BBC - How the West invited China to eat its lunch

FORMER_FYRDMAN

LE
Book Reviewer
Of course company officials will do everything they can to increase profits but they are not legally obliged to do so. The only legal duty is to not act unlawfully in conducting the business of the company.

Again I don’t know but wasn’t there a report in the news recently about a significant company loan that Mr Rees Mogg was given by his company?

Oh look!


The duty is to operate in the best interests of the company - you're at liberty to explain why paying tax unnecessarily is in the best interests of the company but I don't want to be responsible for your investor relations strategy if you do.

Regarding R-M's specific affairs, he will be required to demonstrate that it is a bona fide loan (and Director's loans get serious HMRC lock-on) and he'll be liable for tax if he can't.

For me, the scandal is around HMRC doing stupid deals with entities like Amazon who, if they want to deliver goods to UK customers, cannot Offshore however much they threaten to.
 
Probably the USSR going down the tubes opened up a debate about how the Chinese avoid that happening. The economy is very much operated as a competitive market but that’s where it suits the Chinese to do so.
The debate in China about whether to follow the communist road or the capitalist road started in the 1960s. This is why the hard line communists were complaining about the "capitalist roaders" (you will recognize that phrase if you are familiar with the era).

After Mao died things started to change in the 1970s. By the time the Soviet Union collapsed the changes in China were already well under way.

The changes started simply because the Chinese recognized that communism didn't work. Most Chinese communists were less interested in communism as an ideal than they were in the modernization of China by any means possible.

The Country is still rigidly controlled by the CP. They either allow it to happen or don’t allow it to happen. Their decision is the end of any debate on the matter. If there is any sign of public dissent, then the Chinese police will quickly step in and of course, the PLA will always oblige the communist government if it needs to put tanks and armed troops on the ground to ensure public compliance.

They also direct much of their foreign activity into things that benefit them militarily or give them a major political advantage. And of course having probably trillions in the bank also buys them a lot of what gives them advantages especially in the poorer parts of the world.

They aren’t reticent though in trying to build up advantages of any kind they like the look of in places like the UK. 5G network anybody?

So they call themselves communists because that’s exactly what they are. Authoritarian and quite ruthless in implementing their methods to run the country. Japan and South Korea have free open market economies. The Chinese economy is still very much state controlled with free market activities invited in where it suits them.

China is run by a communist party organized along Leninist lines, but the economy itself isn't run along communist lines. They binned communist economics because it didn't work.

If you want to understand China today, have a look at Taiwan's and South Korea's recent past. Until very recently they were ruthless dictatorships with heavy government involvement in planning and running their economies. They were also very economically successful.

We got along with them just fine and didn't care in the least bit about their lack of democracy or human rights. That they are reasonably democratic today is a fairly recent phenomenon and has to do with internal events and political processes.

China were able to look at Taiwan and South Korea and say to themselves "we can do that too - we can have successful capitalist economies directed by dictatorial government - let's give it a try". And the rest is history.

Think back to the 1970s. There were very few actual democracies then, but we got along fine with most of the dictatorships provided they didn't get above themselves. Spain, Portugal, and Greece were all ruthless dictatorships not that long ago. Being a dictatorship wasn't any sort of bar to NATO membership either.

Will China become a democracy in the foreseeable future? I have no idea. I suspect thought that this wouldn't change the problem the Americans have with them the slightest bit, just change the rhetoric used.

Think back to the 19th century. In my bit of the then British Empire the US were busy invading us, providing havens for insurgents and terrorists to attack us, and generally making a nuisance of themselves. The presence or lack of "democracy" mattered not the slightest in deciding their foreign policy. Britain none the less found American cotton supplies and the American market for British manufactured goods to be important enough to find ways of getting along with them.

Now think ahead to the second half of this century when India will also have surpassed the US in economic power to become the number two global power. If India start to say "we're the world's greatest democracy, it's time for the US to step aside and to accept our leadership and to do what we say while we set the rules the rest of the world follows", do you think the US would take that lying down? Or do you think they would start demonizing India as being somehow "bad"? I suspect the latter.

If the Chinese get pushy, then learn to push back the same as you would with any other country. Deliberately picking a fight with them however is not in the national interests and would likely turn out very badly for the whole world.
 
Japan and South Korea have free open market economies. The Chinese economy is still very much state controlled with free market activities invited in where it suits them.
The Japanese and Korean economies are dominated by huge conglomerates with strong ties to government through the education system - old school ties, etc. - and the board's of these corporations enjoy ready access to and huge influence over economic policy.

To paraphrase Mao, the main difference to the PRC is that in China the Party controls the cash register, the cash register does not control the Party.
 
The debate in China about whether to follow the communist road or the capitalist road started in the 1960s.
The debate pretty much started the moment the second Chinese bloke heard about Communism - the 1920s marked the period when Chinese understanding of Marx crystallised into a definite form.

They followed a trajectory similar to any revolutionary movement that doesn't find itself pushing against an open door from the off - the educated sorts trying to apply a theory to economic development were replaced by those who were good at revolution instead, as the first generation were arrested/summarily executed by the incumbent regime; or overthrown in internecine squabbling.

Mao got his early break studying peasant revolution in Jiangxi, which was where his 'revolution is not a dinner party' quote came from. He wasn't specifically advocating violent revolution as a primary tool but stating that the Party could only remain relevant by riding the wave of inevitable peasant violence and steering it a useful right direction.

It's less a case that 'capitalist roaders' were a competing faction in the CCP than that they were the original CCP. They never entirely went away.
 

Yokel

LE
This thread did not go the way I expected it to.

I thought that any discussion would be about the wholesale outsourcing of manufacturing, component supply, and even services, to the People's Republic of China without any thought to the consequences or the future. This was largely due to short term moneterism in alliance with the 'end of history' types.
 
This was largely due to short term moneterism in alliance with the 'end of history' types.
The belief that price stability can be achieved by government control of the money supply? It was driven by the desire of profit-seeking organisations to seek greatest profit, pure and simple. Exactly the point of capitalism, in fact.

The galling thing about Marx is that no matter how bonkers is prescription was, his diagnoses were often spot on.
 

Yokel

LE
Not being a student of Politics or Economics, I may not have used the correct terminology, but I am referring to the political philosophy that values short term cost cutting and short term profits over everything else - including sustainable spending reductions and long term profits.

That has been very damaging to the West.
 
I am referring to the political philosophy that values short term cost cutting and short term profits over everything else - including sustainable spending reductions and long term profits.
At the risk of inciting a pogrom, I'd say you were describing the effects of economic liberalism - the idea that the government has little-to-no role in the economy.

Small government doesn't equal big society, unfortunately. It just equals incapable government.
 

Yokel

LE
At the risk of inciting a pogrom, I'd say you were describing the effects of economic liberalism - the idea that the government has little-to-no role in the economy.

Small government doesn't equal big society, unfortunately. It just equals incapable government.

Government should be as small as possible, but it has to work. As I have mentioned on many threads, every system will go out of control and become destructive without negative feedback. If short term profit is the goal sought above everything else, then Governnent policies may be the only option. Product safety and the health and safety of employees are two examples, as are environmental standards and export controls.
 
Government should be as small as possible, but it has to work. As I have mentioned on many threads, every system will go out of control and become destructive without negative feedback. If short term profit is the goal sought above everything else, then Governnent policies may be the only option. Product safety and the health and safety of employees are two examples, as are environmental standards and export controls.
The term you are looking for, at least with respect to trade, is "autarchy" (sometimes spelled "autarky").

 

Yokel

LE
The term you are looking for, at least with respect to trade, is "autarchy" (sometimes spelled "autarky").


Sorry for the delay in replying - I had never heard of that term before. I am not proposing it either - just that Government does keep an eye on things and act when appropriate. I see the primary role of Government being to protect national interests, and the law and regulatory authorities existing to protect people by imposing limits on the power of people and companies.

The article mentions Nazi Germany - however withdrawing from international trade caused them real problems in obtaining raw materials, particularly aluminium and other metals.
 
(...) The article mentions Nazi Germany - however withdrawing from international trade caused them real problems in obtaining raw materials, particularly aluminium and other metals.
Withdrawing from international markets generally causes less than optimal economic performance. This is the basic problem with the current US strategy.
 

Yokel

LE
Withdrawing from international markets generally causes less than optimal economic performance. This is the basic problem with the current US strategy.

It also means that you have no exports, which is one of the reasons neutral countries stopped supplying Nazi Germany, as they had nothing to offer in return. That in turn made them lean more and more towards the allies. Britain was still exporting throughout the war.

International trade is a means for diplomacy and influence.
 
It also means that you have no exports, which is one of the reasons neutral countries stopped supplying Nazi Germany, as they had nothing to offer in return. That in turn made them lean more and more towards the allies. Britain was still exporting throughout the war.

International trade is a means for diplomacy and influence.
Napoleon's Continental System is probably the best analogy for the direction which current US policy is headed.
 
 

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