Pitchfork Economics with Nick Hanauer Trade Wars Are Class Wars (with Matthew C. Klein)
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Oct 7, 2025 
Matthew C. Klein, an economist and author of "Trade Wars Are Class Wars," discusses how rising inequality distorts global trade dynamics. He argues that trade tensions are rooted in class struggle, not just national competition. Klein highlights how wealthy elites hoard wealth while workers suffer, exemplifying this with China's wage suppression. He also critiques current U.S. trade policies and calls for reforms to strengthen international financial support, stressing the urgent need to address these imbalances for a more equitable global economy.
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Inequality Drives Trade Imbalances
- Global trade imbalances reflect shifts in income distribution between labor and capital, not just national competition.
- Rising concentration of income in the very rich changes saving vs spending dynamics and spills across borders.
China's Surplus Is Rooted In Domestic Class War
- China sustained large export surpluses by suppressing domestic consumption through institutions like hukou and weak social insurance.
- That redistribution enriched elites while limiting Chinese consumer demand and exported the shortfall abroad.
Crisis Led To Global Self-Insurance
- The 1997–98 Asian financial crisis triggered a global turn toward self-insurance and reserve accumulation.
- Countries hoarded reserves and ran surpluses to avoid crises, worsening global demand imbalances.
