East and West: the twain meet

The conventional wisdom seems to be that China needs to keep its economy growing at more than 7 per cent a year to prevent the resentments and frustrations of its population from boiling over into civil unrest against corruption and autocracy - and to drag along the rest of a recession-hit world (forget about global imbalances just as long as there's money somewhere).
China has problems, we all agree.


East

It is less often said which part of the Chinese population is likely to bring down the house of cards. Will it be the hard pressed FoxConn worker or the frustrated wheeler-dealer with the illegal helicopters hidden in his warehouse? Because China has telescoped a few centuries of western European social and economic development into a few decades (leaving out the political bit) it is difficult to tell. Which is tragedy and which is farce? In this country the middle class commercial interests got their legitimate place in the scheme of government long before industrialisation and urbanisation transformed the make-up of society and so some sections of it could work for the great social reforms of the nineteenth century that stabilised society as the economy expanded and urbanised dramatically. Not so in China, whose breakneck speed of expansion the west is ever keen to stoke up with incendary industrial and financial devices, whilst below offering a low murmur of distress at the destruction of historic culture and at the impending environmental collapse.

Meanwhile, in the west, as economic growth sinks in more and more countries into negative figures, the question is again how can popular civil unrest and violence be avoided. We have democracy (which at times we tell ourselves it is patronising to assume the Chinese people want - they just want to be able to keep on making mobile phones for us, don't they, like we just want to be able to keep on buying them?), but increasingly, as governments fail to respond to popular discontents and as they accept the impositions of unelected international bodies, democracy is perceived as a sham and an excuse for the accelerating transfer of wealth from the poor to the rich.

West

So where lies the path to the sunlit uplands for us? A leading official of the Chinese sovereign wealth fund knows. Ironic? Perhaps not: the Chinese sovereign wealth fund needs markets like almost no-one else. China, which has been buying in Greece,  plans to bury the West in a different way to that which Mr Kruschev threatened: not in a pile of thermo-nuclear rubble, but in a growing mountain of largely plastic consumer goods, durable only in their powdered detritus in the world's oceans. According to Mr Jin, Europe needs to moderate the pace of austerity - if that is not too bizarre a concept. Austerity must continue; it just needs to be a little less severe, and to go on for longer. For ever, preferably, getting rid of those fibre-sapping and unaffordable social welfare and employment protection provisions. In other words, Europe needs to be more like China. We need 'to work a little harder and work a little longer'. Nothing too frightening, you understand. A touch on the tiller here, a touch on the tiller there. We're all, east and west, in this together: we can go on for ever. The Great Helmsman returns! But is it Mao or Ted Heath?

Meanwhile Foxconn, which, although all one tends to hear about are its vast factories in mainland China, is of course based in Taiwan, that elder child of the marriage of East and West, actually knows what the weather is like in the streets. It is finding that Chinese labour costs are growing too high for servicing the declining real-terms disposable incomes of the West (I expect someone has told Mr Jin) and is busily buying up vast tracts of land in Brazil and planning to open factories in the USA - in places like Detroit. Perhaps the Chinese sovereign wealth fund can invest in them. Yet of course American labour costs are also too high to service the diminishing purchasing power of American consumers - a problem for which Foxconn's answer is said to be making the factories purely automated. Is there still a problem there? Where is the money?

Welcome to Detroit

New Franco-German axis

Withered government: leave it to the rich

Former prime minister Tony Blair joined the debate over the role of philanthropy. In a speech in the US, he said: "The best philanthropy is not just about giving money but giving leadership."The best philanthropists bring the gifts that made them successful – the drive, the determination, the refusal to accept something can't be done if it needs to be – into their philanthropy.


"It is creative not passive; it seeks to disrupt not follow conventional thinking. It steps into areas government is too fearful or too risk adverse to go. It uses technology and its power to change the world in innovative ways."

The law's delay - or the proud man's contumely, or the insolence of office?

http://www.guardian.co.uk/society/2012/mar/09/nhs-reforms-appeal-risk-register

Government and wit

Norman St John-Stevas, Lord St John of Fawsley, who has died aged 82, was as vivid a personality as politics can bear. Mannered, self-applauding, with an aura of camp and given to tiffs and squabbles, he had outstanding intellectual gifts, vitiated, despite an underlay of real scholarship, by eternal public performance.

No-one of course would think of Tony Blair or David Cameron as being 'vitiated ... by eternal public performance'. Yet we no longer have a government of the wits: not since Macmillan has a leading politician dared aspire to wit, as distinct from the obligatory jokes at Prime Minister's Questions. Jokes and wit are not the same thing. You can have other people write your jokes for you, as Mrs Thatcher famously did with 'The lady's not for turning', but wit is a state of mind.

I suppose that is what made Norman St John-Stevens seem so unreliable to his political colleagues. In a political culture that regards revealing one's reasoning, as distinct from one's set conclusion, as a sign of weakness and a threat to smooth and effective process, politics gravitates naturally to the semi-corrupt cultivation of the popular press and the centres of wealth and to the erection of a system of boxes and references as a substitute for thought. (See, for example, any planning officer's report to committee and consider the government's complete helplessness, or surrender, when it seeks to 'do away with red tape'.)

Norman St John-Stevas's offence was that 'He commonly split his time between earnestness and frivolity', but amongst his various achievements he left a solid and lasting contribution to good governance and democracy in his work on the strengthening of select committees in the House of Commons, which deserves to be remembered alongside his frivilous quips and ernest scholarship:

Once, he was asked by David Frost about the colour of his shirt: "What's that – purple?" "No," replied Stevas, "crushed cardinal." Meanwhile, his work on Bagehot grew, with volumes appearing in 1966, 1968 and 1974.

The last bonus

We are repeatedly told that those who run banks and other great enterprises require to be paid enormously because their jobs are so tremendously demanding and those who can do them are so few. I suspect that there are actually quite a number of people who could do them, and the evidence suggests that both the CEOs and the star traders often fail to perform above chance and that they can commit egregious errors, even when warned of their possibility.

Yet to pay such individuals truly exceptional amounts of money helps create the impression, to the impressionable, that they are truly, almost Platonically, exceptional people. For the rest of us, to fall in with this view of the world and to give the idea that we are all to be placed into the positions for which we are pre-eminently fitted, there has been created the panoply of ever-expanding competitive formal qualifications. In education and training, as in the economy, ranking and rating supplant judgement. Such a system favours those who can operate it, either as candidates or providers (witness the recent fuss here about our now privatised secondary education examining boards training teachers how to get the best out of their systems), but, beneath it, privilege and favouritism persist.

This is the new 'world-class' status to which we must all aspire (or, in the case of many labourers in the vineyard, sink) lest we perish. The result, amongst the people generally, is to detroy the hope of good fortune (a necessary element of social content always), the belief in an accommodating society (it is no accident that it is in supposedly meritocratic societies that social mobility has declined), and the faith in the nation as a legitimate and effective expression of collective choice (as para-governmental international agencies and trans-national corporations increasingly dictate terms to states). Across Europe the extremist tendencies flex their muscles in dark and disreputable corners, and Molotov cocktails are a growth industry.

Greece confronts its nemesis

We are all Greece's inheritors

http://www.guardian.co.uk/world/2012/feb/13/greece-bankrupt-ablaze-cradle-democracy

Plus ca change or Apres moi...

En attendant Napoleon:

Never mind the revolution, foreign autocrats, with their nice grasp on permanence, know whom they really need to speak to!

One Whitehall official suggested [Prince] Andrew's continued role reflected the British government's need for his influence in autocratic countries where leaders are not satisfied with contact with a changing roster of ministers.

"He is particularly valuable in some parts of the world where continuity is valued over continually changing personnel."

Democracy in action

Mitt Romney has won the Iowa Republican caucus ahead of Rick Santorum by the narrowest of margins - eight votes.

Romney polled 30,015 votes. Total votes cast were 122,255. The total population of the State of Iowa was estimated by the US Census Bureau in July 2011 as 3,062,309. If one asumes that roughly half the population is entitled to vote in the presidential election, approximately 2 per cent of the electorate have just given their backing to Mitt Romney.

Republicans, we are told, seem set to save Obama's bacon by choosing from a pool of candidates that neither they in general, nor the country as a whole finds very attractive. Yet much may change in the outside world between now and the election.

Russia looks up

Activists from the pro-Kremlin youth group Nashi (Ours)

and, elsewhere, Interior Ministry troops

Greece reposes

6 December 2011 - anniversary of the death of a student protester

Choose your slogan

'We're All in This Togeher' or 'United We Stand'

New dawn

People may be inclined to think that concerns about the loss of democratic control in the economic decisions being imposed upon distressed European countries - Ireland, Greece, Italy and others to come - as a condition of the loans being granted by the IMF, the EU and the ECB are an over-nice indulgence of liberal sensibilities rather than a real concern for genuine popular interests.

That might be wise and worldly if these 'rescue' packages did not amount to deeply political choices that attempt to entrench structures in national economies and society that massively favour highly sectional interests and commit societies to paths leading to major practical and cultural consequences.

It is a time for political choices and if they are not made democratically, when peoples believe themselves to live in democracies, we shall reap as we have sown.

http://michael-hudson.com/2011/12/europe%E2%80%99s-transition-from-social-democracy-to-oligarchy/

http://www.golemxiv.co.uk/2011/12/the-hammer-of-debt/?utm_source=rss&utm_medium=rss&utm_campaign=the-hammer-of-debt

Guilty or not?

Love and hate in Moscow today.

War is the Health of the State

The growth of pervasive state control, so often a response to crisis and social, economic or national collapse, finds its ultimate, expression in the creation of state-sponsored groups outside the established mechanisms of government and democratic control. Its most sinister and rebarbative manifestation was seen in the elite groups of fascist European states, but something similar is found now in the unaccountable patriotic groupings of modern Russia or the shadow government of party and people's army in China.

The process is of course less hindered in any effectively one-party state (Does that include coalitions of previously bitterly opposed rival parties?), and where there exists a shadow institutional apparatus of power. No doubt many will see it as a grotesque loss of a sense of proportion to find something similar, in kind, if not scale or overt intention, in the proliferation in our own country now of 'partnerships', 'pathfinder' projects, fora, and all the coming apparatus of 'localism', that ersatz handing of power to the people that bypasses established forms of democratic accountability, which national governments have been so keen to erode at local level for decades, and passes effective control to energetic interest groups. For politicians, 'localism' comes out of a different phrasebook from 'nationalism'.

Debt or taxes

An interesting post by Golem XIV that elaborates a point I made in my talk to the Northern Contemporary Furniture Makers. See the Talks and articles page of this blog.

Making it up

I would recommend everyone to read this:

http://www.golemxiv.co.uk/2011/11/risk-tricky-stuff/

Hobbes, Locke, Rousseau ... Olli Rehn

According to Wikipedia, 'The social contract is an intellectual device intended to explain the appropriate relationship between individuals and their governments. Social contract arguments assert that individuals unite into political societies by a process of mutual consent, agreeing to abide by common rules and accept corresponding duties to protect themselves and one another from violence and other kinds of harm. Social contract theory played an important historical role in the emergence of the idea that political authority must be derived from the consent of the governed.'

Olli Rehn, well-known as a philosopher in his spare time from his role as European Union economic and monetary affairs commissioner, has developed the theory a little further:

Olli Rehn said that Papandreou's unexpected decision to call a referendum over the bailout agreement had been a "breach of confidence" that had thrown Greece's commitment to its fiscal adjustment programme into question.


"We now have to repair the social contract between Greece and the euro area which should be done in writing," he said, insisting that without written confirmation a critical €8bn aid instalment would not be released.

Demos

Until recently comment on the steady growth of non-democratic decision-making groups and practices in the handling of the European debt crisis has been mostly confined to free-lance comment such as that found on David Malone's blog. It is interesting to find the point now being argued very forthrightly by Larry Elliott in the Guardian