The rising proportion of the economy used for investment is one of the most central predictions of Marx’s Capital—or, as he terms it, the “rising organic composition of capital.” Such a rising proportion of investment in the economy was, less systematically, also predicted by Adam Smith, and by, for somewhat different reasons, by John Maynard Keynes.
Instead of the chimera of general “de-dollarisation”, the correct Marxist strategy of development pursued by countries such as China should be taken as the model to be studied.
To understand how China’s socialism has achieved such great improvement in living conditions, the factual account must take precedent.
The U.S. knows from its experience in defeating Germany, Japan, and the Asian Tigers that a decisive way to slow a competitors growth rate is to get it to reduce its level of investment. The problem for the U.S. is that it has no means to force China to reduce its level of investment.
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