We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.
Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]
I was switching from television station to television station when I came upon a show (on “Sky 3”) called Riverdance In China.
OK, I thought, a group of athletic Irish people dancing in China – I will see what the show is like.
And then an Irish women’s voice said something close to the following:
“The Chinese Emperors tyrannically isolated the country from the outside world, but in the first years of the 20th century the Communists under Chairman Mao overthrow the Emperors and the lives of hundreds of millions of people gradually improved…”
Perhaps it got better after this, but I do not know because I turned it off.
Well once the Emperors of China may indeed have isolated China from the outside world, but that certainly was not true in the “early years of the 20th century”, when one could, for example, buy Chinese railway bonds on all the major exchanges of the world.
The Chinese Communists did not overthrow the Emperors – the Chinese Communist Party did not even exist in 1911 when Sun Yat-Sen (and his protégé, Chiang Kai Shek) overthrew the Qing Dynasty.
And as for the life of the Chinese people gradually improving under the Communists, in reality tens of millions of them starved to death during the collectivist ‘Great Leap Forward’ and the rest of it. About 60 million people were murdered under Mao, so perhaps ‘gradually improved’ might not have been the most appropriate choice of words.
Also even the most statist Emperor never demanded that people make steel in their back yards (you can guess what this steel was like) or launched a campaign to exterminate birds in the demented hope that it would improve the harvest (surprise, surprise, there was a plague of insects).
Perhaps the show introduction was, unintentionally, amusing for people who have read books like Mao: The Untold Story, but remember – a lot of young people (and not so young people) get what knowledge of the world they have from sources like the introduction to this show, which is a great pity.
In China, the State does not muck about; in the wake of scandals about the safety of various Chinese products for export, the former head of the Chinese State Food and Drug Administration, Mr. Zheng Xiaoyu has been executed for taking bribes. Zheng Xiaoyu can count himself unlucky, given the maze of corruption that is a fact of life in China. But China is very sensitive about the safety of its products at the moment, and all the more so with the Beijing Olympics not far away.
And whoever Mr Zheng’s successor is, he or she will no doubt face similar temptations and dangers. For regulation is nearly as ubiquitous as corruption in China:
Regulators said their ability to monitor food and drug purity would greatly increase by 2010, when they enhanced their ability to respond to accidents and establish a national product recall system.
The authorities said inspectors would start shifting posts more often to prevent corruption, and that they would inspect a wider range of goods more frequently to ferret out fakes.
But they acknowledged that they face challenges in eliminating unsafe products. China has about 200 million farms, many of them less than an acre in size. It has nearly 450,000 food processing companies, nearly 80 percent with 10 employees or fewer, said Lin Wei, a senior official at the General Administration of Quality, Supervision, Inspection and Quarantine.
“This is our national condition,” Mr. Lin said. “It is our hope that by 2010 we can reduce the number of small food workshops by 50 percent and effectively curb law breaking and counterfeiting.”
Officials acknowledge that responsibility for food and drug safety involves as many as 17 government agencies, ranging from the Ministry of Health, which sets hygienic standards, to the Public Security Bureau, which has power to investigate criminal cases.
For Chinese companies, dealing with up to 17 agencies, the temptation to take shortcuts through corruption must be overwhelming. The answer for China must surely lie in a simplified administration system, not yet another layer of red tape.
A very large box that I need to tick in my travel ambitions is Japan (a sister-in-law of mine is Japanese). Via the excellent website of Stephen Hicks, I came across this site showing some wonderful photos. It certainly encourages me to get on a flight to Tokyo as soon as I can plan and afford it.
The Japanese, judging by the sheer scale of lighting, clearly do not worry over-much about their ‘carbon footprint’, to use the current cant expression of our political classes. Excellent.
To have a free and prosperous country, it is important to have strong institutions underpinning things like contract and property rights. Yet all too often we forget the roll of social attitudes and world-view in creating wealth and its handmaiden, liberty.
There are two interesting articles in The Telegraph today (on the same page in the print version in fact) that shows that places like Russia and China may be vastly wealthier and freer than they were under the darkest days of Communism, but both those places have yet to develop either a culture that expects liberty, understands the implications of state money (they are hardly alone in that) or accepts the usefulness of profound outside influences.
The Chinese government is trying to lure foreign educated Chinese back to China, which suggests at least the people at the top are aware that there is value in the way the rest of the world does things..
Under the government’s new incentives, returnees will be able to work wherever they like, regardless of which city they have a residence permit for, and will be offered higher pay, while their families will receive preferential treatment.
Which is interesting as that means most people still cannot live and work where they like, requiring internal passports and state residence permits. How can a place with such restrictions on a person’s ability to sell their own labour ever hope to become affluent and truly dynamic? Can they not see the link between the ability of individuals to make fundamental choices and the effectiveness of markets?
Those graduates who return, expecting their foreign education and work experience to be a passport to a glittering future in the new China, frequently face discrimination rooted in a deep-seated distrust of those who have left the motherland for the West.
Which makes me wonder, do most Chinese people not realise how much more affluent the First World is than they are? I am guessing they do but this is trumped by the cultural imperative for Chinese-ness… the sort of mindless nationalism that is thankfully largely dead in much of the Western world. This suggests to me that regardless of how China’s leaders tinker around, if Chinese culture is that obsessed with China-is-always-best attitudes, there are serious limits to their ability to grow into a prosperous and civil society.
Also in Russia, most of the institutions associated with advanced nations (courts, property rights, contract law etc.) are not known for their robustness or independence from politics. But also I wonder how much the culture in Russia allows people to imagine things any differently?
Russia’s ageing but revered scientific geniuses are on a collision course with Vladimir Putin after the 1,200-member Academy of Sciences rejected Kremlin proposals to end its unique independence from state control […] Now, however, its autonomy is threatened by a proposed new charter which would give the government control of its management, funding and multi-billion pound property holdings. Kremlin officials claim the institution needs dragging into the modern world to harness its members’ brainpower for lucrative scientific patents and commerce. But critics fear it will fall victim to Mr Putin’s appetite for control and his distrust of free-thinking institutions.
Which is interesting. But then…
The Academy receives £870 million in federal grants, owns about 400 affiliated institutes and employs around 200,000 people across Russia. Prof Valery Kozlov, 57, its vice-president, said: “This is simply an attempt to seize control of our finances and property.”
I am sure Professor Kozlov is a very smart man, yet I wonder if it even crossed his mind that perhaps his Academy should respond to Putin’s power grab by refusing to take any more state money. If they are a centre of excellence as claimed, surely there must be companies and institutions around the world which would love to fund them and allow them to be truly independent of the state.
Yet the notion that everything must happen top-down with the blessing of the state is probably so deeply ingrained that the reality of what is involved with making yourself independent does not track at all.
A tip – here is the same video but with better translated subtitles. Alas, the embedding has been disabled, which is rather stupid. Fits the spirit of the thing.
Tyler Cowen notes an unsavoury fact about the Chinese economic miracle:
…of the 3,220 Chinese citizens with a personal wealth of 100 million yuan ($13 million) or more, 2,932 are children of high-level cadres. Of the key positions in the five industrial sectors – finance, foreign trade, land development, large-scale engineering and securities – 85% to 90% are held by children of high-level cadres.
Cowen lifted the above quote from an interesting article that details how the regime in Beijing controls economic data coming out of the Middle Kingdom, which helps to prompt foreign investors to keep funding the great confidence trick that is the modern Chinese economy.
The family connections of China’s super-rich and captains of industry must be considered alongside rosy economic statistics provided that expound China’s development. These filial links between the commanding heights of China’s supposedly private sector and its government betray the fact that China Inc. is the unholy alliance of a dictatorial regime and the application of corrupted ‘free’ market ideals. Such an arrangement will fail in due course, and will probably fail spectacularly since it has come this far.
The next time you read someone denounce the United States as a haven of unfettered capitalism, read this story and similar ones like it. It is a reminder that the cause of free trade has been on the back foot in the United States for some time.
Regardless of one’s feelings about the dark side of China – its dreadful human rights record, for starters – to slap tariffs on the country’s imports to buy a few votes from special interests in the US will come at a high price for future global economic growth and at a cost to US consumers of products like paper, steel or electronics. Adam Smith wrote the Wealth of Nations over 230 years ago. One might hope that his lessons would have sunk in by now.
When commenting on the recent Chinese stockmarket meltdown, Glenn Reynolds wondered if a prediction posted on Samizdata some time ago could be coming to pass. Whilst exposure for Samizdata on Instapundit is nice, I think Mr Reynolds is wrong if he perceives this stockmarket wobble to be a potential opening salvo of the economic holocaust presaged on these pages early last year. Far from heralding the collapse, it will delay the inevitable.
In spite of a widespread belief in China’s embrace of free-market capitalism, enormous economic distortions characterise modern China’s economy. For example, why is it that, relative to China’s economic footprint, the Chinese stock market is rather pathetically stunted – especially in light of the vast savings pool the Chinese people have accumulated? As mentioned in the above article, the Chinese are great savers and they tend to deposit these savings into bank accounts because alternative investment opportunities are limited compared to those offered to a Western investor. Consider the following:
Why does the Chinese investor not sink his surplus funds into foreign commodities? Because he is restricted from doing so.
Why does he not invest in Chinese stocks? Because he (probably correctly) views the Chinese stock market as being distinctly ropey.
In light of these state-imposed distortive realities, what does one do with one’s savings? One puts them in the bank, of course. Predictably, the banks are awash with deposits. Under these circumstances, the principles of fractional reserve banking have been taken to the extreme in China, allowing the central government to durably zombify huge segments of the otherwise bankrupt state-owned industrial sector by forcing the “big four” state-owned banks to continuously loan depositors’ money to these failed state enterprises, in the full knowledge that these loans will never be repaid.
This fiscal expedience allows the central government to postpone the nasty (and potentially regime-threatening) hangover that inevitably follows a sustained attempt at central economic planning like that witnessed during the Mao era. Unfortunately, it cannot continue indefinitely. Firstly, it provides no market incentive – the only incentive that works – for the wayward state-owned enterprises to reform. If they do not reform into conventional free-market actors, they will always require such charity. Secondly, this charity can only continue if Chinese bank account holders continue to top up (or at the very least maintain) their balances.
Of course, the central government knows the above only too well. If China Inc. in its current incarnation is to survive, it is critically important that the Chinese do not withdraw too much of their savings from the state-owned banks to invest in other pursuits, as this will cause the banking system – and “socialism with Chinese characteristics” – to collapse. The central government probably engineered the recent stockmarket fluctuation to buttress the perception of insecurity that shrouds potential investment targets like Chinese stocks, and are no doubt well pleased with the message that was subsequently delivered to the average Chinese investor. This does not mean that the current Chinese economic model is now secure – it will unravel at some point in the future. However, that point has been postponed with a ‘hair of the dog’-type solution, which will make the eventual hangover even more severe.
The central government has merely bought some time.
I am still in Mozambique, although I shall be getting on a plane to Johannesburg in a few hours, and then another to London right after that. My trip has been a very brief one. I came to Johannesburg for a friend’s wedding, and (partly drivern my great love of things Portuguese) then spent a few days in Mozabique after that. It has been well worth it. (However, upon meeting some members of the South African branch of the Jennings family, I did have to turn down an invitation to visit them at their private game lodge as I had already booked the trip to Mozambique. That was a shame).
I have had a fascinating and enjoyable time, although I have only been able to look at a small area in the south of the country: Maputo, the Ilha da Inhaca, and Catembe. I now know that some day I really must see the Ilha da Mozambique.
Of course, what I would really like to do now is take another couple of weeks, and work my way up the entire length of Mozambique to Malawi and Tanzania. But of course, I do not have time, and in fact in theory I am going to work in London tomorrow. (Who am I kidding? What I would really like to do is take three months, and work my way all the way to Cairo).
So I don’t think it will be long before I visit Africa again. I have lots more to write, but that can wait until I am back in London.
A law firm I use sends out a regular newsletter to their business clients. This arrived in my mailbox some time back. At first I just read it and thought ‘interesting’. But reading it again, I think it may be of interest to some Samizdatistas.
Sections 1 and 2 seem reasonable enough. Section 3 is iffy. But, starting with section 4, some things definitely look like, if actually enforced, they will have a substantial effect on business in China and its overall economic trends. Things like this are what may provide concern for China’s continued economic growth:
Company Rules
Current Law – With no guidance or requirements in the current law, employers often draft their own employee handbooks, manuals and work rules. Enforcement is very similar to that in the United States, with fairness and degree of conduct weighed.
Draft Law – Essentially, every employer policy, rule and procedure that governs its employees must be discussed and approved by the union or employee representative. Rules unilaterally imposed by the employer will be void. The term “employee representative” is new and remains undefined in the draft law. There are also unique challenges for employers posed by this new provision. This provision fails to recognize the fluid nature of employer policies and rules. As stated, every change must be approved by the trade union or employee representative, which will inevitably lead to delay in timely implementation. And, despite the trade union’s power to effect employee policies and rules, an employer is ultimately on the hook for what is implemented. Finally, it is worth noting that this provision does not contain any incentive for the trade unions and/or employee representative to negotiate with employers.
We have a lot of commenters and contributors who travel to China; presumably some of them have business there. I would be interested in knowing what they think of these proposed labor market reforms. Will China actually try to enforce all of these parts of the law, or is it just for show? And if they do enforce it, what will the repercussions be?
As I haverecounted, on my way home to see family in Australia in December I stopped in South Korea for a few days. The trip was principally a city break: I had a look around Seoul. Seoul was in many ways very impressive, but it was also a city striking in its normality. It is a modern, technologically advanced city. The subway system works extremely well. There are McDonald’s and Starbucks outlets everywhere (this is a rare market where a local McDonald’s clone has apparently outdone the original. On the other hand, all Korea’s coffee shops belong to Starbucks). Buildings are modern. People love their mobile phones. Certain Korean brands are perhaps more prominent than they would be in a more balanced economy and they seem to realise this though. Samsung and LG, for instance, seem to market many of their products under local brand names, leading to iconic and very familiar Korean products being present in Korea only under unfamiliar brand names. The city feels extremely safe, it is very clean, and it is about as low stress a place to visit as can be imagined.
The only hint that complete insanity begins less than 50km to the north is only a small one: the fact that uniformed soldiers are to be seen regularly on the streets. There is nothing threatening or remarkable about this. These are just ordinary 19 year old guys in the middle of their compulsory military service. You see them catching the subway, or having lunch in fast food restaurants. These are just young guys going about their lives, who happen to be wearing fatigues. There are many other cities where you will see the same thing. However, now that most developed countries have abandoned compulsory military service, these cities are fewer than they used to be, particularly in countries as advanced as South Korea.
But Korea has retained compulsory military service, and this is because the most heavily defended border in the world lies less than 50km north of Seoul. Of course, I had to go to see it. One can only go into the Demilitarized Zone by going on an organised tour. These are run by both the local USO and by local Korean tour companies. The guidebook recommended the USO tour as “the best tour” but the days on which it ran were not convenient with my schedule, so I booked myself on one of the locally run tours. This turned out to be just fine. However, perhaps because most English speakers go on the USO tour, English speakers were in a minority on this tour. Most of the people on the bus were Japanese. Only six of us were English speakers (myself, three Singaporeans, and an American engineer based in Seoul who was on the tour with his adult daughter who was visiting him for Christmas). There was also a Korean couple. This is apparently rare. Korean civilians are not normally allowed in the DMZ, and those that wish to go on the tour have to apply six months in advance, in which time a thorough background check is undertaken on them, apparently to make sure they are not the sorts of people who are likely to wish to defect to North Korea or otherwise allow the enemy to gain propaganda points (this seems like a deeply peculiar thing to do, but apparently once in a while someone is nutty enough to want to try it). In any event, their presence on the tour was apparently quite unusual, as the English speaking guide remarked upon their presence. And of course, there was no ‘Korean speaking guide’ (although the guides were both Korean and thus clearly spoke the language). The tour was conducted in Japanese and English, and the English and Japanese speaking guides took turns to speak.
When you drive north from Seoul, you realise what a huge metropolitan area the city is at the centre of. (It depends how you measure it, but there is a case for Seoul as the second largest city in the world, which is doubly impressive given that the population was reduced to a few hundred thousand during the Korean War). Urban areas and manufacturing centres are beside the road almost all the way to the border (the LG/Phillips LCD display factory is no more than 10km from the DMZ, so our flat screen television supply is one of the first things we shall lose upon the start of World War 3).
As we drove north the guides gave us various useful pieces of information, such as that we should not run off into the bushes “as there are many minefields”, and that it was very important that we not taunt or gesture at any North Koreans, as if we did they would take our photographs and use them for propaganda purposes against the free world (also, our tour would likely be terminated immediately).
I came across the Moses Wine novels of US blogger Roger L. Simon after reading his blog a few months. Blogging has opened my eyes to authors I might never have encountered before, and I am sure many readers of this site probably had similar experiences. I am a fan of John Scalzi’s science fiction books, for example, and came across them after seeing favourable mentions over at Instapundit. And so on.
I have been enjoying Roger’s book, Peking Duck, which relates the tale of Moses Wine’s trip to China in the late 1970s during the years immediately after the death of Chairman Mao. Wine is persuaded to go on a trip with a bunch of liberal-leftist writers, publishers, fashion models and various other Californians by his Aunt Sonya, who is a sort of ageing communist straight out of central casting. The group with whom Wine travels are shits of varying degrees of ghastliness, egomania and falseness. The book flags up Roger Simon’s own gradual shift away from socialism and Wine’s own observations on China and his travelling companions are well observed, all the more so for not being overtly political. It is a fictional version of PJ O’Rourke’s wonderful article, ‘Ship of Fools’, which depicted a group of far-left travellers to the former Soviet Union in his book, Republican Party Reptile.
The fondness among a certain demographic for communist and repressive regimes has not died out. By coincidence, blogger Matthew Sinclair recently fisked an appalling piece of flim-flam by the British writer Will Hutton, who can still not bring himself to acknowledge the full scale of the slaughter perpetrated in Mao’s China. (Hat-tip, ASI blog).
Of course, in reflecting on such matters, we should not forget that on the other end of the spectrum, there were plenty of people, like the Mitfords and so on, who were only too happy to travel to places such as Italy in the 1930s and drool over the supposed efficiency and orderliness of Fascism, or more recently, to defend ‘strong men’ types such as Saddam Hussein. Human capacity for folly is not confined to the left side of the spectrum.
The Samizdata people are a bunch of sinister and heavily armed globalist illuminati who seek to infect the entire world with the values of personal liberty and several property. Amongst our many crimes is a sense of humour and the intermittent use of British spelling.
We are also a varied group made up of social individualists, classical liberals, whigs, libertarians, extropians, futurists, ‘Porcupines’, Karl Popper fetishists, recovering neo-conservatives, crazed Ayn Rand worshipers, over-caffeinated Virginia Postrel devotees, witty Frédéric Bastiat wannabes, cypherpunks, minarchists, kritarchists and wild-eyed anarcho-capitalists from Britain, North America, Australia and Europe.
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