In a small village in Switzerland which serves as host to an organisation dedicated solely to the interests of the increasingly detached (in every possible sense of the word) global financial and economic elites, the Chinese ‘reform’ clique present (including Hu Shuli and Xu Xiaonian) expressed some very… shall we say naïve views of the history of the nation a ways north of them, as well as of their own. They attempted to paint their regime as inherently violent and unstable by casting the roots of their government back to… Otto von Bismarck.
Yes, you read that right. The very same Otto who under his chancellorship dedicated himself to picking up the pieces of the Concert of Europe which had been scattered in the revolutions of 1848 (and as a result gave Europe 20 years of peace), even to the point of his being hounded out of office by a militarist young Kaiser Wilhelm II; the very same Otto who devoted himself to building a social order which could resist both the extremes of laisser-faire economic liberalism and totalitarian communism (and made enemies of the partizans of both ideologies); the very same Otto who, in the effort to do so, built up a very enviable welfare state and an increasingly prosperous Germany in the attempt to bridge class strife and contain the extremes of German and Slavic hypernationalism. Okay, perhaps there are quite a few parallels to be made here, but the Chinese liberals here are engaging in some very specious history in order to advance their own questionable ideology at home.
State capitalism is not something new. When Bismarck invented this idea in 1870 it gave Germany impressive performance over the main superpower of the time, Great Britain… But 20 years later, it was the First World War.
That’s right, Xu Xiaonian apparently blames Otto von Bismarck for the First World War, in spite of the fact that the First World War was the direct result of the ‘badly brought-up boy’ responsible for von Bismarck’s resignation disregarding practically all of the careful, measured foreign policy advice given to him by von Bismarck and treading on various British and Russian toes in the process. Oh, and some South Slavic assassin might have had something to do with it, too. But that’s actually small potatoes to what comes before it.
Bismarck as the inventor of state capitalism? And what was that East India Company whatsit that the British were on about, eh? A capital venture chartered by said superpower, I believe, in 1599, and which was administered directly by the British government after the passage of the Regulating Act of 1773. And this doesn’t count as state capitalism… how, again? But let’s not mind that, let’s move on to this notion that Bismarck had ‘invented’ an ‘idea’ that had already been fully put into practice and had already met with astounding success a hundred years before he assumed the Chancellorship. What did Bismarck have to do with this idea? Oh, that’s right, he erected tariffs to help shelter domestic industries in the wake of a huge stock-market crash in Vienna. Even worse, he created the first welfare, pension and universal health care systems in Europe. And Heaven forbid that we should associate this terrible, terrible concept of ‘state capitalism’ with that Anglo-American golden age of
Even Nazism was a form of state capitalism, and what the Third Reich brought to the world we all know.
Because remember children, erecting tariffs to protect fledgling and vulnerable industries and providing a safety net for workers and retirees is every bit as bad as rounding millions of Jews into death camps, gassing them and tossing them into ovens. And anyone who tells you otherwise is a commie and a fascist. It’s amazing how much sheer Goldberg-style wingnuttery a Chinese econ professor can pack into just three lines of speech; and the fact that his audience was apparently receptive to such rubbish does not speak well either of their collective intelligence or their honesty.
Now, let me be clear. State capitalism - actual state capitalism, with government providing shelter to big rentier corporations and dominating the economic playing field with anti-competitive regulatory measures - is not an admirable thing. That the People’s Republic of China is still, to a great extent, a state-capitalist society is beyond question; but the comparisons with Bismarck’s Germany are facile at best. There is no safety net for labour in China: no welfare, no pensions, no public health care plan, no legal unions outside the state-run one. Such apparently trivial matters are clearly the last thing on these self-styled reformers’ minds, except insofar as such pesky measures might mean raising the tax rates on the sorts of people they represent (those who might take holidays in Davos, for example). And China’s economic protections are of a most peculiar sort: they have been somewhat (and understandably) wary of unhindered foreign direct investment over the past fifteen years or so, but their development model does not appear averse to manufacturing for foreign-owned industries as eagerly as they manufacture for domestic ones. In the terms of geopolitics and foreign relations, some Chinese intellectuals may have a fascination with Bismarck and may even fancy themselves as taking his queues, but this is a case study in how every analogy has its limitations.
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