Commentary on Political Economy

Monday 9 August 2021


The German newspaper, Frankfurter Allgemeine Zeitung, in connection with the very "burning" problem of fires in southern Europe from Turkey to Greece and Sicily, has a warning eminently applicable to what I mock as... "the firefighter State": fires must be put out early, because

„Das Feuer ist ein Biest – respektierst du es nicht, hast du keine Chance“

Fire is a beast. If you don't fear it, you don't stand a chance". Big finance, Big tech and FinTech are burning down the city... and Western governments are fiddling on the roof! 

 As you can see, Western analysts stubbornly persist with seeing intervention by “the nanny state” in the “personal lives” of its people as a trade-off with “performance”. Like Edward Luce, FT analysts believe that the difference between the West and China is that in the former the liberal absentee state has “system legitimacy” because it does not interfere with “personal lives”, whereas in the latter the party-state needs “performative legitimacy” because it is a “nanny-state”.

THIS IS COMPLETE AND UTTER RUBBISH! As I have argued all along, in EVERY complex society, THE STATE IS PRESENT ESPECIALLY WHEN IT IS ABSENT! If liberal democracy means “no taxation without representation”, then the converse is also true: NO REPRESENTATION WITHOUT TAXATION!

In other words, by not intervening, the Western state allows the socio-economic imbalances and inequalities in capitalism to fester and spread… until they destroy social cohesion and weaken the military-industrial might of the nation!

BOTH Western and Chinese states depend above all else on “performative legitimacy”, not on the bullshit of vapid “system legitimacy” with which Western governments soft-soap their citizens! The question is NOT whether a State is a “nanny” or an “night-watchman”. The question is whether a State represents the political will of its constituents! And in this crucial regard, it can be seen that Western states are beginning to lose legitimacy of any form, systemic or performative, AS MUCH AS, IF NOT MORE THAN, THE CHINESE STATE… BECAUSE THE KIND OF PERFORMATIVE FAILURES IN THE WEST ARE IDENTICAL TO THOSE IN CHINA!

In reality, the Chinese party-state wins out precisely because it is willing to intervene strategically and forcefully to put out social fires BEFORE they spread uncontrollably! What the Western states gain in “democratic legitimacy”, they lose in legislative stalemate, inaction and policy paralysis

What sense does it make, what conceivable social purpose is served, when you allow your people to transfer enormous social resources to a handful of “education providers” when you know FULL WELL that there are a fixed number of opportunities for your students? Allowing this to happen is NOT democracy: it is irresponsibility of the most contemptible kind! It is condemning your people to the most horrific and despicable waste and mis allocation of resources! 


Western states and governments are… “useless, like cops at the scene of a crime” for the precise reason that, like the Chinese party-state, they no longer represent the political will of their people! (Max Weber) Rather, their inaction is permitting the most astounding theft of social wealth to the smallest, most UNWORTHY (“the labourer is worthy of his hire”) stratum of the population in the history of humanity! 

The Western state is a ship of fools sailing to perdition! … its legitimacy waning with each passing day as inaction and indecision and waste of vital social resources (yachts, private jets, outrageous asset price inflation, brutally arrogant displays of wanton, obscene, sybaritic conspicuous consumption) sap not just its political will, not just its will to fight its enemies… but its very WILL TO SURVIVE! Its will to power!

Michael Smith today in the AFR:

"Understanding what is going on is complex. Investors scratch their heads and wonder why Xi would want to undermine the market system that has helped fuel China’s growth.

‘It is not a stockmarket story, not a tech story. It is a social harmony story and a national security story.’

— Andy Xie

Some of the companies affected by the latest crackdowns have several things in common. They control huge amounts of data which the Chinese government does not want to fall into foreign hands, or they are linked to social problems in China such as the ageing population, the wealth gap or childrens’ health.

“It is not a stockmarket story, not a tech story,” Andy Xie, an independent economist based in Shanghai, told AFR Weekend. It is a social harmony story and a national security story. The education reform is just the beginning and it has a long way to go. The Communist Party is so powerful, they can pull every lever in society.”

"Xie compares the shift underway in the way China manages capitalism with what happened in (former US President Donald) Trump’s America. From Beijing’s perspective, he argues, the US model is broken as technology companies have been allowed to run rampant and increase inequality without contributing to the greater good of society.

“In the West, great wealth and big companies create power that allows them to get into the political system. A system like that is not stable. You cannot have someone like Jeff Bezos owning the Washington Post as a propaganda tool. The Communist Party will prevent this kind of thing happening. In China, to have great wealth, you must serve the country.”

Murray also agrees that the way China’s leaders manage capital is influenced by what they are seeing in the United States.

“Trump becoming a businesses celebrity and controlling the United States was something that really caused pause to Xi Jinping. If some dumb-a--- billionaire could run the United States, why couldn’t they run China? People like Jack Ma have massive celebrity status,” he says."

“We are at a significant moment in the history of China’s economy and capital markets: after a decade-long journey to eliminate absolute poverty, Beijing is shifting governance priorities from growth to balancing growth and sustainability: social equality, data security, and self-sufficiency,” Morgan Stanley analysts wrote this week.

“China’s new regulations on fintech, big tech, after-school tutoring, cryptocurrency and carbon emissions over the past nine months underpin this major regulatory reset.”

Murray says the West has to change the way it views China as a money-making machine. “Global capital markets don’t matter to chian any longer and I think they are heading back into an autarchy,” he says.

”The reality is for us, as a nation doing business with China, is the game has changed. It is not going to change back and we need to accept that and we need to diversify our relationship with other countries in the world.“

I like Ross Douthat at the NYT, a practising Christian. This deserves a quick look... what we were talking about, just came up...

Douthat says essentially that if you depend financially on anyone, unlike me, or eveniff you care about friends and connections, especially not me, you are no longer free to speak your mind...

At the bottom of the article there is a link to a piece by Agnes Heller on Hungary. She died last year in Budapest at age 90 while... swimming! Tough lady... well known Marxist philosopher who fled Hungary to Melbourne first, then New York.

I went to see her at La Trobe Uni in 1982 or so with a view to doing a PhD under her supervision. First up she asked me what I knew about the sociology of knowledge - as if I were sitting an exam! I told her point blank that I thought the boundaries of these "disciplines" were as nebulous as their contents! (Always an accomplished diplomat, me. I could never have got an academic post... or "an executive position"! Huh!) Un pallone gonfiato. I didnt like her, and she didnt like me... As luck would have it, I ended up a multimillionaire, and she ended up with a government pension and academic honours... Life can be very unpredictable...

At least in economics (in Cambridge) people know how to count! Not so in philosophy, where total lack of logic and good sense are a desirable attribute!

Another example of how Westminster-type institutions are wilting and self-destroying, this particular instance concerns the tenant evictions moratorium. Things (representative institutions) fall apart BECAUSE the centre cannot hold, in the US and elsewhere in the West…

What you glean from stories like this, is not just how Big Tech is now a Big Mafia, but more alarmingly the US government above all is in cahoots with these criminals! I have a PDF copy of “An Ugly Truth”, the exposé on Zuckerberg’s scoundrel domain…


No comments:

Post a Comment