Newsnotes 2007 11

Notes On The News

By Gwydion M Williams

No Democracy Without Antagonism?

How dare you speak such truths? [Hong Kong]

Poles being Polish

Russians being Russian.

Black South Africans Being Disobedient [Re-electing the ANC]

Finance ‘out of control’, accidentally makes billions for wide-boy operators.

Mysteries of the asset price

Paying for what you value [Climate Change]

Britain’s achievements in Iraq

Chinese dynasties

 

No Democracy Without Antagonism?

Britain acquired its party system by accident, maybe by misfortune. Members of the House of Commons were supposed to be there as individuals. But in the 18th century, Parliament got into the habit of working as two or more opposing teams.

This system worked, because it was two rival teams of gentry and aristocrats, people who knew that they had a lot to lose if they re-started the civil strife of the 17th century. The habits were strong enough to survive the democratisation of the system in the last quarter of the 19th century. Before the Ballot Act of 1872, voting was public and there was a lot of bribery and intimidation by the rich. The election of 1885 was the first in which a majority of the adult males had a vote.

Britain democratised several decades after it had transformed itself into an industrial society. But democracy re-opened one old wound, the desire of Ireland to separate. Home Rule got going after the secret ballot was introduced. The electoral logic encouraged parties in Ireland to concentrate on the votes of Irish Nationalists, or alternatively those who wanted to keep the link with Britain. This split is still not resolved, though a collapse of Unionism is the most likely long-term outcome.

The common claim is that democracy produces civil peace. The historic reality is just the reverse.

It’s also moot if Antagonistic-Team Democracy works better than a monolithic democracy in which a single big party is solidly in government and unlikely to be displaced. That’s the system in Singapore, East Asia’s biggest success story. It was the system in Japan, Italy and West Germany, when they had their ‘economic miracles’. The dominance of the Congress Party helped stabilise the Republic of India. In Pakistan, the Muslim League disintegrated and the country has waltzed between dictatorship and bad democracy. Half of the original Pakistan separating as Bangladesh following an election that highlighted the split between Bengali Muslims and the rest.

The West has pushed Antagonistic-Teams Democracy wherever it could, with mixed results. Meantime China keeps Democratic Centralism, a central body not limited by formal ‘checks and balances’, though it is supposed to take note of public opinion. Political change is done much more sneakily than it was under Mao, with things happened quietly rather than a big campaign being started. And despite a growth in inequality after Mao, the poorest members of society are quite a bit better off in China than in Republic of India or in Brazil, places that started off in the same situation.

Iraq was to be the New Right’s grand example of nation-building. Instead it has gone from relative peace under a secular and westernised warlord to a collection of warlords, most of them believers in hard-line religion. Despite which, Western advice is always to introduce Antagonistic-Team Democracy as soon as possible.

 

How dare you speak such truths? [Hong Kong]

Britain acquired Hong Kong as a base for imperialism and opium-trading. Democracy for the local Chinese was a very late idea, intended to create trouble when the bulk of Hong Kong reverted to Chinese control in 1997. But Britain was also determined to avoid the risk of any large number of Hong Kong Chinese coming to Britain if things went wrong, in the way that happened with East Africa’s Asians. Responding to this, sensible leaders in Hong Kong made sure they worked smoothly with Beijing. First Tung Chee Hwa and currently Donald Tsang, who was recently in trouble for telling people what they didn’t want to hear:

“People can go to the extreme like what we saw during the Cultural Revolution. For instance, in China, when people take everything into their own hands, then you cannot govern the place,” he said.

“When challenged that the Cultural Revolution was not really an example of democracy, Mr Tsang said “[It] was the people taking power into their own hands. Now that is what you mean by democracy if you take it to the full swing.”

“He was broadly criticised for the remarks by pro-democracy lawmakers.” [A]

He later appologised and said it was “an inappropriate remark”, which no doubt it was. But we have had any number of former Red Guards confirming what should have been obvious all along, that the fervour for Mao was entirely genuine and the view of the large majority. Also that it was popular anger at officials who were otherwise untouchable.

Hong Kong’s ‘pro-democracy lawmakers’ have evidently absorbed the current Western notion that it is only democratic if we like it and if it is democratic it must be nice. A notion that doesn’t at all fit the way democracy was established in the West, or anywhere else in the world.

England, France and Russia are distinguished as nations that have formally and legalistically executed their own monarch, a ruler whose legitimacy in monarchical terms was not in question. I don’t think anywhere else has ever done it, offically criminalising and killing their monarch, as distinct from chasing them out or else covertly murdering them. Yet modern Antagonistic-Teams Democracy would definitely not exist without the massive social changes of the Cromwellian Commonwealth and the French Revolution. If that’s not what you understand by ‘democracy’, then you have entirely failed to understand the actual history of building a democratic society.

Meantime the latest district council elections in Hong Kong have let to huge gains for Beijing-backed groups. [B] With the lousy example set by the USA in Iraq and other places, a preference for stability and harmony is quite understandable

 

Poles being Polish

A functional democracy needs at least one competent political party. This is more a matter of luck than anything else. Contrary to what most British commentators have said, I’d reckon Poland has been lucky and now has at least two competent political parties: maybe also a third on the left.

Being replaced as the government has been presented as a setback for ‘Law and Justice’, the party of the Kaczynski twins. [C] But they formed that government in alliance with two smaller parties, parties they then failed to get along with. Their own party’s strength was 27% and 155 seats in 2005: now it is 32% and 166 seats. Even better, from their viewpoint, the two coalition partners they quarrelled with have vanished as parliamentary parties. ‘Self-Defense of the Republic of Poland’ has slumped from 56 seats and 11.4% of the vote to 1.53 and no seats. The ‘League of Polish Families’ had had 8% and 34 seats: this time they made an electoral alliance but still slumped massively, to 1.3% and no seats. ‘Law and Justice’ are now the party of Poland’s parliamentary right. ‘Civil Platform’ did even better and is now the government, but are likely to be forced to make unpopular decision.

A bad electoral system is one where new parties are swept into power on a wave of enthusiasm, and then dismissed with contempt a few years later. Poland has had one since it got free of Soviet rule, but it may be getting better. Of course the European Union that stabilises it, with experienced long-established parties setting an example.

 

Russians being Russian.

When Yeltsin shelled his own parliament, this was hailed in the West as upholding democracy. When he hand-picked Putin to succeed him, this was seen as odd but acceptable. But when Putin began successfully re-asserting Russia’s national pride, then it was suddenly ‘flawed democracy’.

It is called ‘flawed democracy’ because most Russia voters won’t vote for the West’s nice pets, the dedicated upholders of liberalism and individualism. So individual that two very similar parties, Yabloko and the ‘ Union of Right Forces’, cannot form an electoral alliance even though both are now likely to fall below the 7% threshold for the forthcoming election. Between them they got more than 7% back in 2003, rather less than in earlier election, but enough to survive. Pride clearly means more to them than political survival. It has repelled many who used to believe in the Western model:

“‘Russia’s main enemy is political chaos,’ he says, behind a desk laden with party newspapers.

“Mr Milonov, a member of St Petersburg’s local assembly, says he should know. For nearly 10 years he was a main player in Russia’s democratic reform movement. He was an aide to Galina Starovoitova, a leading democrat shot dead in 1998. But instead of being spurred to battle on, he says he grew disillusioned with the country’s liberal movement: ‘All they did was fight between themselves.’…

Before the vote, there was speculation that it might see the disappearance from Parliament of everyone except Putin’s party and the Russian Communists. This was due to a 7% threshold for representation, criticised as unreasonable even though you’d need a lot more than 7% to get significant representation in the British or US electoral systems.

In the event, the hard-line nationalist ‘Liberal Democrats’ are back, though a shadow of what they once were. So too are the leftist but pro-Putin ‘Fair Russia’. If there was fixing, it could only have been at the expense of the Communists and nationalist ‘Liberal Democrats’, the serious opposition. The two ‘reform’ parties got 1.6 and 1.1 per cent – maybe they’d have got more with a lower threshold, but it is still an ignominious end to the West’s dream of remoulding Russia.

Why are the pro-Western parties so little liked? Because people got poorer and society got more violent and unfair when the West’s advice was being taken. It could have been otherwise – a US hegemony was there for the taking, if they hadn’t been so smug, greedy and incompetent. The idea of massive aid to Russia was floated:

“If the George H W Bush administration can be criticised for anything, it is for failing to provide swift economic help to the democratic government of the newly independent Russia in 1992. Observing the transition closely, former President Richard Nixon pointed out that a major aid package could stop the economic free fall and help anchor Russia to the West for years to come. Bush, however, was in a weak position to take a daring stand in helping Russia. By this time, he was fighting a losing battle with candidate Bill Clinton, who was attacking him for being preoccupied with foreign policy at the expense of the US economy. [H]

I’d have said that the USA missed the need for something like the Marshall Plan, which was the actual means whereby the USA won Western Europe, with similar measures for Japan and later Taiwan and South Korea. I suppose that few people in the modern USA will accept that quasi-socialist measures in the 1930, 1940s and 1950s were a brilliant success. Today’s pure capitalism has proved a dismal failure, but the ruling elite have no ideas beyond ‘more of the same’.

Nixon gave the system its last success, getting out of Vietnam without complete disaster and laying the groundwork for US recovery by making peace with China while Mao was still around to endorse such a deal. But the wrong lessons were learned from the crisis of the 1970s: the whole era of the New Deal and Keynesianism was re-classed as a terrible error from which the West needed to be rescued.

In the 1990s, Soviet collapse was held to have vindicated this view – ignoring that it was Keynesianism that kept the West alive when the Soviet challenge was at its height. There was also the peculiar decision to treat the West’s old friend Serbia as criminal, while showering favours on a Croat nationalism that was openly a continuation of the pro-Nazi Croatia of World War Two. This was presided over by Bill Clinton and by Madeleine Albright, his Secretary of State and herself a child of Czech Jewish refugees. In Israel, there was a general understanding that the Serbs were old friends and the Croats old enemies. In Washington the anti-Nazi heritage was somehow transferred to the government of President Tudjman, named as a ‘denialist’ by Deborah E. Lipstadt, along with David Irving. Irving sued and lost. Tudjman avoided bringing the matter to the world’s attention. Pro-Nazi Croat nationalism was supported and anti-Nazi Serb nationalism was criminalised.

Iraq was just as bizarre. Gorbachev was discredited in Russian eyes when he could do nothing about the USA’s profoundly stupid policy in destroying Iraq’s main champion of secular and western values.

[Yabloko and the ‘ Union of Right Forces’ have since fallen far lower, with the Right Forces currently split. Both fell below the 5% minimum for national representation in the Russian legislative election of 2011. But Western media go on treating them as if they were the main opposition, probably because they are the only remaining Russians who will tell the West what it wants to hear.]

 

Black South Africans Being Disobedient [Re-electing the ANC]

When the BBC says ‘democracy’, they mean ‘obedience to current Anglo fashions’. Democracy is at risk from a fatal tendency for voters to support candidates that the West knows will be very bad for them

When the ANC has its first real leadership contest, they don’t call it healthy pluralism followed by a sporting acceptance of the outcome. They predict chaos, almost seem to want chaos. They make a big thing about alleged corruption by Zuma, but it is bloody obvious there has been massive corruption all over. [P]

The New Right hate effective government as such, and will only tolerate it when it serves Anglo interests. The 1990s saw a ‘Cool War’ after the Cold War: a lot of US allies came to grief, one way or another. Some were openly attacked, like Mobutu, Suharto, Ceausescu and Saddam Hussein. Others suffered an unexplained rash of scandals, like the Christian Democrats in Italy and Germany. There must be a strong suspicion that they were removing allies they saw as surplus or a liability

They were also short-sighted and incompetent. Those who took the USA’s advice in the 1990s suffered badly – most notably Russia, talked into impoverishing itself. Those who ignored them did well, notably China

 

Finance ‘out of control’, accidentally makes billions for wide-boy operators.

In the 1920s, the USA let its stock-market and its banking system turn into a gigantic casino. The result was slump, global chaos and the rise of fascism. With the war won, finance was set on a sound basis. The ‘Mixed Economy’ – not at the time called capitalist except by its enemies – produced a period of fast growth and full employment, a success that won the Cold War for the West.

By the 1970s, the world had changed a lot and the global system of regulation needed to be reformed and rebuilt. That would have required the USA to accept it was no longer as dominant as it had once been. Or the question could be evaded and the regulations loosened, in the hope that the system would somehow drift to a safe harbour. The New Right supplied a suitable ideology for this period of weakness. Everything good in the period 1950 to 1975 was credited to the system being capitalist. Everything bad was blamed on the system not being capitalist. The New Right got away with this nonsense, because most socialists at the time viewed Keynesianism as dangerous ‘Corporatism’ and failed to defend it as a system that had worked well.

People are now talking about finance being ‘out of control’. This is not at all true: it has been intentionally de-regulated since the 1970s. Every provision to confine it to sound business and to prevent fraud and gambling has been removed with cries of ‘red tape’ and ‘nanny state’. Now they Bogey Man has really turned up. Don’t cry now for Nanny: you privatised her.

The New Right has a Theory of Transcendental Capitalism in which the market always knows best. Real believers in Transcendence show their sincerity by sticking to their beliefs in the fact of adversity. Or occasionally change their beliefs when belief fails to match reality. By contrast, hypocrites are happy to cite principles that they slide away from as soon as things get difficult and re-affirm when the going gets easy again.

The Theory of Transcendental Capitalism was an ideological cover while wide-boy operations (and a few wide-girls) made the world a gigantic casino, with a few getting rich and many worse off. The real economy has done rather worse than it did in 1950-1975, the era of Keynesianism.

The period from the 1980s through to today may be seen in retrospect as the time Europe and its offshoots lost world dominance. The fall of the Soviet Union was not a vindication of Western values but a crumbling of the edges. Now the disease is striking closer to home.

 

Mysteries of the asset price

Finance used to be relatively simple. People with money lent to those who needed it for some sensible business scheme, or for house purchase which they would pay off in the longer run. Building societies and banks lent out the money deposited with them, and had to be careful who they gave the money to.

All of this was condemned as unadventurous, timid. Rather than make money or lose money depending on whether you lent wisely, you could heroically merge, shuffle and sell complex financial packages. Looking at the complexities and trying to figure a price, the traditional financier would have said ‘God alone knows’. But then along came bright ‘rocket scientists’, people with training in physics or mathematics. They looked at the untradeable ‘God alone knows’ assets and said ‘No, actually I know’. Or rather, this bit of God-like mathematics will give you a price that you can rely on, with risks that can be calculated.

With the aid of ‘rocket scientists’, the markets went high up in the air and then exploded dramatically. Now who could have expected something like that?

What’s happened this year is a loss of faith in the method of analysis that put a price on ‘God alone knows’ assets. A pattern developed that should not have happened in a thousand years. This cast doubt on the claim that the experts really had been pricing the un-priceable.

Of course anyone can put a price on the un-priceable: the trick is to get something like the truth. Obscure ‘financial instruments’ could be priced on the basis of the feeding habits of Sacred Chickens, if investors believed that Sacred Chickens were reliable predictors of value. If this faith suddenly collapsed there would then be financial chaos, just as we have now on the basis of fancy maths.

It isn’t just subprime mortgages. The refusal to trade means that a lot of banks suspect that other banks have much worse debts than they are admitting to. [D] Maybe they also know that their own debts are rather bad, so they hang onto whatever sound money they have.

It’s not just rich speculators who are being hit. An investment fund used by schools in Florida has been hit.[N] There is a crisis in Norwegian local governments after found they’d invested in financial assets whose value has just evaporated. [E] In the USA, people are losing the houses they were persuaded to buy on loans they could not afford. Often the house then stands empty – the logic of finance means it often pays better to waste than to use. [F]

For the past 20 years, the accepted wisdom has been that wealth derives from money breeding with money in the darkness of the bank-vaults. All the state needed to do was stand back and let it happen.

Now it has been found that a lot of the imagined wealth does not exist: fairy gold that turns to dead leaves in the cold light of day. And a lot of people who should never have tried home-ownership are going to suffer. A lot of the top managers who allowed it all to happen will walk away with large fortunes. But for ‘smart money’ to grow rich, there must be a lot of ‘stupid money’ to buy financial products at much more than they’re worth. Mostly the losers are those who are living useful lives, and whose main error was to trust financial advice.

 

Paying for what you value [Climate Change]

The New Right approach has been to see life as a burden on money. ‘ Let money be free and happy, as God intended’: that was the substance of their argument. They supposed that markets would be self-correcting, which they sometimes are. And also sometimes are not, the global market has got into a very unstable state.

Meantime some positive things are being done:

“Man-made climate change is a clear and present danger. Decision-makers from around the globe will converge on Bali in a fortnight in an attempt to do something about it. And the call has gone out for the world’s leaders to take bold action to avoid a catastrophe.

“Enter Guyana. The former British colony, sandwiched between Venezuela and Brazil, is home to fewer than a million people but it is also home to an intact rainforest larger than England. In a dramatic offer, the government of Guyana has said it is willing to place its entire standing forest under the control of a British-led, international body in return for a bilateral deal with the UK that would secure development aid and the technical assistance needed to make the change to a green economy.

“The deal would represent potentially the largest carbon offset ever undertaken, securing the vast carbon sinks of Guyana’s pristine forest in return for assisting the economic growth of South America’s poorest economy.” [G]

Once you stop thinking about life as a burden on money, it is a bloody obvious solution. A few enterprising rich people could also save the surviving chimps, gorillas etc., just by paying the local inhabitants a premium for each one of them found alive. The number of Bonobos is no more than 60,000, maybe as few as 5,000. This is especially bad since the Bonabo or ‘Pigmy Chimp’ is our closest living relative. So have a program to find out exactly how many there are any pay some regional government maybe a thousand dollars each for each one that survives. Make it a source of profit for local people rather than a burden you try to dump on those least able to afford it.

 

Britain’s achievements in Iraq

“The chief of police in the southern Iraqi city of Basra has warned of a campaign of violence against women carried out by religious extremists…

“Some victims were dressed in indecent clothes by their killers or had notices attached to them, he said.

“Women interviewed by the BBC said they no longer dared venture on to Basra’s streets without strict Islamic attire…

“He also said that repression against women had been going on while British forces were still in the city, prior to their withdrawal to Basra airport in September.

“Others were more direct in pointing the finger of blame at the rival Shia militias, known to have infiltrated the police and vying for control of Basra.” [J]

“Hayaniya Square in Basra … is dominated by a painting of six men dressed in casual trousers and jackets, behind whom loom the faces of Moqtada al-Sadr, the leader of the Mahdi army, and his father, Muhammad Sadiq al-Sadr. The six men, described on the mural as martyrs, are Mahdi army commanders who were killed by the British.

“At night, when traffic in the square slows, a group of men gather. These are the sakkaka, or assassins… They buy and sell names of collaborators, Iraqis who worked for the British, as well as journalists and uncooperative police officers, businessmen and the footsoldiers of other militias.

“Depending on the nature of their perceived crime, the price on a collaborator’s head can vary from couple of hundred dollars to a few thousand. The most valuable lives these days in Basra are those of the interpreters and contractors who were employed by the British before they withdrew from the city.” [K]

Britain has mostly refused to give refuge to those whose lives they compromised with false promises of a peaceful Iraq that would be much more Westernised than Saddam’s system. Having been proved wrong, Britain lets others suffer. Not just foreigners: the troops have been over-strained and negelected, with predictable results.

“Two soldiers who smuggled stolen guns out of Iraq to sell as souvenirs were jailed at a court martial yesterday.

“The lance corporals from the Yorkshire Regiment drew up a homemade catalogue of the black market weapons which are thought to have been smuggled out of Iraq in the fuel tanks of trucks and armoured cars. Their plan was to make money from easy sales to colleagues in a battalion which, according to evidence at the court martial in Catterick barracks, North Yorkshire, was “riddled with drug abuse and dealing” at the time of the incident three years ago.” [L]

 

Chinese dynasties

I’ve not yet been able to get a ticket for the terracotta warriors on display at the British Museum. It’s proved very popular, sold out till after Christmas. But it’s natural that there should be interest in the beginnings of Chinese civilisation.

Except that Qin Shi Huang the ‘First Emperor’ was nothing of the sort. He took ‘First Emperor’ as his reign-title, but also he was re-creating an ancient unity. The man was the first and main ruler China’s short-lived 4th Dynasty, 3rd if you count the Xia or Hsia as legendary. We are dependent on definitions by Han Dynasty, who wrote the surviving records and undoubtedly biased them. But no one now doubts the existence of a Chou Dynasty before the Warring States and a Shang Dynasty that the Chou overthrew. The unification by the ‘First Emperor’ worked because the various peoples accepted the notion that they should have a single ruler.

The Qin also failed to create a stable empire: the dynasty’s second emperor was its last. The true guarantor of China’s future was Liu Bang, Emperor Gaozu of Han, who is much less known in the West and who deserves to be known better. His dynasty lasted from 256 BC to 195 AD, beginning in the aftermath of Alexander’s conquest of Persia and overlapping the rise and consolidation of the Roman Empire.

Alexander the Great is still widely viewed as the West’s ultimate hero. Qin Shi Huang is mostly viewed as a monster and Liu Bang is ignored. But what was Alexander’s legacy? He shattered a unified and successful Persian Empire, which by Alexander’s day had settled and given up any ambition to conquer Greece. Alexander’s heirs fought pointless civil wars until their system was eventually conquered by the Romans.

China’s early rulers made something that lasted, and which also made several technological breakthroughs that the West later used. Gunpowder, the magnetic compass and the printing press all began in China. [Also paper and wheelbarrows.] Without Qin Shi Huang and Liu Bang, there might not be any British Museum to show their works.

 

References

[A] [http://news.bbc.co.uk/2/hi/asia-pacific/7042941.stm]

[B] HK democrats in heavy poll losses, [http://news.bbc.co.uk/2/hi/asia-pacific/7100344.stm]

[C] Polish PM quits after poll rout -[http://news.bbc.co.uk/2/hi/europe/7079045.stm]

[D] What’s the damage? [http://www.ft.com/cms/s/0/8ed4716c-8b41-11dc-95f7-0000779fd2ac.html]

[E] Subprime crisis hits small-town Norway [http://www.ft.com/cms/s/0/b28690a8-9a2e-11dc-ad70-0000779fd2ac.html]

[F] Foreclosure wave sweeps America [http://news.bbc.co.uk/2/hi/business/7070935.stm]

[G] Take over our rainforest [http://environment.independent.co.uk/climate_change/article3191500.ece]

[H] Losing Russia, by Dimitri K. Simes. Foreign Affairs, November / December 2007.

[J] Basra militants targeting women, [http://news.bbc.co.uk/2/hi/middle_east/7095209.stm]

[K] [http://www.guardian.co.uk/international/story/0,,2212584,00.html]

[L] Soldiers jailed for selling smuggled Iraq weapons [http://www.guardian.co.uk/military/story/0,,2216253,00.html]

[M] [http://www.ft.com/cms/s/0/1253f58c-9e1e-11dc-9f68-0000779fd2ac.html]

[N] Florida fund freeze leaves schools body ‘flat broke’ [http://www.ft.com/cms/s/0/10a7bfde-9fb3-11dc-8031-0000779fd2ac.html]

[P] Mbeki accused of hypocrisy, [http://www.guardian.co.uk/southafrica/story/0,,2231425,00.html]

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