Can Local Economies Revolutionize the US? This Adviser to China Thinks So

Laurence Brahm advises the Chinese government on economic and environmental policy. Here’s what he thinks the United States can learn from China.
Chinese boys laughing in Guizhou province. Photo by Grigvovan / Shutterstock.com.

Boys in Zhaoxing village, Liping County. Photo by Grigvovan / Shutterstock.com.

Laurence Brahm spent most of his adult life in China, where he wrote more than 20 books on the inner workings of the country’s economy. So it would be easy to join his many critics, who accuse him of being a pro-China “panda-hugger” filled with ex-pat resentment toward his home country. But Brahm, an economist and environmental activist, argues that trumpeting what China gets right—and what the U.S. gets wrong in its economic policies—is the most patriotic thing an American can do.

“Market fundamentalism has really created the havoc that we’re facing today.”

Eighty percent of American adults struggle with joblessness and reliance on welfare for at least part of their lives, according to 2013 data obtained by the Associated Press. Meanwhile, inequality has skyrocketed and wages have barely budged in decades. That’s why Brahm, who helped draft some of China’s current environmental and economic policies as an adviser to its Ministry of Environmental Protection, has called for an economic revolution in the United States—one he calls “fusion economics,” which is also the title of his new book on the subject.

This approach aims to pluck ideas from those already working elsewhere in the world, return the economy’s reins to local communities, and lay the groundwork for an equitable and sustainable system. Brahm hopes this revolution will return the gleam to American society, making it once again the envy of the world.

“We need to get back to our communities, solve our nation’s economic situation, make our country prosperous, and everybody in the world is going to come here again, as they did once before,” he says.

YES! Magazine spoke to Brahm about the steps he believes America can take to repair its economy and the role of local communities in this effort. The following is a lightly edited transcript.


Marcus Harrison Green: What exactly is fusion economics, and how is it different from our current economic system?

Laurence Brahm: It’s a mixture of Eastern and Western thought. I think it’s about pragmatism. It’s based on the local conditions of a community—what works in America won’t necessarily work in China, nor should it. It’s really saying we’ve got to stop the isms, we’ve got to stop the ideology, and start picking and choosing what’s pragmatic. So there might be something that’s working right here in this community, that somebody can use somewhere else, but not necessarily.

Green: The philosophy of martial arts legend Bruce Lee had a major influence on fusion economics: “Adapt what is useful, reject what is useless, and add what is specifically your own.” Could you talk more about this?

Laurence Brahm

Laurence Brahm in Kathmandu, Nepal.

Brahm: I would say that Bruce Lee and his philosophy is a core model behind fusion economics. The traditional Kung Fu schools of the old days were like, “Oh tiger claw, we only do tiger claw,” or “Eagle claw, we only do eagle claw!” and “We’re better than you!”—“No, we’re better than you!” Bruce Lee was saying these systems at their core are all similar in terms of what they’re trying to achieve. Let’s start to pick and choose and use what works best and synthesize. And I think we have to approach economics the same way. We have to stop saying, “My system is right and yours is wrong” for simply ideological reasons, and say, “What can I borrow from you, and what can I learn from you?”

Green: You blame a lot of the world’s current economic plight on neoliberalism. What do you mean, and why do you feel it’s been so harmful?

Brahm: I think a better word for neoliberalism is market fundamentalism, and it really came out of the theoretical view and the ideas of the University of Chicago economist Milton Friedman. Neoliberalism took those ideas to an extreme—what we have now is something called the Washington Consensus. It says all nations have to liberalize their financial markets, take away restrictions on banks, take away restrictions on deposits, and [it] effectively empowers the financial sector to do what it wants without restrictions, like the ones that were put in after the Great Depression.

This really began with the era of Bill Clinton. He removed the Glass-Steagall Act, which had maintained a basic stability in our financial market because it controlled the banks. At the same time, there was a parallel philosophy of shock therapy: You need to go out to other countries that are not market-oriented, and shock them into being market-oriented. This has really created the havoc that we’re facing today.

Green: So globalization imposes one economic system on the rest of the world, without local people having a choice?

“We need to first solve our own problems at home and do it really well.”

Brahm: It’s the forcing of one ideology and one system upon communities that have very good reason to remain as communities and not to be under that system. Basically, the destruction of local businesses is brought about by a few monopoly international businesses that have access to cheap capital.

Green: Like the mom-and-pop store that gets replaced by the big-box Wal-Mart?

Braham: Sure. And the mom-and-pop store provides a sense of community. It provides a place where people gather. It provides an identity—something we need badly today.

I got off the plane this morning and the first news that came to my cell phone was about a shooting in Oregon. This all comes about when people lose their identity. People don’t have a sense of community. What we’ve done is rip all that out by going into communities and saying everything has to be a shopping mall with only a few select brands. This is not allowing people to have the very values that our country was built on, which is local identity and local creativity. We’re not allowed to do that because of this imposition, and it’s made possible because of the absolute concentration of capital within a few investment banks.

Green: Can you give examples of communities that have rejected the neoliberal model and are doing for themselves?

Brahm: I just came from this meeting on climate investment, and there’s a community called Oberlin. The Oberlin experiment came about because Oberlin College decided they wanted to do something about antiquated buildings that were not functioning. They began to switch the grid over to renewable energy. They began to create local farming. They took land that was discarded and they brought back crops. They reconnected the entire agricultural experiment into the local retail. [People are] getting tasty apples that are grown locally and organically.

Green: Your work links many of our current crises, including Europe’s migrant crisis, to economic policies of the past. Can you explain how these policies have shaped many of our current geopolitical problems?

Brahm: Most of them boil down to the economics of oil. In America, we don’t generally link the refugee crisis in Europe back to our actions. Those actions began with America’s invasion of Iraq. We didn’t understand the social dynamics of one of the most complex parts of the world. Instead, we created the foundations for terrorists to move into Iraq because the concentration of American personnel and soldiers basically made it a magnet for them. Then, as the Arab Spring erupted, we started picking sides without understanding them.

In the case of Syria, there are nearly 12 opposition parties fighting and another half a dozen opposition parties in Istanbul claiming that they’re all the legitimate government. So, who are you supporting and who did we support? We supported ISIS. We created ISIS in the same way that we created al-Qaida, by funding, intervening, and supplying arms to groups, thinking that they were going to do our bidding. When they decided they had their own agenda, we got crises across North Africa, the Middle East, and now it’s spreading to the south. It’s destabilizing Nigeria. It’s destabilizing Kenya, and there’s a huge refugee crisis. All the media is talking about the refugee crisis, but nobody has said what the source of the thing is. It is, of course, our foreign policy.

Green: Ultimately, what do you think stops the United States, at least its leadership, to being receptive to a more multipolar world with a diversity of economic systems?

Brahm: Ideology, myopia, and bigotry. We believe that we have a system and a right way to do things and everybody else should fall in line. But people are really different. Geographies are different. Societies are different. We don’t sit back and say, the foods you eat, the way you practice your religion, are all in many ways a response to the [conditions] around you.

Green: With the influence the U.S. wields in the world, how imperative is it that it gets its own house in order?

“They recognized they had a problem and had to change it, and step by step, they did.”

Brahm: It’s absolutely imperative. You know, I was asked this question during the re-election of Barack Obama. I was asked what would or should the president do? I said three words: economy, economy, economy. He’s got to fix the economy and look inward rather than outward on this. We’re meddling around the world, and the perception around the world of America is not good. We are not solving problems; instead, we are creating them. One issue is climate change. The second is intervention in countries that we do not understand. And third is an imposition of a financial system that we force on other nations, while at the same time demanding that people suffer from austerity. We need to first solve our own problems at home and do it really well.

Green: You’ve traveled to several countries across the world and documented what they’re doing right, economically. While there may be no perfect system, what country do you think gets it most right?

Brahm: I’ll first talk about Asia and the case of China, where I’ve spent most of my life. When I arrived there in 1981, they were suffering from the effects of the cultural revolution. I was the second group of Americans to go there after the formation of relations under Jimmy Carter. Relations were established in 1979, so in 1981, I was off the plane studying there. You couldn’t get coffee. You couldn’t get rice. You couldn’t get bread, because you had to have ration coupons. They were an absolute communist socialist system, and it was totally dysfunctional.

They recognized they had a problem and had to change it, and step by step, they did. They had a lot of political infighting to be able to get everybody on the same page, but coming on 30 years later, they now are the economic superpower. I have many issues with the way they treat minorities, their human-rights record, and justice system. But on the other hand, they have succeeded in addressing a fundamental issue, and it’s getting people out of poverty and creating a middle class; creating an educated population; giving people jobs; and solving their own economic situation first. Now they’re challenged by the environment, because all that growth has created enormous pollution. They’re the number-one emitter of carbon. They’ve destroyed their water systems. They’ve messed up their agricultural system.

But in the past three to four years, I’ve worked with the government officially as adviser to the ministry of environment. In 2015, they adopted a massive policy shift where they’re going to put a huge amount of investment into renewable and efficient energy, shifting away from coal. They’re also putting in a lot of nuclear power plants. I know a lot of people have an issue with that, but if you’re looking at the worst of two evils, right now carbon is the problem that’s going to destroy the planet.

They’re rethinking their position on growth. Growth is an American idea: GDP. They’ve been saying high GDP has ruined their environment. It’s ruined their health care.

The key message here is not to say they’re better than us, but to say these are our errors, and it’s not unpatriotic to look at our mistakes.

Green: What are the steps our country needs to take in solving our economic problems? And what gives you hope that we can?

Brahm: When you’re facing challenges, you’ve got to look at where the breaking point is. I’ll give you an example. In the case of China’s environmental policy, the first draft we submitted was April 26, 2013. The national policy for a massive industrial shift was adopted April 25, 2015.

In just two years the decision was made. My point here is to say that was a massive shift, and I want to bring those ideas here because I see the regridding of America with renewable energy as a huge opportunity to reinvigorate business and to get communities off the fossil fuel grid. That in turn creates jobs to employ people, whether they have Ph.D.s, master degrees, or are blue-collar workers who have to put all the gizmos in the walls and on the ceilings.

This is where we should start. Once we do that, we drop our biggest cost, which is energy. Then you allow business to be competitive and effective again.

The other thing is we need to have a third party, a coalition that’s going to crack this duopoly. If we don’t do that, we’re stuck.

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