Commentary on Political Economy

Sunday 31 May 2020


Foreign secretaries urge Britain to stand up for Hong Kong

There were clashes with police last week during protests against the new security law
There were clashes with police last week during protests against the new security law
Seven former foreign secretaries have urged Boris Johnson to lead the international response to China over its decision to impose a draconian national security law on Hong Kong.
More and more Hongkongers are making plans to abandon the island, and Dominic Raab, the foreign secretary, has promised to open up British citizenship to large numbers of them.
“We believe the UK continues to have a moral and legal obligation to the people of Hong Kong,” the former foreign secretaries, including Mr Raab’s immediate predecessor, Jeremy Hunt, said in a letter sent to Downing Street on Friday. “As events in Hong Kong develop over the weeks ahead, we hope you will recognise the pronounced need for international leadership from the UK government on this matter and act accordingly.”
The signatories, completed by Sir Malcolm Rifkind, Dame Margaret Beckett, Lord Hague of Richmond, David Miliband, Lord Owen and Jack Straw, called for the formation of an international “contact group” like the one established for the former Yugoslavia in the early 1990s. They asked Mr Johnson to raise the plight of Hong Kong at the recently postponed G7 summit, to be hosted by President Trump, and to seek support from the Commonwealth and the European Union.
Britain expressed “deep concern” over the plan for the new security law in a joint statement with Australia, Canada and the US. The governments warned that it would undermine Hong Kong’s autonomy from China under the “one country, two systems” principle that was agreed before the handover of the former British colony in 1997.
Mr Straw said that widening the pool of concerned countries would make it hard for China to dismiss outside pressure “as basically a British Empire issue”. Sir Malcolm said he expected the idea to gain ground among China’s neighbours in Asia, who are increasingly alarmed by its aggressive behaviour.
Tom Tugendhat, chairman of the Commons foreign affairs committee, told Sky News that Beijing had proved that Britain’s relationship with China needed to be re-examined. “This is more than about Hong Kong, it is about all of us dealing with an authoritarian state which has decided to tear up the rules,” he said.
Mr Raab set Britain on a collision course with Beijing when he announced last week that he would “set in train” new arrangements for 350,000 Hong Kong holders of British National Overseas passports to secure citizenship if China did not change course.
The Home Office clarified that the pledge could apply to an additional 2.6 million people who are eligible for such a passport, most of whom have previously held the document but not renewed it. New applications are not permitted.
At present the passport holders can travel to Britain for six months but do not have the right to live and work in the UK. Mr Raab’s idea is to allow them to apply to work and study for extendable periods of one year, thus providing “a pathway to future citizenship”.

China’s Barely Begun Economic Recovery Shows Signs of Stalling 

More and more factories are reopening, but they face falling orders from overseas customers 

A cashmere-product manufacturing company in Hebei province. Gauges of China’s factory activity showed activity expanding in May.

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SHANGHAI—China’s economic recovery hit a speed bump in May as the coronavirus pandemic began curbing the world’s demand for Chinese goods.
More and more Chinese factories have reopened for work in the past three months as authorities have eased their once-aggressive coronavirus measures. But now they are facing the dire reality of falling orders from overseas customers.
The conundrum can be seen in official and private gauges of China’s factory activity. China’s official manufacturing purchasing managers index and a closely watched private survey, the Caixin China manufacturing purchasing managers index, both showed factory activity expanding in May.
For the official factory survey, the reading of 50.6 marked the third straight month of expansion, while the Caixin survey showed factory activity jumping to a four-month high of 50.7 in May, from 49.4 in April. For both indexes, the 50 mark separates expansion from contraction.
Below the surface, however, there is evidence that China’s nascent economic recovery is already beginning to stall.
While China’s official PMI, released by the National Bureau of Statistics on Sunday, showed continued expansion, the magnitude of the gains fell for a second straight month, and a subindex to measure production slipped to 53.2 from 53.7 in April—pointing to sluggish demand. Worryingly, the new-export-orders subindex, a gauge of external demand, continued to remain deep in contractionary territory, though it improved to 35.3 in May, from 33.5 in April.
Meanwhile, the Caixin PMI survey, which is tilted toward smaller private manufacturers, showed new export orders contracting at a historically sharp rate, Caixin Media Co. and research firm IHS Markitreported Monday.
While work resumptions and stabilized supply chains have enabled manufacturers to ramp up their output again, production remains much more robust than demand, Wang Zhe, a senior economist at Caixin Insight Group, said in a statement accompanying the Monday release.
Taken together, China’s manufacturing surveys suggest that the pace of the economic recovery from the coronavirus disruption is slowing, due in large part to lackluster overseas buying, said Yang Weixiao, a Beijing-based economist at Kaiyuan Securities.
"I’m afraid the fastest pace of recovery is already behind us,” Mr. Yang said. “Weak demand is indeed the biggest problem.”
Mr. Yang worries that soft demand is likely to continue to hobble smaller Chinese companies’ recovery efforts, which are already lagging their larger peers in resuming work.
Premier Li Keqiang said last month at China’s annual legislative conclave that the country would formally abandon this year’s annual growth target, pointing to uncertainty around the pandemic.
Even so, Chinese leaders haven’t given up entirely on growth, which underpins two other goals for Beijing this year: the eradication of poverty and the creation of nine million jobs to ensure social stability.
The continued export weakness is likely to take a toll on both of those efforts, since exports still account for a substantial part of the Chinese growth equation. In response, policy makers have pledged a slate of stimulus measures to boost the economy, though the announced response has fallen short of efforts during previous, less severe downturns.
A lack of export growth momentum could weigh on China’s jobs situation for years to come, said Mr. Yang, of Kaiyuan Securities.
If there is any silver lining in the latest economic data, it is to be found outside China’s factories.
The government’s official nonmanufacturing PMI, released on Sunday, climbed to a four-month high of 53.6 in May, boosted by a strong recovery in the country’s construction activity.
The survey covers services such as retail, aviation and software, as well as the real estate and construction sectors.
The subindex measuring construction activity surged to 60.8 in May from 59.7 previously, while the subindex measuring business activity in the service sector edged up to 52.3 from 52.1 in April.

Saturday 30 May 2020

I am posting together today's Column by Maureen Dowd in The New York Times about how social media - Facebook and Twitter - are destroying the American polity (and the world's) and a theoretical piece of mine from 2016 on Hegel's analysis of civil society as it was in the Roman Empire. The nexus between the two pieces is evident. My aim is to show that as Karl Jaspers once said "a little philosophy leads away from reality, but complete philosophy leads right back into it" (The Philosophy of Existence). Enjoy!

Think Outside the Box, Jack
Trump, Twitter and the society-crushing pursuit of monetized rage.

Opinion Columnist
·        May 30, 2020
WASHINGTON — C’mon, @Jack. You can do it.
Throw on some Kendrick Lamar and get your head in the right space. Pour yourself a big old glass of salt juice. Draw an ice bath and fire up the cryotherapy pod and the infrared sauna. Then just pull the plug on him. You know you want to.
You could answer the existential question of whether @realDonaldTrump even exists if he doesn’t exist on Twitter. I tweet, therefore I am. Dorsey meets Descartes.
All it would take is one sweet click to force the greatest troll in the history of the internet to meet his maker. Maybe he just disappears in an orange cloud of smoke, screaming, “I’m melllllllting.”
Do Trump — and the world — a favor and send him back into the void whence he came. And then go have some fun: Meditate and fast for days on end!

Our country is going through biological, economic and societal convulsions. We can’t trust the powerful forces in this nation to tell us the truth or do the right thing. In fact, not only can we not trust them. We have every reason to believe they’re gunning for us.
In Washington, the Trump administration’s deception about the virus was lethal. On Wall Street and in Silicon Valley, the fat cats who carved up the country, drained us dry and left us with no safety net profiteered off the virus. In Minneapolis, the barbaric death of George Floyd after a police officer knelt on him for almost nine minutes showed yet again that black Americans have everything to fear from some who are charged with protecting them.
As if that weren’t enough, from the slough of our despond, we have to watch Donald Trump duke it out with the lords of the cloud in a contest to see who can destroy our democracy faster.
I wish I could go along with those who say this dark period of American life will ultimately make us nicer and simpler and more contemplative. How can that happen when the whole culture has been re-engineered to put us at each other’s throats?
Trump constantly torques up the tribal friction and cruelty, even as Twitter and Facebook refine their systems to ratchet up rage. It is amazing that a septuagenarian became the greatest exploiter of social media. Trump and Twitter were a match made in hell.

The Wall Street Journal had a chilling report a few days ago that Facebook’s own research in 2018 revealed that “our algorithms exploit the human brain’s attraction to divisiveness. If left unchecked,” Facebook would feed users “more and more divisive content in an effort to gain user attention & increase time on the platform.”
Mark Zuckerberg shelved the research.
Why not just let all the bots trying to undermine our elections and spreading false information about the coronavirus and right-wing conspiracy theories and smear campaigns run amok? Sure, we’re weakening our society, but the weird, infantile maniacs running Silicon Valley must be allowed to rake in more billions and finish their mission of creating a giant cyberorganism of people, one huge and lucrative ball of rage.
“The shareholders of Facebook decided, ‘If you can increase my stock tenfold, we can put up with a lot of rage and hate,’” says Scott Galloway, professor of marketing at New York University’s Stern School of Business.
“These platforms have very dangerous profit motives. When you monetize rage at such an exponential rate, it’s bad for the world. These guys don’t look left or right; they just look down. They’re willing to promote white nationalism if there’s money in it. The rise of social media will be seen as directly correlating to the decline of Western civilization.”
Dorsey, who has more leeway because his stock isn’t as valuable as Facebook’s, made some mild moves against the president who has been spewing lies and inciting violence on Twitter for years. He added footnotes clarifying false Trump tweets about mail-in ballots and put a warning label on the president’s tweet about the Minneapolis riots that echo the language of a Miami police chief in 1967 and segregationist George Wallace: “When the looting starts, the shooting starts.”
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“Jack is really sincerely trying to find something to make it better,” said one friend of the Twitter chief’s. “He’s like somebody trapped in a maze, going down every hallway and turning every corner.”
Zuckerberg, on the other hand, went on Fox to report that he was happy to continue enabling the Emperor of Chaos, noting that he did not think Facebook should be “the arbiter of truth of everything that people say online.”
It was a sickening display that made even some loyal Facebook staffers queasy. As The Verge’s Casey Newton reported, some employees objected to the company’s rationale in internal posts.
“I have to say I am finding the contortions we have to go through incredibly hard to stomach,” one wrote. “All this points to a very high risk of a violent escalation and civil unrest in November and if we fail the test case here, history will not judge us kindly.”
Trump, furious that Dorsey would attempt to rein him in on the very platform that catapulted him into the White House, immediately decided to try to rein in Dorsey.
He signed an executive order that might strip liability protection from social media sites, which would mean they would have to more assiduously police false and defamatory posts. Now that social media sites are behemoths, Galloway thinks that the removal of the Communications Decency Act makes a lot of sense even if the president is trying to do it for the wrong reasons.
Trump does not seem to realize, however, that he’s removing his own protection. He huffs and puffs about freedom of speech when he really wants the freedom to be vile. “It’s the mother of all cutting-off-your-nose-to-spite-your-face moves,” says Galloway.
The president wants to say things on Twitter that he will not be allowed to say if he exerts this control over Twitter. In a sense, it’s Trump versus his own brain. If Twitter can be sued for what people say on it, how can Trump continue to torment? Wouldn’t thousands of his own tweets have to be deleted?
“He’d be the equivalent of a slippery floor at a store that sells equipment for hip replacements,” says Galloway, who also posits that, in our hyper-politicized world, this will turn Twitter into a Democratic site and Facebook into a Republican one.

Nancy Pelosi, whose district encompasses Twitter, said that it did little good for Dorsey to put up a few fact-checks while letting Trump’s rants about murder and other “misrepresentations” stay up.
“Facebook, all of them, they are all about making money,” the speaker said. “Their business model is to make money at the expense of the truth and the facts.” She crisply concluded that “all they want is to not pay taxes; they got their tax break in 2017” and “they don’t want to be regulated, so they pander to the White House.”
C’mon, Jack. Make @realDonaldTrump melt to help end our meltdown.

Maureen Dowd, winner of the 1999 Pulitzer Prize for distinguished commentary and author of three New York Times best sellers, became an Op-Ed columnist in 1995.

The Miserable Life of Worms or, the Society of Savage Capitalism

Hegel’s diatribe against the liberal State – delivered obliquely by reference to the Roman State under the emperors in The Philosophy of History– is perhaps as impassioned as it is devastating:

We observed the

Romans proceeding from the principle of abstract Subjectivity,

which now realizes itself as Personality in the recognition of

Private Right. Private Right, viz., is this, that the social unit as

such enjoys consideration in the state, in the reality which he

gives to himself — viz., in property.

There is nothing wrong with Subjectivity, says Hegel here. But Subjectivity cannot be “abstract”; it cannot, that is, assume a Personality that stands against the State even as the State is necessarily the political expression of not just human society, but of human society as an ineradicable aspect of human being. “Extra Ecclesiam, nulla salus” was the Scholastic saying encapsulating this very thought: there is no safety, indeed no life is possible, outside of the Church – and by “Church” here we understand the State. The individual taken abstractly, outside of its “sociality” realised in the State, is only an empty, phantomatic abstraction.

Such a condition is Roman life at this epoch: on the one

side, Fate and the abstract universality of sovereignty; on the

other, the individual abstraction. “Person,” which involves the

recognition of the independent dignity of the social unit — not

[G.W.F. Hegel, The Philosophy of History, 336]

on the ground of the display of the life which he possesses — in

his complete individuality — but as the abstract individuum.

For the State is the “objective” being of Subjectivity: the State allows the individual to realise its individuality fully – its “complete individuality” - because no individuality is complete outside the State. Equally, a State that fails to objectify, to realise, to make real, the incipient sociality of individuals – such a State is a non-State, it is tyranny or anarchy, not a democracy, as the Greek philosophers had realised early in the story of our civilisation.

It is the pride of the social units to enjoy absolute importance

as private persons; for the Ego is thus enabled to assert

unbounded claims; but the substantial interest thus

comprehended — the meum — is only of a superficial kind, and

the development of private right, which this high principle

introduced, involved the decay of political life.

But a State made up of abstract Subjectivities, made up purportedly, in law alone, of isolated individuals, of “private persons”– such a State already abdicates ab initio all claims to being “the living political body”, that is to say, the political realisation of the individualities of its members:

The living political body —

that Roman feeling which animated it as its soul — is now

brought back to the isolation of a lifeless Private Right. As, when

the physical body suffers dissolution, each point gains a life of

its own, but which is only the miserable life of worms; so the

political organism is here dissolved into atoms — viz., private


Liberalism, which is the political ideology of capitalism and its bourgeoisie, rests entirely on the notion of a society of “individuals” whose existence is dissected into private property, on one side, and personality (opinions, beliefs, “life-style”), on the other. The interaction of these “individuals” is made possible, so far as private property is concerned, by the exchange of goods and services through the market mechanism – and, so far as personalities go, by the public sphere of “life-styles” and the pursuit of a myriad “rights” and “isms” (animal rights, environmentalism, feminism, gay rights, transgender rights, animal rights, refugee rights, right to housing, right to work and so on ad infinitum). The cohesion of this “society of individuals” is ensured and guaranteed by the liberal State which is the product of a social contract between individuals inter se (between themselves) whereby the function of the State is to keep separate the private sphere of the exchange of goods and services between individuals from any interference on the part of the public sphere. And the powers of the State must be kept to the minimum necessary to ensure the independence of the private sphere from any such possible interference from the public sphere.

A necessary corollary of this premise is that the State must remain “neutral” with regard to the social contract, that is, to the private rights entered into by the individuals collectively and inter se in erecting the State as the arbiter of their private property by guaranteeing their possessive rights. Again, this “neutrality” of the liberal State with regard to the enforcement of private rights between individuals can be assured if and only if there is a rational scientific basis on which the exchange of goods and services between individuals in the private sphere can be guaranteed to maximize their individual welfares.

Hence, the Political existence of the State can be legitimized only through the possibility of a scientific operation of the private sphere – that is to say, only through the possibility of a scientific Economy by means of which the State can orient and legitimize its enforcement of private property rights as well as the non-interference of the public sphere with the private sphere. This is the essence of the “science” of Political Economy. The liberal State is founded on possessive individualism – and Political Economy enables it to become a State of Law or a “negative State” whose function and powers are confined to ensuring the separation of the private economic sphere from the public political sphere.

The foundations of the liberal State therefore rest, first, on the legitimacy of private property rights; second, on the possibility of a scientific determination of the exchange of these private property rights between individual owners; third, on the recognition on the part of individuals that are party to the social contract that such a scientific determination exists, and finally on their agreement that it can be administered scientifically by the liberal State without any political interference from the public sphere. Thus, the scientisation of the economy is a condition for the neutrality of the State. But this scientisation is still entirely dependent on the agreement on the part of individuals that not only such a science of economics is possible but also that individuals are sufficiently rational to accept this scientisation as a way of maximizing their self-interest or individual welfare or private property. Yet here the notion of self-interest – which is egoistic, selfish and therefore irrational - clearly comes into conflict with the notion of science – which is by definition rational in the sense that it appeals to an “interest” that goes beyond self-interest!

It follows that the neutrality of the State and the scientisation of the private sphere – of the Economy – requires the conscious supersession on the part of individuals of their individual self-interest and egoism in favour of the adoption of rational-scientific measures to direct the Economy. Yet, such a rational recognition is itself ineluctably and incontestably an exquisitely “political” choice that is entirely independent of any “scientific” discourse and certainly independent of the private sphere of economic self-interest. Therefore, such an agreement can originate in and derive from the public sphere alone – from the political sphere of beliefs and opinions, of culture and “life-style” – and not just from the “rational-scientific” sphere that presumably governs the private sphere.

But here the insuperable difficulty arises that it is impossible to see how a “society” of selfish individuals can ever give rise to one of rational individuals. Indeed, it is far more likely instead that – far from agreeing on a scientific and rational conduct of the neutral State – the egoistic, self-interested individuals of a liberal society will rather manipulate the public sphere – the Political – in a way that “privatizes” the beliefs and opinions, the culture and the life-styles, in an endless pursuit of “rights” that far from converging toward a political consensus will diverge into a maelstrom of irreconcilable conflicts! And that is precisely what we are witnessing now with the spread of what we have dubbed “savage capitalism”.

It follows therefore that the hermetic separation of the private sphere – the sphere of private property and private rights, of the Economy – will contaminate the sphere of public opinion, pushing it into a virulent pursuit of private claims that quickly and inevitably lead to the disintegration of the State and of the polity, of the society. This is why even Kant – who certainly shared the liberal creed – referred to bourgeois-capitalist society as the “ungesellige Gesellschaft” – “unsociable society”, a contradiction in terms in which private interests lead to the dissolution of the body politic. It is why Schopenhauer – the philosopher of philistine individualism par excellence - thought it was sheer madness to think that the liberal State, or any State at all, could ever be founded on a “social contract” rather than be pure Police. But a State that has become so “negative” that its sole function is to protect “private rights” – such a State must perforce earn Hegel’s scathing and apocalyptic condemnation:

The living political body… is now

brought back to the isolation of a lifeless Private Right. As, when

the physical body suffers dissolution, each point gains a life of

its own, but which is only the miserable life of worms; so the

political organism is here dissolved into atoms — viz., private


Life under the liberal State has become just that: “the miserable life of worms”.

Friday 29 May 2020

China and the Rhineland Moment
America and its allies must not simply accept Beijing’s aggression.

Opinion Columnist
·        May 29, 2020

Great struggles between great powers tend to have a tipping point. It’s the moment when the irreconcilability of differences becomes obvious to nearly everyone.
In 1911 Germany sparked an international crisis when it sent a gunboat into the Moroccan port of Agadir and, as Winston Churchill wrote in his history of the First World War, “all the alarm bells throughout Europe began immediately to quiver.” In 1936 Germany provoked another crisis when it marched troops into the Rhineland, in flagrant breach of its treaty obligations. In 1946, the Soviet Union made it obvious it had no intention of honoring democratic principles in Central Europe, and Churchill was left to warn that “an iron curtain has descended across the Continent.”
Analogies between these past episodes and China’s decision this week draft a new national security law on Hong Kong aren’t perfect. Hong Kong is a Chinese port, not a faraway foreign one. Hong Kong’s people have ferociously resisted Beijing’s efforts to impose control, unlike the Rhineland Germans who welcomed Berlin’s. And the curtailment of freedom that awaits Hong Kong is nothing like the totalitarian tyranny that Joseph Stalin imposed on Warsaw, Budapest and other cities.
But the analogies aren’t inapt, either. Beijing has spent the better part of 20 years subverting its promises to preserve Hong Kong’s democratic institutions. Now it is moving to quash what remains of the city’s civic freedoms through a forthcoming law that allows the government to punish speech as subversion and protest as sedition. The concept of “one country, two systems,” was supposed to last at least until 2047 under the terms of the 1984 Sino-British Joint Declaration. Now China’s rulers have been openly violating that treaty, much as Germany openly violated the treaties of Locarno and Versailles.

And again, alarm bells quiver.

For years, Donald Trump’s comments on China have swung between the truculent and the obsequious. But beneath the president’s mental foam, the administration has undertaken a sober rethink of the U.S. strategic approach to China, the outlines of which are described in a new interagency document quietly released by the White House last week.
Gone from this new vision are the platitudes about encouraging China’s “peaceful rise” as a “responsible stakeholder” in a “rules-based order.” Instead, Beijing is described, accurately, as a habitual and aggressive violator of that order — a domestic tyrant, international bully and economic bandit that systematically robs companies of their intellectual property, countries of their sovereign authorities, and its own people of their natural rights.
“Beijing has repeatedly demonstrated that it does not offer compromises in response to American displays of goodwill, and that its actions are not constrained by its prior commitments,” the report reads. “We acknowledge and respond in kind to Beijing’s transactional approach with timely incentives and costs, or credible threats thereof.”
A critic might note that this description of China’s behavior sounds a lot like Trump’s. Sort of, except that the comparison trivializes the scale of China’s abuses and neglects the breadth and longevity of its challenge. A Biden administration will be confronted with the same unpleasant facts about a geopolitical adversary that seeks not only to dominate its region but also dethrone liberal democracy as the dominant political model of the 21st century.
All of which makes the Hong Kong crisis so consequential. Beijing almost certainly chose this moment to strike because it calculated that a world straining under the weight of a pandemic and a depression lacked the will and attention to react. On Friday, Trump said he would strip Hong Kong of its privileged commercial and legal ties to the U.S. But that punishes the people of Hong Kong at least as much as it does their rulers in Beijing.

What’s a better course for the U.S.? A few ideas:

Sanction Chinese officials engaged in human-rights abuses in Hong Kong under the Global Magnitsky Act. Upgrade relations with Taiwan and increase arms sales, including top-shelf weapons’ systems such as the F-35 and the Navy’s future frigate. Re-enter the Trans-Pacific Partnership agreement as a counter to China’s economic influence. (This won’t happen in a Trump administration, but should in a Biden one.) Publicly press all G-7 countries to stop doing business with telecom-giant Huawei as a meaningful response to the Hong Kong law.
One other idea is now being explored by Britain, the former colonial power. Give every Hong Kong person an opportunity to easily obtain a U.K. residency card, even a passport. As Tom Tugendhat, the chair of Parliament’s Foreign Affairs Committee and founder of its China Research Group, told me on Thursday, doing so would “right a wrong done when the U.K. removed the status in the 1980s. After a century of rule, Britain has obligations.” A future American president who believes in the value of immigration could join that effort, in the same way we helped Hungarian refugees and Vietnamese boat people.
If all this and more were announced now, it might persuade Beijing to pull back from the brink. In the meantime, think of this as our Rhineland moment with China — and remember what happened the last time the free world looked aggression in the eye, and blinked.