China's favorite kind of capitalism
This from Harold Meyerson's op-ed column in the Washington Post.China's Hot Stock: Orwell Inc.
"The American economy may be teetering on the brink of a recession, but there's an industry our hedge fund gurus believe has an almost limitless future: the Chinese police state.
"In a stunning report in the New York Times last week, correspondent Keith Bradsher documented the rise of China's electronic surveillance industry, whose leading companies have incorporated themselves in the United States and obtained the lion's share of their capital from U.S. hedge funds. Though ostensibly private, these companies are a for-profit adjunct of the Chinese government...
"An authoritarian government can never be sure how many of its citizens would relish its demise, which means the Chinese Communist Party has 1.3 billion potential targets for surveillance. Bradsher reports that 660 Chinese cities have begun installing high-tech surveillance systems. By one estimate, high-end surveillance will expand from a $500 million industry in 2003 to a $43 billion industry by 2010...
"These numbers have drawn Wall Street's notice. China Security and Surveillance Technology (CSST) has received $110 million in convertible loans from the Citadel Group, a Chicago-based hedge fund, which it has used to buy up smaller Chinese surveillance companies. Some Wall Street executives have even defended their investments by equating the Chinese surveillance system with the surveillance cameras of London and New York..."Once China turned communist repression into an investment opportunity, however, capitalism responded as capitalism is supposed to respond: It wanted in. There are mega-bucks to be made, the hedge funds concluded, in hedging against democracy.
"Capitalism is global now; democracy is not. We are moving toward one unified world market that is home to democratic and authoritarian systems alike. The Chinese model of Leninist capitalism poses a systemic challenge to the democratic capitalism that the West espouses. It promises continuing power and greatly increased wealth to the ruling elites of developing nations. Which means that America must disenthrall itself from one of its most cherished myths: that capitalism and democracy go hand in hand, that the spread of markets inevitably means the coming of democracy. That was a key argument that proponents of extending permanent favored trade status to China made during the 1990s. In fact, the creation of the Chinese-American economic entity that followed -- in effect, moving our manufacturing belt from the Midwest to Shenzhen -- has demonstrated the opposite. Leading American companies such as Microsoft, Google and Yahoo have acquiesced in Chinese Internet censorship. China's nonexistent standards of product safety -- the direct consequence of its absence of democracy -- became our standards, too.
"And now, some of Wall Street's smoothest operators are investing directly in China's suppression of speech, worship and the right to assemble..."
Labels: China, economics, globalization, theory
posted by Ken Wedding @ 10:20 AM
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