Newsnotes 2010 02

Notes On The News

by Gwydion M Williams

Sweet Capitalism [selling Cadbury to the USA]

The Word For Film Is Magic [Avatar]

Ukrainian Oranges – a Really Rotten Fruit

Blackwater Above The Law [US in Iraq]

Be Drunk But Not Merciful [Mercy Killings]

China At The Centre

Haiti – a Cash Cow for the West

Clinton on Obama

Iceland Resists [Financial Crisis]

Gadir, good riddance [Russian ‘reforms’]

Zuma Asserts African Values [South Africa]

 

Sweet Capitalism [selling Cadbury to the USA]

When former Tory Prime Minister Harold Macmillan accused then-prime-minister Thatcher of ‘selling the family silver’, I commented it was much worst than that, she was selling the family. Britain was very much like a family up until Thatcher, and she ended that. No doubt she wished to strengthen it, but her understanding was wildly off. A general rise in mistrust and selfishness were perfectly predictable results of what she did.

The takeover of Cadbury by the Kraft conglomerate has been a total scandal. The firm is well run, maybe better than Kraft. But shuffling ownership brings short-term profits to the people in control:

“The chief executive of Cadbury stands to pocket cash and shares worth £12m from the company’s £11.9bn sale to the American food giant Kraft in a deal that also hands fees of at least £250m to legions of City advisers.

“The scale of the payments for Todd Stitzer contrasts sharply with the uncertainty faced by thousands of Cadbury factory workers, after the group’s chairman Roger Carr admitted he had put shareholders first and job losses were inevitable.

“Carr said the board did not feel guilty about selling Cadbury. ‘We have done nothing wrong. We have done the role that is required of us,’ he said. ‘We don’t own the company – the shareholders own the company and the board has a fiduciary duty [to recommend an offer] when appropriate value has been paid.’

“Investment bankers, lawyers, accountants and PR advisers racked up fees at a rate of more than £2m a day during the acrimonious £12bn battle for control of Cadbury in the latest sign that it is business as usual in the City, barely 15 months after the fall of Lehman Brothers brought the financial system to the brink of collapse…

“Carr, who previously sold Thames Water to the German group RWE, said agreeing the deal was a ‘bittersweet moment’. He admitted Kraft was bound to pursue cost savings and that job losses were an inevitability.” [M]

“‘All things being equal it is easier to take over a company here than anywhere else in the world,’ Lord Myners, the City minister, declared during the battle of Bournville. He’s right. We know that Cadbury-style deals would not happen in France or Germany and that US companies often run off to Delaware to adopt a variety of poison-pill defences…

“France and Germany, quicker out of the recession than the UK, are not noticeably suffering from a grave mis-allocation of capital. Their companies tend to be more competitive internationally for a simple reason: their managements are not afraid to invest because they are not constantly feeding the City’s appetite for special dividends, instant profits and deals. The idea that the takeover train delivers greater productivity and long-term wealth is now a bad joke.” [N]

“Peter Cadbury, a great grandson of George Cadbury, who stressed he was not a spokesman for the family, said: ‘It is regrettable that a company which took 186 years to build up has had its future decided by investors whose aims are short-term.’

“He added: ‘The City Code should be changed so that shareholders that appear on the register after a bid is announced should not be able to vote.’

“But he dismissed threatened intervention by Lord Mandelson against ‘asset strippers’ as ‘sabre rattling’.

“Food analysts said Kraft’s likely acquisition of Cadbury – shareholders are expected to approve the deal by early February – was the outcome of a successful bid strategy that bolstered the proportion of hedge funds on the UK company’s shareholder register to more than 20 per cent.

“But some echoed the Cadbury family’s concerns. Martin Deboo, analyst at Investec, said: ‘Our overwhelming feeling is that, while shareholder capitalism might have triumphed, something valuable has been lost today.'” [P]

It later emerged that Kraft funded deal with huge borrowings from the Royal Bank of Scotland, which is nominally state-owned after nearly wrecking itself with previous financial gambling. Ordinary peoples and small or medium-sized businesses find it hard to borrow money, but there is plenty of money for multi-billion-dollar gambles. Famous US investor Warren Buffet, who owns a slice of Kraft, disliked the whole deal but could not stop it. [Q]

Meantime Manchester United, Britain’s best-loved football club, is burdened by gigantic debts thanks to the financial games played in its own ownership.

It’s all down to the notion that finance works better, the less it is regulated. Thatcher pioneered the notion, but New Labour swallowed it and stick to it even after the near-collapse of deregulated global finance.

 

The Word For Film Is Magic [Avatar]

If you haven’t already seen Avatar, go see it now, unless you’re the sort who doesn’t enjoy ‘action-adventure’ movies. Reviewer talk of ‘one-dimensional characters’ is silly: they are more plausible than you’d find in a James Bond movie and have the merit of being visibly vulnerable.

The theme is humans from Earth exploiting the mineral wealth of an alien world and ignoring the rights of the aliens, tall thin blue hunter-gatherers. The humans are very much modern-USA. The aliens have a cleaned-up tribalism. No slavery, no absurd superstitions, no inter-tribal warfare or torture and mutilation of foes. No collecting body parts as trophies. And their religious beliefs turn out to be sort-of true: it would be a pretty one-sided battle otherwise.

The film has been accused of borrowing from some Russian SF I’ve never read: I can’t comment on that. I do note that it is a lot like Ursula Le Guin’s The Word For World Is Forest, a short SF novel from 1972. Both seem to think that hunter-gatherers could successfully see off high-tech invaders, which has never happened. Both seem to be thinking of Vietnam and both fail to realise that serious guerrilla warfare has only ever been waged by peasant communities with a strong religious or political ideology to motivate them. Still, it would be nice if the vast financial success of Avatar led to someone making a decent dramatisation of Le Guin’s book. There are bound to be a run of primitive-natives-on-alien-world films, much as Star Wars spawned a rash of space-opera. Back then, a range of decent existing space-opera stories were ignored, including Isaac Asimov’s ever-popular Foundation series. Instead they mostly tried to repeat George Lucas’s trick of making your own universe from scratch, and none of them did well. Maybe the best of them was Flash Gordon, based on an old comic-strip. It would be nice if someone in the film industry showed signs of learning.

Le Guin’s book has the natives one-metre tall, which would mean fancy computer graphics and require a conventional action-adventure to get enough of an audience to make money from huge production costs. The story would lose nothing essential if the natives 4 foot to 5 ft 3, with the humans 5 ft 8 to 6 ft 6, meaning that actual actors could fill the roles. The natives are also green and hairy, which could be done by a body-suit, except you’d need to keep the face expressive and therefore largely hairless.

In Le Guin’s tale, the oppressed natives lose many of their good points in their struggle to save their land – their forest, rather, it is the forest that is seen as the prime identity. She sees war as a kind of insanity and has a point. All of the other such tales either give the natives strong operative magic or else accepts that they lose.

I saw the film in 3D, I suspect it would be almost as good without. Indeed I’ve always found 3D unsatisfactory, feeling that I am watching solid models rather than real people. But it seems the technology has advanced, with light uncoloured spectacles that work by polarised light. There are a lot more 3D films to come.

 

Ukrainian Oranges – a Really Rotten Fruit

Five years after Ukraine’s ‘Orange Revolution’, the voters have changed their minds. Ukraine’s President Viktor Yushchenko, the one-time hero of protest, has been eliminated from the country’s presidential election. He got less than 6% of the votes: the leading candidate is Viktor Yanukovych, the man he displaced, who got 35%. We’ll have to wait till February to see if power passes to him or to Yulia Tymoshenko, formerly Yushchenko’s orange ally but now committed to better relations with Russia.

All political systems need a measure of consent to work at all. A system of multiple parties and free criticism of leaders needs a much higher level of consent, or it will soon break down into chaos. It also needs a strong core of people who will put efficient government ahead of personal ambitions and rivalries. The process is visibly not working in the Ukraine.

Europe had centuries of electoral politics, most of it confined to an elite but sanctifying the idea. There is no such tradition in much of the world, notably China. Chinese won’t form an orderly queue unless there is some superior power imposing it. If they are required to queue they will do so cheerfully enough. If left to choose they will choose to push.

The mess-up in the Ukraine and the failure to win over China are not so unexpected. The USA in its 1990s dominance failed to see the need to build up traditions and preferred to encourage protests whenever an election produced a result they did not like. That matched the Libertarian ideal – I want you to spontaneously choose to do it my way. Libertarians hate to concede that people could legitimately have a different point of view, which is the common fault of almost all anarchists. Someone who wants a different sort of social order is told off for having failed to understand freedom.

Dissidents usually find it easier to smash one system than to create an alternative. This has happened in the Ukraine. The West, having encouraged the ‘Orange Revolution’, has now pretty much written the place off. It seems it can stay indefinitely in a mess, as far as the West is concerned. The protests are about Russia having painfully pulled itself together again after a period of major losses of status and wealth. And about China hanging on to a system that is working well.

[The Orange faction came back in 2013 / 2014, of course. This time they were stiffened with Ukrainian Fascists and managed to split the country by their blind hostility to all connections with Russia.]

 

Blackwater Above The Law [US in Iraq]

“In a significant blow to the Justice Department, a federal judge on Thursday threw out the indictment of five former Blackwater security guards over a shooting in Baghdad in 2007 that left 17 Iraqis dead and about 20 wounded.

“The judge cited misuse of statements made by the guards in his decision, which brought to a sudden halt one of the highest-profile prosecutions to arise from the Iraq war. The shooting at Nisour Square frayed relations between the Iraqi government and the Bush administration and put a spotlight on the United States’ growing reliance on private security contractors in war zones…

“In a ‘reckless violation of the defendants’ constitutional rights,’ the judge wrote, investigators, prosecutors and government witnesses had inappropriately relied on statements that the guards had been compelled to make in debriefings by the State Department shortly after the shootings. The State Department had hired the guards to protect its officials.” [K]

Blackwater are the same people who were involved in the disaster of Fallujah, an Iraqi town largely hostile to Saddam, but quickly alienated by US blunders. That may have been mostly the fault of regular troops, but Blackwater generally have been involved in a lot of messes. So much that they’ve renamed themselves ‘Xe Services’ and adopted a neutral logo, replacing the clawed paw they started out with.[L] Looking at that logo, I felt it merited a suitable motto – maybe ‘We’re a complete bunch of animals’.

Mercenaries are a military mistake, and the USA should have known better. The highly peculiar culture of regular armies didn’t evolve by accident: it evolved because it worked in the utterly abnormal circumstances of warfare. Part of its purpose is to make the individuals think of themselves as part of the unit and forget about themselves as individuals. Mercenaries usually have superior individual skills, but they understandably think of themselves primarily as individuals. If this means staying alive by shooting anyone who might be an enemy, what else would you expect?

It is also typical of US law that someone can be blatantly guilty and walk free if the judges decide there was a procedural error with the evidence. And it’s not used in a neutral way. Judges are part of the state machine and usually defend their own. Soldiers and police get acquitted if any ambiguity can be found.

Judges are also not that smart outside of their own specialism. Acts like the Blackwater acquittal sends a clear message to the rest of the world that talk about ‘rule of law’ is just talk and that niches are created to shelter anyone serving general US interests.

 

Be Drunk But Not Merciful [Mercy Killings]

“The mother of a severely disabled 22-year-old man was today convicted of ­murder despite her claim that she had injected him with a lethal shot of heroin to bring his suffering to an end.

“Frances Inglis, 57, insisted throughout the two-week trial that she was innocent because she had killed her son with love in her heart, and not malice. She was given a life sentence and told she must spend a minimum of nine years in jail.

“Tom Inglis was left severely brain­damaged after a road accident in July 2007, and his mother believed he was locked into a ‘living hell’ with no hope of recovery.

“But 10 members of the jury were not convinced, and by a majority verdict she was found guilty of murdering him…

“She was releasing him, she told the court. He had not uttered a word since the accident, nor communicated in any way beyond squeezing his mother’s hand, but Inglis felt certain he was in constant pain and would have no wish to continue living like that…

“She was told that the only way for her son to be allowed to die legally would be to apply to the high court to withhold his food and water.

“‘I couldn’t bear the thought of Tom dying of thirst or hunger,’ she told the jury, through streams of tears. ‘To me that would be so cruel, so cruel. To die slowly like that would be horrible.’…

“She was given a life sentence at the Old Bailey and told she must spend a minimum of nine years in jail.” [T]

This contrasts with another case at about the same time, this one involving a drunken driver, a businesswoman who killed a couple when she lost control of a speeding car while over the drink-drive limit. She reached speeds of 113mph in the high-performance Jaguar XJ8 saloon before hitting standing water on the A1 near Grantham as she returned from a day at the races.

“The vehicle hit Mark Compton (20) and his girlfriend Jodie Brown (19) as they walked from their broken down car on the central reservation.” [W]

That lady got seven and a half years for drunken driving that ended two lives, both capable of being lived and enjoyed for another half-century each. Very typical of such cases, and it makes perfect sense if you assume that judges care mostly for state authority, the thing that gives them their importance. This includes sometimes frustrating government authority and often thwarting the police, but never on matters they see as vital for their own way of life.

A life term for mercy killing has become the norm, but when the Guardian listed the cases, they included one interesting exception:

“Jacob Wragg, 10, who suffered from Hunter syndrome, was suffocated by his father Andrew. The former SAS soldier Robert Andrew Wragg was found guilty of manslaughter but spared jail in December 2005.” [W]

If you’ve been a killer for the British state, a more tolerant attitude is taken to any other killing you might do?

 

China At The Centre

The execution of British Asian Akmal Shaikh shows that China has a very different legal philosophy from the West. They seem to think it should be about punishment for the guilty.

Of course the public in the West still take an old-fashioned view. The BBC organised a ‘Have Your Say’ on the issue. Most such debates get split between defenders and critics, with critics of China in the majority. And you find lots of Chinese-sounding names on both sides. But this topic was an exception, the response was overwhelmingly British and overwhelmingly in favour of China’s tough line. [A] You got comments like “‘What’s Bipolar Disorder’ ‘An excuse’.” Even a few postings from people who said that they had Bipolar Disorder (also known as Manic-Depressive) and that it made no difference to their understanding of right and wrong.

There was also the lack of evidence for mental illness before the man got caught red-handed with 4 kilograms of heroin, described by the Chinese as “enough to cause 26,800 deaths, threatening numerous families”. [B] What other defence besides supposed insanity can you try when caught with vast amounts of drugs?

Western Liberalism has dropped the requirement for civilised behaviour or the ability to coexist with others. The middle class got squeamish about enforcement, but also hang on like limpets to all of the old absurdities. Justice is required to be slow and expensive, but there is no real confidence that the result is right.

More recently there was another news story, about a world map made in 1502 for the Chinese Ming Dynasty by Jesuit missionary Matteo Ricci. It was widely described as having China at centre – both the Financial Times and the BBC said this. [C] Curiously, none of them actually showed this map. I was interested enough to look into it: there are two maps it could be. One is a familiar long box, except it had the Pacific Ocean at the centre and the two edges are the two halves of the Atlantic Ocean.[D] This is no more arbitrary than the British norm, with Europe and Africa central and the two edges being the two halves of the Pacific Ocean. The other – which I think is the new discovery – is an odd circular map showing most of the northern hemisphere.[E] It shows Asia at the bottom and the North Pole at the centre. India at the centre of the bottom edge, with China to one side. The New World at the top, upside-down compared to the normal view. Europe is to one side and rather larger than it actually is – I think this was the common belief at the time, not corrected till some French scientists measured longitude accurately using the moons of Jupiter as a kind of celestial clock. (This story is at least as interesting as the later British achievement of reliably measuring longitude at sea, but gets much less attention from English-speakers.)

Meantime Google might or might not be withdrawing from China, where they any way have a smaller market share than the home-grown company Baidu.[F] Hacking attacks on pro-Western Chinese were cited as the main issue, but such things are routine and it seems that Google in China are suspicious that some of their 700 employees in China were involved in the hacking.[G]

I’ve been saying for years that it was irresponsible to encourage dissidents to think the internet was safe, that it actually would make it very easy for the authorities to spot them and learn exactly what they were up to and who knew who. It might also suit the authorities to let it seem to succeed, so I was unsurprised to see one commentator say:

“Even if Google China stays and continues to filter websites in accordance with the Chinese Government’s rules, it doesn’t make any difference, the VPN software and other readily-available programs allows anyone to easily bypass the blocked websites, therefore censoring done by Google China or anyone else is largely fruitless. The only people it really effects are those Chinese citizens who use public internet cafes and those who are unaware of the bypass software, which is available for the asking from any university student at any Chinese university.” [J]

I’d have thought it was ordinary people at the internet cafes that counted, university students would anyway get access to foreign news. I’d also wonder if this easily-available bypass software might have a little attachment which reported the browser’s habits straight to China’s cyber-police.

Meantime most of the other big firms in the USA’s Silicon Valley are carrying on as normal, thinking the Chinese market too valuable to lose. [H] It is also arguable that Google blundered all along, thinking that they could triumph with what had worked elsewhere:

“Foreign companies have taken a long time to figure out – then adapt to – one of the key features of Chinese consumers: they do not like to type. ‘Typing is a pain in Chinese,’ explains Zhang Honglin, demonstrating how he has to enter a search word in Latin transcription, then pick the right character scrolling through sometimes dozens of different choices in a pop-up window. This is because Mandarin has many thousands of characters. So when 35-year-old Mr Zhang sneaks away from his family’s tobacco and liquor shop in Beijing to an upstairs internet café for hours on end, he navigates almost entirely using the mouse.

“Most portals have reacted by filling their pages with hundreds of colourful links competing for attention – creating a cluttered and disorderly view to the western eye but making life easier for Chinese users.

“Beyond aesthetics, Chinese web users are much more lively than their western peers – a characteristic that forms consumption preferences. ‘The amount of comments posted per user in China is double that of other geographies’… One Chinese GyPSii user posted 300 places and 7,000 comments within a few months…

“The government has skilfully used the preference of its internet users for entertainment. Loose enforcement of intellectual property rights means that – despite pledges from Beijing that say otherwise – Chinese consumers can easily find the latest music and movies for free on a host of websites, a situation that helps keep the minds of many off topics that could prove inconvenient to their rulers.” [R]

The USA should be getting its own culture right, rather than insisting on inflicting it on the rest of the world. The Chinese government has a point when it views the Internet as ‘Electronic Opium’, but has also sought to control rather than stifle. Enforcing ‘intellectual property rights’ is the obsession in the West, where governments since the 1970s have returned to their original control of defenders of the rich and enforcers of business interests on the general public. But it’s moot if anyone will benefit in the long run.

The culture of ‘coolhearts’ that grew up in the 1970s and came of age with the Internet is good at hooking customers and creating chaos, incapable of creating a meaningful alternative to the older social patterns it is undermining. It looks very possible the West will bust its own culture by not having proper controls.

 

Haiti – a Cash Cow for the West

Haiti was the first part of the New World to abolish slavery. But it did this at the dawn of the 19th century, when white power was enormously strong and unashamedly racist. Having been a French slave-colony that sent immense wealth to France, it was only accepted as independent after agreeing to pay ‘compensation’ to the former slave-owners, paying reparations to France from 1825 until 1947. [S]

A former slave society is not likely to develop without a period of radical authoritarian rule, almost any development requires it. Britain did not give the vote to a majority of adult males living in Britain until the 1880s, generations after the massive dislocation of the Industrial Revolution, which a parliament under democratic control would have been likely to prevent. Parliament was controlled by the rich in Britain until after the society had changed massively.

The notorious ‘Papa Doc’ was an authoritarian ruler, though originally elected, but he wasn’t radical. He looked after foreign interests, mostly US interests, and they in turn looked after him. When the Haitians dared to elect Jean-Bertrand Aristide, a liberation theologian, he got ousted by military coup, with the USA obviously behind it. It’s now a very demoralised society and is unlikely to get better soon. The USA after the earthquake gave priority to getting its own troops onto the island, making sure it remains a resource under US control. Haiti was pushed into ‘free market’ policies, meaning that local producers get pushed out by global products and unemployment gets worse.

 

Clinton on Obama

Racism in the USA is hardly dead. Though most people in the USA were clear about helping Haiti, there were exceptions:

“Rush Limbaugh, the most popular radio talkshow host, who is sometimes described as the real leader of the Republican party, says Americans should not give a penny to a population struggling for survival after the earthquake.

“Limbaugh agreed with a caller suspicious that the White House website was being used to direct funds to the American Red Cross. ‘Would you trust the money’s gonna go to Haiti?’ the caller asked. Limbaugh then said Obama was exploiting the disaster for political ends

“‘This [the earthquake] will play right into Obama’s hands,’ said Limbaugh. ‘He’s humanitarian, compassionate. They’ll use this to burnish their, shall we say, credibility with the black community – both light-skinned and dark-skinned black community in this country. This is made to order for them.’…

“The evangelical leader Pat Robertson has also drawn criticism for suggesting Haiti had brought decades of torment on itself by making a pact with the devil to end French rule. The White House press secretary, Robert Gibbs, described Robertson’s remarks as ‘utterly stupid’.” [X]

Those are extreme positions, but some degree of prejudice lingers on, without ever being expressed so openly. Surprisingly, this seems to extend as far as ex-President Bill Clinton:

“The Rev. Al Sharpton on Monday said he was disturbed by condescending remarks reportedly made by former President Bill Clinton about Barack Obama during the 2008 presidential campaign

“Sharpton was referring to a passage in the new book, ‘Game Change,’ which recounts the conversation Clinton had with the late Sen. Ted Kennedy when he was trying to convince the liberal lion of the Senate to endorse his wife for president

“‘A few years ago, this guy would have been getting us coffee,’ Clinton told Kennedy, according to the book — a comment that angered Kennedy, who later endorsed Obama.

“Sharpton, speaking on Fox News, defended Senate Majority Leader Harry Reid over a passage in the book in which he said Obama doesn’t have a ‘Negro dialect’ unless he wants one. But the reverend would not give Clinton such a pass for his remark.

“‘I think that’s far more disturbing because this is someone seeking to stop Mr. Obama’s campaign and making a direct reference — I don’t know the context in which he said it — but that is far more disturbing to me than even the comments that were made by Mr. Reid,’ Sharpton said.” [Y]

Meantime the citizens of Massachusetts have elected a Republican and probably killed the Health Care reform. In most multi-party systems, a 59 to 41 majority would be fine. In the USA, legislators can waste an infinite amount of time and kill any law they don’t like, unless a ‘super-majority’ decides to stop them.

When will Europe realise that the USA has rather alien values, and is getting worse all the time?

 

Iceland Resists [Financial Crisis]

Under a centre-right government, Iceland foolishly allowed a gigantic financial cuckoo to flourish in their economy. It was a piece of fashionable ‘Fancy Finance’, offering above-average rates to customers who were often signed up via the internet. This was balanced by risky money-games which came apart when the global financial system went into chaos. Profit flowed mostly to the wealthy. Now ordinary Icelanders are being expected to pick up the loss – but are protesting at the harshness of the terms.

“Iceland’s president on Tuesday said he would not sign legislation to reimburse Britain and the Netherlands for nearly €4bn lost in a failed Icelandic bank, threatening to plunge the crisis-hit country into a fresh round of political and economic turmoil.

“Olafur Grimsson, president of Iceland, said the legislation, narrowly passed by the country’s parliament last week, should be put to a national referendum, amid overwhelming public opposition to the bill.

“His decision marked only the second time since Iceland gained independence in 1944 that the president has refused to sign legislation, and it represented an act of defiance against Johanna Sigurdardottir, prime minister, whose ruling coalition backed the bill.

“It also threatened to deepen the diplomatic dispute with Britain and the Netherlands over the lost money and jeopardise the $10bn economic rescue programme set up by international donors after the collapse of Iceland’s banking sector in 2008…

“He made clear that an earlier bill passed in August, which authorised the repayments with various conditions attached, would remain active regardless of the outcome of a referendum. Some of those conditions – including a cut-off date for guaranteed repayments – were rejected by the British and Dutch governments, forcing Reykjavik to seek fresh parliamentary approval last month for a compromise deal agreed with the two countries.

“More than 60,000 people – about a quarter of Iceland’s voting-age population – have signed a petition against the revised bill, and opinion polls indicate that more than two-thirds oppose it.” [Z]

It also didn’t help that Britain used so-called anti-terrorist legislation against Iceland. The panic about Islamic terrorism has been used to pass some draconian legislation, none of it limited to a pure anti-terrorism role, despite being sold on that basis. Some sort of nasty global authoritarian system was possible – but fortunately for the world, the project stalled in Iraq and has now generated the worst financial crisis since the 1930s.

The valid role of banks is to look after money, to store it and to lend it. But lending is healthy only when the lender loses if the borrower loses. Such a system means they look just for what’s likely to work. If they can gain from lending to something that fails, then this encourages waste. This also encourages lending to finance excess consumption, and there has been a lot of this. Or to finance gambling – create doubtful ‘financial instruments’ and hope to pass them on for good money. It has ended with a vast accumulation of doubtful ‘financial instruments’, with state money needed to prop up the system.

‘Fancy Finance’ is a normal feature of capitalism. So are alcoholism, gambling, drug abuse and prostitution. Any or all of these can be banned by Western states, and ‘Fancy Finance’ is much the most risky. The West’s best period was from the 1950s to the mid-1970s, when ‘Fancy Finance’ was constrained by laws that had been passed in reaction to the Wall Street Crash and the Great Slump. But then all of it was allowed to return, with predictable result.

 

Gadir, good riddance [Russian ‘reforms’]

In 1991, the USA was handed the world on a plate, and knocked the plate over. It was the state-dominated ‘Keynesian’ era in the West that out-competed Soviet Union. There were many within the Soviet system who wanted to adapt this, notably the Slovak and Czech leaders of Czechoslovakia under Alexander Dubcek. By stopping sensible reform, Brezhnev and those who backed him prevented a sensible compromise on a semi-socialist system such as the West then had. They went to the limit, and then collapsed and capitulated to a primitive sort of capitalism that had revived in the West.

The West limited the amount of ‘Primitive Capitalism’ that could be practiced at home. The Soviet collapse became the great opportunity for the New Right to display their brilliance. And some Russians were foolish enough to take those people at face value.

“Yegor Gaidar, the architect of Russia’s market reforms in the 1990s, has died aged 53, his spokesman has said.

“The spokesman said Mr Gaidar had died of a blood clot.

“Mr Gaidar was Russia’s acting prime minister in 1992, launching the ‘shock therapy’ reforms after the collapse of the Soviet Union.

“Mr Gaidar is credited with carrying out the first wave of privatisations under President Boris Yeltsin. His lifting of price controls was highly unpopular.

“The policies angered millions of Russians who saw their savings devalued, while prices, which in some cases the government had kept artificially low for decades, suddenly rocketed.

“Countless jobs were lost in bloated state industries as they struggled to adapt to new economic realities.

“Perhaps because of that, Mr Gaidar’s reforms are still remembered with loathing by many ordinary people, says the BBC’s former Moscow correspondent James Rodgers.” [AA]

The net result of the ‘reforms’ were to get a lot of state property into undeserving hands, and with a large criminal element independent of the society. The successful example of China in reforming a similar economy was ignored – leading to comments from some Chinese that Russia’s ‘shock therapy’ had been all shock and no therapy. Also making China much more suspicious of Western advice, beginning the trend back towards self-assertion as Russia showed them that the West was either foolish or malicious, or maybe both.

Of course the man still has his defenders, people who count him as a ‘Slayer of Invisible Dragons’. To normal eyes, he took over a sluggish but comfortable economy and created poverty, crime, unjust wealth and a rise in the death rate. But the wisdom of the New Right is that he acted to prevent unthinkable disasters.:

“His supporters argue that his reforms made Russia’s later economic boom possible.

“His contemporaries on the liberal wing of Russian politics in the 1990s praise him for taking difficult decisions which, they believe, saved the Russian economy from total disaster…

“His supporters argue that his reforms made Russia’s later economic boom possible.

“His contemporaries on the liberal wing of Russian politics in the 1990s praise him for taking difficult decisions which, they believe, saved the Russian economy from total disaster.” [AA]

“With his big shiny forehead and podgy face, he looked like the class swot, rather than a revolutionary. Yet his impact was no less significant: he helped to avert another revolution of the violent Bolshevik kind…

“In December 1992 parliament refused to approve him as head of government. But in September 1993 he returned as economy minister. Once again, civil war was close: in October 1993 the stand-off between Yeltsin and his parliament turned into armed conflict. Mr Gaidar, on television, appealed to Russians to defend democracy.” [Economist, AB]

If a new Managing Director took over a large sluggish company and caused its value to shrink drastically, you’d call them a bungler, or at best unlucky. So why is Gaidar viewed as a hero?

He didn’t even serve Western interests very well. Given the amount of pain that was inflicted on the Russians, we’re lucky it didn’t result in something much worse than Putin.

What the Economist calls ‘ defending democracy’ was a fight between Yeltsin and his Parliament, which he resolved using the army. His chief opponent was Ruslan Khasbulatov, a Chechen and a former ally of Yeltsin. Yeltsin followed Western advice and narrowed his basis of support, with disastrous results. The Chechen War began the following year and has taken a long time to be even partly resolved.

Even if Gadir had been right about the long term economic prospects, did he also realise he was destroying the future of liberalism in Russia? The economic benefits are disputed. The political backwash is unambiguous. That’s why I’d rate the Western advice more foolish than malice. Had those people known what they were doing, would they have followed policies which lost them their best potential ally? It’s now clear that they did not know what they were doing.

The Neo-Cons and other Washington ‘Insiders’ dismissed one of the world’s major powers as ‘Upper Volta with nuclear weapons’. If Upper Volta really did have nuclear weapons, then it would be bloody stupid to neglect it. It was an incredible blunder to let Russia be neglected. George Soros had the right idea, a copy of the Marshall Plan that pumped money into former enemies West Germany and Japan, securing them as long-term allies and helping win the Cold War. But such a policy would have led to immense howls about wasting tax-payer’s money, so instead the Russians pushed into policies that cost the West little in the short term. Cost the Russians plenty in terms of poverty, crime and decay.

In US politics, there is a kind of Natural Selection in which successful politicians succeed by flattering the ignorance of the US public and show skill at shifting the blame. Direct democracy does not work above a local level, the level at which even stupid people will easily notice the result of their own actions.

 

Zuma Asserts African Values [South Africa]

“Jacob Zuma, the president of South Africa, married his third wife today in a traditional Zulu ceremony – but not without a hitch.

“Zuma, 67, reportedly slipped and fell during a traditional solo dance at the wedding at his homestead in Nkandla, KwaZulu-Natal province.

“Zuma and Tobeka Madiba, the republic’s third first lady, were presented to society as husband and wife for the first time during their ceremony, South Africa’s Eyewitness News reported.

“Accompanied by an entourage of men dressed in leopard skins, Zuma sang and danced, the network said. Madiba was then presented with her own entourage of young Zulu men and women.

“The president did a solo traditional dance but slipped and fell backwards in the process, according to Eyewitness News. The reporter who saw the slip said later that this did not appear to be part of a traditional Zulu ceremony where dancers execute a fall. There was no indication that he had been hurt…

“South African law recognises multiple marriages, although fewer young South Africans are entering into them because they are seen as expensive and old-fashioned. The cultural practices of Zulus and other groups are protected by the constitution.

“Zuma played up his Zulu heritage during the election campaign and spent Christmas at his homestead in Nkandla. He relaxed by shooting birds with a slingshot, drinking umqombothi (traditional beer) and taking part in a chess tournament. It emerged this month that a reported R65m (£5.3m) expansion of the Nkandla residence is under way with new houses being built to accommodate Zuma’s three wives.

“Jeremy Gordin, Zuma’s biographer, said he was surprised how little attention Zuma’s latest wedding had received. ‘I find it interesting that there were all kinds of people making belligerent comments on his polygamy, but that died down after the election.'” [AC]

Myself, I’ve always found it odd that Gay Marriage is being asserted as a human right by some people, but very few of them would also support polygamy – or polyandry either. Such arrangements have rather more historic precedent. It can be a form of exploitation of women, but if women have general freedom to choose, what is the harm?

 

References

[A] [http://newsforums.bbc.co.uk/nol/thread.jspa?sortBy=1&start=0&edition=1&ttl=20091229191651&forumID=7377&#6981524]

[B] [http://news.bbc.co.uk/1/hi/uk/8433704.stm]

[C] [http://www.ft.com/cms/s/0/dc906ade-0225-11df-8b56-00144feabdc0.html] and [http://news.bbc.co.uk/1/hi/world/asia-pacific/8454049.stm]

[D] [http://commons.wikimedia.org/wiki/File:Ricci1600.jpg]

[E] [http://www.cowart.info/blog/uploaded_images/Ricci-1602-Map-from-China-1-728396.jpg]

[F] [http://www.guardian.co.uk/technology/2010/jan/14/google-china-internet-blog-announcement]

[G] [http://www.guardian.co.uk/technology/2010/jan/18/china-google-cyber-attack]

[H] [http://www.ft.com/cms/s/0/c0eb89e4-0207-11df-8b56-00144feabdc0.html]

[J] Comments at [http://www.nytimes.com/2010/01/13/world/asia/13beijing.html], post 151

[K] [http://www.nytimes.com/2010/01/01/us/01blackwater.html?th&emc=th]

[L] [http://en.wikipedia.org/wiki/Blackwater_Worldwide]

[M] [http://www.guardian.co.uk/business/2010/jan/19/cadbury-kraft-takeover-todd-stitzer]

[N] [http://www.guardian.co.uk/business/2010/jan/19/takeover-business-a-brutal-game]

[P] [http://www.ft.com/cms/s/0/c022b2e0-053f-11df-a85e-00144feabdc0.html]

[Q] [http://www.guardian.co.uk/business/2010/jan/20/buffett-blasts-cadbury-takeover]

[R] [http://www.ft.com/cms/s/0/a7bdfbae-054b-11df-a85e-00144feabdc0.html]

[S] [http://www.guardian.co.uk/world/2010/jan/14/haiti-history-earthquake-disaster]

[T] [http://www.guardian.co.uk/uk/2010/jan/20/mother-guilty-murder-disabled-son]

[W] [http://www.peterboroughtoday.co.uk/news/Court-Stamford-woman-jailed-for.5999690.jp]

[X] [http://www.guardian.co.uk/world/2010/jan/15/haitians-donations-radio-rush-limbaugh]

[Y] [http://www.nypost.com/p/sharpton_clinton_obama_coffee_remark_tOHinnsy4HAwiVgJ8cr10H]

[Z] [http://www.ft.com/cms/s/0/a6b60178-f9f4-11de-adb4-00144feab49a.html]

[AA] [http://news.bbc.co.uk/1/hi/world/europe/8415441.stm]

[AB] [http://www.economist.com/obituary/displaystory.cfm?story_id=15125467]

[AC] [http://www.guardian.co.uk/world/2010/jan/04/jacob-zuma-weds-tobeka-madiba]

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