Tag Archives: authoritarianism

Is China going through an economic slump or a second industrial revolution?

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The rate of GDP growth in China is slowing, and prices for consumer goods are dropping. This article from Warwick Powell argues that the situation is not an economic problem at all, but rather caused by a sudden acceleration of productivity analogous to a period of rapid industrial progress in the west from about 1870 to 1890.

The period from roughly 1870 to 1890 in the industrialising world is often called the Great Deflation because consumer and producer prices fell steadily for nearly two decades. Yet this was simultaneously a period of rapid industrial expansion: steelmaking, railways, shipbuilding, chemicals, and textiles all experienced extraordinary increases in output, fixed capital formation, and labour productivity. Real wages also rose, even as nominal prices and, in some cases, nominal wages remained flat or declined. Conventional monetary interpretations – where deflation is associated with falling demand, recession and financial stress – don’t explain this apparent contradiction.

The key is that this deflation was supply-led. Massive technological change (Bessemer steel, open-hearth furnaces, mechanised weaving and rail distribution networks), dramatic extensions of energy inputs (coal and steam), and economies of scale fundamentally changed production cost structures. Unit costs fell faster than aggregate demand could absorb the increased output. Prices therefore declined not because the economy was weak, but because the production system became structurally more efficient. This is what we could call “good deflation.” An excellent paper by Borio et al., (2015) explores this in more detail…

China’s current economic conditions – marked by soft consumer prices, prolonged factory-gate deflation and extraordinary expansion in clean-energy and advanced-manufacturing output – mirror the paradox of the Great Deflation of 1870–1890. Then, as now, falling prices were not signs of contraction, but the surface expression of deep productivity shifts and sectoral transformation. China today is experiencing a similar structural reconfiguration.

In our high school (U.S.) history classes, we tend to learn that the late 19th century was a time of rapid technological and industrial progress, but that was also coupled with rapidly growing inequality, labor unrest, and unregulated pollution. Maybe China’s system and leaders will be able to reap the benefits of progress while keeping these problems under control. My thinking is authoritarian political and economic systems can appear to work better than democratic capitalist systems when they have leadership in place that is rational and genuinely has the citizens’ best interests at heart. This might actually describe the majority of authoritarian places and points in time. But then they don’t have the safeguards in place to stop bad leadership from metastasizing if and when it does pop up, and that is how you get history’s worst and longest-lasting geopolitical disasters. I’m not guaranteeing the U.S. has the immune system to successfully fight off our currently spreading political and economic cancer, only time will tell.

comparing MAGA to European right-wingers

This (paywalled) Financial Times article compares survey results in the World Values Survey by political party. What is really striking to me is that the U.S. right is off the scale compared to the German, French, or Italian “far right” parties we are hearing about in the news. I didn’t dig into all the details but if this is a survey of the public based on their stated party affiliations, it is possible the right-wing politicians in Europe are much farther right than their respective publics. It is also interesting that this result shows the German right as left of center, while the Australian, French and UK left are right of center. So I am taking all this with somewhat of a grain of salt without understanding all the details, but still it shows that survey responses of the U.S. public identifying with MAGA are way out there.

Is the Pope the king of Italy?

Just kidding, I’m not that ignorant. That headline was just to get your attention. But then again, I don’t think about the political system in Italy often, so you could say I am ignorant of it. The politics of Italy obviously matters to Italians, but does it matter to the rest of us? Well, there was a guy named Mussolini, but that was quite awhile ago… There’s also a guy called the Pope, who’s not part of the Italian government but has some political power and sway on a global scale. As far as the actual modern government, it’s just a typical European parliamentary democracy, we assume? Well, there is no Italian king, but…

On January 24, when Sergio Mattarella’s seven-year term comes to an end, the Italian parliament and its regional representatives will hold a secret ballot to elect the country’s new president and official head of state…

And yet, in his official capacity as the “guarantor” or “guardian” of the constitution, the president holds considerable power: governments are required to obtain the “approval” of the president, who also nominates (“approves”) the prime minister and his cabinet ministers. Moreover, all laws passed by parliament have to be approved by the president, and he or she is also charged with signing off the dissolution of parliament, for example following a government crisis and loss of parliamentary majority. This means the president effectively decides whether elections should be held or not.

Nor does the president’s power stop there: the incumbent also ratifies all international treaties, and serves as commander-in-chief of the army and as the head of the governing body of the judiciary. The president also wields influence through the technocratic structures of the Ministry of Economy and Finance, particularly the all-powerful Accounting Office (Ragioneria Generale dello Stato) and the Bank of Italy.

Unherd.com

So Italy is at least a Republic of sorts if its head of state is elected by its legislature, which is in turn elected by the people. But the actual powers of the president almost sound like…an ayatollah? In practice, the head of government (i.e. prime minister) may not defer to the President, but it sounds like that balance of power could potentially change with time. And if the President has the ability to dissolve parliament and delay elections during an emergency, the conditions for a potential loss of democracy would seem to be there, at least according to this article.

Day X

This New York Times article about right wingers in the German police and military is a bit concerning. It sounds like most of it is just doomsday prepping, but at least some subset of it involves taking advantage of said doomsday to round up immigrants and political “enemies”. I kind of thought Germany was one of the last countries we needed to worry about at this point. But seriously, what I find concerning is that if it is happening there, the situation in the U.S. is probably worse. Oh, and neo-nazis in Europe have a magazine, and on the cover of that magazine is Donald Trump.

Surveillance in western China

Der Spiegel describes the Chinese government’s surveillance of a minority population in the western part of the country.

Beijing is equipping the far-western province with state-of-the-art surveillance technology, with cameras illuminating every street all over the region, from the capital Urumqi to the most remote mountain village. Iris scanners and WiFi sniffers are in use in stations, airports and at the ubiquitous checkpoints — tools and programs that allow data traffic from wireless networks to be monitored.

The data is then collated by an “integrated joint operations platform” that also stores further data on the populace — from consumer habits to banking activity, health status and indeed the DNA profile of every single inhabitant of Xinjiang.

Anyone with a potentially suspicious data trail can be detained. The government has built up a grid of hundreds of re-education camps. Tens of thousands of people have disappeared into them in recent months. Zenz estimates the number to be closer to hundreds of thousands. More precise figures are difficult to obtain. Censorship in Xinjiang is the strictest in China and its authorities the most inscrutable.

Later the article talks about reeducation camps and a point system that rates how “trustworthy” families are.