The New Dark Age

US Vice President JD Vance gave a speech about globalization that made it clear that Washington’s goal is to keep formerly colonized countries in the Global South trapped at the bottom of the global value chain.

Vance acknowledged that the US-led West wants to maintain a strict international division of labor, in which poor countries in the periphery produce low value-added goods (with lots of competition and therefore low profits), whereas the rich nations in the core extract exorbitant monopoly rents through their control over high value-added technologies (with little to no competition, reinforced by strict intellectual property rights).

Silicon Valley prepares for war with China

The US vice president made these remarks at a summit that was organized by the Silicon Valley venture capital firm Andreessen Horowitz. This annual meeting in Washington, DC is called the American Dynamism Summit, and it brings together corporate executives and US government officials to facilitate contracts.

One of their main priorities is preparing for war with China. Andreessen Horowitz promotes 50 US companies that it says are “shaping the fight of the future”, outlining a scenario of a hypothetical 2027 war with China over Taiwan.

Vance is a China hawk who has scapegoated Beijing for the many economic problems in the US, demonizing it as “the biggest threat to our country”.

After Donald Trump selected Vance to be his running mate in the 2024 campaign, Vance pledged that they would end the war in Ukraine, not because they wanted peace for peace’s sake, but rather to prioritize containing China. The US will “bring this thing to a rapid close so America can focus on the real issue, which is China”, Vance told Fox News, claiming, “That’s the biggest threat to our country and we are completely distracted from it”.

In his March 18 speech at the Andreessen Horowitz summit, the US vice president sought to bridge the gap between right-wing “populists” and what he called “techno-optimists” — a term promoted by billionaire venture capitalist Marc Andreessen, a personal friend of Vance.

Vance has close ties to Silicon Valley billionaires, and has even worked for some of them.

Although Vance is known for exaggerating his humble upbringing, for which he was accused of poverty “stolen valor”, Vance attended the elite Yale Law School and worked as a corporate lawyer and venture capitalist.

The far-right Silicon Valley billionaire oligarch Peter Thiel previously employed Vance. Thiel then cultivated his political career, spending $15 million to help Vance win the 2022 Senate election in Ohio.

Like Vance, Thiel is extremely anti-China. Thiel also openly supports monopolies. The billionaire venture capitalist declared that “competition is for losers”, writing that “monopoly is the condition of every successful business”.

Thiel identifies as a conservative libertarian, and he has argued that capitalism is more important than democracy. But he also wrote that, “Actually, capitalism and competition are opposites”, and that US corporations must “look to build a monopoly”.

Dependency theory was right: Global North wants Global South stuck at bottom of value chain

In his speech at the American Dynamism Summit, Vance stated (emphasis added):

The idea of globalization was that rich countries would move further up the value chain, while the poor countries made the simpler things. You would open an iPhone box, and it would say “designed in Cupertino, California”.

Now, the implication, of course, is that it would be manufactured in Shenzhen or somewhere else. And, yeah, some people might lose their jobs in manufacturing, but they could learn to design or, to use a very popular phrase, learn to code.

But I think we got it wrong. It turns out that the geographies that do the manufacturing get awfully good at the designing of things. There are network effects, as you all well understand.

The firms that design products work with firms that manufacture. They share intellectual property. They share best practices. And they even sometimes share critical employees.

Now, we assumed that other nations would always trail us in the value chain, but it turns out that as they got better at the low end of the value chain, they also started catching up on the higher end. We were squeezed from both ends. Now, that was the first conceit of globalization.

In these comments, the US vice president inadvertently acknowledged that the fundamental thesis of the dependency theorists in the 1960s was indeed correct.

The rich countries in the core of the world-system (mostly in the Global North) seek to trap the poor, formerly colonized nations in the periphery (mostly in the Global South) in a cycle of dependency on the core’s high value-added products, through monopolistic control of advanced technologies.

Because countries in the periphery are constantly competing with each other to produce primary commodities (like agricultural products, crude oil, and unprocessed minerals) and low value-added goods (such as textiles), their profit margins are tiny, and the terms of trade are unbalanced in the favor of the wealthy core countries, which previously colonized the nations of the periphery.

China has tried to challenge its subservient place in the world-system, to move up the global value chain and out of the periphery — so the US government has responded with aggressive tariffs, sanctions, and export controls, aimed at sabotaging China’s technological innovation and economic development, to keep the US at the top of the international division of labor, where it can continue to extract monopoly rents.

It is not a coincidence that the co-founders of BRICS are the countries that managed to move from the periphery to the semi-periphery. They have sought to transform the world-system.

China’s Foreign Minister Wang Yi referenced this in a historic speech on the subject of multipolarity at the Munich Security Conference in February.

“Whether it is the colonial system or the core-periphery structure, unequal orders are bound to meet their demise”, declared the Chinese foreign minister, while pledging support for a multipolar world.