Cookies n Cream
Teams of 2, 20 minute AMRAP
- 60 calorie row, 60 kettlebell swings 53#
- 50 calorie row, 50 box jumps [24"]
- 40 calorie row, 40 burpees
- 30 calorie row, 30 wallball [20#, 11']
- 20 calorie row, 200m run
Cookies n Cream
Teams of 2, 20 minute AMRAP
Elevated shoulders hip thrust 4x10
Bulgarian split squat 2x10 each leg
2015 Master's Chipper
One of the fascinating things about American foreign policy is our simultaneous capacity for utter dominance and utter incompetence. Baathists were forbidden from participating in the Iraqi government after the Second Iraq War, by analogy to the Second World War policy of de-Nazification. Unfortunately, this excluded pretty much everyone who knew what they were doing, or who had a stake in what the US actually intended for Iraq, including many Chaldean Catholics.
Christians in Iraq supported the Baathists for the same reason Christians in Syria supported the other Baathists; they were the least worst option. The Baathists in both countries did protect religious minorities from persecution by the Muslim majorities (cf. Yazidis and Chaldeans now).
In 2003, John said that while the Syrian government was odious, there shouldn't be any need to destroy that regime too. I suppose this has come half-true. At least we didn't invade Syria.
On a stronger note, John also wished that President George W. Bush would have spent his post 9-11 popularity on a Nixon-goes-to-China move that would simplify the US tax code with the intent of increasing actual tax receipts, as opposed to rates per se. This still seems like a good idea.
Islamist taste in strategies seems to be quite as poor as the taste of the decor in Saddam Hussein's palaces. First they tried to beat a huge conventional invasion with a thousand "Mogadishus." Now the idea is to import the Palestinian Intifada into Iraq. That seems to be the reasoning behind the recent shooting at Mosul. According to this pro-Islamist source:
"The people moved toward the government building, the children threw stones, the Americans started firing,"
Most sources do not mention "the children," but perhaps that detail is more a matter of aspiration than description. In Palestinian propaganda, child-martyrs are far preferred, since any violence they commit is presumed to be simultaneously futile, spontaneous, and sincere. I am not aware that any of the civilian dead in the past few days are children, but these things take a little time to organize.
Intifada tactics are wholly irrelevant to Iraq. Strictly speaking, they were irrelevant in Palestine, at least in terms of serious opposition to the Israeli military. Their object was to relieve the Palestinian leadership of the duty to govern. They make no sense at all in the unblocked political situation in Iraq. Within broad limits, power there is available to anyone who can organize to take it. Presently, even the dimmest ex-Baathists will realize that there is no need to snipe at City Hall when the front door is open.
* * *
Speaking of stupidity, consider the government of Syria. That country is run by another Baathist Party. As is the way of totalitarian states, Syria was the enemy of the fraternal tyranny in Iraq. Nonetheless, Syria worked to undermine the sanctions regime imposed on Iraq. Now it seems to be facilitating the infiltration of Hizbollah into Iraq, the very people who have done so much to make Palestine what it is today.
The government of Syria is corrupt, incompetent, and oppressive. It is also deeply stupid. Nonetheless, it is not a Jonestown state, as Iraq was. The humanitarian arguments that supported an invasion of Iraq do not apply to Syria. Neither does Syria have anything like the territorial ambitions that Iraq once had. The Syrian Baathist regime no longer refers to Israel as "Southern Syria," a pretension of which history has cured it, (As Henry Kissenger once put it, the Syrian army would not have the logistical capability to drive to Tel Aviv even if all the Israelis disappeared.) A US invasion of Syria with the goal of regime change would put far more stress on the international system than the Iraq War did. For Irak, the Coalition could make a legally plausible case that it was acting to enforce Security Council resolutions dating back to 1990. Without some flagrant violation of international norms, no comparable justification is available for Syria.
Nonetheless, the policies of Damascus really are intolerable. There is nothing at all ambiguous about Syria's support for Islamist terrorist groups. Their reach extends far beyond Israel and Palestine into Europe and the United States. This cannot be allowed to go on: networks of this sort must be taken down before nuclear weapons become available on the international terrorist market.
Happily, it probably will not be necessary to go "On to Damascus," though there is no harm at all if Donald Rumsfeld continues to hint that he is planning for just that. Now that the US has access to a border with Syria, Special Forces raids against terrorist camps become far easier. So do smart-bomb attacks on selected leaders. Invisible robot drones in the sky can change the way you think about life. Syria will complain about precision strikes, but they are hardly in a position to complain too loudly: the targets will be too embarrassing to admit they were there in the first place.
* * *
President George W. Bush has it in his power, within the next few weeks, to make certain his reelection in 2004. All he has to do is make a statement like this:
"My fellow citizens: As you know, the Pole Star of my economic philosophy is the principle that the economy functions best when the private sector, and not the government, directs the largest possible fraction of the nation's resources. As I have often put it: 'It's your money.' However, as chief executive of the federal government, I cannot forget that the deficits in the federal budget become: 'Your Debt.' I continue to believe that, on the whole, the best way to ensure that the economy will remain strong is to keep taxes as low as possible. I promise to do that. However, 'as low as possible' means that taxes must not be so low that the national debt balloons out of control. For this reason, I will not seek any net tax reductions for the coming fiscal year, or for several years thereafter. Rather, my Administration will devote its energies to restructuring the existing tax code in order to make it fairer, simpler, and more easy to enforce.
"To put it another way: cough up those bucks, you stingy bastards."
Except for the last bit, we know that such a change in Administration policy would be popular, in fact extremely popular. According to a poll by the Associated Press, this would be true, not just with a majority of the total population, but even with a majority of Republicans. Most remarkably, it would be popular with a majority of the half of the country that believes it is overtaxed.
Nonetheless, the president continues to advocate very large tax cuts to move the economy out of the doldrums, even though it's pretty clear that the basket of cuts he is asking for would have a negligible stimulative effect. Why pursue a policy that is both bad economics and bad politics? Perhaps because it is not bad politics with the president's activists in the Republican Party. Although only four out of ten Americans support tax cuts, those are likely to be the four out of ten for whom lower taxes are a decisive issue. Few people will vote against a candidate for failing to raise taxes. President Bush's father lost in 1992 for many reasons, but one of them was that he broke an ill-considered pledge to never raise taxes under any circumstances. When he did raise taxes, most people thought the step was necessary. Among those who didn't, however, were those on whom his electoral coalition depended.
Might I suggest that this would be a good time to look for other backers? The current president, like the one before him, was elected by promising to focus on domestic issues. The coalition he put together was designed to promote that agenda. However, history has dealt GWB another hand. Contrary to his expectations, he is running a foreign-policy presidency. He needs fiscal policies to match. Particularly, he now has to assemble a "Coalition of the Willing" on the domestic front. He needs the support of groups, many of them traditionally Independent or Democratic, who are motivated by the new patriotism. A majority of the people are eager, even willing, to make sacrifices.
Frankly, at this point in history, a "War Sur-Tax" would be a winning issue.
* * *
Richard Branson of Virgin Atlantic is trying to get the British government to sell him its fleet of Concorde supersonic passenger-jets. Both the British and the French flag carriers plan this year to end service of the beautiful but uneconomical machines. To my knowledge, no one is working on a new generation of commercial supersonic jets. It is just barely possible that private carriers will continue some token supersonic service, but it looks as if this kind of travel will go the way of the transatlantic Zeppelin.
I never looked forward to the prospect of flying cars, but I had always assumed that supersonic passenger-service would be standard by the beginning of the 21st century. There were many intimations of doom thirty years ago, when Congress refused to supply subsidies to develop an American supersonic transport. The plane's proponents said that the refusal to supply the money meant that the US was ceding a critical growth industry to Europe.
In the year 2000, people said that the unexpected advent of the Internet was more than enough compensation for the absence of Lunar bases and videophones. They said that before the dotcoms collapsed. Now what have we to console us?
Copyright © 2003 by John J. Reilly
John's rather broad take on the Enlightenment makes me think of Pope Francis, and Pope Emeritus Benedict. Pope Francis' recent trip to America has been a huge success. From the very first, Francis' style has won over nearly everyone. You cannot find a better example of this than the way in which Francis laughed in obvious delight when he saw a baby dressed as the Pope in Philadelphia.
Poor misunderstood Benedict never had this kind of press. Partly, this is due to very real personality differences between the two men. But it is also due to the way in which portraying each man in a certain way fit the narrative. Inconvenient acts or statements by either man tend to fall down the memory hole. For example, who now remembers when Pope Benedict installed solar panels on the Vatican, or when he praised environmental values and criticized capitalism in an encyclical? Contrariwise, who remembers when Cardinal Archbishop Bergoglio compared a bill before the Argentine Senate regarding gay marriage to a work of the Father of Lies?
Activists on each side remember these things, but the general public neither knows nor cares. Yet, each man in his own way is working on the same project of human betterment, often doing and saying things that are indistinguishable. In fact, their differences only make sense in a certain shared context, that of the Enlightenment. As John said:
Left and Right, Progressive and Traditional, Liberal and Conservative, all these are oppositions that began with the Enlightenment and are meaningful only within it.
This shared set of assumptions is precisely what unites Francis and Benedict. Each man naturally appeals to slightly different strains of thought within the Enlightenment, but neither would be comprehensible without its shared set of assumptions. Eventually, modernity will come to an end, and something fresh and new will take its place. In time, that new point of view will make it difficult to distinguish exactly why Francis was popular in a way that Benedict never was [although in truth, Benedict was pretty popular, despite his press].
The World United
No less a person than Jane Fonda is now on record with the fear that "the entire world" will unite against the United States in the wake of the Iraq War. That would be good material for a humor column, but people who should know better have had thoughts along the same lines. Indeed, some of these thoughts substitute "hope" for "fear."
Consider the column by Matthew Parris in the London Times: It's Time We All Signed up for the Rest of the World Team. Though he does not touch on the merits of the Iraq War, he does go on at some length about American hubris and the need for the United Kingdom to return to the eastern side of the Atlantic. The gist of the argument is this:
"[T]hose nations that do not choose to take Washington's whip are going to need to coordinate their positions and keep in touch. The balance of power needs rebalancing. For want of a better term, I shall call the grouping of which Russia, Germany and France now form a putative core, the Rest of the World."
I don't want to beat a horse that was born dead, but I must point out that what we have here is a proposal for an Anarchist Union. If the world were capable of uniting, the US would not have had to conduct the Iraq War almost alone. (Giving due regard to the substantial contributions of the UK, Australia, and the other Coalition members, the war would not have happened if the US had not wanted it to happen.) Without rehashing the whole issue, it seems to me that any serious international system would have taken care of Iraq, and North Korea, long before now, even for human rights issues alone. War would probably not have been necessary; such a system would be able to impose sanctions that mean something. Such a system would also require a redefinition of sovereignty even more radical than that implicit in the European Union. The most uppity American acts would be far less irksome.
Whether or not the US was right about Iraq, the US acted precisely because the Rest of the World did not act. The institutions that purport to represent The Rest of the World worked to make collective action incoherent. Toothless Security Council resolutions, phony inspections, a porous sanctions regime that the "core of the Rest of the World" wanted dismantled anyway: the UN did nothing, and took 12 years to do it. The US believed that, finally, something real had to be done. Now we are asked to suppose that a new League of Nations will be formed to ensure that nothing is ever done again. I would not bet on it.
* * *
Let us count the quagmires. Soon after 911, there was the Afghanistan Quagmire. Then there was the Diplomatic Quagmire. Then there was the Desert Stalingrad Quagmire. We are in the waning hours of the Looters' Quagmire. Presently, we will be hip-deep in the Iraqi Internal Politics Quagmire. If we have learned nothing else in the past two years, we have learned that wetlands are drainable.
* * *
There is a critique of the Iraq War which goes far beyond issues of mere power and legitimacy. People who think that no use of force is legitimate without a UN stamp are still playing in the same intellectual ballpark as the neoconservatives. The dispute is really about how the goals of the Enlightenment can be best achieved; the proponents of the Rest of the World say merely that America is the wrong agent, implementing the wrong policies.
This is far from the only way to look at the question. One could also argue that America is the finest flower and avatar of the Enlightenment, and its activities in the world promote the Enlightenment most perfectly. According to a a Dr. John Rao, writing in Seattle Catholic, that is precisely what damns the Iraq War:
Orthodox Catholicism is what it says it is, and fails only in so far as people do not live up to its message. We are now witnessing the complete victory of a message that has never been what it says that it is, and becomes even more of a lie when people do live up to its potential for evil...These are not failures to live up to American Pluralist conceptions. This is what the American Regime, one of several socio-political by-products of revolutionary Enlightenment concepts, inevitably encourages.
As I have argued previously, the Enlightenment is a bit above our likes and dislikes. Everything that came after it was tinged by it: Left and Right were created at the same time in the 18th century. This is also true of Orthodox Catholicism in the 21st century. John Paul II is a man of the Enlightenment. He is comfortable with the fact, because he understands that there is more than one Enlightenment. The modern era is fragmented, but it is not essentially anti-religious or antinomian. Moreover, its program of human betterment can be considered nothing other than a Christian project, even if sometimes carried out in other terms.
At any rate, this is what the Enlightenment has meant in America. Michael Novak's essay in the April First Things, The Faith of the Founding, puts some welcome daylight between the actual "American Regime" and the recent jaundiced assessments of the whole Whig Tradition as an exercise in wiley anti-theism. All of this is not to suggest that the Enlightenment inaugurated the millennium, or that the United States is the Lord's anointed. What I am saying is that the Enlightenment is what we have. America is what we have. Any great good that is to be done in the current era will involve these two.
Copyright © 2003 by John J. Reilly
I've reproduced this because of the concluding paragraph, which I think is a very interesting point about modernity, not because I have any beef with Jones or his magazine.
I had been the Reviews Editor of Culture Wars magazine since it started in May 1995. I still think the original conception was a good idea. However, I became increasingly uncomfortable with the direction the magazine was taking. Finally I resigned in January 1998, though my pieces already submitted continued to run until March. The following letter to the editor, E. Michael Jones, illustrates why I resigned. If you would like to see Culture Wars for yourself, you can go the website by clicking: here
An Open Letter to E. Michael Jones from John J. Reilly
Once again, I ask you to please remove my name from the masthead of Culture Wars. [Note: Through an oversight, my name continued to appear on the masthead two months after we agreed it would be removed.] Provocative though the magazine continues to be, I really don't want to be involved with what is increasingly becoming a journal of psycho-sexual conspiracy theory.
The problems are apparent in your review in the May issue of Daniel Pipes' book, "Conspiracy: How the Paranoid Style Flourishes and Where It Comes From." For one thing, I am at a loss to understand what you mean by a "conspiracy." You cite the litigation thirty years ago to remove prayer from public schools as the product of a conspiracy "confected by Jewish organizations." There follows a quote from the Catholic bishops' attorney, William Ball, in which he lists the numerous Jewish organizations that supported the other side.
Mike, it's not a conspiracy when you organize to change public policy. It's especially not a conspiracy when your advocacy is not a secret. The Rockefeller Foundation no more "conspired" to legalize abortion than Operation Rescue is "conspiring" to end it. I object as a citizen to the use of the courts to promote abortion and contraception because it is a kind of judicial coup. However, the misuse of the courts in this fashion is a chronic problem in the American constitutional system. "Conspiracy" does not explain Roe v. Wade anymore that it explains Dred Scott or Schechter Poultry (the Depression-Era case that made FDR try to pack the Supreme Court).
I have not read the Pipes book, so I cannot say whether his treatment of secret societies and lodge politics is adequate. Certainly the subject has not been neglected by serious scholars. James Billington covers the role of "secret" societies (which actually operated quite publicly) in his discussion of the origin of the French Revolution in his "Fires in the Minds of Men." My favorite study of the matter is James Webb's "The Occult Establishment." (An interesting history of the Templar myth, which also makes short work of Augustin de Barruel, is Peter Partner's "The Murdered Magicians.") I am not aware of any serious historian who thinks that secret societies as such are the key to any period of history. When they are politically important, it's because they are not much of a secret.
In any case, I suspect what Pipes is most interested in is the specific branch of conspiracy theory that deals with the Jews. Or the Jewish Masons. Or the Jewish Masonic International Bankers, the ones with the black helicopters. Paul Johnson gives some coverage to this myth in his "History of the American People," starting with its American incarnation among the Populists in the 1880s. A hundred years later, when I was writing newsletters for the American Bankers Association, I came across exactly the same stuff (except for the helicopters) from radical-right groups in the Midwest. If Pipes thinks there is an irrational folk-tradition incorporating this material, he is on to something. In any case, it has nothing at all to do with what happened to American culture in the 1960s or with the process of repair.
The chief argument against your attribution of the 1960s to a Grand Conspiracy to impose "social control" is that the time was most marked by the freezing up of control systems. Serious policing stopped in many cities. Crime went through the roof. Governments lost control of their budgets. Public school systems disintegrated. Manufacturing standards declined. You say that what was really happening was the implementation of the Masonic program as described by Pope Leo XIII: "...the multitude should be satiated with a boundless license of vice, as, when this has been done, [the multitude] would easily come under [the] power and authority [of crafty and clever men] for any acts of daring." What "acts of daring" did your controllers have in mind? If you are talking about the decline in the birthrate, that was not engineered: it happened from Sicily to Japan, quite without the aid of the US Supreme Court. License is not an instrument of control: licentious people are useless to the very extent that they are licentious.
Finally, regarding the Enlightenment, I think you persistently misunderstand what order of thing it is. The Enlightenment is like the Hellenistic period, and equally contains both good and bad. Richard Rorty is a man of the Enlightenment. John Paul II is a man of the Enlightenment. E. Michael Jones is a man of the Enlightenment. So was Augustin de Barruel. Left and Right, Progressive and Traditional, Liberal and Conservative, all these are oppositions that began with the Enlightenment and are meaningful only within it. The revolutionary tradition is a creature of the Enlightenment. So is the grand tradition of conspiracy theories, to which I have no desire to contribute.
John J. Reilly
This letter originally appeared on May 19, 1998, on the online Discussion Forum of Culture Wars magazine. It started an exchange which it is unnecessary to reproduce in its entirety, though I would be willing to do so at the request of the other participants.
Part of the reason we ended up in such a mess in Iraq is that we had not clue what we were getting ourselves into, compounded with not knowing who we could trust. Our go-to man after the invasion, Ahmed Chalabi, is perhaps better known as Chalabi the Thief. Chalabi is a fool, but we were more foolish to have trusted him.
“C&H argue that nearly everyone in South Vietnam supported Ho Chi Minh except for the dictator and his cronies.”
My impression is that the pattern was more systemic.
It only recently dawned on me that a massive problem the U.S. had in assessing public opinion in South Vietnam in the critical 1954-1964 era was that practically zero Americans spoke Vietnamese. (In contrast, the U.S. had a modest but highly useful number of Japanese speakers by 1945; but then the U.S. quickly got into a confusing and dangerous situation in Korea made worse by practically no Americans having any knowledge of Korean.)
But lots of Vietnamese spoke French. And they tended to be anti-Communist.
But Vietnamese who spoke French and thus could articulate their opinions to Americans turned out not to be a representative sample of Vietnamese opinion. The French-speakers tended to be from families who had long collaborated with the French imperialists, and thus tended to be hated by the Vietnamese who didn’t speak French. There was also a lot of overlap among the categories “speaks French,” “Catholic,” “refugee from Communist North Vietnam,” “lives in Saigon,” “educated,” “hates the Communists,” and “tells us everybody they know hates the Communists.”
And there were hundreds of thousands of these people, far more than just “the dictator and his cronies.” (A lot of them live in America today.)
And Americans, many of whom had served in France in the World Wars, could converse fairly easily with these large numbers of French-speaking Vietnamese, who kept telling us it was a great idea for the U.S. to intervene in Vietnam against the spread of Communism.
The strategic problem was that although there were large numbers of French-speaking Vietnamese in Saigon, there were immense numbers of non-French speaking Vietnamese out in the countryside. And they hated the French-speaking Vietnamese and wanted to kill them.
Here are a couple of other East Asian examples: In contrast, the U.S. had a modest but highly useful number of Japanese speakers by 1945 after investing heavily in Japanese language schools and the like during the War. And the U.S. handled Japan pretty adroitly in late 1940s.
But the U.S. immediately got into a confusing and dangerous situation in Korea made worse by practically no Americans having any knowledge of Korean. Reading Wikipedia’s account of the U.S. role in South Korea in 1945 to 1950 is nightmarish because practically nobody in America had any clue about Korean language, culture, history, or politics. It was an entire civilization of very intense people about which Americans had only vague knowledge before suddenly becoming patron of the southern half in 1945. Liberal Americans were worried (not unreasonably) that the mercurial president installed by America would start a war with North Korea and it came as a shock when North Korea started the war on 6/25/50 and quickly overran most of the South.
It has been all too easy for us to be misled by whoever happens to speak English [or any other convenient lingua franca], when no one in charge has any clue about the history or politics of the areas we find ourselves fighting wars in. The English were far better than us at that game, and it still didn't pay off in the end. If you can't win, you shouldn't play.
What Would Hitler Do?
It makes a difference whether an occupying power can use a functioning civil administration or has to start from chaos. That was the burden of Elizabeth Stanley-Mitchell's essay in today's New York Times: No Peace Without Surrender. She notes, correctly, that it was much harder to get relief and reconstruction efforts off the ground in Germany in 1945 than it was in Japan. In Japan, the government and even the military were still working, because the country surrendered as a unit. (Much mention has been made in the press recently about the difference between a "capitulation" and a "surrender." Japan fudged the distinction by surrendering unconditionally on terms.) Germany, in contrast, had been occupied by several powers before the end. Few institutions were working. That is not a good place to begin, as the recent chaos at Basra illustrates. Stanley-Mitchell argues that the future of Iraq will be much brighter if we can find someone with sufficient authority to surrender.
A correction is in order, though. Contrary to what Stanley-Mitchell says, Germany did surrender in 1945, on May 7. Some regional commanders had surrendered in the preceding days. However, on that day, the German military as a whole surrendered, to General Eisenhower and representatives of all the Allies, at Riems. Neither was this just an act of the military. General Jodl, who represented Germany, signed at the direction of Grand Admiral Doenitz, who succeeded briefly to the leadership after Hitler killed himself the week before. The Allies never treated with Doenitz's government again, but the Germans did lay down their arms in a coordinated fashion. (The chief exceptions were in the east, where some units continued to try to fight their way west.)
So, unless the Baathist regime in Iraq exhibits some uncharacteristic concern for legal forms in its last days, this collapse may look more like the end of the Confederacy than of the Third Reich. Robert E. Lee surrendered, but the Confederate government never did. Indeed, after it fled Richmond, it planned to try to contact a surviving southern army and continue the struggle. For the Iraqi government to do something similar, however, it would first have to admit it has lost control of Baghdad.
* * *
When I sat down to write this entry, I had intended to speculate a little about possible career options for Iraq's Minister of Information, Mohammed Saeed al-Sahhaf, but too many people seem to have had the same idea already. (The Iconoclast, for instance.) In any case, soon we will no longer be able to enjoy his briefings, which are real-time exercises in alternative history.
It is, perhaps, no slight to the man to suggest that he is no Joseph Goebbels. As Minister of Propaganda, Goebbels used to make things up in the final weeks of the Third Reich, but I am not aware that he made up quite as much as his Iraqi counterpart. He had to be realistic about the Russian assault on Berlin, because he was the city's Nazi Party leader, and so to some extent responsible for its defense.
Goebbels' diaries for 1945 are available in English (Hugh Trevor-Roper was the editor). They show that he knew exactly what was happening; so did Hitler. The Nazi strategy was based on the knowledge that there was tension between the Western Allies and the Soviets. Goebbels correctly surmised that the tension would get worse when the two halves of the alliance came into direct contact. The Nazi strategy was to keep a government in being, in the hope that open hostilities would break out, and then the East or West would try to ally with Germany.
In this the Nazis were more delusional than the Baathists. The Iraqi leadership was rational in believing that a coalition of Security Council powers would bring the Coalition to heel before it got to Baghdad, or even that domestic US opposition to the war would force a stand down. The prestige press all around the world was arguing for just this.
* * *
It is possible to overplay the analogy between the Iraq War and World War II. Paul Krugman's column in The New York Times today, entitled The Last Refuge, manages to make Senator John Kerry look even worse by using such an analogy to defend him.
The irrepressible Krugman reminds us that, in 1944:
Thomas Dewey, the Republican candidate, campaigned on the theme that Franklin Roosevelt was a "tired old man." As far as I've been able to ascertain, the Roosevelt administration didn't accuse Dewey of hurting morale by questioning the president's competence. After all, democracy "including the right to criticize" was what we were fighting for.
Then, unfortunately for the object his of solicitude, Krugman makes this connection:
Last week John Kerry told an audience that "what we need now is not just a regime change in Saddam Hussein and Iraq, but we need a regime change in the United States." Republicans immediately sought to portray this remark as little short of treason.
I don't doubt that Thomas Dewey said that FDR was a tired old man. He was a tired old man; people could see that just by looking at him. Imagine, though, that Dewey had said that FDR should be treated the same way that the Allies planned to treat Hitler: that FDR should be tried for war crimes, or removed from office by force. That might not have been treason for legal purposes, but certainly would have comforted the Axis Powers; and yes, in that context, to say such things would have been unpatriotic.
I actually had not paid much attention to what Senator Kerry said. Only after reading Krugman's column did I realize just how outrageous the comment was.
* * *
Speaking of malicious people making things worse for themselves, there is a lesson to be learned from the assault on Baghdad by those readers who plan to start their own fascist states. Those triumphal avenues in Baghdad, which now have American tanks on them, once provided wonderful settings for the monuments to the Maximum Leader. In fact, that sort of city layout is related to the growth of state power in various ways. In post-revolutionary Paris, the dramatic new boulevards not only allowed for patriotic parades; they also made it far easier to suppress popular insurrections. A city laid out with wide, straight streets is the worst sort of urban terrain for irregular fighters. However, irregulars seem to be the only effective force the Iraqis have. As Tolkien put it: "Oft evil will doth evil mar."
* * *
Finally, if you will permit me one last mention of The New York Times, we see this same principle applying in its pricing policy. The Sunday New York Times went to $3.50 this last weekend. This happens even as the paper's content becomes less reliable and more bigoted. I can't imagine who the audience is for the glossy special features that seem to have occasioned the increase, but I know I am not in it.
I have been reading the Times every Sunday since at least the mid-1970s. Enough is enough, I think.
Copyright © 2003 by John J. Reilly
Terms of Play: Essays on Words that Matter in Videogame Theory
by Zach Waggoner, editor
McFarland Books, 2013
$40.00; 244 pages
I received this book for free as part of LibraryThing's Early Reviewers program.
I have been sitting on this book for two years, so that finally became the basis for my review. I just can't read this book. I picked it up and put it down several times during the past two years, and I am now willing to consider the book unreadable and move on.
I have a confession to make. At one point, during a slough of despond, I actually considered doing something like this book as a career. I looked into graduate programs, went to a conference, I even did some thesis work. Thankfully, nothing ever came of it, and I regained my senses. Seeing this book, I was fortunate indeed. There are interesting things to say about videogames, but I don't think you will find them here.
Hayao Miyazaki's World Picture
by Dani Cavallaro
McFarland Books, 2015
$35.00; 204 pages
I received this book for free as part of LibraryThing's Early Reviewers program.
I tried to like this book. I love Miyazaki's works, and this book's cover blurb covers a lot of things I am interested in. However, it is probably the things in this blurb that I am not interested in that make the book unreadable for me.
Hayao Miyazaki has gained worldwide recognition as a leading figure in the history of animation, alongside Walt Disney, Milt Kahl, Tex Avery, Chuck Jones, Yuri Norstein, and John Lasseter. In both his films and writings, Miyazaki invites us to reflect on the unexamined beliefs that govern our lives. His eclectic body of work addresses compelling philosophical and political questions and demands critical attention. This study examines his views on contemporary culture and economics from a broad spectrum of perspectives, from Zen and classical philosophy and Romanticism, to existentialism, critical theory, poststructuralism and psychoanalytic theory.
There are some really interesting things here. I appreciate the effort that went into researching this book, and the way the author tried to tie Miyazaki's work together into a coherent whole. What I don't appreciate is the prose style:
The key words in the chapter headings used in this study—time, space, vision, the courage to smile—are necessary demarcators of specific aspects of Miyazaki's thought. However, their relative arbitrariness cannot be denied. Indeed, the director's world picture is distinguished throughout by such fluidity, and such a passion of unrelenting metamorphosis, as to be by and large unsympathetic to demarcations. In Miyazaki's cosmos, time and space coalesce in a continuum of Einsteinian resonance.
I think there is something interesting here, I just don't have the patience to wade through this. I do find the book is much improved if you stop reading the text closely and just skim it. Then the ideas come through more clearly, without needing to try to analyze the text. Perhaps I come to this book with unfair expectations. Miyazaki is a very interesting filmmaker, and I was hoping for something more accessible. To a specialist audience, this book may be just the thing. For the general reader interested in Miyazaki, I cannot recommend this book at all.
This is a fine essay of alternative history by John Reilly, regarding an early twentieth century China in which someone managed to cobble together enough Confucian orthodoxy to proclaim themselves Emperor, of a sort, sparing China Chairman Mao and the Cultural Revolution.
In a fascinating aside, John gets at what is really interesting about alternative history: events across space and time in human history seem to exhibit patterns. In some ways, history is a panoply of detail, a pageant of colors. In other ways, the same damn thing just keeps happening over and over again, and the former can obscure the latter.
A New Dynasty in 1916?
by John J. Reilly
Like many what-ifs, this one was suggested by something that almost happened. The provisional president of China in 1916, a general named Yuan Shikai (1859--1916), actually did declare himself emperor, though he had to back down after a few months. As is also the case with many what-ifs, there are some pretty good reasons for why the attempt to found a new dynasty failed. What I would like to do here is sketch a historical configuration in which the successful launching of a new dynasty would have been easier. Then I would like to speculate for a bit about what the implications of continued monarchy in China would have been for the rest of the 20th century.
Before describing Yuan's unsuccessful dynastic project, I would like to thank the people who alerted me to errors in the original version of this essay that I posted to the newsgroups alt.history.what-if and soc.history.what-if. One of the things that I have discovered is that mention of this incident still excites emotional condemnation. Maybe for good reason. My only excuse for my errors is that the brief accounts in John King Fairbank's books, "The United States and China" and "China: A New History," are a bit misleading.
Additionally, I am calling the hypothetical new dynasty discussed here simply "The New Dynasty." In an earlier draft, I had cleverly called it "The Xin Dynasty," on the grounds that "Xin" means "new." Further research reminded me that the usurper Wang Mang had established a regime with the same pronunciation 2000 years ago. A little knowledge is an embarrassing thing.
Yuan Shikai was the chief architect of the New Army that was created in the terminal phase of the Qing Dynasty. Although considered to be a friend of the reformers who sought to establish a constitutional monarchy, he supported the Dowager Empress in her last, unhappily successful effort to stifle reform in the final years of the dynasty. He was involuntarily retired at the time of her death in 1908. At the time of the Revolution of 1911, however, he was recalled to Peking to save the dynasty. To the surprise of the last Qing officials, however, he supported the insurgents.
The end of the imperial system in 1911 seemed at first to have been accomplished without any major national calamity. At any rate, there were no peasant uprisings or civil war. The revolution was sparked by the revolt of a major army garrison; others soon followed suit. The provinces, led by local assemblies, essentially seceded from the central government. The leader of China's modernizing forces, Dr. Sun Yatsen, was briefly made provisional president by a national parliament. However, when the last emperor finally abdicated in 1912 under pressure by Yuan Shikai, Sun deferred to Yuan. Yuan, after all, did have greater governmental experience. He also had the army, at least in North China.
On becoming provisional president, Yuan quickly suppressed the national parliament and the assemblies. The government of the country at the local level was returned to the magistrates. During 1915, he took steps toward establishing a new dynasty. His bid for the throne was mildly favored by the British, but strongly opposed by the Japanese. The attempt to secure Japanese acquiescence was at least one factor in his agreement to most of Japan's very harsh "21 Demands," which severely impinged on Chinese sovereignty. In any case, there were other reasons for staying on the good side of the Japanese at that time. The British were wholly preoccupied by the First World War, so their Japanese allies at least temporarily had a free hand in East Asia. (Besides their Chinese initiatives, the Japanese used the opportunity to pick up Germany's colonial possessions in the region.)
Despite the unfavorable diplomatic situation, Yuan declared himself emperor at the beginning of 1916. It did not work. He could not get foreign support, military or financial, though investors had hitherto regarded him as a good credit risk. He was opposed by his own generals for a variety of reasons, and he had forfeited the support of the nation's reformers. He abandoned the monarchical experiment in March. He died in June, reportedly of natural causes.
Yuan was probably not the man to found a new dynasty in any case. His career had been made in the crepuscular world of the late Qing. One of the benefits of dynastic change is that it allows for a fresh start in policies and personnel; Yuan offered neither. Let us assume, however, that a more attractive personality had attempted a similar enterprise. Is there any plausible set of historical circumstances under which the New Dynasty could have been established in 1916?
Yuan's most pressing handicap was probably that the advent of the First World War left him to face the Japanese alone. While there is a good argument to be made that a war like the First World War was almost inevitable, there is no particular reason why the war had to start at the time and in the way it did. Worse marksmanship in Sarajevo in 1914 could easily have delayed the start of the World War by a year or more. Even had it started in 1914, a cease-fire might have been declared when the armies deadlocked in the West. For that matter, the war would have been over by 1915 had the Schlieffen Plan worked. A quick defeat for Britain, before it had invested heavily in men and emotions, would not have done the British Empire any immediate harm. Rather the opposite, in fact. One suspects that, like the Russians after their string of defeats in the Balkans and the Far East in the early years of the century, the British would have determined not to lose further ground anywhere in the world. This would have predisposed the British to oppose Japanese policy in China simply for the sake of opposing.
In any case, this was the direction in which British policy had long been evolving. By 1914, British were already dubious about their alliance with Japan and they scrapped it as soon as they decently could after the War. A unified China that needed the protection of the Royal Navy against Japan would not have endangered British interests at Hong Kong and Shanghai, but it would have been a formidable barrier to further Japanese expansion.
Rectifying the international situation, however, solves only the proximate problem. The deeper difficulty that a new dynasty would have faced would have been a crisis of legitimacy. Chinese dynasties made perfect sense in terms of Confucian ideology; they had been the only imaginable form of national government for upwards of two millennia. The Qing had indeed been overthrown in part because they were Manchurian foreigners. However, the movement against them had been informed, not simply by Han nationalism, but by a critique of the Confucian heritage itself.
Throughout Chinese history, successful brigands and ambitious generals had become acceptable as the founders of dynasties by signaling their intention to follow traditional precedents of government and morality. There was almost an established drill to go through, down to the wording of key proclamations. After a period of interdynastic chaos, even a personally horrible candidate who honored the forms could nevertheless get the support of the local gentry and magistrates. They did not have to like a would-be dynastic founder; they simply needed to be assured that government would again become predictable and comprehensible.
It was precisely this cultural consensus that reformers in China had spent the prior 50 years destroying. Though no democrat, Yuan Shikai still falls into this class. His modernized national army, and his use of it as the primary instrument of government, was as un-Confucian as the democratic assemblies favored by Sun Yatsen. There were plenty of tradition-minded people in China still in 1916, even among the literate elites. However, they were not for the most part the people who managed new enterprises or who understood modern administrative techniques. Yuan could not have created a dynasty on the traditional model without bringing the country back to 1800.
On the other hand, even if a traditional monarchy was not possible, it does not follow that no monarchy would have been possible. The 20th century has not lacked for monarchies that justified themselves by simultaneous appeals to tradition and the project of modernization. There was a gaggle of them in the Balkans between the First and Second World Wars, kings of shaky new states who make themselves dictators when parliamentary government stopped working. In practice, these regimes were not much different from the party dictatorships elsewhere in Europe.
The most successful example was not in Europe, but in the Middle East. There, the new Pahlavi Dynasty of Persia (which it taught the world to call "Iran") attempted a program of national modernization comparable to, but milder than, the reconstruction of Turkey undertaken by Kemal Ataturk and his successors. To be a Pahlavi Shah was not quite the same thing as being a Shah in prior Persian history had been. The Pahlavi Shahs had new bases of social support and a novel relationship with the outside world. Still, some of the ancient terminology of government lent a bit of credibility to the letterheads of the new regime. We should remember that it actually lasted quite a long time for a government of ruthless modernizers, until the late 1970s. It is conceivable that a competent candidate could have established an analogous government in China, and so might have become "emperor" in a similarly qualified sense.
So how would a new dynasty have affected Chinese history for the first half of the 20th century? Such speculation may require less imagination than might at first appear. The reality of the New Dynasty would be that, while in some respects traditional in form, the government would actually have been a moderately conservative military dictatorship. We don't have to speculate about what such a regime would have looked like: the Nationalist government provides the model. There would have been two major differences, however.
First, the New Dynasty would have had a far greater measure of legitimacy than the Nationalists ever achieved, even during the brief period before the Japanese invasion when they governed almost the whole country. Legitimacy and hypocrisy are often inversely related. The Nationalist government pretended to be running a republic; it delivered less than it promised. The New Dynasty, on the other hand, would have been pretending to be a Confucian monarchy. All it would have needed to do is govern the country better than did the Qing in the 19th century. This would not have been a tall order.
The biggest advantage, however, would be that a dynasty established around 1916 might have succeeded in preventing the warlord era entirely. This does not require a great leap of faith. After all, before 1916, even Yuan Shikai had shown some ability to put uppity provincial commanders in their place.
There are a few things that we might reasonably assume about our hypothetical New Dynasty. As we have seen, it would probably have had British support. Partly for that reason, it would have had more credibility with international investors than did the Republic. If it also had just enough features of a parliamentary democracy to garner some support among the business class and intellectuals, then it seems likely that a formal monarchy would have been better able to control potential warlords than was the Republic. Deleting the warlord era would not only have spared the country the damage and disorder of that period, it would also have probably spared China Communism.
Chinese Communism as an insurgent movement was able to gain a foothold only because of the breakdown of national authority in the 1920s. It was because the central government was in eclipse that the Communists were able to establish bases in south-central China, and then to escape to Yennan when those bases were attacked. There would still, of course, have been a Communist Party in some form, but the New Dynasty government would not have needed to make common cause with it, as the Nationalists did early in this period. (For a while, foreign observers tended to think of the Nationalist Party as a Communist front.)
If China had not fallen into disunity, one suspects that the Communist Party would have been more urban and less rural than in fact it was. After all, in this scenario the countryside would have been better policed. In all likelihood, its history would have paralleled that of the Japanese Communist Party; frequently suppressed, never destroyed, important primarily as an aggravating factor during episodes of civil unrest.
Would the New Dynasty have performed much better against the Japanese in the `30s and `40s than the Nationalists did? One of the axioms of world history is that military dictatorships have incompetent militaries. They use their armies as police, and cops are not soldiers. Still, it is hard to imagine that the New Dynasty army could have done worse than the Nationalists did. In any case, assuming that a revived Chinese Empire would have been a long-term client of Britain, the Japanese would have had to think twice before making provocative actions south of Manchuria.
The effect of a more coherent China, on the other hand, might have been to sharpen Japan's strategy toward it. The Japanese war against China was a meandering series of campaigns, often without discernible strategic purpose. A Chinese government that actually governed the country would have made a far more valuable target. Japan might have confined their Chinese operations to a single blitzkrieg campaign to compel China to neutrality for the great offensive of 1941, and it might have worked.
And as for the second half of the century? We will assume that the Japanese still lost the war. Despite the havoc the war caused on the Asian mainland, it was always a naval war, and there is no way Japan could have won it without forcing the United States to a negotiated peace in the first few months. Would China then have proceeded more or less directly to full modernization, on the model of Japan? Conceivably, but my own suspicion is that the second fifty years would have been surprisingly like the history of the People's Republic.
The New Dynasty would no doubt have been greatly energized by being among the victors in the war. This would be particularly the case if, as this scenario suggests, the country had been less damaged by the conflict. Doubtless there would have been a decade or so of very rapid growth, and the beginning of real prosperity in some regions. The problem is that a regime of this type does not, in the long run, benefit from improving conditions. As the history of the Pahlavi regime in Iran illustrates, the effect of modernization in an authoritarian context can often be to manufacture an opposition that would not otherwise have existed. At the beginning of such regimes, people are often grateful for the establishment of basic civil order. Later, when economic conditions improve, they are content to look after their private lives. Finally, there will be a self-assured middle class that asks the regime, "What have you done for us lately?" By that point, the chief benefit that the regime could bestow would be to abolish itself. Such situations lead to trouble.
The chronology could have been similar to that which happened in the real world: great disorder in the 1960s, the restoration of social peace in the 1970s, followed by relaxation in the 1980s. The jettisoning of the New Dynasty would probably have been the price of the restoration of order. As happened after the overthrow of the last Shah of Iran, the successor regime would probably have been more "conservative" in some ways. The conservatism, however, would have been of the "social conservative" type. Confucian tradition would have been quite as capable as Shia Islam of generating a critique of modernity. This sort of consideration never troubled the People's Republic much, but then the Communist regime is explicitly dedicated to uprooting Confucianism. The New Dynasty, in contrast, would have been based in part on a show of respect for tradition. In other words, the regime would have had to preserve the standards by which it would eventually be judged and found wanting.
There would, no doubt, have been vast differences from the China of today had an imperial regime of some sort been reestablished after the Qing. Still, the upshot could have been that, after about 1975, China would again have been a republic of sorts. Like India, it would have been a vast country with greatly varying levels of development. Because of a lack of local tradition, it would probably not have been a very democratic republic. Still, it would no doubt have been friendly to private economic initiative, carried out in the context of overall government planning.
There is a fashion in certain history departments to encourage speculation about alternative histories as a way of demonstrating the contingency and unpredictability of history. Fair enough, but I myself have doubts about how much contingency and predictability history actually manifests. No doubt it is true, as the chaos theorists tell us, that the flapping of a butterfly's wings at Peking can cause tornadoes in Kansas a month later. From this, many students of alternative history surmise that similarly tiny changes in the events of the past could create a whole different world farther down the line. The reality is that, while a butterfly may cause tornadoes, it cannot cause an ice age, or prevent winter from turning into spring. There are principles of conservation in history, whereby many different routes can lead to a similar destination. One of the uses of alternative history is to discern what was really inevitable.
Copyright © 1998 by John J. Reilly
China is going through one of its periodic financial crises, so this series of book reviews and essays by John Reilly seems appropriate. While I am skeptical about Gordon Chang's predictions of China's collapse [Chang is a Hedgehog in Isaiah Berlin and Philip Tetlock's terminology], eventually, it seems like events will probably eventually catch up with his predictions. Fundamentally, the Chinese financial system seems like the kind of thing that works until it doesn't. It is just really hard to know when that is going to happen.
The Fragile Financial Foundation of
China's Extraordinary Rise
By Carl E. Walker and Fraser J. T. Howie
2011 John Wiley & Sons (Asia) Pte. Ltd.
256 Pages, $29.95
Famously, in 2001, the investment analyst Gordon Chang published a book entitled The Coming Collapse of China. Though by no means disparaging of the great progress that China had made since the beginning of Deng Xiaoping's reforms in the 1970s, the book dwelt on the fundamentally diseconomic nature of the country's State Owned Enterprises (SOEs) and on the hilarity that is the Chinese banking system. It also made many pointed comments to the effect that the Chinese Communist Party had become an essentially parasitic caste about which the Chinese people would eventually ask, "What have you done for us lately?" He suggested that the system would implode around 2006. By that time, he surmised, the transparency demanded by the World Trade Organization, which the regime imprudently insisted on joining, would reveal the phantasmal nature of the Party's attempt to maintain a communist-capitalist hybrid.
Now come Carl E. Walker and Fraser J. T. Howie, an investment banker and a financial writer respectively, with many years of experience in and around China. In effect, they seek to explain why China remains uncollapsed a good five years after Mr. Chang's doomsday date, though that is not quite how they put it; they do not even cite the earlier book. They wax effusive at times in their praise of the benefits that the People's Republic has brought and on the statesmanship of certain of its leaders. Indeed, their admiration for Zhu Rongji, premier from March 1998 to March 2003, is so complete that they sometimes seem like partisans in the bureaucratic battles they describe, particularly the struggle of the central bank, the People's Bank of China, against those fiends at the Ministry of Finance. The authors usually venture only subdued suggestions about the kind of event that might cause a crisis of the system. Their presentation is prosaic and detailed in a way that only an accountant could love, but it does make a very strong argument that China's sterling economic growth statistics by no means imply that China should be regarded as an inviting investment opportunity. Quite the opposite: terms like "debt," "capital," "stock," and "contingent liability" do not mean in China what they mean in the rest of the world. Economic China is a great cloud of unknowing, a region of financial opacity that will not grow less opaque as long as the Party remains in power.
The proof of this is that, during and after the financial crisis of 2008, China was the dog that did not bark. Any earlier economic Great Power in the midst of its expansive phase would have used such an event as an opportunity to buy up the suddenly cheap assets that littered the world's economic landscape. China did no such thing, beyond one or two modest overseas acquisitions. Not only did financial capital not flow out of China; neither did intellectual capital. Though the Chinese increasingly like to boast that they have devised an economic system that is different from and maybe better than that of the developed world, the fact is that their system cannot be exported. The issue is whether it is sustainable domestically.
The authors point out that the development of China has not been a smooth upward glide after the end of the Maoist era. There have been bubbles, panics, and periods of serious inflation. The banking system has collapsed at the end of the 1970s, 1980s, and 1990s. The Tiananmen Square incident of 1989 was only the social expression of a period of monetary mismanagement. Indeed, the authors argue that the reforms that had been attempted earlier were essentially negated at the end of the first decade of the 21st century. At that time, the banks were directed to make an astronomically large aggregate of infrastructure loans, mostly to local governments through shell organizations, to make up for the sudden decline in the export market. The loans look solid only because they are new. In reality, there is no obvious way they can provide income streams to pay themselves off.
These practices simply repeat the post-Maoist pattern, and they are exactly what Gordon Chang was talking about. There are four big government banks, as well as lesser institutions. Banks do operate conventionally, especially when they deal with the outside world. However, the Big Four, either directly or through other institutions acting at their behest, ensure that the financing for the key elements of the economy takes the form of loans made on the basis of politics rather than of economic calculation. These are made principally to SOEs that are under no particular pressure to pay their arrears, much less to pay on time. The result is that the banks fill up with nonperforming assets that have to be disposed of periodically. They can be written off, or their repayment can be delayed into a future when the incumbent administrators will not be responsible for them.
The preferred Chinese solution has been to kick the can down the road. This can be done in various ways, but here is an unusually clear example of how it was done at the beginning of 1998:
In the first step, the [People's Bank of China, which is the central bank and not one of the Big Four] reduced by fiat the deposit-reserve ratio imposed on the banks, from 13 percent to eight percent. This move freed up RMB270 billion in deposit reserves which were then used on behalf of each bank to acquire a Special Purpose Treasury Bond of the same value issued by the [Ministry of Finance]. In the second step, the MOF took the bond proceeds and lent them to the banks as capital . . . This washing of RMB270 billion through the MOF in effect made the banks' depositors -- both consumer and corporate -- de facto shareholders, but without their knowledge or attribution of rights.
Premier Zhu's strategy was to make a clean break with the past by actually writing off the bad debt. That would allow the purged banks to take in real money, in contrast to fiat capital from the central bank or the Ministry of Finance, through IPOs and debt offerings to foreigners and to genuine entrepreneurs at home. This would not only provide a market-based reality check for the economy as a whole; it would also allow Chinese banks to develop world-class levels of expertise, which they in turn would be able to offer to the Chinese government's own financial regulators. The authors remark several times that the hopes for the import of foreign expertise were realized. The financial system of China today was built largely with the advice and enthusiastic collaboration of Goldman-Sachs and other institutions that they authors do not seem to realize have become names of ill omen. However, the crucial features of the premier's reconstruction strategy were not realized. The result was that Chinese finance became an artist's conception of a modern system, overlaying a mechanism that combined elements of the Soviet and feudal systems.
Premier Zhu's intent was to deal with the nonperforming assets by creating entities like the Resolution Trust Corporation (RTC). That institution was how the United States managed the savings-and-loan crisis. The RTC took on all the assets of the saving-and-loan institutions that had failed and whose depositors' had been paid off by federal deposit insurance. The assets were sold for whatever the market would offer. To most people's surprise, the RTC broke even. Encouraged by this success, the Chinese created one such "bad bank" for each of the Big Four banks. The idea was that the assets would be sold at a discount and the banks would then close. For bureaucratic reasons, however, these things did not happen. The values of the bad assets were never written down, and the bad banks were not closed. They have gone through various transformations over the years, but their worthless assets are still somewhere in the financial system, and are still marked at full value.
The Big Four from which the bad assets had been drained, however, now appeared to be in sterling condition, and able to make more loans. This they did, nationally and soon internationally. They raised capital for themselves in successful IPOs. They also continued to make political loans; which, again, when they are new, seem to be as good as any other asset. By and by, though, the banks require further infusions of capital to bring their ratio of capital to assets up to international standards. This is an inevitable result of ferocious lending; bank loans are assets to the banks, remember, so a bank must have a certain amount of capital on hand as a cushion against the loans that go bad. The authors point out that an amount equal to all of the money from the last big recapitalization of the banks, which happened about four years ago and was funded by sales of stock, was paid out almost immediately as dividends to the Ministry of Finance and to other government bodies that own a controlling interest in the banks
The banks are actually the feature of the Chinese financial system that most closely resemble their developed-world counterparts. The other two major components, the bond market and the stock market, are idiosyncratic institutions that could not interface with the wider world even if the government were inclined to let them try.
The interest rates on bonds are decided politically, as are the identities of the enterprises that can sell them; the matter has little to do with risk assessment by the lenders and underwriters. In any case, bond rates are not much higher than the derisory rates offered by bank accounts. Businesses acquire bonds to conform to some official policy, not as genuine investments.
The situation is a bit different with stocks. Along with real-estate speculation, stocks are the only way to better the return on bank interest rates. However, the actual ownership of the entities represented by the securities that are traded with such enthusiasm in the Chinese stock markets is never really at issue. The entities are SOEs, for the most part. This means that they are national property, if not quite the People's Property anymore. In any case, the price of stocks is not determined by estimates of the profitability of the SOEs. Prices rise in response to real or perceived changes in state policy, particularly monetary policy. All the retail stockowners are pure speculators; there are no "natural investors" in China, in the sense of people who invest for the long term. The long term is a political matter.
Not much of the real capital in the system comes from the stock speculators, of course. The basis of the system is what the authors call the "heroic savings rate" of the Chinese people. For the most part, there really is no place to put most of one's money except in the banks, even if the real interest rates are negative. Those savings support whatever real growth occurs in the system. However, this arrangement is predicated on a population that is overwhelmingly of working age and is little inclined to spend. This is one of the few contexts in which the authors allow themselves to sound apocalyptic. The fact is that the one-child policy means that the population is becoming quickly and dramatically older, and older people who cannot work have to spend.
For the moment, though, the authors say that the Party has arranged China in a way that is very satisfactory to itself and not intolerable to the population as a whole. The country does have a real market economy, principally in a few great urban agglomerations on the eastern coast. These are a source of foreign capital and expertise; at the same time, the arrangement allows the Party to insulate its beloved Inner Economy of SOEs and parastatals from all global events except commodity shortages. This arrangement is not so different from the state of things during the latter Qing Dynasty, when Treaty Ports were a feature of the coast but the interior of China was less affected by foreign influence. We might note some historical parallels that the authors did not mention. Today's debates within the Party about the desirability of state direction versus market forces is somewhat reminiscent about the debates during the Ming Dynasty about whether the Yellow River should be accommodated in a wide bed defined by dikes (the cheap, small government solution) or dredged deeply (the dirigiste favorite). An even better fit is the argument during the Former Han about whether the state's salt and iron mines should be privatized.
In any case, the Party is interested in the market economy only to the extent that it affects the Inner Economy. Readers will note the resemblance between the Inner Economy and the "commanding heights" to which Lenin alluded when he defended his New Economic Policy against the charge that the private enterprise it allowed was a form of counter-revolutionary backsliding. Essentially, Lenin argued that, as long as heavy industry and the utilities remained public property, then the economy remained socialist, no matter how many private traders there were. The rulers of China seem to be of similar mind.
The greatest irony in all this, the authors remind us more than once, is that China is now ruled by an oligarchy of old revolutionary families. This development was facilitated by a bureaucratic shuffle that occurred in connection with a reform of the SOEs. These had once been governed by state institutions, according to the Soviet command-economy model. The controlling bodies had been headed by persons who held ministerial rank, generally as vice-ministers, and often a place on the Politburo, if only as alternate members. In China, these controlling institutions were closed down, theoretically in the interest of economic freedom. Their place was taken by regulatory agencies with much less authority. The vice-ministers and politburo members, however, simply became the heads of the enterprises they had formerly overseen, while maintaining their positions in the state and Party. It is interesting to note that the Big Four banks did not benefit from this process of the old political bosses taking direct control. The Big Four and the financial system in general are subject to the state in a way that SOEs are not. That follows the Soviet pattern, too, which subordinated banks as mere payment systems.
Also conforming to the Soviet model is the way the classical Communist era was wound up. The oligarchs of the Russian Federation were essentially Soviet economic ministers who had contrived to walk off with the assets of their old ministries. Pretty much the same thing happened in China, but with notably greater tact.
In a way, the picture of China in Red Capitalism is even more disconcerting than that in The Coming Collapse of China. The latter book at least gave a clear picture of where the faults in the system were and when they could be expected to express themselves. In Red Capitalism, however, the authors suggest that the direction of the Chinese economy is no less wrong-headed, but the system successfully masks the fact. They end the book by likening the Chinese financial system to the layout of the Forbidden City. That complex is a maze of courtyards and narrow corridors designed to frustrate the line-of-sight on the ground, so that only people in the upper stories have a clear view of the whole. Readers may suspect this model to be too optimistic, however. If China really is as the authors describe, then no one, least of all the people in charge, knows what is really happening. This has never been a formula for success.
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