Politics

Since the economic crisis began, stresses in trade between the U.S. and China have led to unfriendly official comments on both sides regarding the other nation’s currency. Some financial commentators suggest that "currency wars," which might also embroil the European Union and other nations, may be in the offing, and that these could eventually turn into trade wars or even military conflicts. The U.S. dollar, as the world’s reserve currency and as the national currency of the country leading the world into the post-growth era, appears to be central to these "money wars."

For some time a small group of ecological economists has been suggesting that we switch the tax base from income (value added to natural resources by labor and capital), and on to natural resources themselves. Value added to resources is something we want more of, so don’t tax it (either at each stage of production as in Europe, or at the final stage as income as in the U.S.). The resource throughput, beginning with depletion and ending with pollution (both real costs), is something we want less of in a full world economy, so let’s tax it.

China is likely the site of world economic growth’s last stand. This nation, together with the other Asian “tigers,” comprises the main engine of expansion that remains after the faltering of the older, more established economies in North America and Europe. When China sputters, the quickening slide of the global economy will be clear and obvious to everyone.