Sunday 19 April 2020

Capitalist Weekend Reading: China as Capitalist Power

Gotta keep up with what's going down.  Chinese capitalism is a common theme in these two pieces.

1)  Here's a long review of Capitalism on Edge, a book about 'precarity capitalism' (inter alia).  Extract:
... Capitalism itself has moved on, leaving its neoliberal phase behind and the global left-neoliberal critique and prescriptions largely dangling in mid-air ... the large Chinese state-owned corporations and China’s presence on the world stage are unquestionably Galbraithian, focused on market share, learning, new technologies, and improvement of the national capital stock. And so, in important respects, has been the Chinese state, which prizes above all autonomy, predictability, and social stability, and if not always firm control of its banking sector, the willingness to override that sector’s autonomy whenever necessary. China is no democracy, and modern China was built on many epic disasters, including the famine and Cultural Revolution, none of which appeal as models. But that it is a functioning society capable of mobilizing to meet vast challenges has never been clearer than in recent days. And one can say the same of South Korea, and perhaps of Japan, while in Europe Germany is, so far, the best prepared to handle the corona crisis.
What is the source of this resilience? It is not, of course the leadership of a Communist Party, which does not exist in Korea or Japan or Germany. What these societies share is that over four neoliberal decades they maintained their large industrial corporations as going concerns in line with national strategies, along with their productive base and social organization; they did not give everything over to the market. And over those decades, put to the test against the neoliberal corporation dominated by Wall Street, there is no doubt which side won out. The Galbraithian firm fostered and protected by a vigilant state now dominates world markets in most advanced sectors and many that are more modest but no less basic. It is also capable of meeting the challenge of mobilization facing the world in this pandemic...
2)  And here's an article specifically about China, aka 'authoritarian capitalism', coupled with some nervous glances at the EU.  Extract:
... Amidst the turmoil in global financial markets in recent weeks, something unusual has happened. Investors, seeking shelter from the coronavirus-linked sell-off, have piled into Chinese government bonds on an unprecedented scale. These purchases have increased the total foreign ownership of Beijing’s bonds to record highs, even as much of the country is still emerging from lockdown after the viral outbreak. In an ironic twist, the country where the pandemic originated has become an unlikely safe haven for investors – a shift that one prominent trader has described as “the single largest change in capital markets in anybody’s lifetime” ... it would be na├»ve to assume that China is content to live under dollar dominance forever.
... But those who have spent years dreaming about a world beyond neoliberalism should think twice before popping the champagne. While some may celebrate the arrival of policies that, on the surface at least, involve a greater role for the state in the economy, there remains one problem: there is no evidence that state action inherently leads to progressive social outcomes ... For progressives across the West, the task ahead is enormous. Not only is there a need to respond to the growing dynamism of China’s authoritarian political-economic system, there is a need to do so in a way that strengthens democracy and protects civil liberties at a time when both are increasingly under threat. When economies eventually open up again, the urgency of the climate crisis means that we cannot afford to return to business as usual ... Following the global financial crisis however, it was the authoritarian right, not the progressive left, that managed to gain a foothold in many countries. The same can be said of the Great Depression in the 1930s. As governments struggle to deal with an economic crisis on a scale that could easily surpass both, there are signs that authoritarian forces could stand to benefit once again. In 1848 Karl Marx wrote that ‘A spectre is haunting Europe — the spectre of communism.’ Today another spectre is haunting the West: its name is authoritarian capitalism.



dearieme said...

Those passages probably read better in the writers' mother tongues.

DJK said...

The James Galbraith review is very interesting. That Germany and South Korea are coping with the coronavirus pandemic much better than the UK and USA is demonstrably true. I have a nagging doubt though that the answer is to copy the structure of German banks and industries, or the German insurance-based health service. I suspect that if we in the UK were organized differently, but with the same incompetents in charge, the result would be the same.

Nessimmersion said...

There is always the possibility that Germany Japan and Korea led Bismarkian systems, which rely mostly on free markets to respond to incentives.
US has the most litigous society on earth with 50% of their spend going on precautions against being sued, bit like how much we waste here demonstrating compliance with H&S.
China is of course telling porkies.
THe shower of screaming incompetents at PHE who have pissed away 4.5 billion on non public health wokerati crap is simultaneously true as well( Ecksian solutions required)

dearieme said...

I'll reserve judgement on who's done best until some perspective is available - after two years or even after five years. Maybe Sweden will prove wisest. Nobody knows.

John in Cheshire said...

Maybe this?

E-K said...

Sth Korea and Germany have engineering.

That's why they're coping better.

We have PPE of our own and it's shit.

(PPE graduates in charge - aka talking heads.)

andrew said...

On the wider 'what is the point of democracy'.

There needs to be a way to fit the needs of govt and people together.
There needs to be a way of transferring power without civil war.
There needs to be a way of recovering from a bad govt without revolution.

Perhaps there is something that does this better than democracy. Not sure i have seen it yet

Old git Carlisle said...

Agree with E-K not only too much arts educated running country but also many of us feel that accountants may have a lot to answer for.

The destruction of our industrial base excess consolidation and loss of the loss of supervisor types (equivalent of SNCOs) and the number of genuine trades union officials (not just big union politicos)

Also worried about number of people occupying multiple public offices particularly local government often for many years. At least a lot are now under geriatric house arrest!

Remember when your ENRON mates nearly shut down ICI Billingham . They were on direct supply from NTS and a 24'' slum shut fired . The clown from ENRON just opened up the valve with probably 5 bar differential across it . Result was that gas rushed into the reduced pressure section of main and pressures at end of NTS collapsed . Think ICI got their compressor away in time. The standard drill is to slowly pressurise the dead leg via the small bore bypass whilst maintaining the upstream pressure then with less than one bar differential - open the line valve . This was learnt the hard way in the late 60's - I know I have the scars

Nick Drew said...

OGC - funny thing was (if "funny" is the right word here), all the Enron Teesside operatives, and management, were ex ICI ! (plus a handfull of Northern Electric)