It Seems to Me(Archive)
The news in August that the Chinese Communist Party will now admit capitalists into its ranks provoked some amusing commentaries. At least I found them amusing. I was longing for a “Saturday Night Live” skit but it was summertime, when the networks fall back on reruns. So we will have to do with Thomas Friedman, the New York Times columnist who is a cheerleader for global capitalism; he said that while it may look like “a vegetarian restaurant that also serves steak,” the Chinese decision was good because it might lead to a more open society, one that will set China on a course similar to the ones being followed in South Korea, Indonesia, Singapore and Taiwan. That’s enough to give anyone pause. Wasn’t Indonesia the place where Chinese business people were hounded because they were so successful? And isn’t Singapore the place where incoming magazines and newspapers are screened for pornography or the slightest criticism of the government? Oh well, it’s never a perfect world.Writing on the Times op-ed page two days after Friedman’s column appeared, Charles Wolfe Jr., a fellow at the Rand Corporation and the Hoover Institution, also welcomed this step as one that “could convert the party from a relatively homogenous body to one that tolerates pluralism.” Wolfe said this move “raises the possibility of Communists co-opting capitalists – or of capitalism co-opting the party.” Whatever. I see it as another nail in the coffin of socialism, an idea that inspired many people to believe that a society could be organized so that its members would share equitably in the fruits of production, with no class oppressing another. Few people believe in this idea anymore. Wherever you look – Africa, Latin America, Asia, Eastern Europe – the “free market” is the new God. Never mind that it may not be very free. The important thing is that it allows some buccaneers to make money. Enfin. In Bulgaria, once a hard-line Communist state, they have even brought back the former king, Simon Saxe-Coburg, as prime minister and installed as his deputies two guys, Nikolai Vassilev and Milen Velchev, who previously toiled in London for Lazard Capital Markets and Merrill Lynch. Plans are afoot to privatize all the state-owned companies. Vassilev, Bulgaria’s finance minister, was quoted in the Financial Times as saying that it is important to privatize quickly. “Speed is vital,” he said. “Price is an issue, but speed is more important because if we delay, the assets are eventually worth nothing.” I have pondered that statement for quite a while – and I still don’t understand it. Does it mean that government bureaucrats are systematically plundering these companies?Well, what can we expect in a China where capitalists will become card-carrying members of the Communist Party, which controls the government?Better conditions in the sweatshops turning out many of the goods we find these days in American stores? Not likely. If these conditions prevailed in a country that supposedly subscribed to socialism, why would capitalists, focusing on the bottom line, try to improve them?Privatization of state-owned enterprises? You bet. As quickly as possible, a la Bulgaria.More companies listed on stock exchanges? Bien sur. What’s capitalism without a stock market?Introduction of socially responsible investing? Forget it. This is about catching up with the gunslingers on Wall Street. Widespread ownership of these newly privatized entities among employees or customers or just plain citizens? No way. We will probably see a repeat of the scenario that unfolded in Russia after the Soviet Union collapsed. Communist Party members parlayed their positions of power into control of huge enterprises. Corruption was rampant.Now that they have holed away their gains in Swiss bank accounts, the Russian “capitalists” are trying to sanitize their operations, just the way the Rockefellers did in the early part of the last century. Mikhail Khodorkovsky became the largest shareholder in Yukos, Russia’s second largest oil company, by a series of shady financial maneuvers that drove out minority investors; his actions have been described as “setting a benchmark for unacceptable behavior.” Now he has put up this banner outside the Moscow mansion that serves as company headquarters: “Honesty. Openness. Responsibility.” And in an interview he granted the New York Times, he said times have changed: “People now understand that transparency, good relations with investors and honest behavior in the market in the short term is to your advantage.” Corporate social responsibility in Russia.Of course not everyone is buying this “born again” conversion to social responsibility. Times reporter Sabrina Tavernise interviewed Yulia Latynina, a business commentator on Russian television, who observed: “As a Russian oligarch, Mr. Khodorkovsky doesn’t have built-in restraint – otherwise he couldn’t have become an oligarch. You can teach a wolf to eat oatmeal, but he’ll always be looking for rabbits running by. Russian oligarchs just have stomachs built that way – they aren’t vegetarians.” Here we are again (see Thomas Friedman above), back to the vegetarian analogy. Everyone believes capitalists are meat eaters. There’s no love lost between China and Russia but the Chinese might take a leaf out of the book of the new Russian capitalism. Both countries have vast territories that could serve profitably as dumping grounds. Over the heated objections of the Turks, President Valadmir Putin has signed off on a deal that would bring 20 tons of spent nuclear fuel into the country for burial. Turkey said it would try to stop the shipment from moving through the narrow Bosporus Strait. “I call this Russia’s dirty trade,” said Turkish naval minister Fevzi Aytekin. But the Russians plan to go right ahead, pointing out that the Strait is considered international waters.Russia will earn $21 billion in hard currency for this underground storage. It looks to me like a macabre Marxian version of capitalism. Maybe the Russians can even get the Ukrainians to store some of the waste at Chernobyl.