “Freeman’s Africa and the World, and on X @lkfreemansafrica

With Manufacturing, Modern Farming & Energy From GERD, Ethiopia Can Be A Leading Economy in Africa: Interview

June 1, 2025June 1, 2025 Lawrence Addis Ababa, Africa, electricity, Ethiopia, ethnonationalism, farming, GERD, Infrastructure, manufacturing

June 1, 2025

During my visit to Ethiopia (5/12-5/25), I did a comprehensive interview with “Horn Review” in which I reviewed Ethiopia’s current policy on agriculture, manufacturing, and infrastructure. I emphasized the importance of the completed Grand Ethiopian Renaissance Dam, and the need to replace the false identity of ethnic nationalism with the superior conception of citizenship of the Ethiopian nation.

Please watch my forty-five minute interview. I believe you will find it edifying.

Read my earlier post: Ethiopia Prioritizes Growth in Manufacturing

Ethiopia Prioritizes Growth in Manufacturing

May 28, 2025May 28, 2025 Lawrence Africa, economy, Ethiopia, Infrastructure, manufacturing

May 28, 2025

I visited Ethiopia from May 12 to May 25, 2025, to evaluate the progress of Ethiopia’s economy. I met with government officials, visited manufacturing plants, farms, a sugar refinery, and spent a day touring the Grand Ethiopian Renaissance Dam. I will be posting articles on what I observed over the weeks ahead.

Ethiopia Builds up Manufacturing Foundation to Become Africa’s Future Industrial Hub, Says US Analyst

Addis Ababa, May 27, 2025 (ENA) – Ethiopia has been building up its manufacturing sector while currently registering remarkable progresses in this sphere of the economy, a renowned American Political-Economic analyst for Africa Lawrence Freeman told ENA.

On his part, Ethiopia’s Industry State Minister, Tarekegn Bululta underscored that significant reforms have been implemented aimed at stimulating the manufacturing sector.

These reforms include macroeconomic adjustments and policies focused on import substitution and export growth, the state minister said.

“The manufacturing is one of the critical sectors that will determine the future prosperity of Ethiopia. The sector is currently undergoing massive reforms. The government has already introduced new sound policies and procedures and the sector has witnessed a transformation,´” Tarekegn stated.

The reformist leadership of the country has placed a strong emphasis on the industrial sector and is diligently striving to enhance the sector’s competitiveness while fostering a more conducive environment for manufacturers; Tarekegn noted stating that significant results have been achieved over the last three years.

The American Analyst Lawrence Freeman who witnessed textile garment factories, steel complexes, sugar factories and other manufacturing sites, said Ethiopia is clearly making progress in the sector.

The new homegrown economic reform program for Ethiopia essentially makes the growth of the manufacturing sector one of its top priorities and is now delivering concert outcomes, he confirmed.

“I think this shows that Ethiopia has a commitment to build up its manufacturing base, which is essential for any economy to truly function…..,and this is very weak throughout Africa. But Ethiopia is clearly trying to make progress in this area,” Freeman said.

The analyst added that he has observed an increase in the number of people employed in Ethiopia’s manufacturing sector over the past few years.

He emphasized that producing tangible products is essential for economic expansion, stating that this is the direction Ethiopia is currently pursuing and should continue to pursue more vigorously.

“This is how the United States was built by emphasis on manufacturing. It’s not replaceable by any other sector of the economy. So I’m very pleased and also to see the optimism that I’ve seen in all the factories that I’ve been at today.

There’s a real optimism and enthusiasm growing in Ethiopia, and that, along with other accomplishments such as the GERD, Ethiopia is making progress, and that makes me happy to see Ethiopia make progress.”

For him, Ethiopia has a lot of light manufacturing by far, such as a textile industry.

Having confidence that manufacturing is the most important sector to achieve prosperity, Freman urged Ethiopia to further accelerate its transition in this regard.

Following the new policy reform introduced in the manufacturing sector, the production capacity of industries in Ethiopia has now jumped from 46 percent to 61.2 percent, Industry State Minister, Tarekegn Bululta revealed.

Tarekegn noted that the manufacturing sector has achieved a significant milestone in its import substitution strategy, generating goods valued at 3.1 billion USD during the first nine months of this fiscal year.

Can U.S. Compete With China? Washington Establishment Has Serious Qualms

April 20, 2025April 24, 2025 Lawrence China, manufacturing, post-industrial society, President Trump, rules-based order, US, US debt, Washington Establishment

April 20, 2025

China’s superiority has to be countered by a new, advanced coalition of the United States with its allies around the world, according to a just published article in Foreign Affairs, by Kurt Campbell, and Rush Doshi. Underestimating China

I will summarize their essential argument, which is grounded in the flawed axioms of the rules based order and its perverted zero-sum mentality. In brief: 1) China’s superiority over the U.S. has to be acknowledged; 2) China can only be effectively thwarted by a new type of alliance led by the U.S.; 3) U.S. cannot lead such an alliance under President Trump’s current diplomacy.

They argue that the U.S. is weaker than China in vital categories of military and economic capacity, and the West needs a new type of collective strategy with its international partners to respond to China’s hegemony.

This paper was published on April 10, after the imprint of President Donald Trump, but before the consequences of his so called tariff “Liberation Day.” It is more than a wake-up call for the rules-based order, which is already suffering from severe political and financial crises. With brutal honesty and a cache of devastating statistics, the authors attempt to break through any delusions about China’s dominance.

China’s Superiority

They write:

China will remain vastly more powerful than any past U.S. competitor on metrics most relevant for competition…China is the first to outmatch the United States in size alone as well as in several strategically relevant areas…Beijing will remain more formidable than any past challenger.

The greatest risk is not declinism: it is complacency, leading to a lack of strategic intention and a failure to catalyze action to rise to the China challenge. If anything, the United States–particularly in the era of President Trump–risks overestimating unilateral power and underestimating China’s ability to counter it.

The authors’ thesis is that in great power competition, scale and capacity matter-quantity has a quality all its own. That the U.S. cannot catch up to China’s advantage in scale by itself…its only viable path lies in coalition with others.

They warn Trump; it would be particularly unwise to go-it alone in a complex global competition. By retreating to its sphere of influence in the Western Hemisphere, the United States would cede the rest of the world to a globally engaged China.

This warning, published in the Anglo-American Establishment’s premier magazine, exposes a challenge for the rules-based order that is unsolvable owing to their ideologically flawed world view. Viewing nations as victors and victims, the mighty and the less mighty, in a zero-sum fixed world, the political-financial elites wrongly perceive China as an enemy whose development must be contained, if not suppressed.

Contrary to the prejudices and false beliefs that dominate the believers of the rules-based order, the universe is not fixed; but actually, growing and expanding. Nations are composed of human beings, who are uniquely endowed with the potential for creative thought. Human-cognitive intervention in the physical universe changes the world in which we live. All nations have a shared interest in providing for the physical and spiritual needs of their citizens, who are universally indistinguishable in their common innate creative power. This understanding of the commonality of human creative thought is overlooked by the overwhelming majority of political leaders and the world’s population but is the secret to all successful foreign and domestic policies.

The authors insist that if Washington and its allies are going to triumph over China, they must not risk:

underestimating both the latent and actual power of the only competitor in a century whose GDP has surpassed 70% of that of the United States. On critical metrics, China has already outmatched the United States. Economically, it boasts twice the manufacturing capacity of the United States. Technologically, it dominates everything from electric vehicles to fourth-generation nuclear reactors and now produces more active patents and top-cited scientific publications annually. Militarily, it features the world’s largest Navy, bolstered by shipbuilding capacity 200 times as large as that of the United States; vastly greater missile stocks; and the world’s most advanced hypersonic capabilities

Washington is filled with seminars and papers by numerous think tanks, that believe inherent weaknesses in China will undermine their future dominance. However, Campbell and Doshi warn: Emphasizing China’s weaknesses risk understating its scale and capacity on the metrics and time frame most relevant for great power competition.

In their attempt to make sure this reality is not overlooked, they write, Accounting for purchasing power and local prices using the world bank’s methodology, although imperfect, reveals that China’s economy surpassed the US economy about a decade ago and is 25 percent larger today: roughly $30 trillion to the United States’ $24 trillion.

China’s Advantage in Physical Economy

China’s phenomenal economic growth that includes lifting almost one billion Chinese out of poverty over the last two generations is the result of their commitment to expanding their manufacturing sector, and large investments infrastructure. Washington chose the opposite policy of deindustrialization, and transformed the U.S. into a service economy, over the same period of time.

The authors provide an astonishing comparison between the physical economy of China and the U.S.

…if one looks narrowly at goods rather than services, China’s productive capacity is three times as large as that of the United States–a decisive advantage in military and technological competition–and exceeds that of the next nine countries combined. In the last two decades after China joined the World Trade Organization, its share of global manufacturing quintupled to 30 percent while the US share halved to roughly 15 percent; the United Nations has estimated that by 2030 the imbalance will grow to 45 percent and 11 percent. China leads in many traditional industries–producing 20 times as much cement, 13 times as much steel, three times as many cars, and twice as much power as the United States…China is also a decade ahead of anyone else in commercializing fourth-generation nuclear technology with plans to build over 100 reactors in 20 years. The last great power to so thoroughly dominate global production was the United States, from the 1870s to the 1940s.

The authors calculate that the combined economies of Australia, Canada, India, Japan, Mexico, New Zealand, the U.S., and the European Union are two to three times the size of China and produce almost half of all global manufactured products. They emphasize that unlocking the potential of this coalition should be the central task of American statecraft in this century.

Data source: U.S. Energy Information Administration and the International Atomic Energy Agency

Trump An Immediate Problem

The authors contend that Trump threatens the international alliances, which must be strengthened and upgraded to effectively counter China’s economic and military dominance. They write:

Trump has presented the United States’ partners with hard choices and outright threats. Many may understandably be loath to further tie themselves to Washington anytime soon… key U.S. allies are already considering declaring ‘independence’ from Washington–pursuing nuclear weapons, building new regional groupings, challenging the dollar’s role. Some, spurred by domestic reaction to U.S. pressure are contemplating moving closer to China, even at an enormous peril to their industries or security. The United States risks fracturing the free world and closing its path to scale.

Expressing the concerns of the Washington Establishment, they fear that under Trump:

If the United States fails to pursue scale with others, or retreats to the Western Hemisphere while undoing its alliances, the contest for the next century will be China’s to lose… The result will be a United States that is weaker, poorer, and less influential–and a world in which China sets the rules…Success requires going much further with greater ambition than the alliance-friendly policies of the previous Biden ministration and rejecting the outright the alienating go-it-alone ‘America First’ approach taking shape under Trump.

There is no question that President Trump has up-ended many aspects of the existing rules-based order structure. This is exemplified by pursuing peace in the three-year old Russian-Ukrainian war, freeing Russian President Putin from pariah status, and distancing the U.S. from NATO. This is of immediate concern for those advocating a U.S. led Western mobilization to scale-up economic and military capacity to prevent China from becoming the hegemon of the world.

President Trump may succeed in disrupting the accepted norms of the Western alliance, threatening the goals of the rules-based order. However, thus far he has not displayed the leadership qualities necessary to guide the world to a new paradigm of political-economic relationships among nations.

President Trump, like all of the U.S. presidents since John F Kennedy, has no knowledge of the scientific economic principles that built the U.S. into an industrial nation. He knows the word tariff but has no understanding how tariffs were actually utilized to create an indigenous manufacturing sector from thirteen agrarian based colonies.* President Trump has built hotels, gambling casinos and was known during the time I lived in New Your City, as a real estate mogul. He, like many in his cabinet and the majority of American, believes making money is synonymous with economic growth. In fact, President Trump, like his predecessors, has no concept of the importance of creating a robust manufacturing sector, or the vital necessity of replacing the dilapidated infrastructure of the U.S., to drive real economic growth.

U.S. Self-Destruction

Any politician or American, who blames China for the economic failings of the U.S., is either grossly misinformed or simply lying.

The decision by President Nixon, in August 1971, to remove the dollar from its established mooring to gold, ended the fixed exchange rate system created at Bretton Woods. This ushered in an orgy of monetary speculation over the succeeding years, creating a monetary bubble divorced from the physical economy. This ill-fated decision was the beginning of the transformation of the Western financial system into a gigantic gambling casino.

In less than a decade later, the U.S. launched the contraction of its all-important manufacturing sector. Beginning in 1979, about the time China commenced its “opening-up” strategy, the U.S. financial-political establishment adopted the insane concept of transforming America’s industrial economy into a “post-industrial society.” Opposite to China, the U.S. intentionally reduced its manufacturing-industrial component. The U.S. became a consumer society with the service sector becoming the primary employer, living off of commodities produced by cheap labor from poorer nations; otherwise known as globalization. Although some services are necessary for the functioning of society, services do not produce physical wealth. Hence, the very notion of “service industries” is a misnomer.

Examine the decline of the last forty-five years of employment in the U.S. manufacturing sector. The facts speak for themselves.

Manufacturing jobs peaked in June 1979, at 19.6 million out of 90.1 million total non-farm jobs-(22%). Two generations later, in June 2019, manufacturing employment dropped to 12.8 million out of a total 150.7 million non-farm employment (8.5%). A decline of 6.7 million jobs or 35 percent from forty years earlier. A direct result of the post-industrial utopian fantasy. From 1979 to 2019, not only did the level of manufacturing jobs decrease by over one third, but of great consequence for the economy, the percentage of manufacturing jobs to total non-farm employment decreased by over 60 percent. In analyzing the physical economy, this means that a shrinking number of manufacturing operatives were supporting an increasing number of total employed workers and within an expanding population. A recipe for disaster, which continues today. After the huge decline during the Covid-19 period, manufacturing employment recovered to only 12.9 million in December 2024, barely above the 2019 level and still 35 percent below manufacturing employment in 1979.

From 1979-2019, employment in all categories of the service sector increased. This includes employment in trade, transportation, information, utilities, professional business, and financial services.

If one adds up the federal debt, consumer debt, school debt, state debt, mortgage debt-all public and private debt-the total approaches $100 trillion in U.S. indebtedness. Presently the U.S. economy is built on a house of cards. A whopping 70% of the U.S. GDP consists of consumer spending. Without credit cards the U.S. economy would cease to exist.

This essay is a call to arms to mobilize the rules-based order to maintain their supremacy. However, to challenge China on the global stage in the years ahead requires reversing decades of self-destruction by the U.S. Do the so called wise men of the Anglo-American Establishment have the intelligence and resolve to reach back into America’s history to discover the scientific-economic principles that actually built the United States into an industrial power.** However, should the goal merely be to neutralize China, or should the U.S. endeavor to achieve a more noble mission? To wit: collaborate with China to finally end poverty and hunger in every nation on this planet, thus ensuring durable peace and security throughout the world. Through cooperation, the two economic superpowers could change the future of our civilization for generations to come. This would require an end to the rules-based order and the creation of a new financial architecture committed to global growth of the physical economy. Now is the time to begin preparing for this new paradigm.

*Nancy Spannaus, Hamilton versus Wall Street: The Core Principles of the American System of Economics

** Anton Chaitkin, Who We Are: America’s Fight for Universal Progress, from Franklin to Kennedy: Volume I -1750s to 1850s

Read below my earlier post:

U.S. Establishment Admits Truth Of China’s Economic Superiority, But They Don’t Understand It

China & BRICS Choose Progress Over West’s Deindustrialization

Will Trump Bash China & BRICS in Africa or Promote Joint Economic Growth?