8 Jan 2007

Power, corruption and lies

Although I am posting the article here for my own purpose there does seem to be a few similarities between the Chinese and Singaporean model, and huge differences as well. One thing did grab my attention and that was Hutton's references to Leninism which has been a topic on this site in the past and linked to Lee Kuan Yew.

To the west, China is a waking economic giant, poised to dominate the world. But, argues Will Hutton in this extract from his new book, we have consistently exaggerated and misunderstood the threat - and the consequences could be grave

Will Hutton
Monday January 8, 2007


The emergence of China as a $2 trillion economy from such inauspicious beginnings only 25 years ago is such a giddy accomplishment that the temptation to see its success as proof positive of your own prejudices is overwhelming. And the west's broad prejudice is that China is growing so rapidly because it has abandoned communism and embraced capitalism. China's own claim - that it is building a very particular economic model around what it describes as a socialist market economy - is dismissed as hogwash, the necessary rhetoric the Communist party must use to disguise what is actually happening. China proves conclusively that liberalisation, privatisation, market freedoms and the embrace of globalisation are the only route to prosperity. China is on its way to capitalism but will not admit it.

But the closer you get to what is happening on the ground in China, its so-called capitalism looks nothing like any form of capitalism the west has known and the transition from communism remains fundamentally problematic. The alpha and omega of China's political economy is that the Communist party remains firmly in the driving seat not just of government, but of the economy - a control that goes into the very marrow of how ownership rights are conceived and business strategies devised. The western conception of the free exercise of property rights and business autonomy that goes with it, essential to any notion of capitalism, does not exist in China.

The truth is that China is not the socialist market economy the party describes, nor moving towards capitalism as the western consensus believes. Rather it is frozen in a structure that I describe as Leninist corporatism - and which is unstable, monumentally inefficient, dependent upon the expropriation of peasant savings on a grand scale, colossally unequal and ultimately unsustainable. It is Leninist in that the party still follows Lenin's dictum of being the vanguard, monopoly political driver and controller of the economy and society. And it is corporatist because the framework for all economic activity in China is one of central management and coordination from which no economic actor, however humble, can opt out.

In this environment genuine wholesale privatisation is impossible and liberalisation has well-defined limits, as President Hu Jintao himself brutally reminds us. The party, he says, "takes a dominant role and coordinates all sectors. Party members and party organisations in government departments should be brought into full play so as to realise the party's leadership over state affairs". It may be true that party organisations in the provinces (some with populations bigger than Britain's) and in the chief cities are jealous of their autonomous local political control, but all retain the discretionary power to do what they choose and override any challenge or complaint from any non-state actor - or, indeed, from state actors if they cross the will of the party.

to read in full...


Matilah_Singapura said...

It's called a mixed economy — there is a mix of stuff from the left, and stuff from the right.

Therefore you'll find privatisation (depending on state approval), a market economy (also defined by the state), capital markets, free banking etc,
...and you'll find this "co-exists" with socialist institutions — public healthcare, public schools, social welfare.

All states do this, varying in degrees throughout the world. And since a state has the territorial monopoly on law and taxation, the head-honchos can design anything they like to centrally plan the territory (and its people)

"Mixed economies" are politically "safe". And so you'll find very little differnce between US Republicans and Democrats, Australian Liberals and Labour, UK Tories and (New) Labour. They are installed by democratic process, usually after months of mindless and pointless campaigning, mudslinging, bribery, laws suits, and if we-the-people are lucky — assassination.

The people are divided. But really, there are no stunning differences between the contestents of what boils down to a two horse race. However the people believe that right and left and centrists are "different". They aren't. They only quibble on the amount of resources — the private property legally plundered from the citizenry by taxes.

“The government consists of a gang of men exactly like you and me. They have, taking one with another, no special talent for the business of government; they have only a talent for getting and holding office. Their principal device to that end is to search out groups who pant and pine for something they can't get and to promise to give it to them. Nine times out of ten that promise is worth nothing. The tenth time is made good by looting A to satisfy B. In other words, government is a broker in pillage, and every election is sort of an advance auction sale of stolen goods.” — H. L. Mencken

China is an example of a modern mixed economy. A bloody BIG one because of its bloody BIG population.

Both China and India are not without hiccups—socially and economically. But both those countries are doing a grand job with regards to capitalism—they are building up their capital stock very rapidly, and they have almost an inexhaustible supply of CHEAP labour, and growing in the area of CHEAP high value-adding labour—a capitalist's dream come true!

Firms like WalMart do a wonderful job of marketing and distributing the "cheap and good" manufactured good from China. And they are opening huge new stores in areas which could never sustain big retail commerce — ares where most of the (local) stores are inefficient and downright lousy.

Many folks out there have a funny way of looking at capitalism. They think it is somehow "evil".

IMO, we as a species, could not survive and prosper without it.

Capitalism, does indeed rock. If you want proof, ask the Rolling Stones.

Anonymous said...

The description of "monopoly political driver and controller of the economy and society" sounds disturbingly familar. Scary!

Possibly that explains why China chinese PRs find it so easy to adapt to the life in the little red dot.

Matilah_Singapura said...

What's so hard about adapting to life in the little red snot?

It's one of the easiest places in the world to live.

So there're restrictions on certain freedoms people in the west all but take for granted.

So what?

Does that give people ("victims" — aka assholes) an excuse to wail like stuck pigs crying "oh poor me?"

Or is it better to just get on with life, and make the best of it?

I dig the folks from the PRC — I reckon most of them know what they want, and go for it. Many of them don't have higher education. But they still go for it, and when they get an education, they kick everyone's ass.

Welcome, you folks from PRC.