China’s Expanding Empire: State Capitalism Trumps Neo-Liberal Capitalism
If you didn’t catch this opinion piece by Heriberto Araujo and Juan Pablo Cardenal in the Sunday Review of the New York Times (6/2/2013), I recommend taking a look at it.
I think it reinforces the point that (from pure economic point of view (disregarding democracy, human rights, and the environment) “Authoritarian State Capitalism” easily trumps “Neoliberal Anglo-American Capitalism”. The Chinese are developing their real economy and world wide sources of supply (including necessary infrastructure and markets [e.g. see this piece about the Chinese and Iraqi oil from Monday 6/2's NYT. --CS]) as we are growing hedge fund billionaires and and destroying our real economy. Old style “Neoliberal Capitalism” oriented to individual self-benefit does not work and only makes things worse. The only viable existing democratic alternative is “social democratic capitalism” and for this to really compete with the authoritarian model it probably needs to be pushed more toward democratic socialism. (See the last point in my MayDay manifesto.) Why exactly do we need a private financial sector? Finance after all has very little to do with a “competitive market.” When it’s working well it should be functioning more like a “regulated utility” administering a system of credit rationing and long-term investment planning that supports the real economy. The “Asian Model” has shown that public direction of credit and investment is highly beneficial to long-term growth. The Chinese have just taken this a step farther and in a more authoritarian direction with a much larger economy.
Araujo and Cardenal support the looming “Trans-Pacific Partnership” trade agreement as an alternative to European inability to combat Chinese predatory state capitalism. But this dystopian nightmare of an agreement would undermine national democratic sovereignty in multiple ways and strengthen the Neoliberal corporatist world economy thus making life even worse for the citizens of the countries included in this agreement as opposed to multinational corporations and their investors. This is the opposite of the direction we need to go as “Authoritarian Corporate Capitalism” is probably even worse than “Authoritarian State Capitalism” which at least has a nationalistic interest in developing one country! If the former verges on what we used to call nationalistic “fascism,” the latter diminishes the power of the nation-state (democratic or not) altogether in favor of world corporate tyranny by multinationals and their investors. (See for example this New York Times piece.)