[porkmarras]

This process increased the power of banks and financial institutions and brought forth finance capitalism. Cartels and trusts emerged, using vertical and horizontal integration to eliminate competition and manipulate markets and prices for entire sectors of the economy. Middle-class membership was mainly concentrated in salaried workers of corporations, while the working class were hourly wage earners in factories. The 1848 Revolutions were the the first proletariat revolutions in modern time. The creation of an integrated world market, the financing and development of economies outside of Europe and the consequence of rising standards of living for Europeans were the triumphs of the 19th-century system of unregulated capitalism. In the 20th century, the process continued, with the center shifting to the United States.

Friedrich List, in his National System of Political Economy (1841), asserted that political economy as espoused in England at that time, far from being a valid science universally, was merely British national opinion, suited only to English historical conditions. List's institutional school of economics asserted that the doctrine of free trade was devised to keep England rich and powerful at the expense of its trading partners and that it had to be fought with protective tariffs and other protective devices of economic nationalism by the weaker countries. List influenced revolutionaries in Asia, including Sun Yatsen, who until coming under the influence of Marx and Lenin after the October Revolution was primarily relying on List in formulating his policy of economic nationalism for China. List was also the influence behind the Meiji Reform Movement in Japan.

The current impending collapse of neoliberal globalized market fundamentalism offers Asia a timely opportunity to forge a fairer deal in its economic relation with the West. The United States, as a bicoastal nation, must begin to treat Asian-Pacific nations as equal members of an Asian-Pacific commonwealth in a new world economic order that makes economic nationalism unnecessary.

China, as the largest economy in the Asia-Pacific region, has a key role to play in shaping this new world order. To do that, China must look beyond its current myopic effort to join a collapsing global market economy and provide a model of national domestic development in which foreign trade is reassigned to its proper place in the economy from its current all-consuming priority. The first step in that direction is for China to free itself from dollar hegemony.

Henry C K Liu is chairman of the New York-based Liu Investment Group.

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