Curious Disruptions in both Super-Powers

Corona-virus and China’s globalism America’s Democrats are in revolt

by Kumar David-February 29, 2020, 12:00 pm

Two unforeseen spats have come to the boil in the last two months. One is the corona-virus (CoV), which has spread from its epicentre in Wuhan, China and threatens to become a pandemic. It has created panic in China, South Korea, Japan, Iran and Italy and the WHO has declared a global alert. After making a cockup during the first ten days the Chinese government responded with ruthless efficiency, the useful side of authoritarianism you might say, imposed draconian controls, built hospitals, moved doctors with military precision and now seems to have got the better of the virus. I expect mass hygiene, medical science and government measures will best CoV before long.

An interesting spin off is that the authority of the Party and in particular of President Xe has been challenged in domestic social media. There are fearless, unusual in China, demands for freedom of expression and Party elite are in a bit of a funk. I am hopeful of some loosening up, as a survival tactic and that the post-Mao universal two-term limit on national leadership will be imposed again. I am cautiously optimistic that the One-Party-Regime will relax some way towards a Half-Party-State.

The second matter that has, quietly come to a boil under the bonnet is more USA-centric. Socialism has been a near swear word in the US from long ago. For example, my extended family in the US - and believe me, thanks to their collective fecundity they are indeed numerous - never made a distinction between the devil incarnate and Karl Marx, or socialism and purgatory. I have news for you; things seem to be changing in the next generation of Americans – read on to the end.

CoV disrupts globalism

If CoV drags on into April and May the world economy will be gummed up because China is the centre, the cog, in the global manufacturing and components supply chain. A breakdown of the China centred global supplies will have a far, far more serious knock-on effect on the world economy than, say a recession in the US. If the global chain is disrupted recession threatens not only China but everywhere. Japan and South Korea are near recession already, it may reach America and the West if the lock-down continues. The global economy stands on five pillars; manufacturing, communications, energy, transport and finance. China is the heart of manufacturing and infrastructure construction; it sits at the hub of the goods and components supply chain and provides components for computers and communication systems the world over. A slowdown in China will also reduce demand for oil and coal upsetting the Middle East and Australia. As trade slows it inflicts pain on shipping companies. Disruption of goods, components, energy and transport chains will create more problems for the global economy than a recession in America. The former may trigger the latter as the slide in global stocks which commenced in earnest on Monday 24 February augurs. The 10-year US Treasury Yield has been in decline for a long time which means that cautious investors are wary about the health of the economy and its outlook. A global stock-market collapse is in progress right now as we watch.

For example, car manufacturers in Germany and washing machine and electronic gadget makers in Mexico, Japan and France depend on timely supply of components along the chain. Disruption destabilises industry everywhere. The corona-virus epidemic is doing just this. European car manufacturers depend on components from say a Guangzhou supplier who may be linked to subcontractors in other parts of the country; these chains are deep and complex. The whole of Hubei Province and many cities – up to 500 million people - have been locked-down or partially locked-down. Two hundred million went home to the countryside for the Lunar New Year; the government is slowing down their return for fear crowded trains, busses, factories and housing will speed up spread of the virus. The situation is still very serious and aggravated by mountains of fake news and outright lies spread by Hong Kong’s fascistic-Democrats and Western anti-China propaganda groups.

The old Silk Road connected ancient Chang'an (modern Xi’an) - China’s Anuradhapura though older - via Central Asia, Persia and Byzantium (later Constantinople now Istanbul) to Rome bearing silk, porcelain and beautiful artefacts in exchange for silver. From Asoka’s time it also retraced its steps taking Buddhism and later Islam to China. The ancient Silk Road was a highway but it is wrong to think of the "New Silk Road" as a transport link; transport is less than half the story. BRI (Belt and Road Initiative) is an ambitious economic launch. Not just ports and China-Europe railways but infrastructure and industrial projects are emerging all along the route. For example in Sri Lanka, more important than Hambantota harbour are Colombo Port City, highways, power-plants and proposed Industrial zones. BRI dwarfs the Marshal Plan and is aimed at Asia, North Africa and a few European countries (Greece). The Marshal Plan committed $150 billion in today’s money to rebuild Europe after WW2, but BRI plans $6 trillion investment in 160 countries, about half to be raised by the host countries themselves; China has so far committed $400 billion. America is opposed to the global projection of Chinese economic power and engages in worldwide anti-China campaigns, but it does not have the economic resources to compete against these initiatives. A Thucydides Trap has been sprung.

Revolt in the US Democratic Party

Had I told you last year that millions of young people would call themselves democratic-socialists and socialism would cease to be a dirty word I am certain you would have asked me to go have my head examined. The Bernie Sanders campaign has taken off like a rocket; it acknowledges itself as democratic-socialist and has brought tens of thousands of young people (the Democrats future) and is softening the older generation as well. I taught in an American university, briefly, four decades ago and I thought I knew the people well. To have tens of thousands, maybe millions of Americans declare that democratic-socialism is fine is like going to another planet. This America is new to me.

Let me convey in ten bullet-points culled from stump speeches and printed material what the highlights of this socialism are:

* Health care for all, that is a national health service like in the European countries

* Stop pharmaceutical companies from ripping-off $100 billion a year in profits

* Ten million affordable housing units for low income families

* Economic, social and racial justice (Socialism in three keywords)

* A commitment to environmental protection

* Equal pay for equal work; that is fairness to working women

* Tuition free university and tertiary education

* Universal child care and assistance with school funding for low income families

* A universal minimum wage of $15 per hour

* Reform a broken and racist criminal justice system (US has world’s largest prison population)

If this is socialism, "Well what’s wrong, it’s fine", is the response of a youthful and energised Bernie throng. Instead of talking about the collective ownership of the means of production, or decrying appropriation of the social surplus by the capitalist class the message is kept simple and real life. It is translated to match practical and populist needs and it resonates. The young fear no gulags, knocks on the door in the dead of night or a one-party state that will dare regiment their lives.

That bogey is non-existent for this new generation; that is an imagined serfdom in the fevered brain of Friedrich Hayek (1988-1992) and James M Buchannan (1919-2013). The latter, of infamous "public choice theory" was the quintessential guru of economic imperialism. Hayek and Buchanan were ideologues and seminal influences on Margaret Thatcher and Ronald Regan. That is the legacy that America’s rising democratic socialists have rejected. Bernie had the temerity to say on TV that Castro did a lot of good things too, not only preside over an authoritarian state. He was not lynched!

The 10-point wish-list seems unduly populist, undoable and unfinanceable; but that is no longer true. Superabundance has been made possible by the very success of capitalism’s revolutionary role in the development of productivity and technology - Marx’s "productive forces". A 21-st Century post-capitalist America has the capacity to provide what Bernie and his cohorts dream about. As Marx put it: "(Capitalism) despite itself, is instrumental in creating social disposable time by reducing labour and thus freeing everyone their own development. – Grundrisse (abbreviated). In mundane terms, the rational utilisation of the productive power of the world’s most advanced and productive economy makes a democratic socialist programme feasible.

At this point in time I cannot foretell whether Sanders will secure Democratic Party nomination and if he does whether the enthusiasm of his youthful democratic socialist wave will override Trump all the way the victory in November as a liberal wave did in electing Obama. Very unlikely, and if not, no matter. A genie has been released from the bottle and America will not be the same again. Trump in his second term will be a prisoner in the White House. There are advantages in progressing at a measured pace instead of attempting to turn America democratic-socialist in one fell sweep, which frankly is undoable. Whether Bernie wins or loses the nomination and the November election youthful American democratic-socialist surely appreciate that this is only the first innings of a long game.

Did the 1917 Russian Revolution run too far ahead and too fast; history is a cruel taskmistress in punishing premature social revolutions? But that analogy is false because America, now at the acme of its power is objectively overripe for socialism. A social-democratic US will unstoppably shift global attention away from China’s place as global loadstar of the starry-eyed left. Oh dear, again I am running ahead too far; but only a little (sic!). The corona-virus will be banished but a great social-democratic wellspring cannot be diminished.