Alain Anderton in The Guardian
A Freedom of Information request by the Times, showed that Economics, my A-level textbook and the “bible for those seeking a handle on basic economics”, was the most issued book from the library of the Bank of England. Since it was first published in 1991, the book has been the bestselling text in the A-level economics market. Generations of economists have learned their basic economics from studying it. However, it isn’t the economists at the Bank of England who are borrowing the book now. The bank has helpfully explained that it provides development for secretaries, graduates and school leavers. Panic over – the Bank of England is not being run by economists consulting a school textbook.
What is good about this news is that it means the Bank of England is serious about education and professional development. In Economics, you will find out that these are essential for the growth of the economy. They raise productivity levels of workers and contribute to our national wellbeing. Other topical points raised in the book include the fact that increasing the supply of oil on to world markets will lead to a fall in the price of oil; if you cut government spending, at least in the short term, aggregate demand will fall and so will GDP; that global warming is the result of market failure; and that directors and managers of companies might be more concerned with maximising their own benefits than the benefits of the shareholders of the company.
It is also good news that people want to find out about economics. Since the financial crisis of 2008, the numbers of people studying A-level economics have more than doubled, suggesting that these uncertain times have sparked the curiosity of 16- to 18-year-olds about the world in which they live.
Economics at A-level is fundamentally about studying models: ways of looking at the world and making sense of it. But it is also about evaluating the world around us. Was there an alternative for the UK to fiscal austerity in 2010? Does it matter that the UK persistently runs a current account deficit on the balance of payments? Should we regulate banks more? Would a significant rise in the minimum wage be good or bad and for whom? In A-level exams, only candidates who can show they understand basic economic models and appreciate that there are many sides to each issue will get top marks.
Should our politicians be studying some basic economics? The answer to that is obviously yes. What is particularly disheartening about much current political discourse is the failure of politicians to admit that there will be costs and disadvantages to their policies. Our adversarial system means that any such admission is seized upon by the media and blown up out of all proportion. The simple fact is that almost any economic decision has its costs and benefits.
The first concept an A-level student may well learn is the principle of opportunity cost. If you buy a car, you lose the benefits of what you could otherwise have bought with that money. If the government cuts taxes, what are the benefits that are going to be lost as a result of that decision, benefits like higher government spending or a lower national debt? However, to some extent we get the politicians we deserve. Too many people seem to think that there are simple answers to complex problems; we don’t want to pay for the choices we make. For example, we want high-quality public services but we don’t want to pay for them in taxes.
Our grasp of economics would be more mature if the acceptance of costs and benefits that are being acknowledged in classrooms were also being acknowledged at our dinner tables, in our local council chambers and in parliament.
Wednesday 25 March 2015
Tuesday 24 March 2015
Inflation falls to 0%: what does it mean for the UK economy?
With average earnings growing by just under 2%, living standards should rise and interest rates should remain low but it’s not all good news
Larry Elliott in The Guardian
Britain is within a month of a period of deflation. When the figures for March come out next month lower energy bills mean that the cost of living will be lower than it was a year earlier.
These are uncharted waters for the UK, at least in the modern era. There have been times when inflation has turned negative but they have been few and far between since the second world war, and there have been none since the move to the consumer prices index as the preferred yardstick.
The general assumption is that this is good news, for two reasons. The first is that the fall in inflation boosts living standards, because wages are rising faster than prices. Wages have risen extremely slowly since the recession of 2008-09 and even against a backdrop of falling unemployment are currently only going up by 1.6% a year.
But the sharp drop in oil prices in the second half of 2014 has pushed inflation lower and meant those modest wage increases now stretch further. This is clearly welcome news for the government, eager to fend off Labour’s accusation that the coalition has presided over a cost-of-living crisis. The opposition will say that the recent increase in living standards does not make up for the earlier falls.
The second boost to consumers comes from the outlook for interest rates. It will come as no surprise to the Bank of England that inflation now stands at zero, and the Bank’s governor, Mark Carney, has said it would be “foolish” to cut the cost of borrowing in response to what is thought to be a temporary fall in commodity prices.
That said, the Bank is not going to be in a hurry to raise rates either. All nine members of the Bank’s monetary policy committee are in favour of official interest rates remaining at 0.5%, which is where they have been since early 2009. They look like remaining there for the rest of this year, and one MPC member – Andy Haldane, the Bank’s chief economist – says he can contemplate voting to cut borrowing costs.
That’s because there’s a potential dark side to the fall in inflation, namely the risk that it becomes a permanent feature of the economic landscape. The reason the majority of economists view February’s zero inflation as benign is because they think lower unemployment will put upward pressure on wage settlements. Higher pay deals will start to push up inflation at a time when last year’s drop in oil prices starts to unwind. There is, on this view, little prospect of deflation becoming embedded, as it did in Japan.
This, though, assumes that wage settlements are not dragged lower by the drop in inflation. The fact that average earnings are growing at an annual rate of below 2% even after two years of a relatively robust period of growth is indicative of a labour market where employers are able to secure workers cheaply. They may be tempted to be even less generous once inflation goes negative.
Larry Elliott in The Guardian
Britain is within a month of a period of deflation. When the figures for March come out next month lower energy bills mean that the cost of living will be lower than it was a year earlier.
These are uncharted waters for the UK, at least in the modern era. There have been times when inflation has turned negative but they have been few and far between since the second world war, and there have been none since the move to the consumer prices index as the preferred yardstick.
The general assumption is that this is good news, for two reasons. The first is that the fall in inflation boosts living standards, because wages are rising faster than prices. Wages have risen extremely slowly since the recession of 2008-09 and even against a backdrop of falling unemployment are currently only going up by 1.6% a year.
But the sharp drop in oil prices in the second half of 2014 has pushed inflation lower and meant those modest wage increases now stretch further. This is clearly welcome news for the government, eager to fend off Labour’s accusation that the coalition has presided over a cost-of-living crisis. The opposition will say that the recent increase in living standards does not make up for the earlier falls.
The second boost to consumers comes from the outlook for interest rates. It will come as no surprise to the Bank of England that inflation now stands at zero, and the Bank’s governor, Mark Carney, has said it would be “foolish” to cut the cost of borrowing in response to what is thought to be a temporary fall in commodity prices.
That said, the Bank is not going to be in a hurry to raise rates either. All nine members of the Bank’s monetary policy committee are in favour of official interest rates remaining at 0.5%, which is where they have been since early 2009. They look like remaining there for the rest of this year, and one MPC member – Andy Haldane, the Bank’s chief economist – says he can contemplate voting to cut borrowing costs.
That’s because there’s a potential dark side to the fall in inflation, namely the risk that it becomes a permanent feature of the economic landscape. The reason the majority of economists view February’s zero inflation as benign is because they think lower unemployment will put upward pressure on wage settlements. Higher pay deals will start to push up inflation at a time when last year’s drop in oil prices starts to unwind. There is, on this view, little prospect of deflation becoming embedded, as it did in Japan.
This, though, assumes that wage settlements are not dragged lower by the drop in inflation. The fact that average earnings are growing at an annual rate of below 2% even after two years of a relatively robust period of growth is indicative of a labour market where employers are able to secure workers cheaply. They may be tempted to be even less generous once inflation goes negative.
Monday 23 March 2015
The Coming Chinese Crackup
The endgame of communist rule in China has begun, and Xi Jinping’s ruthless measures are only bringing the country closer to a breaking point
Chinese President Xi Jinping, front center, and other Chinese leaders attend the opening meeting on Thursday of the third session of the National People’s Congress at the Great Hall of the People in Beijing. PHOTO: XINHUA/ZUMA PRESS
The Gate of Heavenly Peace in Beijing’s Tiananmen Square, the site of pro-democracy demonstrations in 1989. PHOTO: NATIONAL GEOGRAPHIC/GETTY IMAGES
China-watchers have been on high alert for telltale signs of regime decay and decline ever since the regime’s near-death experience in Tiananmen Square in 1989. Since then, several seasoned Sinologists have risked their professional reputations by asserting that the collapse of CCP rule was inevitable. Others were more cautious—myself included. But times change in China, and so must our analyses.
The endgame of Chinese communist rule has now begun, I believe, and it has progressed further than many think. We don’t know what the pathway from now until the end will look like, of course. It will probably be highly unstable and unsettled. But until the system begins to unravel in some obvious way, those inside of it will play along—thus contributing to the facade of stability.
Communist rule in China is unlikely to end quietly. A single event is unlikely to trigger a peaceful implosion of the regime. Its demise is likely to be protracted, messy and violent. I wouldn’t rule out the possibility that Mr. Xi will be deposed in a power struggle or coup d’état. With his aggressive anticorruption campaign—a focus of this week’s National People’s Congress—he is overplaying a weak hand and deeply aggravating key party, state, military and commercial constituencies.
The Chinese have a proverb, waiying, neiruan—hard on the outside, soft on the inside. Mr. Xi is a genuinely tough ruler. He exudes conviction and personal confidence. But this hard personality belies a party and political system that is extremely fragile on the inside.
Consider five telling indications of the regime’s vulnerability and the party’s systemic weaknesses.
A military band conductor during the opening session of the National People’s Congress on Thursday at the Great Hall of the People in Beijing. PHOTO: ASSOCIATED PRESS
First, China’s economic elites have one foot out the door, and they are ready to flee en masse if the system really begins to crumble. In 2014, Shanghai’s Hurun Research Institute, which studies China’s wealthy, found that 64% of the “high net worth individuals” whom it polled—393 millionaires and billionaires—were either emigrating or planning to do so. Rich Chinese are sending their children to study abroad in record numbers (in itself, an indictment of the quality of the Chinese higher-education system).
Just this week, the Journal reported, federal agents searched several Southern California locations that U.S. authorities allege are linked to “multimillion-dollar birth-tourism businesses that enabled thousands of Chinese women to travel here and return home with infants born as U.S. citizens.” Wealthy Chinese are also buying property abroad at record levels and prices, and they are parking their financial assets overseas, often in well-shielded tax havens and shell companies.
Meanwhile, Beijing is trying to extradite back to China a large number of alleged financial fugitives living abroad. When a country’s elites—many of them party members—flee in such large numbers, it is a telling sign of lack of confidence in the regime and the country’s future.
Second, since taking office in 2012, Mr. Xi has greatly intensified the political repression that has blanketed China since 2009. The targets include the press, social media, film, arts and literature, religious groups, the Internet, intellectuals, Tibetans and Uighurs, dissidents, lawyers, NGOs, university students and textbooks. The Central Committee sent a draconian order known as Document No. 9 down through the party hierarchy in 2013, ordering all units to ferret out any seeming endorsement of the West’s “universal values”—including constitutional democracy, civil society, a free press and neoliberal economics.
A more secure and confident government would not institute such a severe crackdown. It is a symptom of the party leadership’s deep anxiety and insecurity.
A protester is pushed to the ground by a paramilitary policeman March 5, 2014, in Beijing before the opening of the National People’s Congress nearby. PHOTO: ASSOCIATED PRESS
Third, even many regime loyalists are just going through the motions. It is hard to miss the theater of false pretense that has permeated the Chinese body politic for the past few years. Last summer, I was one of a handful of foreigners (and the only American) who attended a conference about the “China Dream,” Mr. Xi’s signature concept, at a party-affiliated think tank in Beijing. We sat through two days of mind-numbing, nonstop presentations by two dozen party scholars—but their faces were frozen, their body language was wooden, and their boredom was palpable. They feigned compliance with the party and their leader’s latest mantra. But it was evident that the propaganda had lost its power, and the emperor had no clothes.
In December, I was back in Beijing for a conference at the Central Party School, the party’s highest institution of doctrinal instruction, and once again, the country’s top officials and foreign policy experts recited their stock slogans verbatim. During lunch one day, I went to the campus bookstore—always an important stop so that I can update myself on what China’s leading cadres are being taught. Tomes on the store’s shelves ranged from Lenin’s “Selected Works” to Condoleezza Rice’s memoirs, and a table at the entrance was piled high with copies of a pamphlet by Mr. Xi on his campaign to promote the “mass line”—that is, the party’s connection to the masses. “How is this selling?” I asked the clerk. “Oh, it’s not,” she replied. “We give it away.” The size of the stack suggested it was hardly a hot item.
Fourth, the corruption that riddles the party-state and the military also pervades Chinese society as a whole. Mr. Xi’s anticorruption campaign is more sustained and severe than any previous one, but no campaign can eliminate the problem. It is stubbornly rooted in the single-party system, patron-client networks, an economy utterly lacking in transparency, a state-controlled media and the absence of the rule of law.
Moreover, Mr. Xi’s campaign is turning out to be at least as much a selective purge as an antigraft campaign. Many of its targets to date have been political clients and allies of former Chinese leader Jiang Zemin. Now 88, Mr. Jiang is still the godfather figure of Chinese politics. Going after Mr. Jiang’s patronage network while he is still alive is highly risky for Mr. Xi, particularly since Mr. Xi doesn’t seem to have brought along his own coterie of loyal clients to promote into positions of power. Another problem: Mr. Xi, a child of China’s first-generation revolutionary elites, is one of the party’s “princelings,” and his political ties largely extend to other princelings. This silver-spoon generation is widely reviled in Chinese society at large.
Mr. Xi at the Schloss Bellevue presidential residency during his visit to fellow export powerhouse Germany in Berlin on March 28, 2014. PHOTO: AGENCE FRANCE-PRESSE/GETTY IMAGES
Finally, China’s economy—for all the Western views of it as an unstoppable juggernaut—is stuck in a series of systemic traps from which there is no easy exit. In November 2013, Mr. Xi presided over the party’s Third Plenum, which unveiled a huge package of proposed economic reforms, but so far, they are sputtering on the launchpad. Yes, consumer spending has been rising, red tape has been reduced, and some fiscal reforms have been introduced, but overall, Mr. Xi’s ambitious goals have been stillborn. The reform package challenges powerful, deeply entrenched interest groups—such as state-owned enterprises and local party cadres—and they are plainly blocking its implementation.
These five increasingly evident cracks in the regime’s control can be fixed only through political reform. Until and unless China relaxes its draconian political controls, it will never become an innovative society and a “knowledge economy”—a main goal of the Third Plenum reforms. The political system has become the primary impediment to China’s needed social and economic reforms. If Mr. Xi and party leaders don’t relax their grip, they may be summoning precisely the fate they hope to avoid.
In the decades since the collapse of the Soviet Union, the upper reaches of China’s leadership have been obsessed with the fall of its fellow communist giant. Hundreds of Chinese postmortem analyses have dissected the causes of the Soviet disintegration.
Mr. Xi’s real “China Dream” has been to avoid the Soviet nightmare. Just a few months into his tenure, he gave a telling internal speech ruing the Soviet Union’s demise and bemoaning Mr. Gorbachev’s betrayals, arguing that Moscow had lacked a “real man” to stand up to its reformist last leader. Mr. Xi’s wave of repression today is meant to be the opposite of Mr. Gorbachev’s perestroika and glasnost. Instead of opening up, Mr. Xi is doubling down on controls over dissenters, the economy and even rivals within the party.
But reaction and repression aren’t Mr. Xi’s only option. His predecessors, Jiang Zemin and Hu Jintao, drew very different lessons from the Soviet collapse. From 2000 to 2008, they instituted policies intended to open up the system with carefully limited political reforms.
They strengthened local party committees and experimented with voting for multicandidate party secretaries. They recruited more businesspeople and intellectuals into the party. They expanded party consultation with nonparty groups and made the Politburo’s proceedings more transparent. They improved feedback mechanisms within the party, implemented more meritocratic criteria for evaluation and promotion, and created a system of mandatory midcareer training for all 45 million state and party cadres. They enforced retirement requirements and rotated officials and military officers between job assignments every couple of years.
In effect, for a while Mr. Jiang and Mr. Hu sought to manage change, not to resist it. But Mr. Xi wants none of this. Since 2009 (when even the heretofore open-minded Mr. Hu changed course and started to clamp down), an increasingly anxious regime has rolled back every single one of these political reforms (with the exception of the cadre-training system). These reforms were masterminded by Mr. Jiang’s political acolyte and former vice president, Zeng Qinghong, who retired in 2008 and is now under suspicion in Mr. Xi’s anticorruption campaign—another symbol of Mr. Xi’s hostility to the measures that might ease the ills of a crumbling system.
Some experts think that Mr. Xi’s harsh tactics may actually presage a more open and reformist direction later in his term. I don’t buy it. This leader and regime see politics in zero-sum terms: Relaxing control, in their view, is a sure step toward the demise of the system and their own downfall. They also take the conspiratorial view that the U.S. is actively working to subvert Communist Party rule. None of this suggests that sweeping reforms are just around the corner.
We cannot predict when Chinese communism will collapse, but it is hard not to conclude that we are witnessing its final phase. The CCP is the world’s second-longest ruling regime (behind only North Korea), and no party can rule forever.
Looking ahead, China-watchers should keep their eyes on the regime’s instruments of control and on those assigned to use those instruments. Large numbers of citizens and party members alike are already voting with their feet and leaving the country or displaying their insincerity by pretending to comply with party dictates.
We should watch for the day when the regime’s propaganda agents and its internal security apparatus start becoming lax in enforcing the party’s writ—or when they begin to identify with dissidents, like the East German Stasi agent in the film “The Lives of Others” who came to sympathize with the targets of his spying. When human empathy starts to win out over ossified authority, the endgame of Chinese communism will really have begun.
Dr. Shambaugh is a professor of international affairs and the director of the China Policy Program at George Washington University and a nonresident senior fellow at the Brookings Institution. His books include “China’s Communist Party: Atrophy and Adaptation” and, most recently, “China Goes Global: The Partial Power.”
Chinese President Xi Jinping, front center, and other Chinese leaders attend the opening meeting on Thursday of the third session of the National People’s Congress at the Great Hall of the People in Beijing. PHOTO: XINHUA/ZUMA PRESS
By DAVID SHAMBAUGH in The Wall Street Journal March 6, 2015 11:26 a.m. ET
On Thursday, the National People’s Congress convened in Beijing in what has become a familiar annual ritual. Some 3,000 “elected” delegates from all over the country—ranging from colorfully clad ethnic minorities to urbane billionaires—will meet for a week to discuss the state of the nation and to engage in the pretense of political participation.
Some see this impressive gathering as a sign of the strength of the Chinese political system—but it masks serious weaknesses. Chinese politics has always had a theatrical veneer, with staged events like the congress intended to project the power and stability of the Chinese Communist Party, or CCP. Officials and citizens alike know that they are supposed to conform to these rituals, participating cheerfully and parroting back official slogans. This behavior is known in Chinese as biaotai, “declaring where one stands,” but it is little more than an act of symbolic compliance.
Despite appearances, China’s political system is badly broken, and nobody knows it better than the Communist Party itself. China’s strongman leader, Xi Jinping, is hoping that a crackdown on dissent and corruption will shore up the party’s rule. He is determined to avoid becoming the Mikhail Gorbachev of China, presiding over the party’s collapse. But instead of being the antithesis of Mr. Gorbachev, Mr. Xi may well wind up having the same effect. His despotism is severely stressing China’s system and society—and bringing it closer to a breaking point.
Predicting the demise of authoritarian regimes is a risky business. Few Western experts forecast the collapse of the Soviet Union before it occurred in 1991; the CIA missed it entirely. The downfall of Eastern Europe’s communist states two years earlier was similarly scorned as the wishful thinking of anticommunists—until it happened. The post-Soviet “color revolutions” in Georgia, Ukraine and Kyrgyzstan from 2003 to 2005, as well as the 2011 Arab Spring uprisings, all burst forth unanticipated.
On Thursday, the National People’s Congress convened in Beijing in what has become a familiar annual ritual. Some 3,000 “elected” delegates from all over the country—ranging from colorfully clad ethnic minorities to urbane billionaires—will meet for a week to discuss the state of the nation and to engage in the pretense of political participation.
Some see this impressive gathering as a sign of the strength of the Chinese political system—but it masks serious weaknesses. Chinese politics has always had a theatrical veneer, with staged events like the congress intended to project the power and stability of the Chinese Communist Party, or CCP. Officials and citizens alike know that they are supposed to conform to these rituals, participating cheerfully and parroting back official slogans. This behavior is known in Chinese as biaotai, “declaring where one stands,” but it is little more than an act of symbolic compliance.
Despite appearances, China’s political system is badly broken, and nobody knows it better than the Communist Party itself. China’s strongman leader, Xi Jinping, is hoping that a crackdown on dissent and corruption will shore up the party’s rule. He is determined to avoid becoming the Mikhail Gorbachev of China, presiding over the party’s collapse. But instead of being the antithesis of Mr. Gorbachev, Mr. Xi may well wind up having the same effect. His despotism is severely stressing China’s system and society—and bringing it closer to a breaking point.
Predicting the demise of authoritarian regimes is a risky business. Few Western experts forecast the collapse of the Soviet Union before it occurred in 1991; the CIA missed it entirely. The downfall of Eastern Europe’s communist states two years earlier was similarly scorned as the wishful thinking of anticommunists—until it happened. The post-Soviet “color revolutions” in Georgia, Ukraine and Kyrgyzstan from 2003 to 2005, as well as the 2011 Arab Spring uprisings, all burst forth unanticipated.
The Gate of Heavenly Peace in Beijing’s Tiananmen Square, the site of pro-democracy demonstrations in 1989. PHOTO: NATIONAL GEOGRAPHIC/GETTY IMAGES
China-watchers have been on high alert for telltale signs of regime decay and decline ever since the regime’s near-death experience in Tiananmen Square in 1989. Since then, several seasoned Sinologists have risked their professional reputations by asserting that the collapse of CCP rule was inevitable. Others were more cautious—myself included. But times change in China, and so must our analyses.
The endgame of Chinese communist rule has now begun, I believe, and it has progressed further than many think. We don’t know what the pathway from now until the end will look like, of course. It will probably be highly unstable and unsettled. But until the system begins to unravel in some obvious way, those inside of it will play along—thus contributing to the facade of stability.
Communist rule in China is unlikely to end quietly. A single event is unlikely to trigger a peaceful implosion of the regime. Its demise is likely to be protracted, messy and violent. I wouldn’t rule out the possibility that Mr. Xi will be deposed in a power struggle or coup d’état. With his aggressive anticorruption campaign—a focus of this week’s National People’s Congress—he is overplaying a weak hand and deeply aggravating key party, state, military and commercial constituencies.
The Chinese have a proverb, waiying, neiruan—hard on the outside, soft on the inside. Mr. Xi is a genuinely tough ruler. He exudes conviction and personal confidence. But this hard personality belies a party and political system that is extremely fragile on the inside.
Consider five telling indications of the regime’s vulnerability and the party’s systemic weaknesses.
A military band conductor during the opening session of the National People’s Congress on Thursday at the Great Hall of the People in Beijing. PHOTO: ASSOCIATED PRESS
First, China’s economic elites have one foot out the door, and they are ready to flee en masse if the system really begins to crumble. In 2014, Shanghai’s Hurun Research Institute, which studies China’s wealthy, found that 64% of the “high net worth individuals” whom it polled—393 millionaires and billionaires—were either emigrating or planning to do so. Rich Chinese are sending their children to study abroad in record numbers (in itself, an indictment of the quality of the Chinese higher-education system).
Just this week, the Journal reported, federal agents searched several Southern California locations that U.S. authorities allege are linked to “multimillion-dollar birth-tourism businesses that enabled thousands of Chinese women to travel here and return home with infants born as U.S. citizens.” Wealthy Chinese are also buying property abroad at record levels and prices, and they are parking their financial assets overseas, often in well-shielded tax havens and shell companies.
Meanwhile, Beijing is trying to extradite back to China a large number of alleged financial fugitives living abroad. When a country’s elites—many of them party members—flee in such large numbers, it is a telling sign of lack of confidence in the regime and the country’s future.
Second, since taking office in 2012, Mr. Xi has greatly intensified the political repression that has blanketed China since 2009. The targets include the press, social media, film, arts and literature, religious groups, the Internet, intellectuals, Tibetans and Uighurs, dissidents, lawyers, NGOs, university students and textbooks. The Central Committee sent a draconian order known as Document No. 9 down through the party hierarchy in 2013, ordering all units to ferret out any seeming endorsement of the West’s “universal values”—including constitutional democracy, civil society, a free press and neoliberal economics.
A more secure and confident government would not institute such a severe crackdown. It is a symptom of the party leadership’s deep anxiety and insecurity.
A protester is pushed to the ground by a paramilitary policeman March 5, 2014, in Beijing before the opening of the National People’s Congress nearby. PHOTO: ASSOCIATED PRESS
Third, even many regime loyalists are just going through the motions. It is hard to miss the theater of false pretense that has permeated the Chinese body politic for the past few years. Last summer, I was one of a handful of foreigners (and the only American) who attended a conference about the “China Dream,” Mr. Xi’s signature concept, at a party-affiliated think tank in Beijing. We sat through two days of mind-numbing, nonstop presentations by two dozen party scholars—but their faces were frozen, their body language was wooden, and their boredom was palpable. They feigned compliance with the party and their leader’s latest mantra. But it was evident that the propaganda had lost its power, and the emperor had no clothes.
In December, I was back in Beijing for a conference at the Central Party School, the party’s highest institution of doctrinal instruction, and once again, the country’s top officials and foreign policy experts recited their stock slogans verbatim. During lunch one day, I went to the campus bookstore—always an important stop so that I can update myself on what China’s leading cadres are being taught. Tomes on the store’s shelves ranged from Lenin’s “Selected Works” to Condoleezza Rice’s memoirs, and a table at the entrance was piled high with copies of a pamphlet by Mr. Xi on his campaign to promote the “mass line”—that is, the party’s connection to the masses. “How is this selling?” I asked the clerk. “Oh, it’s not,” she replied. “We give it away.” The size of the stack suggested it was hardly a hot item.
Fourth, the corruption that riddles the party-state and the military also pervades Chinese society as a whole. Mr. Xi’s anticorruption campaign is more sustained and severe than any previous one, but no campaign can eliminate the problem. It is stubbornly rooted in the single-party system, patron-client networks, an economy utterly lacking in transparency, a state-controlled media and the absence of the rule of law.
Moreover, Mr. Xi’s campaign is turning out to be at least as much a selective purge as an antigraft campaign. Many of its targets to date have been political clients and allies of former Chinese leader Jiang Zemin. Now 88, Mr. Jiang is still the godfather figure of Chinese politics. Going after Mr. Jiang’s patronage network while he is still alive is highly risky for Mr. Xi, particularly since Mr. Xi doesn’t seem to have brought along his own coterie of loyal clients to promote into positions of power. Another problem: Mr. Xi, a child of China’s first-generation revolutionary elites, is one of the party’s “princelings,” and his political ties largely extend to other princelings. This silver-spoon generation is widely reviled in Chinese society at large.
Mr. Xi at the Schloss Bellevue presidential residency during his visit to fellow export powerhouse Germany in Berlin on March 28, 2014. PHOTO: AGENCE FRANCE-PRESSE/GETTY IMAGES
Finally, China’s economy—for all the Western views of it as an unstoppable juggernaut—is stuck in a series of systemic traps from which there is no easy exit. In November 2013, Mr. Xi presided over the party’s Third Plenum, which unveiled a huge package of proposed economic reforms, but so far, they are sputtering on the launchpad. Yes, consumer spending has been rising, red tape has been reduced, and some fiscal reforms have been introduced, but overall, Mr. Xi’s ambitious goals have been stillborn. The reform package challenges powerful, deeply entrenched interest groups—such as state-owned enterprises and local party cadres—and they are plainly blocking its implementation.
These five increasingly evident cracks in the regime’s control can be fixed only through political reform. Until and unless China relaxes its draconian political controls, it will never become an innovative society and a “knowledge economy”—a main goal of the Third Plenum reforms. The political system has become the primary impediment to China’s needed social and economic reforms. If Mr. Xi and party leaders don’t relax their grip, they may be summoning precisely the fate they hope to avoid.
In the decades since the collapse of the Soviet Union, the upper reaches of China’s leadership have been obsessed with the fall of its fellow communist giant. Hundreds of Chinese postmortem analyses have dissected the causes of the Soviet disintegration.
Mr. Xi’s real “China Dream” has been to avoid the Soviet nightmare. Just a few months into his tenure, he gave a telling internal speech ruing the Soviet Union’s demise and bemoaning Mr. Gorbachev’s betrayals, arguing that Moscow had lacked a “real man” to stand up to its reformist last leader. Mr. Xi’s wave of repression today is meant to be the opposite of Mr. Gorbachev’s perestroika and glasnost. Instead of opening up, Mr. Xi is doubling down on controls over dissenters, the economy and even rivals within the party.
But reaction and repression aren’t Mr. Xi’s only option. His predecessors, Jiang Zemin and Hu Jintao, drew very different lessons from the Soviet collapse. From 2000 to 2008, they instituted policies intended to open up the system with carefully limited political reforms.
They strengthened local party committees and experimented with voting for multicandidate party secretaries. They recruited more businesspeople and intellectuals into the party. They expanded party consultation with nonparty groups and made the Politburo’s proceedings more transparent. They improved feedback mechanisms within the party, implemented more meritocratic criteria for evaluation and promotion, and created a system of mandatory midcareer training for all 45 million state and party cadres. They enforced retirement requirements and rotated officials and military officers between job assignments every couple of years.
In effect, for a while Mr. Jiang and Mr. Hu sought to manage change, not to resist it. But Mr. Xi wants none of this. Since 2009 (when even the heretofore open-minded Mr. Hu changed course and started to clamp down), an increasingly anxious regime has rolled back every single one of these political reforms (with the exception of the cadre-training system). These reforms were masterminded by Mr. Jiang’s political acolyte and former vice president, Zeng Qinghong, who retired in 2008 and is now under suspicion in Mr. Xi’s anticorruption campaign—another symbol of Mr. Xi’s hostility to the measures that might ease the ills of a crumbling system.
Some experts think that Mr. Xi’s harsh tactics may actually presage a more open and reformist direction later in his term. I don’t buy it. This leader and regime see politics in zero-sum terms: Relaxing control, in their view, is a sure step toward the demise of the system and their own downfall. They also take the conspiratorial view that the U.S. is actively working to subvert Communist Party rule. None of this suggests that sweeping reforms are just around the corner.
We cannot predict when Chinese communism will collapse, but it is hard not to conclude that we are witnessing its final phase. The CCP is the world’s second-longest ruling regime (behind only North Korea), and no party can rule forever.
Looking ahead, China-watchers should keep their eyes on the regime’s instruments of control and on those assigned to use those instruments. Large numbers of citizens and party members alike are already voting with their feet and leaving the country or displaying their insincerity by pretending to comply with party dictates.
We should watch for the day when the regime’s propaganda agents and its internal security apparatus start becoming lax in enforcing the party’s writ—or when they begin to identify with dissidents, like the East German Stasi agent in the film “The Lives of Others” who came to sympathize with the targets of his spying. When human empathy starts to win out over ossified authority, the endgame of Chinese communism will really have begun.
Dr. Shambaugh is a professor of international affairs and the director of the China Policy Program at George Washington University and a nonresident senior fellow at the Brookings Institution. His books include “China’s Communist Party: Atrophy and Adaptation” and, most recently, “China Goes Global: The Partial Power.”
Saturday 21 March 2015
The West and the Rest
Gautam Adhikari in The Times of India
What is it about the so-called West that so many in the Indian elite seem to hate? Not ordinary people, but the bureaucratic-academic-intellectual elite that dominates public as well as private discourse in the metropolises, particularly in Delhi and, less influentially, Kolkata and Mumbai. Too many members of that privileged class sneer at the West, especially America, and both right-wing ultra-nationalists and left-wing Lohiaite and Gandhian socialists want to build protective walls for the native masses against a tide of Western culture and values that they fear are out to sabotage India.
Don’t get me wrong, there’s plenty that’s dysfunctional in Western societies, by which we mean the urbanised, modernised and, therefore, advanced economies that lie mostly in the Western hemisphere. But isn’t the aim today of every developing nation to achieve precisely that kind of urbanised advancement as best as feasible?
Swathes of India’s intellectual elite would apparently disagree. They conjure up visions of a bucolic, spiritually untainted, pristinely Indian and self-reliant utopia that can come about if only the Western model of growth were jettisoned once for all. There are several problems with this dream, to say nothing of the futility of searching for a tested model of such an ideal society. Walden Pond, Tolstoy Farm and Sabarmati Ashram are not examples anyone can recreate on a national scale.
Like it or not urbanised modernisation, with all its flaws, forms the only surviving blueprint that humankind has to improve the quality and durability of life. And, it so happens, the current phase of urbanised advancement the human race is passing through indeed began a few centuries ago in societies located in the West.
That by no means implies that the road to this unprecedentedly rapid phase of modernisation of the world began magically in the West. The bricks of that road had been laid gradually over centuries by many civilisations, though it was from Europe for a complex range of reasons that the path began to take the shape of a highway.
Hundreds of scholars and intellectuals, mainly Western, have written on how a 15,000-year-old agricultural system suddenly gave way to an industrial society, and thence to our globalised post-industrial world in the space of a few hundred years. Only, it wasn’t all that sudden, though the speed of change was truly phenomenal.
If you don’t trust Western scholars on the subject, there are non-Western options available. You can read Nayan Chanda’s ‘Bound Together: How Traders, Preachers, Adventurers and Warriors Shaped Globalization’. He is of pure Indian origin. His 2007 book traces the ever-growing interconnectedness and interdependence that began from the start of early human migration from Africa 50-70,000 years ago and remains ongoing in this intricately globalised phase of our history.
Much of the foundation of Western enlightenment, for instance, was based on ancient Greek philosophy and logic. Along with their own speculative philosophy, the Greeks were open-minded enough to borrow ideas that had germinated in China and India. The Romans borrowed wholesale from the Greeks and developed ideas to create social and legal systems that form a basis for many modern institutions.
Then came a lull in the area now known as the West for about a millennium. It is commonly called the Dark Ages in European literature but it was not dark at all for a rising Islamic-Arab civilisation, which thrived for much of that period to keep Greek thought alive while also developing Chinese inventions and Indian mathematics to spread ideas across a wide empire. The Arabs thus formed a crucial link in global civilisation.
Then, to compress a complex story, came the European Renaissance. As the name implies, it was a ‘rebirth’ of ideas and a socio-cultural reawakening that led in due course to the industrial revolution and to this extraordinary stage in civilisation that we inhabit. In sum, we live a life born of interconnectedness and interdependence.
To put it another way, what we call the West today is little more than a stage in the march of human history. In the intertwined world that has come about as a result of millennia of exchange between cultures, the West is a convenient geopolitical term that combines both a violently harsh as well as enlightened tale of interdependence.
So, get over it. Why try to reinvent the wheel?
As a Muslim woman, I see the veil as a rejection of progressive values
Yasmin Alibhai Brown in The Guardian
‘In 1899 Qasim Amin warned that unless Muslims embraced modernity and equality, the future would be bleak. We are in that bleakness now.’ Illustration by Noma Bar
It could be a millenarian crisis or a delayed reaction to decades of bad history, but millions of Muslims seem to have turned inwards, hankering for an imagined golden age. They are contemptuous of modernity’s bendable, ductile values. Some are drawn to reactionary dogma, and preachers while a good number have thrown themselves into political Islam to resist and combat western hegemonies – or so the story goes.
As a practising (though flawed) Shia Muslim, I watch the new puritans with apprehension. So too other Muslims worldwide, the silent many, watch and tremble. From the eighth to the early 20th century, Muslims strove for a broad education (as commanded in the Qur’an), questioned doctrines, and were passionate about scientific advancements, political and social ideals and art. Not even humiliating colonial rule deterred them from the march forward. Now the marchers are walking backwards. The hijab, jilbab, burqa and niqab are visible signs of this retreat from progressive values.
This article will divide people. Women I respect and like wear hijabs and jilbabs to articulate their faith and identity. Others do so to follow their dreams, to go into higher education or jobs. And an increasing number are making a political statement. I am not assuming that the coverings all represent simple oppression. What I am saying is that many women who take up the veil, in any of its forms, do so without delving fully into its implications, significance or history. Their choice, even if independently made, may not be fully examined.
Muslim feminists of the past critiqued and repudiated the veil. One of them was a man, Qasim Amin, an Egyptian judge and philosopher, who in 1899 wrote The Liberation of Women.He was the John Stuart Mill of the Arab world. Huda Shaarawi set up the Egyptian women’s union in the early 1920s. One day in 1923, as she disembarked from a train in Cairo, she threw off her veil and claimed her right to be visible. Educated Iranian women started feminist magazines and campaigned against the veil around the same time. These pioneers have been written out of history or are dismissed as western stooges by some contemporary Muslim intellectuals.
After the transformative 60s, Muslim feminists resumed the fight for equality. European rule was over. It was time. The Moroccan academic Fatema Mernissi, Egypt’s Nawal El Saadawi and the Pakistani scholar Riffat Hassan all argued for female emancipation. They rightly saw the veil as a a tool and symbol of oppression and subservience. Mernissi’s Beyond the Veil ( 1975) is a classic text. So too El Saadawi’s The Hidden Face of Eve (1975). But more conservative Islamic tenets have taken over lands, communities, families, heads and hearts.
The promise of this version is a return to certainties and “purity” of belief, a mission backed by Saudi Arabia and other Gulf states. Deobandi revivalists, funded by Arab money, now run more mosques in Britain than any other Muslim subgroup. Women are told not to travel without male relatives, not to work, to be subservient, to veil. This movement began as a reaction against the Indian raj and mutated into a fundamentalist creed. Today their pushback against “cultural imperialism” appeals to many alienated young Muslims. And, in part, it explains the growing popularity of the hijab, jilbab and full veil .
But in the Qur’an, the veil is mostly used metaphorically to describe barriers between good and bad, believers and nonbelievers. In two verses, women are told to lower their gaze, and to cover their private parts and bosoms. Men are also instructed to lower their gaze, and to dress modestly. One verse commands the women in the prophet’s family to fully veil, partly to protect them from enemies and supplicants.
Sahar Amer, associate professor at the University of North Carolina, has studied these sacred injunctions: “[Nowhere] is the hijab used to describe, let alone prescribe, the necessity for Muslim women to wear a headscarf or any other pieces of clothing often seen covering women in Islamic countries today. Even after reading those passages dealing with the female dress code, one continues to wonder what exactly the hijab is: is it a simple scarf? A purdah? A chador? Or something else? Which parts of the body exactly is it supposed to cover? Just the hair? The hair and neck? The arms? Hands? Feet? Face? Eyes?”
Veils, in truth, predate Islam. Zoroastrian and Byzantine upper-class ladies wore them to keep aloof from the hoi polloi. When Islam’s armies first reached Persia, they were shocked at this snobbery; then they adopted the custom they loathed; the control of women was hard-wired into their psyches.
All religions cast women as sinners and temptresses. Conservative Islam has revived the slander for our times. Women have to be sequestered or contained lest they raise male lust and cause public disorder. Some young Muslim women argue that veils liberate them from a modern culture that objectifies and sexualises females. That argument is appealing; but if credible, why would so many hijabis dress in tight jeans and clinging tops, and why would so many Muslim women flock to have liposuction or breast enhancements?
It is complicated: veils for me represent both religious arrogance and subjugation; they both desexualise and fervidly sexualise. Women are primarily seen as sexual creatures whose hair and bodies incite desire and disorder in the public space. The claim that veils protect women from lasciviousness and disrespect carries an element of self-deception. I have been at graduation ceremonies where shrouded female students have refused to shake the hand of the chancellor. Veiled women have provoked confrontations over their right to wear veils, in courts, at schools and in colleges and workplaces. But I regard their victories as a rejection of social compromise.
Of even more concern are young Muslim lives. Little girls are being asked to don hijabs and jilbabs, turned into sexual beings long before puberty. You can even buy stretchy baby hijabs with fake Calvin Klein and Versace logos.
Like a half-naked woman, a veiled female to me represents an affront to female dignity, autonomy and potential. Both are marionettes, and have internalised messages about femaleness. A woman in a full black cloak, her face and eyes masked walked near to where I was sitting in a park recently, but we could not speak. Behind fabric, she was more unapproachable than a fort. She had a baby girl in a pushchair. Her young son was running around. Will the girl be put into a hijab, then a jilbab? Will the son expect that of his sister and wife one day? To never have the sun warm your face, the breeze through your hair – is that what God wants? Whatever happened to sisterhood?
But do those who choose to veil think of women in Iran, Saudi Arabia, Afghanistan, Pakistan, Iraq, and even the west, who are prosecuted, flogged, tortured or killed for not complying? This is not a freestanding choice – it can’t be. Although we hear from vocal British hijabis and niqabis, those who are forced cannot speak out. A fully burqaed woman once turned up at my house, a graduate, covered in cuts, burns, bruises and bites. Do we know how many wounded, veiled women walk around hidden among us? Sexual violence in Saudi Arabia and Iran is appallingly high, as is body dysmorphia.
Liberalism is being tested by the new Islamic ardency. A French-style ban would be unwise and unjust. But institutions can apply dress codes. A bank worker cannot dress like a stripper; a child cannot wear a boob tube to school. Have rules and stick to them, within reason. In 1899, Qasim Amin warned that unless Muslims embraced modernity and equality, the future would be bleak. We are in that bleakness now, and few dare to speak up for its values.
Wednesday 18 March 2015
Let’s not fool ourselves. We may not bribe, but corruption is rife in Britain
George Monbiot in The Guardian
It just doesn’t compute. Almost every day the news is filled with stories that look to me like corruption. Yet on Transparency International’s corruption index Britain is ranked 14th out of 177 nations, suggesting that it’s one of the best-run nations on Earth. Either all but 13 countries are spectacularly corrupt or there’s something wrong with the index.
Yes, it’s the index. The definitions of corruption on which it draws are narrow and selective. Common practices in the rich nations that could reasonably be labelled corrupt are excluded; common practices in the poor nations are emphasised.
This week a ground-changing book called How Corrupt is Britain?, edited by David Whyte, is published. It should be read by anyone who believes this country merits its position on the index.
Would there still be commercial banking sector in this country if it weren’t for corruption? Think of the list of scandals: pensions mis-selling, endowment mortgage fraud, the payment protection insurance scam, Libor rigging, insider trading and all the rest. Then ask yourself whether fleecing the public is an aberration – or the business model.
No senior figure has been held criminally liable or has even been disqualified for the practices that helped to trigger the financial crisis, partly because the laws that should have restrained them were slashed by successive governments. A former minister in this government ran HSBC while it engaged in systematic tax evasion, money laundering for drugs gangs and the provision of services to Saudi and Bangladeshi banks linked to the financing of terrorists. Instead of prosecuting the bank, the head of the UK’s tax office went to work for it when he retired.
The City of London, operating with the help of British overseas territories and crown dependencies, is the world’s leading tax haven, controlling 24% of all offshore financial services. It offers global capital an elaborate secrecy regime, assisting not just tax evaders but also smugglers, sanctions- busters and money-launderers. As the French investigating magistrate Eva Joly has complained, the City “has never transmitted even the smallest piece of usable evidence to a foreign magistrate”. The UK, Switzerland, Singapore, Luxembourg and Germany are all ranked by Transparency International as among the least corrupt nations in the world. They are also listed by the Tax Justice Network as among the worst secrecy regimes and tax havens. For some reason, though, that doesn’t count.
The Private Finance Initiative has been used by our governments to deceive us about the extent of their borrowing while channelling public money into the hands of corporations. Shrouded in secrecy, stuffed with hidden sweeteners, it has landed hospitals and schools with unpayable debts, while hiding public services from public scrutiny.
State spies have been engaged in mass surveillance. And the police, adopting the identities of dead children, lying in court to assist false convictions and fathering children by activists before disappearing, have infiltrated and sought to destroy peaceful campaign groups. Police forces have protected prolific paedophiles, including Jimmy Savile, and – it is now alleged – a ring of senior politicians who are also suspected of the murder of children. Savile was shielded too by the NHS and the BBC, which has sacked most of the those who sought to expose him while promoting people who tried to perpetuate the cover-up.
There’s the small matter of our unreformed political funding system, which permits the very rich to buy political parties. There’s the phone-hacking scandal and the payment of police by newspapers, the underselling of Royal Mail, the revolving door allowing corporate executives to draft the laws affecting their businesses, the robbing of the welfare and prison services by private contractors, price-fixing by energy companies, daylight robbery by pharmaceutical firms and dozens more such cases. Is none of this corruption? Or is it too sophisticated to qualify?
Among the sources used by Transparency International to compile its index are the World Bank and the World Economic Forum. Relying on the World Bank to assess corruption is like asking Vlad the Impaler for an audit of human rights. Run on the principle of one dollar, one vote, controlled by the rich nations while operating in the poor ones, the bank has funded hundreds of white-elephant projects that have greatly enriched corrupt elites and foreign capital while evicting local people from their land and leaving their countries with unpayable debts. To general gasps of astonishment, the World Bank’s definition of corruption is so narrowly drawn that it excludes such practices.
The World Economic Forum establishes its corruption rankings through a survey of global executives: the beneficiaries of the kind of practices I’ve listed in this article. Its questions are limited to the payment of bribes and the corrupt acquisition of public funds by private interests, excluding the kinds of corruption that prevail in rich nations. Transparency International’s interviews with ordinary citizens take much the same line: most of its specific questions involve the payment of bribes.
How Corrupt is Britain? argues that such narrow conceptions of corruption are part of a long tradition of portraying the problem as something confined to weak nations, which must be rescued by “reforms” imposed by colonial powers and, more recently, bodies such as the World Bank and the IMF. These “reforms” mean austerity, privatisation, outsourcing and deregulation. They tend to suck money out of the hands of the poor and into the hands of national and global oligarchs.
For organisations such as the World Bank and the World Economic Forum, there is little difference between the public interest and the interests of global corporations. What might look like corruption from any other perspective looks to them like sound economics. The power of global finance and the immense wealth of the global elite are founded on corruption, and the beneficiaries have an interest in framing the question to excuse themselves.
Yes, many poor nations are plagued by the kind of corruption that involves paying bribes to officials. But the problems plaguing us run deeper. When the system already belongs to the elite, bribes are superfluous.
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