2021-03-02

The End of Global Capitalism and the Rise of China

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by Neil Godfrey

John K.

I once read a thick biography of John Maynard Keynes and a less thick book by John Kenneth Galbraith, The Affluent Society, that expressed a very high regard for Keynesian ideas, and over the years have often found myself thinking back on ideas and turns of phrase in both of those works. I suppose that’s a sign that both Keynes and Galbraith have had an ongoing influence on my understanding of economics. (An engaging high school economics teacher led me towards top marks for the subject in my senior year so maybe the influence goes back to him.) So I was not able to resist reading what looked like a promising refresher and update on the nature of economics by that same Galbraith’s son, James K. Galbraith, on the Brave New Europe website:

James K. Galbraith – What is Economics?

James K.

The end of that article asked the question, What about global Capitalism: can it survive in its current form? and his answer is a neat outline of the history of capitalism since its inception through to today:

Pure global capitalism, such as it was, developed from around 1500 to the end of the 19th century.

It was undermined by the Great War and collapsed in North America, Europe and the British Empire at the end of the 1920s.

It was replaced over the course of the succeeding decades by a mixed economy, rooted in the pragmatic reforms of the American New Deal, the exigencies of the Second World War, and in reactions and adaptations to the competing systems of fascism and state socialism.

The attempt to reconstruct a system of pseudo-unregulated global capitalism began only in the late 1970s, with waves of privatization, deregulation and austerity. That system never fully matured and it has already collapsed, first in the financial crisis [of 2008], and now in the pandemic. So the question of its survival does not arise.

The question now is, what should be built in its place?Answers to that question are already emerging, most prominently in China but perhaps also in Russia and in parts of Latin America. Europe, the UK and North America, where neoliberal ideologues prevailed for decades, must now come to grips with the urgent need for fresh thinking suited to free and democratic societies.

https://braveneweurope.com/james-k-galbraith-what-is-economics (my formatting)

Now that last paragraph set me off on a quest to find what JKG has in mind, exactly, about those countries, especially China.

[John Galbraith] . . . in the 1930s, worked on the New Deal, was charged with price control in World War II, and was a close advisor to Presidents John F. Kennedy and Lyndon B. Johnson while becoming Harvard University’s longest-serving professor. But it was in the 1950s and 1960s that he became the world’s most famous economist and the first ever to reach a mass audience without the backing of any state. (foreignpolicy.com)

Here is an excerpt from a piece written in April 2020. If America in the 1950s and early 60s was Galbraithian (see the insert box), then today China comes closer to that description:

And there is China. We need not be detained by squabbles over whether the Chinese system is capitalist or socialist, whether the most influential economist over modern China is Karl Marx, John Maynard Keynes, or Henry George. Elements of both systems, and inspiration from all three thinkers, can be found in the way China’s economy works today. But 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.

https://democracyjournal.org/magazine/the-pandemic-and-capitalism/ (my highlighting)

That’s quite generalized. Here is a more detailed explanation. It is a clearer focus on what our author means by “Galbraithian”:

In America’s heyday, the dominant economic formation was the large industrial corporation. Giants like General Electric, General Motors, Ford, Bethlehem Steel, International Harvester, and IBM provided the backbone of U.S. military power and technological dominance on world markets. These firms grew up on American soil, survived the Depression, and were buttressed by the New Deal and the mobilization for World War II. In the postwar years, their power was balanced by strong trade unions, the organized voices of consumers and independent scientists, and an engaged government that weighed those voices against those of big business. This was the reality described and endorsed by my father, the economist John Kenneth Galbraith. That reality still exists out there—but America’s industrial firms are no longer the world’s leaders, and those that are, are not in the United States.

Enter Covid-19 to make for the rise of some and the decline of others:

The pandemic has now put Galbraith’s global legacy into stark relief. One can now map out the rise and decline of nations simply by distinguishing between those that have continued along the lines that once defined U.S. economic success as Galbraith saw it and those that fell under the spell of illusions about free, competitive, and self-regulating markets and under the dominating power of finance. The United States today finds itself sadly in the latter group, alongside the United Kingdom. . . .

JKG explains again what the “Galbraithian” world was like before Reaganism and Thatcher when the shareholders, the investors, have become the decisive force. In “Galbraithian” times/nations . . .

The corporation, not the mythical sovereign consumer, set the terms of economic change. It designed, engineered, produced, and marketed to the masses. It was at the same time the architect of novelty and the stabilizing factor. Government helped by keeping predatory finance under strict controls and by vanquishing mass unemployment through public spending and tax reductions, in line with the ideas of John Maynard Keynes. Progress, in a certain sense, was therefore ongoing, steady, and confidently expected to continue. . . .

Then there is China! . . .

Then there is China. In her forthcoming book, How China Escaped Shock Therapy, Isabella Weber demonstrates that China made an explicit choice in the 1980s to shun Friedman’s free market radicalism in favor of Galbraith’s pragmatism and gradualism. China’s post-Mao-era planners made a detailed study of American wartime price controls under my father’s direction at the U.S. Office of Price Administration in 1942-1943 and maintained a central role for large state-owned but autonomously managed corporations in their development strategy. Today, these firms and privately owned newcomers like Huawei are among the world’s leading Galbraithian firms . . . .

What about the Elizabeth Warrens who see the solution to America’s ills in the dismantling of the huge monopolies and Big Tech firms in order to restore a happily genuinely competitive market where individual entrepreneurship can flourish once more? Continue reading “The End of Global Capitalism and the Rise of China”


2020-12-29

Tyrannies and Godfathers

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by Neil Godfrey

China’s Communist Party jails a Chinese citizen journalist for four years for reporting a narrative inconsistent with the one the authorities sought to present:

Her live reports and essays were widely shared on social media platforms in February, grabbing the attention of authorities, who have punished eight virus whistle-blowers so far as they try to stamp out criticism of the government’s response to the outbreak.

UK, Australia and the US have acted even more viciously against Julian Assange:

 

Meanwhile in the US, with the acquiescence of the Republican Party —  Trump’s Pardons Show He’s Just a Mob Boss; His Presidency Is a Criminal Enterprise

Trump’s choices made clear he is a crime boss.

Four Blackwater mercenaries who, working for Trump ally Erik Prince murdered Iraqi civilians, were pardoned. But there was no pardon for Jeremy Ridgeway, the soldier-for-hire who pleaded guilty to manslaughter, testified against the others and was sentenced to a year and a day in federal prison.

Roger Stone, dirty trickster confidant; former General Michael Flynn, national security adviser who was on the Kremlin payroll; and 2016 campaign manager Paul Manafort were pardoned. But Trump didn’t pardon Manafort deputy Rick Gates, who turned state’s evidence and confessed.

Earlier, Trump pardoned Rod Blagojevich, the former Illinois governor convicted of trying to sell a Senate seat. But there was no pardon for lawyer Michael Cohen, Trump’s longtime fixer who confessed to committing felonies at the direction of unindicted co-conspirator “Individual 1,” identified in federal court as Trump.

In true mobster fashion, Trump once referred to Cohen as a “rat” for confessing. He praised Manafort for not “flipping” to testify against him.

The boss takes care of friends and allies if they lie for the boss or keep silent, but does nothing for those who cooperate with law enforcement.

2020-09-01

The Shape of the New World Dawning?

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by Neil Godfrey

American readers closer to the mises en scène will be able to help this outsider more clearly focus his observations.

From here in Australia I see

    • a President of the U.S. who speaks out against one side involved in violent clashes there, and speaks defensively on behalf of the others involved and who are his supporters;
    • a President of the U.S. who blurs into one violent image both peaceful and violent protests (those whom his own supporters oppose) as if they were all one and the same and all violent and destructive;
    • a President who focuses almost to the exclusion of all else the violence and destruction of one side without at any time addressing the issues, the complaints, the causes both immediate and long-term, that has led to the protests in the first place;
    • following from the point above, a President who frames all the protests (all of them being portrayed as violent) as a “law and order” issue, that is, as nothing more than a situation that needs to be crushed by force.

Is the above a fair synopsis?

Oh, and one other thing that keeps bugging me. An Australian Prime Minister who happens to be a Pentecostal fundamentalist and a bit of a narcissist (Australian style) and comes across as a pet puppy keen to make a good impression for his master so has dutifully acted on his master’s wishes and called on an investigation into a prejudged assessment of China’s criminal negligence with respect to the coronavirus. That’s all fine except that China is now powerful enough to throw around the sort of bully beef we expect the U.S. to apply to disobedient small-fry. Now Australia is subject to early trade sanctions and other disincentives (putting a squeeze on our hitherto lucrative Chinese student intake into our universities) from its largest trading partner as well as “arbitrary” detention of its citizens who happen to be in Chinese territory. Nice one — that sort of thing is supposed to happen to “them”, not to “us”. I still envy New Zealand for maintaining a degree of independence that seems far too rare in modern Australian history.

Posts on Vridar have been somewhat patchy in regularity lately with extended family business taking over priorities at the moment, but the above thoughts have been playing on my mind. So here they are.


2019-06-04

Tiananmen Square — Khartoum

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by Neil Godfrey

4th June 1989, the images are still fresh (link is to Four Corners program). Time will tell if the State can erase memory of 4th June 1989 from future Chinese generations.

I learned last night watching the Four Corners program that soldiers came to the homes of students in the middle of the night to take them away. Hours later the parents would be given papers to sign acknowledging that their children had died in an accident or while trying to escape if they wanted their bodies returned for burial.

https://www.abc.net.au/news/2018-06-04/my-memories-of-the-tiananmen-square-massacre-as-a-young-boy/9832850

Meanwhile, 4th June 2019, with less worldwide publicity “for some reason” —

https://www.theguardian.com/world/2019/jun/05/sudan-death-toll-rises-to-60-after-khartoum-pro-democracy-sit-in  Jason Burke is the author of a book surveying the rise of Islamist extremism that I have discussed here. See posts at https://vridar.org/?s=Jason+Burke


2018-06-04

Tiananmen Square (My Uncomfortable Visit)

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by Neil Godfrey

In 2005 I had the opportunity to visit Tiananmen Square. It was an eerie, haunting experience not simply because of knowing what had happened there 16 years before but because of the pressure to remain silent and forget.

From the night of June 3, 1989 until early morning, Chinese soldiers carried out a clearance operation on and near Beijing’s Tiananmen Square, a crackdown on what the Chinese Government wrote off as a “counter-revolutionary riot”.

Western media reported at the time that the death toll from the resulting massacre ranged from 100 to 3,000, but according to a secret UK diplomatic cable released last year, up to 10,000 protesters may have been killed. . . .

Over 1 million people were occupying Tiananmen Square in a show of solidarity by mid-May, but on June 2, China’s rulers made the order to send tanks and armed soldiers into the heart of Beijing.

ABC Report

Only a year earlier we had been treated to high-tech 3-D visuals of Tiananmen Square as a proud jewel of the Chinese exhibit at Brisbane’s World Entertainment Expo.

The event “never happened” according to Chinese government and educational institutions.

Born in 1990, Ming says he never even heard about the Tiananmen Square massacre until he was at university.

He happened to overhear his roommates talking about the so-called June Fourth Incident — a topic which is completely censored by Beijing and inaccessible for ordinary Chinese people.

It is not mentioned in Chinese state media, and it is not taught in schools. It is also a taboo topic even within some Chinese families, including Ming’s.

In 2005 soldiers stood guard at key points to enforce …. I’m not sure what. Presumably the curfew: no-one was allowed there after daylight hours. Possibly against large groups or persons they deemed suspicious from approaching. It remained a vast empty space broken in one direction by Chairman Mao’s mausoleum and queues of people slowly moving past his embalmed body. I felt very conspicuous stepping far away from that shrine to the vast empty expanse of the rest of the square that particular afternoon, with only a handful of others in the area, and with my movements being watched by the many young guards.

What agonized me was the failure of my Chinese hosts to indicate the slightest awareness of why I might have been interested in exploring further there at all after I had completed the obligatory look at Mao’s embalmed corpse. There was the usual talk of old history, of Mao, of the architectural features. . . . I finally burst it out, though nervously, softly: What did they think of what happened …. I don’t think I had the chance to finish my sentence. One girl butted in with a tense, anxious tone (or was that my imagination?) to tell me that yes, some bad people had been there at one time and how soon afterwards soldiers came to her family’s house (far away from Beijing) to ask about her. I think she had been a student at that time. I was told that her parents and neighbours assured the soldiers that she was a “good girl” and was not mixed up with any of those very bad hooligans causing some very bad trouble in Beijing. The soldiers, she told me proudly, went away smiling having been assured by parents and neighbours that she was, as they said, a “good girl”.

The reaction to my question left me in no doubt that I had seriously gaffed. It was not my place to raise such a question about such a “bad thing” that happened so long ago. Was I some sort of sympathizer with “bad people” for even thinking and wanting to ask about that horrible “forgotten” time?

That was the end of my visit to the vast and — except for the guards and the people immediately surrounding Mao’s mausoleum — practically empty Tiananmen Square.

Photo: Guo Jian’s artwork The Square. It’s a model of Tiananmen Square covered in pork mince. (Supplied: Guo Jian)

2013-12-29

Rewriting the History of Modern China

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by Neil Godfrey

dowagerHow history changes! At school I learned that nineteenth century China was easy-pickings for European powers who were able to easily kick aside her antiquated army and carve out for themselves “spheres of influence” for their own trading benefits as they willed. The most scandalous of these occasions were the Opium Wars in which Britain forced the Chinese imperial government to open up the Chinese populace to British merchants making a “killing” selling Indian opium.

Two reasons were always given for the ease with which Westerners were able to dominate China so easily:

  1. The Chinese felt so superior to the West, disdaining the “barbarians”, that they had no wish to learn from them or adopt any of their ways, not even their superior technology;
  2. The Chinese from the later nineteenth to the early twentieth century was effectively ruled by a Dowager Empress who was authoritarian yet weak and loathed Westerners and resisted any form of modernization.

Maybe those points need to be nuanced but that’s essentially how I recall my high school lessons of China before the Republican movement, the Japanese invasion and the Communist Revolution.

One thing always stood out: the Empress Dowager was bad news for China.

All that has been completely turned on its head since a new book by Jung Chang, Empress Dowager Cixi: The Concubine Who Launched Modern China. The author writes with the benefit of documents released for the first time from Chinese and Japanese archives.

It turns out that far from being the brake on modernizing China the Empress Dowager was in fact the driving force behind modernization. At the time of her death she was even working towards establishing a Constitutional Monarchy that would have given millions of Chinese the right to vote. So much that I learned about pre-communist and pre-republican China has been completely turned on its head.

Among the reforms she was responsible for: Continue reading “Rewriting the History of Modern China”


2012-01-13

Good News!

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by Neil Godfrey

Chinese tree offers hope for alcohol antidote

This appeared on the national ABC’s PM program last night: Herbal cure for alcoholism

An extract from an oriental raisin tree – a compound called DHM – has proved its worth as an alcohol antidote in a series of experiments on rats. . . .

But she says those dreaming of a magic antidote to drinking too much can think again. The presence of DHM also reduced the cravings for alcohol – a factor that Dr Liang says could prove invaluable in treating alcoholism in humans. . . .


2008-04-10

Human rights in China

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by Neil Godfrey

The Tibetan separatist movement is a red herring (post 1, post 2). Human rights issues in China deserve a far more comprehensive and incisive response from westerners.

For a more comprehensive picture see the 2007 Amnesty International Report on China for details of abuses:

  • against human rights defenders
  • against journalists and internet users
  • against rural migrants
  • against women
  • against spiritual and religious groups
  • use of death penalty against 68 offences, including non-violent ones
  • use of torture, arbitrary detention and unfair trials

not forgetting specific abuses and applications of the above in relation to:

  • Uighurs
  • Tibetans
  • North Korean refugees
  • refusal to apply the UN Refugee Convention to Hong Kong

Supporting, or failing to distinguish, separatist movements that are contrary to international law is doing a disservice to the thousands whose lives are destroyed and ruined throughout China through human rights abuses.