Last week was 六四 in 中国/China - June 4, the day the government massacred protesters around 天安门广场/Tian'anmen Square in 1989. I happened to be meeting with a friend of mine on the anniversary, a grad student at 北大/Beijing University, China's most prestigious university whose students were extremely active in the 1989 protest movement. I asked him what he thought about 6/4. He didn't even realize that it was the anniversary of the massacre.
The Tian'anmen massacre is understood very differently in China than in the USA. Americans see it as very black and white: the protesters were heroes fighting for democracy, the government was a villain crushing the people's hopes. Chinese people, on the other hand, tend to either accept the government line - that the protests were destabilizing and threatened chaos if nothing was done - or have some sympathy for the protesters' ideals and goals but nevertheless criticize them for being too reckless.
Even more striking is the contrast between appraisals of 6/4's place in history. For Americans, the Tian'anmen massacre is the defining event of the last 25 years of Chinese history. The strongest and most enduring American perception of China - of a country with common human rights violations and few freedoms - stems directly from 6/4. Chinese people disagree. For most, 6/4 isn't even worth commemorating. The discourse on human rights in China is seen as largely a foreign imposition used against the country by foreign powers that want to prevent China's rise to greatness. This isn't to say that Chinese people aren't worried about or critical of the violation of certain freedoms, but grouping all these issues under the rubric of "human rights" is rarely heard.
You might assume that this is because the climate of repression prevents people from saying openly what they feel, but the "climate of repression" in China is far overblown in American minds. Holding a protest or distributing essays might get you in trouble, but people have no qualms expressing themselves in private. Even writing critical essays on the web is tolerated to a certain extent, as related in a recent New York Times Magazine piece.
What people are worried about, and often very angry about, is not the rights of dissident intellectuals but the far bigger social problems of growing inequality and economic insecurity. The right to organize, the right to a stable job, the right to education, the right to health care - these issues are constantly being debated in China, even tho simply raising them is an implicit critique of government policy. Yet many, perhaps most, Americans wouldn't even consider these to be human rights. Recognizing both the latitude to criticize the government (within limits) that does exist in China, and the nature of that criticism as being primarily economic, makes the typical formulation of American writers - that the Chinese government allows economic freedom but not political freedom - seem like nonsense.
Other human rights violations, far more severe than those affecting intellectuals, are mostly ignored in both the West and in China. Two key ones are government-supported Han colonization of ethnic minorities' lands and all its accompanying repressions and the rights of prisoners. Many Americans have a vague idea that China is oppressing Tibet, but remain ignorant of the equally severe repression in Xinjiang directed especially against Uighurs. Han Chinese, far from seeing this as a human rights problem, harbor deep stereotypes against "dangerous" ethnic minorities, especially the Uighur, and see Han/Communist Party colonization as liberation. In this regard they're not so different from other imperialist peoples, including Americans, who rarely question the imbalance of power between themselves and their objects of domination.
At all levels of the criminal justice system, too, there are major violations of rights that go far beyond the unjust arrest of people for exercising their right to free speech. False arrest, torture, false testimony and forced confessions by the police, mistreatment of prisoners, execution - the list of rights violations in the Chinese justice system goes on and on. Americans hear about these when they affect dissidents, or sometimes professionals or Falun Gong members, but these groups make up a small percentage of the people suffering in Chinese prisons.
I'm not trying to excuse Chinese people for ignoring abuses against socially marginal groups or dissidents, but I do think the human rights criticisms of China coming out of the United States are imbalanced and in many ways distort the actual experience of Chinese people. As human rights is increasingly used as a rhetorical club by those favoring a new cold war with China, now seems like a good time to reevaluate what the human rights situation in China really is and what Americans can realistically do about it.
2006/06/14
2006/06/09
Ahmadinejad the progressive
The best recent article i've read on Iran is this one. As strange as it seems, Ahmadinejad might be the best thing that could have happened to Iran. Not only is he consolidating power at the expense of the clerics, he's also taking a stand for women's rights. Here's some strange rhetoric to hear coming out of Iran: "Unfortunately, whenever there is talk of social corruption, fingers are pointed at women," Ahmadinejad said. "Shouldn't men be blamed for the problems, too?"
Of course the actual best thing that could happen is the rise of a feminist, secular, anti-imperialist, pareconist mass movement. But given the constraints of reality, I'd be pretty satisfied if Ahmadinejad can pull a Nixon going to China and both democratize Iran (accumulating power in the presidency, an elected position, would be a step in the right direction) and improve the place of women. This isn't to excuse Ahmadinejad's far-right positions on religion in government or the existence of the Holocaust. But, as painful and strange as this is, it seems like he might be the most progressive leader in the Middle East today.
Of course the actual best thing that could happen is the rise of a feminist, secular, anti-imperialist, pareconist mass movement. But given the constraints of reality, I'd be pretty satisfied if Ahmadinejad can pull a Nixon going to China and both democratize Iran (accumulating power in the presidency, an elected position, would be a step in the right direction) and improve the place of women. This isn't to excuse Ahmadinejad's far-right positions on religion in government or the existence of the Holocaust. But, as painful and strange as this is, it seems like he might be the most progressive leader in the Middle East today.
2006/06/05
Markets in China and their victims
I finally got around to contributing to The Protest again. This is my summary of what the market reforms have done to China and why massive opposition to them is unlikely to yield anything constructive.
for unknown reasons, the word "China" is not featured in the title
State Power, The Market and Oppression
China is a mess of contradictions. It has the most dynamic and fastest continually growing economy in the world. This economic expansion has lifted millions of people out of poverty and hunger and opened extraordinary new opportunities for millions more. Its cities are filled with construction cranes, new malls (including the biggest mall in the world) and all the luxuries available in the rich countries.
Yet social unrest is greater now than at any time since the Cultural Revolution of the late 1960s. According to government estimates, last year alone saw nearly 90,000 riots and demonstrations, a number that has grown rapidly in the last few years. Juxtaposed against the consumer opulence of the big cities is the appalling exploitation of restaurant staff, factory workers and construction crews, who work 12-hour shifts seven days a week for 40 cents an hour. These workers' employers house them in cramped dorm rooms and regularly interfere in their personal lives, setting curfews or threatening to fire them if they travel home to see their family on the lunar new year, China's most important holiday.
The sweeping market reforms of the last 27 years brought about these devastating contrasts. The government dismantled the planned economy — owned and operated completely by the state — and gradually imposed market forces and the profit motive. These reforms did solve many of the problems of the planned economy, such as an overemphasis on heavy industry, innumerable production bottlenecks, low productivity and allocative inefficiency.
Yet the market reforms also created a host of new social problems. Of all people, China's supposedly Marxist leadership should have foreseen that their reforms would entail increasing levels of worker exploitation, skyrocketing wealth inequality, rapidly expanding corruption and accepting a subordinate position in the global economy. Market-led development has also created innumerable severe environmental problems: China's cities are the most polluted in the world, its waterways are filled with industrial runoff, its forests are disappearing.
Of course we should avoid misplaced nostalgia for the prereform period. Aside from the clear economic problems with central planning, Chinese society before 1979 was highly repressive and imposed strict limits on freedoms of movement, speech, association, sexuality and job choice. Today these freedoms are still restricted in key ways, but the market reforms have helped to expand freedom in China, often in ways unintended by the officials responsible.
Yet neither should we succumb to the kind of free market boosterism so common in the Chinese and Western media. The reforms may have increased freedom, but they have done so in deeply unequal ways and often with ambiguous results. Peasants are now free to leave the land and move to the cities — where they become second-class citizens and highly exploited workers. People are free to pick their own jobs, but what exactly are their choices? For the millions of rural migrants to the cities, their choice is between one kind of degrading work or another, all for pittance wages with no job security or healthcare and no access to education for their children.
Though incomes in China have risen several times over, the new burden of fees for basic services and rising taxes have also increased rapidly, leaving many people actually worse off than before. Nearly everyone once enjoyed the system of public services that included free healthcare, free education and free housing. Of course the market now offers many more choices when it comes to these basic needs, but only the small middle class, 10 to 15 percent of the population, can afford such choices. Just one-third of the country has even basic health insurance, and a World Health Organization survey in 2000 ranked China fourth from last in healthcare fairness. Stuck between school fees for their children and medical fees for their parents or themselves, millions upon millions of peasants must leave their families, travel hundreds of miles to the cities, and suffer appalling working conditions and the contempt of urban residents just to get by.
The reforms have restricted the very intimate power that party cadres once wielded over people's work lives, family lives and even love lives. Yet the decentralization of administrative power has given local officials greater leeway to squeeze taxes out of peasants and expropriate their land, as well as to exploit connections in corrupt or nepotistic fashion. The central government has repeatedly promised to crack down on corruption, yet its power over localities has been deeply compromised by decentralization, and the anti-corruption campaigns amount to little more than rhetoric. Meanwhile the market reforms have ushered in a dramatic rise in previously miniscule social problems like unemployment, homelessness and violent crime.
Popular opposition to the problems created by markets is strong and growing. The Western media have generally misunderstood or ignored this trend. In the 1989 protests that culminated in the massacre around Tian'anmen Square, for instance, the media portrayed only a "Democracy Movement" led by idealistic young students hungry for Western politics. To some extent this was accurate, but what gave the protests real power — and what terrified the government most — was that workers protesting the effects of economic liberalization, especially inflation, joined the demonstrations. The complex reality didn't fit the media's story line, and their blanket prescription for solving China's problems remained unchanged: more market reform.
It's no different today, as the Western media's two most popular economic suggestions to China show. The first is to legally enshrine property rights, ostensibly to help peasants protect their land from corrupt officials who confiscate it and sell it to developers for their own profit. The second is to privatize state-owned enterprises so that they can slim down and start making money. Great suggestions from the point of view of investors, but these reforms would be a disaster for regular workers and peasants. All land is currently state-owned, a vestige of socialism that makes it easy for corrupt officials to force peasants off their land. Already 70 million peasants have lost their land this way. Yet changing land into a private commodity would expose peasants to another equally dangerous threat: expropriation through the market. One of the Chinese revolution's greatest achievements was destroying the old system of a few large landowners controlling masses of destitute tenants. That system would quickly reemerge if land were once again subject to the market.
As the government moves closer to privatizing land, it is already privatizing many state-owned enterprises. Since these businesses are some of the only ones still providing job security and full benefits to their employees, their higher costs leave them uncompetitive against all the rest, which exploit their workers to the breaking point. Not only does privatization lead to major job losses and benefit cuts, but it also allows corrupt officials and their family and friends to accumulate great private wealth at public expense as they buy the companies for next to nothing or rob the pension funds of the employees. Declining job quality and increasing unemployment: this is what economists call "efficiency."
The countless victims of the market reforms don't take all this lying down, as the rapid rise in demonstrations attests. But what are the chances for success in winning something better? Progressive movements face an uphill struggle.
China's two central problems today are the vast, unaccountable power of the state and the growing strength of the market and private wealth. Since the reforms began in 1979, these two forces have forged a powerful and mutually beneficial bond. The state imposes markets, pays for key business requirements like infrastructure and skilled education, develops key sectors through targeted subsidies and protectionism, and represses the social unrest caused by markets. Intimate personal links nourish an alliance between the two sides: most successful businessmen are either former government officials or officials' close friends or family.
Given the strength and unity of elites, workers and peasants can only win meaningful change by uniting as well. Yet protests in China remain local and isolated. The government is partly responsible, controlling the news media and repressing any organization that might serve as a unifying force. But perhaps the bigger problem is how protesters themselves see their problems.
Rural protesters generally aim their ire against some local official who has imposed heavy taxes or expropriated their land or against a factory that has poisoned their air or water. When, inevitably, the official refuses concessions, the peasants frequently send a representative to Beijing to appeal to the central government for help. Labor protests are similarly local in focus. Protesters complain that their boss has stolen their pension fund or illegally forced them off the job, rarely taking aim at the market structures that encourage such abuses.
The problem, directly tied to the fragmented and isolated nature of social protest in China, is that the victims of the state and markets have no structural critique of the forces working against them, and, therefore, no consciousness of how closely related their struggles are. They direct their anger against mere agents — local officials or factory bosses — of those forces, rather than against the government and the economic system, which gives those agents power in the first place. In my two years living in China, I've heard many people criticize the course of their country, but I've never heard anyone locate these problems in the fundamental systems that structure Chinese power and wealth.
The problem should be familiar to Americans, because we suffer from the same short-sightedness. Every new war, every new corporate scandal, every time we hear that the government is spying on citizens or torturing foreigners, every time the number of people without health insurance increases — every perfectly predictable result of the power structure in the United States takes us by surprise. The answer to unceasing abuses of power, in the United States as in China, is to develop a structural understanding of how the inequality of power is built and maintained and how we can undo it. This approach also points toward the strategic and moral necessity of a unified social movement demanding fundamental restructuring rather than tinkering on the margins.
The problems of China may seem far away, but they're not so different from those Americans face, and they're connected in important ways. To address these problems we must all understand what we're facing and all get involved to fix it.
For more information:
On the healthcare system, see The Wall Street Journal, December 5 and 30, 2005.
On inequality and social unrest, see The New York Times series “The Great Divide,” October 13, November 10, December 8, 21 and 31, 2004.
On migrant workers, see Dorothy Solinger, Contesting Citizenship in Urban China: Peasant Migrants, the State, and the Logic of the Market.
On the economics of market reform, see Barry Naughton, Growing Out of the Plan: Chinese Economic Reform, 1978-1993.
for unknown reasons, the word "China" is not featured in the title
State Power, The Market and Oppression
China is a mess of contradictions. It has the most dynamic and fastest continually growing economy in the world. This economic expansion has lifted millions of people out of poverty and hunger and opened extraordinary new opportunities for millions more. Its cities are filled with construction cranes, new malls (including the biggest mall in the world) and all the luxuries available in the rich countries.
Yet social unrest is greater now than at any time since the Cultural Revolution of the late 1960s. According to government estimates, last year alone saw nearly 90,000 riots and demonstrations, a number that has grown rapidly in the last few years. Juxtaposed against the consumer opulence of the big cities is the appalling exploitation of restaurant staff, factory workers and construction crews, who work 12-hour shifts seven days a week for 40 cents an hour. These workers' employers house them in cramped dorm rooms and regularly interfere in their personal lives, setting curfews or threatening to fire them if they travel home to see their family on the lunar new year, China's most important holiday.
The sweeping market reforms of the last 27 years brought about these devastating contrasts. The government dismantled the planned economy — owned and operated completely by the state — and gradually imposed market forces and the profit motive. These reforms did solve many of the problems of the planned economy, such as an overemphasis on heavy industry, innumerable production bottlenecks, low productivity and allocative inefficiency.
Yet the market reforms also created a host of new social problems. Of all people, China's supposedly Marxist leadership should have foreseen that their reforms would entail increasing levels of worker exploitation, skyrocketing wealth inequality, rapidly expanding corruption and accepting a subordinate position in the global economy. Market-led development has also created innumerable severe environmental problems: China's cities are the most polluted in the world, its waterways are filled with industrial runoff, its forests are disappearing.
Of course we should avoid misplaced nostalgia for the prereform period. Aside from the clear economic problems with central planning, Chinese society before 1979 was highly repressive and imposed strict limits on freedoms of movement, speech, association, sexuality and job choice. Today these freedoms are still restricted in key ways, but the market reforms have helped to expand freedom in China, often in ways unintended by the officials responsible.
Yet neither should we succumb to the kind of free market boosterism so common in the Chinese and Western media. The reforms may have increased freedom, but they have done so in deeply unequal ways and often with ambiguous results. Peasants are now free to leave the land and move to the cities — where they become second-class citizens and highly exploited workers. People are free to pick their own jobs, but what exactly are their choices? For the millions of rural migrants to the cities, their choice is between one kind of degrading work or another, all for pittance wages with no job security or healthcare and no access to education for their children.
Though incomes in China have risen several times over, the new burden of fees for basic services and rising taxes have also increased rapidly, leaving many people actually worse off than before. Nearly everyone once enjoyed the system of public services that included free healthcare, free education and free housing. Of course the market now offers many more choices when it comes to these basic needs, but only the small middle class, 10 to 15 percent of the population, can afford such choices. Just one-third of the country has even basic health insurance, and a World Health Organization survey in 2000 ranked China fourth from last in healthcare fairness. Stuck between school fees for their children and medical fees for their parents or themselves, millions upon millions of peasants must leave their families, travel hundreds of miles to the cities, and suffer appalling working conditions and the contempt of urban residents just to get by.
The reforms have restricted the very intimate power that party cadres once wielded over people's work lives, family lives and even love lives. Yet the decentralization of administrative power has given local officials greater leeway to squeeze taxes out of peasants and expropriate their land, as well as to exploit connections in corrupt or nepotistic fashion. The central government has repeatedly promised to crack down on corruption, yet its power over localities has been deeply compromised by decentralization, and the anti-corruption campaigns amount to little more than rhetoric. Meanwhile the market reforms have ushered in a dramatic rise in previously miniscule social problems like unemployment, homelessness and violent crime.
Popular opposition to the problems created by markets is strong and growing. The Western media have generally misunderstood or ignored this trend. In the 1989 protests that culminated in the massacre around Tian'anmen Square, for instance, the media portrayed only a "Democracy Movement" led by idealistic young students hungry for Western politics. To some extent this was accurate, but what gave the protests real power — and what terrified the government most — was that workers protesting the effects of economic liberalization, especially inflation, joined the demonstrations. The complex reality didn't fit the media's story line, and their blanket prescription for solving China's problems remained unchanged: more market reform.
It's no different today, as the Western media's two most popular economic suggestions to China show. The first is to legally enshrine property rights, ostensibly to help peasants protect their land from corrupt officials who confiscate it and sell it to developers for their own profit. The second is to privatize state-owned enterprises so that they can slim down and start making money. Great suggestions from the point of view of investors, but these reforms would be a disaster for regular workers and peasants. All land is currently state-owned, a vestige of socialism that makes it easy for corrupt officials to force peasants off their land. Already 70 million peasants have lost their land this way. Yet changing land into a private commodity would expose peasants to another equally dangerous threat: expropriation through the market. One of the Chinese revolution's greatest achievements was destroying the old system of a few large landowners controlling masses of destitute tenants. That system would quickly reemerge if land were once again subject to the market.
As the government moves closer to privatizing land, it is already privatizing many state-owned enterprises. Since these businesses are some of the only ones still providing job security and full benefits to their employees, their higher costs leave them uncompetitive against all the rest, which exploit their workers to the breaking point. Not only does privatization lead to major job losses and benefit cuts, but it also allows corrupt officials and their family and friends to accumulate great private wealth at public expense as they buy the companies for next to nothing or rob the pension funds of the employees. Declining job quality and increasing unemployment: this is what economists call "efficiency."
The countless victims of the market reforms don't take all this lying down, as the rapid rise in demonstrations attests. But what are the chances for success in winning something better? Progressive movements face an uphill struggle.
China's two central problems today are the vast, unaccountable power of the state and the growing strength of the market and private wealth. Since the reforms began in 1979, these two forces have forged a powerful and mutually beneficial bond. The state imposes markets, pays for key business requirements like infrastructure and skilled education, develops key sectors through targeted subsidies and protectionism, and represses the social unrest caused by markets. Intimate personal links nourish an alliance between the two sides: most successful businessmen are either former government officials or officials' close friends or family.
Given the strength and unity of elites, workers and peasants can only win meaningful change by uniting as well. Yet protests in China remain local and isolated. The government is partly responsible, controlling the news media and repressing any organization that might serve as a unifying force. But perhaps the bigger problem is how protesters themselves see their problems.
Rural protesters generally aim their ire against some local official who has imposed heavy taxes or expropriated their land or against a factory that has poisoned their air or water. When, inevitably, the official refuses concessions, the peasants frequently send a representative to Beijing to appeal to the central government for help. Labor protests are similarly local in focus. Protesters complain that their boss has stolen their pension fund or illegally forced them off the job, rarely taking aim at the market structures that encourage such abuses.
The problem, directly tied to the fragmented and isolated nature of social protest in China, is that the victims of the state and markets have no structural critique of the forces working against them, and, therefore, no consciousness of how closely related their struggles are. They direct their anger against mere agents — local officials or factory bosses — of those forces, rather than against the government and the economic system, which gives those agents power in the first place. In my two years living in China, I've heard many people criticize the course of their country, but I've never heard anyone locate these problems in the fundamental systems that structure Chinese power and wealth.
The problem should be familiar to Americans, because we suffer from the same short-sightedness. Every new war, every new corporate scandal, every time we hear that the government is spying on citizens or torturing foreigners, every time the number of people without health insurance increases — every perfectly predictable result of the power structure in the United States takes us by surprise. The answer to unceasing abuses of power, in the United States as in China, is to develop a structural understanding of how the inequality of power is built and maintained and how we can undo it. This approach also points toward the strategic and moral necessity of a unified social movement demanding fundamental restructuring rather than tinkering on the margins.
The problems of China may seem far away, but they're not so different from those Americans face, and they're connected in important ways. To address these problems we must all understand what we're facing and all get involved to fix it.
For more information:
On the healthcare system, see The Wall Street Journal, December 5 and 30, 2005.
On inequality and social unrest, see The New York Times series “The Great Divide,” October 13, November 10, December 8, 21 and 31, 2004.
On migrant workers, see Dorothy Solinger, Contesting Citizenship in Urban China: Peasant Migrants, the State, and the Logic of the Market.
On the economics of market reform, see Barry Naughton, Growing Out of the Plan: Chinese Economic Reform, 1978-1993.
2006/06/02
Henry Paulson and conflict within the American economic elite
Henry Paulson shouldn't have any trouble being confirmed as the new Secretary of the Treasury. Frequent critics of the Bush administration were falling all over themselves welcoming his nomation. Democratic Senator Chuck Schumer called him "the best pick that America could have hoped for" and The New York Times sounds like it has a major crush on Paulson, claiming he "will bring much-needed clout, pragmatism and credibility to the job" and holding out hope that he'll support "rigorous economics and sound fiscal practices" in the administration.
So mainstream Democrats can hardly contain themselves in praising a man who is worth $700 million and heads Goldman Sachs, one of the most powerful forces in international financial capitalism. If we needed any more proof, this shows conclusively that the Democrats are a lost cause until something big changes in how much popular pressure the left can bring to bear on them.
Okay, I've made my polemical point. But the choice of Paulson and the Democratic response also points to some interesting things going on within the American elite. In the broad scheme of things, there are four basic economic orientations: radical, social democrat, neoliberal, and fascist. The American elite and most government policy can be placed within the neoliberal category, yet there remain disagreements even among neoliberals. Some prefer expanding markets slowly and working to coopt opposition in order to maintain economic stability, others prefer a naked grab for power, pursuing a rapid increase in inequality and deregulation. There are also differences based on industry: financial capital and multinational corporations have different interests than those producing primarily for the domestic market or companies like military contractors, which thrive on international instability.
Paulson hails from that faction of the elite that prioritizes economic stability and is based in financial capital, which is the same faction that controlled the Clinton administration's economic policy. Clinton's Treasury Secretaries, Robert Rubin (also an ex-chief of Goldman Sachs) and Larry Summers (former chief economist at the World Bank), enthusiastically pursued balanced budgets, slow-moving domestic market reforms, free trade, and free movement for financial capital. The Bush administration, on the other hand, has pursued a program of rapid market reforms to the domestic economy, most obviously huge tax cuts for the richest Americans and a failed bid to privatize Social Security. It has invested little effort in the multilateral negotiations favored by the Clinton administration to help American corporations penetrate foreign markets, preferring instead unilateral trade agreements and war and occupation as market-opening mechanisms. It has given much less attention to the interests of financial capital and instead prioritized the interests of energy and military companies. And it has created an enormous budget deficit as it quickly expands military spending and cuts taxes.
All of these policies rub the more cautious wing of the neoliberal elite the wrong way. They worry that the Bush administration's aggressive approach could give rise to either economic crisis or popular opposition that would undo the gains that have been made. This is why Paulson, a solid member of their faction, is such a welcome pick.
The question is how Paulson will affect policy. He could just be window dressing meant to calm financial markets and mollify other governments, or he could significantly change the direction of policy. Two especially important areas to keep an eye on are China and energy. The cautious neoliberal faction tends to support an "engagement" policy with China, meant to profit American companies while binding China in US-dominated international economic institutions. The Bush administration has rhetorically endorsed such an approach, but led by Cheney and Rumsfeld has worked quietly to contain China with military alliances and economic pressure. In this regard the Bush administration has proved similar to the Clinton administration, which quietly laid the groundwork for China's military encirclement while speaking loudly of trade and cooperation. But the forces within the Bush administration calling for overt confrontation with China have always been stronger than under Clinton and constantly threaten to push the administration into open cold war. Will Paulson, who has worked extensively with China and explicitly endorses the engagement position, prevent a move to more robust containment?
The second issue is energy and global warming. Parts of the American economic elite are increasingly worried about the damage that global warming promises and about the uncertainty of not having a national policy on global warming. A different faction, based in fossil fuel producers and the car companies, is resolutely opposed to greater regulation. Paulson, who is also chairman of the board of the Nature Conservancy, is clearly a member of the former. The Bush administration has clearly been pursuing the demands of the latter. It will be interesting to see how this conflict plays out.
If Paulson can affect policy, should he be considered an improvement? Obviously some regulation on carbon emissions is preferable to none, balanced budgets are better than rapid redistribution from the poor to the rich, and engaging China isn't as bad as containing it. Yet all of these policies, tho less bad than the far-right alternative, are themselves fundamentally flawed. Moreover, we could argue that Clinton's approach to freeing up international trade and investment was more effective than the Bush administration's, which shows that the cautious faction isn't always to be preferred.
Regardless, the choice between two different factions of neoliberal elites is not something we should spend too much time agonizing over. Moving public debate toward social democratic (liberal) and ultimately radical policies is what we should be concentrating on, and that will only happen thru the hard work of organizing.
So mainstream Democrats can hardly contain themselves in praising a man who is worth $700 million and heads Goldman Sachs, one of the most powerful forces in international financial capitalism. If we needed any more proof, this shows conclusively that the Democrats are a lost cause until something big changes in how much popular pressure the left can bring to bear on them.
Okay, I've made my polemical point. But the choice of Paulson and the Democratic response also points to some interesting things going on within the American elite. In the broad scheme of things, there are four basic economic orientations: radical, social democrat, neoliberal, and fascist. The American elite and most government policy can be placed within the neoliberal category, yet there remain disagreements even among neoliberals. Some prefer expanding markets slowly and working to coopt opposition in order to maintain economic stability, others prefer a naked grab for power, pursuing a rapid increase in inequality and deregulation. There are also differences based on industry: financial capital and multinational corporations have different interests than those producing primarily for the domestic market or companies like military contractors, which thrive on international instability.
Paulson hails from that faction of the elite that prioritizes economic stability and is based in financial capital, which is the same faction that controlled the Clinton administration's economic policy. Clinton's Treasury Secretaries, Robert Rubin (also an ex-chief of Goldman Sachs) and Larry Summers (former chief economist at the World Bank), enthusiastically pursued balanced budgets, slow-moving domestic market reforms, free trade, and free movement for financial capital. The Bush administration, on the other hand, has pursued a program of rapid market reforms to the domestic economy, most obviously huge tax cuts for the richest Americans and a failed bid to privatize Social Security. It has invested little effort in the multilateral negotiations favored by the Clinton administration to help American corporations penetrate foreign markets, preferring instead unilateral trade agreements and war and occupation as market-opening mechanisms. It has given much less attention to the interests of financial capital and instead prioritized the interests of energy and military companies. And it has created an enormous budget deficit as it quickly expands military spending and cuts taxes.
All of these policies rub the more cautious wing of the neoliberal elite the wrong way. They worry that the Bush administration's aggressive approach could give rise to either economic crisis or popular opposition that would undo the gains that have been made. This is why Paulson, a solid member of their faction, is such a welcome pick.
The question is how Paulson will affect policy. He could just be window dressing meant to calm financial markets and mollify other governments, or he could significantly change the direction of policy. Two especially important areas to keep an eye on are China and energy. The cautious neoliberal faction tends to support an "engagement" policy with China, meant to profit American companies while binding China in US-dominated international economic institutions. The Bush administration has rhetorically endorsed such an approach, but led by Cheney and Rumsfeld has worked quietly to contain China with military alliances and economic pressure. In this regard the Bush administration has proved similar to the Clinton administration, which quietly laid the groundwork for China's military encirclement while speaking loudly of trade and cooperation. But the forces within the Bush administration calling for overt confrontation with China have always been stronger than under Clinton and constantly threaten to push the administration into open cold war. Will Paulson, who has worked extensively with China and explicitly endorses the engagement position, prevent a move to more robust containment?
The second issue is energy and global warming. Parts of the American economic elite are increasingly worried about the damage that global warming promises and about the uncertainty of not having a national policy on global warming. A different faction, based in fossil fuel producers and the car companies, is resolutely opposed to greater regulation. Paulson, who is also chairman of the board of the Nature Conservancy, is clearly a member of the former. The Bush administration has clearly been pursuing the demands of the latter. It will be interesting to see how this conflict plays out.
If Paulson can affect policy, should he be considered an improvement? Obviously some regulation on carbon emissions is preferable to none, balanced budgets are better than rapid redistribution from the poor to the rich, and engaging China isn't as bad as containing it. Yet all of these policies, tho less bad than the far-right alternative, are themselves fundamentally flawed. Moreover, we could argue that Clinton's approach to freeing up international trade and investment was more effective than the Bush administration's, which shows that the cautious faction isn't always to be preferred.
Regardless, the choice between two different factions of neoliberal elites is not something we should spend too much time agonizing over. Moving public debate toward social democratic (liberal) and ultimately radical policies is what we should be concentrating on, and that will only happen thru the hard work of organizing.
Labels:
capitalism,
China/中国,
East Asia,
environment,
US foreign policy
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