By
LARRY ROMANOFF – October 04, 2020
•Playing the Word Game
In early 2014 the Shanghai Daily carried an
article by Cherry Cao titled "Pudong office rents outperform Puxi’s in
Q4". Its content is instructive. First, what are rising prices? Inflation.
Is that good? Not usually. We certainly don't like to see rising home prices,
we don't enjoy paying more for the fuel for our cars and few of us are happy to
pay the increasing prices in the supermarkets. China's Central Government has
taken resolute action on many occasions to kill inflation, to at least stop
prices increasing if not to drive them down. Inflation is bad, and harms almost
everyone. But this article isn't bemoaning rising office rents in Pudong; quite
the contrary, it suggests that this is a good thing because Pudong's rents are
"outperforming" those in Puxi. What are we to think?
If I own a shopping mall and raise the rents,
600 shop-owners will now have to raise their prices and hundreds of thousands
of shoppers will have to pay more for the goods they buy. Who is supposed to be
happy about this? The consumers have nothing to cheer about. Certainly the
shop-owners aren't happy. Does the city government smile at the news that rent
inflation is taking its toll on smaller businesses? I don't see why it would.
The only person who is happy is me, because I am bleeding more bank accounts
faster. The end result of course, is precisely the income disparity that
everyone claims is a bad thing, the increasing transfer and concentration of
wealth in a steadily decreasing number of hands. By raising the rents, I am transferring several RMB from each purchase
by hundreds of thousands of individual consumers, through the shop-keepers,
into my bank account. That is the prime source of what we call income
disparity, the difference in assets between the very rich and everyone else. What
we need to do is to push the rents down, make it easier for the shop-owners to
stay in business and offer lower prices. And we need to increase taxes to the
landlords, to reduce the profitability from their greed, and redistribute that
money through civic infrastructure and social services. This is how we push
incomes to the lower levels, to the smaller shops and the smallest consumer,
and how we reduce the income disparity in China. And in doing this, we needn't feel sympathy for the landlords who now
have only $80 billion instead of $90 billion.
And
therein lies the danger of listening to the Americans: the risk of being
contaminated by their political/religious/capitalist ideology is surprisingly
high because you become infected without conscious realisation. The subtle
changes in definition and usage of words, the clever presentation of bad as
good and, just as with the movies, we
unconsciously accept the moral lesson contained in the message, in this case
that "performance" is somehow a good thing, even if the thing
performing is inflation. And instead of feeling concern, we are urged to
feel a kind of pride that Pudong is performing so well and also a bit of pity
for poor Puxi that is underperforming the market, probably being left behind
because it is old-fashioned. Rising
prices - bad inflation - is now reclassified as good performance, cleverly
couched in terms of prestige, success, and high-class development and therefore
to be praised. We are creating a myth that bad is really good and should be
supported. Listen to the words, and how they are intended to push us to
accept values that are against our own best interest. This choice of words is not an accident:
"Rents for Grade A offices on the Pudong
side of the Huangpu River "continued to outperform" those on the Puxi
side", "strong demand" "continuing to drive rental
growth". And this was "a notable contrast" to poor Puxi that
"shed" its prices and had "a flat office leasing market"
because "demand from cost-conscious companies" remained weak.
What
conclusions do we draw from these words? First, that Pudong is growing and
expanding and doing markedly better than Puxi, with increasing demand driving
growth, and attracting all the companies that have money. How can we not be in
favor of that? And secondly that backward Puxi is not expanding but
contracting, "shedding" its growth, and how can we be happy about
that? Even worse, Puxi rents were flat because demand from
"cost-conscious" companies was weak, and what does that imply? That
Puxi is the location of choice for firms with no money, those who can't afford
to rent nice space because they aren't expanding and are probably worried about
paying the water bill. Not only that, but Puxi is probably on a long-term trend
to failure since it is "shedding" what appears to be value. But Puxi
is not shedding value; instead, it is shedding high prices, the opposite of
inflation, which is what everyone really wants.
And with all of this, where will you go if you
want to rent space? To Pudong with its driving growth and demand, where all the
action is, or to poor shrinking backward Puxi with all the other losers who
have no money? And what is the result of all this? To take advantage of clever psychological tricks to force demand in
Pudong where these companies are building and leasing space, to play up Pudong
at the expense of Puxi, to denigrate the real heart of Shanghai, to change
social attitudes and alter society's values to fill the pockets of parties with
vested interests. For many of the above quotes we can thank Eric Xin at Jones Lang LaSalle and others at Colliers International, which are not Chinese companies and have no
interest whatever in what is good for China. I would be interested to know if
these people think about what they do, in terms of what is good for Shanghai,
beyond promoting huge profits for an American company.
China
is being contaminated by American ideology and so-called "values" in
ways you can't even imagine. It wouldn't be so bad if these values were
beneficial or neutral, but they are not. American firms, and the US government,
are almost viciously anti-consumer and anti-society, this ideology reflected in
their actions if not their words. Why do you suppose Monsanto is suing every
state in the US that tries to pass food-labeling laws requiring identification
of GM food? Why do you suppose the US has the most expensive and dysfunctional
mobile phone system in the world, but some of the most profitable mobile phone
companies? Why do you suppose the US government spent trillions bailing out the
banks that caused 25% of Americans to lose their homes, altogether ignoring the
victims of those banks? This is merely one symptom of the insanity that is the
financialisation of the American economy: cheering for high prices in new home
sales, office and shop rents, bank profits, a rise in the Chinese currency and
more. Increasingly, portions of society
that should be stable are being treated as a kind of imaginary
"investment" for the benefit of the public when of course they are no
such thing. In what way are excessively high home prices or property rents
a good thing for society? In what way is a steadily increasing currency exchange
rate good for China?
The International bankers and financiers have
utilised their control of the media over decades to create an enormously
dangerous public myth that price-gouging and excessively-high corporate profits
are somehow good for the economy of a nation and for the people.
We needn't be very intelligent to realise this is nonsense. And yes of course
corporations need profits in order to grow and remain in business, but this is
not the issue; it isn't normal or reasonable profits that are being encouraged
and praised, but excessive and abnormal ones. The purpose of course is the
dividends and stock values for the top 1% who control these banks and
industrial companies, but they are not "society" in any sense, and
their intention is not to contribute but to drain, to bleed the middle and
lower classes and transfer an increasing share of national wealth to
themselves. This is the cause of the
large and growing income disparity in America today, precisely the situation
the Americans are encouraging in China and that China is working to reduce:
Capitalism is extractive by nature, never contributive, and will destroy a
society if not rigidly controlled.
We read that China's RMB is "performing
well" on international markets.
What does that mean? China's currency is rising in relation to currencies of
other countries, damaging China's trade position, making Chinese goods more
expensive and creating domestic employment pressure. Why is that good? Yes, it lowers the cost of imports and makes
foreign travel cheaper, but most Chinese expenditures are for domestic products
whose market position is damaged by their price increases relative to foreign
goods. And the lower-income people suffer the most, increasing China's income
disparity. But "performance"
must somehow be good, and we often fail to think beyond this.
We read the same propaganda with relation to
bank profits, the US media constantly crowing about these reaching record
highs, as if this were a good thing for the nation. It isn't a good thing, not
in any sense. Tens of millions of Americans have lost their homes and jobs,
with many millions of these people working part-time at McDonald's or Wal-Mart
and sleeping in tents in the park, but Americans have for generations been
conditioned to cheer on command when Goldman Sachs is achieving record profits.
And again, of course banks need profits to stay in business, but again that
isn't the issue. The issue is that banks are achieving exorbitant profits at
the expense of the nation, sucking immense sums of money from the middle and
lower classes and concentrating it in a few hands. The retail fees and charges
- and lack of paid interest - function as a tax on all of society, something no
other industry can do, and it is these greatly-increased fees and charges to
consumers that create the record profits. Why should we cheer about that? There was a time when banks earned their
profits by taking deposits on which they paid 3% and lent out at 6%, and that
interest rate differential was sufficient for them to survive and make a good
living. But then greed activated their imagination and they discovered hundreds
of ways to make customers pay extra fees, not because they did anything to earn
them, but just because they could get away with it.
In the same vein we are conditioned to cheer
for a firm like Apple who had more than $200 billion in excess profits sitting
in China and other countries, outside the reach of
the US tax man. We are supposed to be impressed at this wonderful firm with its
sexy products, and cheer its good fortune. But
it earned much of that good fortune in viciously anti-consumer behavior, by
gouging its Chinese consumers in totally illegal ways, from gross over-pricing
to cheating on warranties, charging for free services and paying Foxconn almost
nothing for the wages of Chinese workers. Apple's China executives should be in
prison, but instead we are admiring them. Why?
Similarly, in October of 2014, an article in
the China Daily by Zheng Yangpeng lamented the
"weak" housing prices in many cities in China, saying the October
figures were "the gloomiest" house pricing report since January. And Yan Yuejin, an analyst with 'E-house China R&D Institute' was
whining that "the road to recovery" was bumpy, complaining that
developers "might have to cut prices to get more sales". And what does all this mean? It means that
too many Chinese have lost their brains while listening to the American version
of capitalism and free markets.
What are 'weak housing
prices'? Evidence that finally the totally outrageous home prices in some large
cities have stopped rising, maybe for the first time in a decade giving hope to
millions of Chinese who want to buy their own home. But
to Zheng, this is "gloomy" news and we should hope that prices
"recover" to even higher levels, creating even more profit for the
few owners of three or four companies while another 100 million Chinese can
forget about ever buying their own home. And what a shame that developers might
actually have to lower their prices. How terrible, that these few people will
fail to earn yet more billions, with no apparent thought of the overall good of
the nation or the lives of hundreds of millions of Chinese. Who is more important to China? A few
property developers, or the people? I have no particular animosity toward
big business, but:
If all
the large property developers in China go bankrupt, that event would be of no
consequence whatever to the nation and others would be quick to take their
place. But if 300 million Chinese cannot afford to ever purchase a home, that
is of enormous consequence to China and its future.
For
the sake of all Chinese, we should hope for more 'gloomy' news on house prices,
and soon. And these so-called experts need
to be committed to institutions for the mentally incompetent where they can
stop listening to Americans and do no more harm to their country.
•Let
the Market Decide
This is one of the most pervasive - and most
dishonest - capitalist myths promoted by virtually every part of America from
the government to the average brainwashed man on the street. But what does it mean to "let the market
decide"? For one thing, who is 'the market' that will do the deciding?
The statement somehow implies that this market consists of all the consumers,
designated by God as the final arbiter of choice, and that they should be
presented with a more or less unrestricted selection of products, be free to
choose those which they prefer, and thus determine the kind and quality of the
future flow of products and services. But when dealing with American
capitalism, this is precisely what does not happen. The simple truth is that
people cannot buy what they prefer because they have no control over the
manufacturing and supply of goods. They can choose only from what they are
offered.
General Motors does not want to build electric
cars. It made one in the US that was a success, but then repossessed all those
cars and had them crushed into scrap metal. GM didn't want to build them in the
US and doesn't want to build them in China. But China's government wants
electric autos because it realises that is the only hope for a mobile China,
that we cannot have 1.5 billion Chinese driving gasoline-powered cars since the
resultant pollution would eventually kill everyone. GM refuses to comply with
China's wishes and needs, until recently producing only the useless Volt,
badly-overpriced to ensure it wouldn't sell. GM wants to produce only
gasoline-powered autos, so how to deal with China's government? Easy. Preach
the capitalist mantra of "letting the market decide", which in this
case means permitting Chinese customers to choose from among GM's
badly-overpriced and crappy Volt and the badly overpriced and crappy regular GM
autos.
There is nothing in here about producing a
wide range of gasoline and electric vehicles and then letting the consumers
choose. It is all about GM using the
myth of market demand to support its own manufacturing preferences. GM is
focused entirely on profits and has minimal knowledge of or concern for China's
larger social or economic needs. GM was telling us there was no demand for
electric autos, hardly a surprise since GM didn't make any. But China's
government is encouraging and subsidising electric auto purchases, which meets
with great displeasure from GM who, sadly, doesn't qualify for the subsidies.
We are therefore treated to the added attraction of watching GM whine about how
it is morally wrong for the Chinese government to promote or subsidise the
manufacture of anything GM doesn't want to make. GM has little or no interest
in either the market or in demand. It simply designs and makes whatever it
believes will produce the highest profits. A
"free market" means leaving GM free to do whatever it wants. And that
is the entire story.
We find the same with housing construction
where a relatively small number of firms control the bulk of the residential
housing supply. Certainly they assume people will buy what they build, but then
people can buy only what is available.
Since these firms control the entire design and construction process, they will
build whatever they estimate will produce the highest profits, almost entirely
without regard for either consumers' wishes or the good of society as a whole.
As with autos, the land development
companies use the smoke of "market demand" to justify their own
building preferences based solely on profitability.
Capitalism presents its
arguments on the basis of some cryptic moral code, suggesting it is tantamount
to God's will or some law of nature that choices must be left to "the
market" which, in the end, consists entirely of their own preferences and
driven only by their own profitability. The entire mantra of "letting the
market decide" has no meaning at all. None. It is all foolish and baseless
propaganda presented in terms of some kind of high morality but which, if
properly examined in full daylight, would be discarded as dishonesty and
nonsense.
American
capitalism has pushed the envelope so far in its favor that even Western
governments today are afraid to challenge this claim of "letting the
market decide". But it needs to be
challenged; the entire capitalist narrative is nothing more than a presumption
imposed on a nation by those who stand to gain from it. There are precious
few examples where letting the market decide anything, had a beneficial result
for a society. GM's total destruction of the electric train and auto industry
in the US was a perfect example of the real meaning of "letting the market
decide". (1)
On the same note, China has been overly blessed
with a veritable cornucopia of foreign professors at Chinese universities,
people like Patrick Chovanec, a
professor at Tsinghua University’s School of Economics and Management,
telling us in condemnatory fashion that China's government "doesn't want to
let the market define risk", except that he isn't talking about 'defining
risk' but instead about abandoning the economy to the kind of unregulated
capitalism that produced the disastrous 2008 financial debacle in the US. Chovanec complains that China "wants
to channel resources" in what it deems to be the best places, and is
"refusing to give up control" to the free market - as if this were a
bad thing. Of course China wants to channel resources and investment into those
areas most necessary for the nation. Why wouldn't China do that? And what
demon would possess China's government that it would turn over full control of
the nation's economy to be structured and then plundered by Western
multinationals? Mr. Chovanec's
ideological US preachings no doubt make their way into his classrooms, to the
detriment of all students and China's future.
There are many such examples of Western
"professors" spending their classroom time in subtle and hypocritical
condemnation of China's policies on matters ranging from social planning,
censorship, democracy, human rights, infrastructure spending and financial
controls, to the evils of a one-party government and the "lack of
choice". These people are dangerous
and should be removed. Almost no Americans are able to separate their
programmed ideological nonsense from rational fact, and I doubt any American
professors would be either able or willing to eliminate their utopian blindness
from their classroom responsibilities. In fact, as Americans, they deem it their responsibility to infect
their Chinese students with the full gamut of US political and commercial
ideologies, all of which will be detrimental to China.
User-Pay
During
the 1980s recession, the bankers and MBA's came to the rescue with yet another
new gospel for their capitalist bible, this one dictating that "users" should be held responsible for their
personal share of the costs of any public good they accessed, transferring
government social costs directly to the public at large. In simple terms,
'user pay' means that whenever you as an individual use any service provided by
any portion of the state, whether local or national, you should have to pay the
cost of that service. Nothing is free any longer, on the theory that it is
'unfair' for those who don't use the public library to 'subsidise' you who like
to read. Why should my taxes contribute
to the cost of public transport, when I don't use the subway? So, if you use
the subway, you pay in full.
Everything from library cards to public
swimming pools, from the use of public highways to hospitals, from airports to
driving licenses, were targeted by this recessionist and tragically
disingenuous philosophy promulgated by the bankers and business schools. They attacked the very foundations of
society, targeting education and health care, all public utilities and
transportation, and virtually all public services which had to that point been
part of the universal "social good" that all governments funded
through general tax revenue. In fact, the bankers and the business schools
were simply extrapolating the corporate religion of greed (nominally referred
to as "efficiency") into the public sector. Unfortunately, it seemed
to not occur to any Western government that these public goods, manifested in items like communications and
transportation, health care, education, were not "costs" in any
corporate sense, but were the very fabric of the nation, and as such were
necessarily provided by a national government through general taxation.
It is frightening to me that
some influential Chinese have senselessly bought into this twisted philosophy
with all their hearts, failing to see that the only reason for the existence of
their governments was to fulfill these same responsibilities to the people of
the nation. But 'the people' had now become a kind
of enemy, greedy abusers and exploiters of free "optional" services
like ambulances or passports. These 'cheaters' wanted to drive on streets
without paying, or graduate from elementary school at a bargain price. The bankers
and business schools exposed to us the irresponsibility of the public in
forming such unreasonable expectations of their government, and asked why they
should expect to eat freely at the public trough, at the expense of other
citizens. It doesn’t seem to occur to many governments that the reason the
bankers and corporations don't want the population 'feeding from the public
trough' is that they wanted to feed off it themselves, and the trough wasn't
large enough for both the bankers and the people. In the end, governments were re-trained by the bankers
and business schools to recognise that the true reason for their existence was
not to provide for the people of the nation, but rather to plunder them for the
enrichment of the top 1%. User-Pay, which became a new capitalist gospel
not for reducing debt but for rapidly accelerating a nation's income disparity,
was a concoction consisting of equal parts of 50% ignorance and 50% stupidity.
Privatisation was 100% stupidity.
Wal-Mart and Basketball
There is one other item that fits neatly into
the category of privatising profits and socialising losses, and usually
includes big-box hypermarkets, sports venues and transportation nodes. In the
US, Wal-Mart has almost always been successful in coercing a local government to
pay for all the necessary infrastructure, including access roads, cloverleafs,
electrical, sewer and other, when it decides to build a store many Kms. from
the nearest highway. This is always justified on the basis of Wal-Mart
"creating jobs" when virtually every Wal-Mart in existence has
destroyed many more jobs than it has ever created - which is why Wal-Mart is
illegal in some US states.
Sports
venues like football and hockey stadiums and basketball courts are almost
always another massive theft of public funds, the private investor usually
threatening to move the stadium to another city unless local authorities pay
most of the cost of the facility - without any ownership, of course - hugely
increasing the profitability of a sports franchise. It is not for nothing that
sports teams are so profitable they sell for hundreds of millions of dollars
and yet provide no benefit to a city except foolish pride. Shanghai's Formula
One auto racetrack is one good example; there are hundreds more. Shanghai Disneyland would like a high-speed
train link directly to its site; so long as Disney pays for it, I have no
objection, the same as with other public facilities. This is one of the oldest scams existing, sucking billions of dollars
of public funds to enrich a few private pockets, almost always Jewish-American
pockets since this particular fraud was invented by them.
The stories about professional sports teams
are the stuff of legend, of naive and gullible local governments spending
billions of taxpayer dollars to enrich the personal bank accounts of one or two
individuals and receiving little or nothing in return. It is always astonishing
to read of the extortion so openly practiced by the owners of sports teams,
usually of the following nature: "If you don't build a new stadium (or
racetrack, or football field, or basketball court), we will move our team
elsewhere and your city will become a wasteland." The extortionate threats
seem to almost always work. And the result? In 2015, St. Louis in the US was dismayed
to learn their football team was relocating to Los Angeles, but even more
dismayed to realise they still owed a major portion of the nearly $300 million
they had borrowed to build a new stadium to convince the team to remain in
their city in the first place. The mayor of St. Louis tried to put a brave face
on the loss by claiming with the absence of the football team the city could
book more conventions to help recover its losses. Perhaps things are different
in America, but I don't know many organisations that care to hold a convention
on a football field. But not to lose the main point which is that none of these
contracts, at least none that have come to my knowledge, contain any penalties
for a renege or a default on the part of the company. Again, a one-way street.
It's actually worse than this, because in so many cases a city also incurs substantial
costs for creation or upgrading of roads and utilities as well as for the
facility itself. Moreover, many of these
firms demand as part of the incentive for their presence that the local
government embark on an intense crackdown to protect logos, copyrights and
various other things loosely classified as IP, much as Disney is doing in
Shanghai.
When the financial crisis hit the US in 2008,
GM filed for bankruptcy, with the US and Canadian governments injecting about
$75 billion into the company to save it. The unprecedented Canadian government
decision to virtually donate almost $15 billion to GM was defended on the basis
that it prevented a much greater loss of Canadian auto sector jobs, a claim
that is clearly nonsense. If GM had been permitted to go bankrupt and disappear
as logic dictated, Chinese and German auto factories would have been fully
operational in Canada within a year or less, providing Canadians with much
better cars and much less whining. Canada's $15 billion would have paid for the
factories with enough left over for interim unemployment benefits. It was only
extreme political pressure - bullying - that would have prompted such an
extravagant waste of money, a great proportion of which was never recovered
from eventual share sales. And that means Canadian taxpayers gave a gift of
billions of dollars to an American company the country didn't need and which
regularly reneged on contractual commitments to invest in Canada. Dealing with
the American capitalism is almost always a one-way street.
A similar situation occurred when US Steel
filed for bankruptcy in Canada while its pension plan had a deficiency of
nearly $1 billion, with the company claiming Canada would be responsible for
all those pensions unless the Canadian government wanted to
"restructure" the pension plans, which means assuming the American
company's debts. US Steel also had other obligations in Canada totaling hundreds
of millions of dollars for loans and pension obligations, not including a
massive liability for environmental degradation and cleanup. Some years prior,
Canada's government lent $150 million to US Steel, at an interest rate of only
1%, to encourage the company to "invest" in Canada, but virtually all
these investment agreements go sour at the end with the Americans reneging on
their commitments. But not everyone was unhappy. Citibank applauded the move, saying the best plan was to "bankrupt
the bad and keep the good stuff", without specifying that this meant 'keep
the good assets for yourself, while you dump the bankruptcies and the losses
onto yet another gullible foreign government'. In other words, privatise the
profits and socialise the losses.
The
American Dream. Just so it doesn't go unsaid, this was the same Canadian
government that gave American pharma companies exclusive patent rights
extending for decades into the future, in exchange for 10% of their revenue
being invested in R&D. But the only 'research' investment the pharma firms
made was in creative accounting, where they fraudulently charged all possible
operating expenses to "R&D" but still could reach only 4% of
revenue, justifying the shortfall by denigrating Canada as 'uncompetitive'.
Naturally, the semi-perpetual patents remained in place. As I wrote above,
doing business with the Americans is almost always a one-way street.
•Labor Productivity
Labor productivity is yet another area where
the Americans have cleverly re-defined a term to mask a bitterly anti-social
agenda. Productivity is normally measured by volume of output in a given time
or by the amount produced per person. If I can work faster and more efficiently
and produce more items in a day, I am more 'productive', but the Americans have
changed the meaning of the term from an improved performance of labor to the
elimination of it. What was once a desirable social good - improving individual
performance and creating more highly-skilled employment for the benefit of the
long term - has now become the elimination of labor to improve profit in the
short term. American capitalism has re-defined productivity as the elimination
of jobs, with the consequent impoverishment and unraveling of society.
I have detailed elsewhere that while the Europeans
and Asians will utilise new technology to enhance product quality and
performance, the Americans will apply it to lower their costs and maximise
their profits without regard to quality or product development. This is one
reason that American products, with some exceptions, have seldom been highly
regarded and were most often only barely acceptable in terms of quality. It is
the same with labor and productivity; when organisational efficiencies or
advances in technology present an opening, the Europeans and Asians will take
advantage of these to improve the skill levels of their workforce while the
Americans will almost invariably apply those same advances to eliminate their
workers. Both parties claim an 'increase in productivity', the Europeans and Asians
by upgrading the skills and increasing the output of each worker, and the
Americans by firing workers and claiming increased output for the unskilled
remainder. You can decide which way is best.
When a US corporation today claims it can
increase productivity, it means it can make more money by firing more people
and adding their salaries to the bottom line, and when it claims that
government is not efficient and productive in providing social or other
services, it really means that a government is sacrificing potential corporate
profits by foolishly maintaining social objectives (employment, for example) as
an integral part of these services. Shanghai today has many street sweepers
with their little brooms and wagons, picking up litter from the city's streets.
It is true this method is not efficient by some economic measures, but it
provides thousands of jobs for unskilled laborers who might have difficulty
surviving otherwise, and those people are more important than efficiency, at
least to me. American firms want Shanghai to purchase large numbers of
street-cleaning machines that could do these jobs without the people, the
theory being that huge one-time profits for a large American multi-national are
more morally praiseworthy than permanent jobs for thousands of Chinese. I
disagree.
On this topic, the American position totally
ignores the massive capital cost of purchasing these machines as well as the
large expenditure for buildings and maintenance facilities to house them, and
of course the huge operating costs as well as the salaries of the operators.
Finally, their position ignores entirely the problem of many thousands of
suddenly unemployed workers who would either starve or fall onto the city's
welfare rolls, thereby leaving Shanghai with all its original costs in addition
to all the new ones. Everybody loses, except one American firm who gains
millions in profits by selling street-cleaning equipment. And, by American
standards, that's called "efficiency". It is also known as privatising the profits and socialising the losses,
in other words some privately-owned company gets all the money and the local
government is left to pay all the bills.
The truth is that for many social goods, labor
productivity and efficiency are not a blessing but a curse.
In education, private one-on-one tutoring is the least productive and efficient
of all methods, but is also by far the best and offers by far the highest
social utility in the long run. We can
double the 'labor productivity' of education by firing half the teachers, but
then what do we have for quality? Yet this is precisely the approach
promulgated by American capitalism that strives to eliminate or at least
heavily reduce every possible labor component without regard to the larger
social issues. This is one reason the US unemployment rate remains stubbornly
high, with its high accompanying social and personal costs. The creation and
maintenance of employment as a social good is a prime responsibility and an
area of serious concern to any decent government, but one Americans shun for
the sake of corporate profits. This anti-social attitude has always existed in
the US but gained momentum from the early 1980s to the point where the
Americans not only commoditised labor but degraded and dehumanised it. Why
would China want to emulate this pathology?
Notes
(1)The American Love Affair with the Automobile”: The Unspoken History of the Electric Car
https://www.moonofshanghai.com/2020/04/the-american-love-affair-with.html
*
Larry
Romanoff is a retired management consultant and
businessman. He has held senior executive positions in international consulting
firms, and owned an international import-export business. He has been a
visiting professor at Shanghai's Fudan University, presenting case studies in
international affairs to senior EMBA classes. Mr. Romanoff lives in Shanghai
and is currently writing a series of ten books generally related to China and
the West. He can be contacted at: 2186604556@qq.com
Larry
Romanoff is one of the contributing authors to
Cynthia McKinney's new COVID-19 anthology ''When China Sneezes''.
Copyright
© Larry
Romanoff, Moon of Shanghai,
2020
