Home > BRICS, Europe, History, Pax Americana > Charge of the lite brigade

Charge of the lite brigade


The nature of the political beast is the same. Welcome to globalization of ideology. A standardized world. No difference at all!

It has been Post WW2 belief that Economic planning and State intervention will work. (Artist - David Low; (1891-1963) Published - Evening Standard, 26 Jun 1944).

It has been Post WW2 belief that economic planning and State intervention will work. (Artist - David Low; (1891-1963) Published - Evening Standard, 26 Jun 1944).

Low-cal, idea-lite brigade

With a collapsing economic base, changing power equations, their social superiority in tatters, the West has created a corps of propagandists, whose  job it is to create red herrings and  dead-end arguments. These content-lite ideologues, manage to put many ‘victims’ on the defensive.

For the past few quarters, we have seen a rising tide of co-ordinated attacks on China, using right-wing Christian rhetoric, from pit-bulls like Hugh Hendry, Jim Chanos, with the Charlie Rose show chiming in, aided by ‘think-tanks’ like CFR.

A recent column, deals with one such nuisance. A banker-economist-columnist, Abheek Barman writes about Ian Bremmer and his latest ‘theses’ about ‘state capitalism.’

Ian Bremmer, a pundit who analyses global political risks at the Eurasia Group, has recently argued that giant companies, backed by governments, are out to capture free markets. Among others, he identifies China, Russia, Brazil – and India – as candidates that practice ‘state capitalism.’

Western auto industry

Is the French and German auto industry anything but State controlled. With governing boards packed with representatives of the various Landesbanks, union representatives, where does private sector classification come from.

'Confidence of the voter' is always useful and preferred. In case it is absent ... does it matter? (Artist RJ Matson - from Roll Call, Date - 7/21/2010 4.02.01 PM).

'Confidence of the voter' is always useful and preferred. In case it is absent ... does it matter? (Artist RJ Matson - from Roll Call, Date - 7/21/2010 4.02.01 PM).

Are we forgetting how Europe’s largest auto-manufacturer Volkswagen, was set up by State initiative? Or how Renault was saved from the ignominy of ‘Nazi’ collaboration by State initiative? How long would the Agnelli Empire last without State support? Are we not forgetting how Chrysler has been saved several times by US State guarantees – and now GM, too!

Banks on a dole queue

A Swiss survey estimates that the Western banks may need US$1.5 trillion in capital-support. Would Mr.Bremmer like to name the likely source for these funds? French banking is public-sector controlled – which in turn controls French industry. Are we saying that Alsthom, ENI and ANSALDO are private creatures!

In the USA, the heavy-hand of the State was plain and for all to see in the handling of LTCM, WaMU, Bear Sterns, Lehman Brothers. Can anyone forget how Robert Rubin, Hank Paulson, Alan Greenspan all had a distinguished private-sector career (mostly at Goldman Sachs) – before and after their positions in the US Government.

Ian Bremmer frequently faults the ‘sovereign funds’ as a ‘marker’ of the State Capitalism’. Are BofA, Citibank, JP Morgan-Chase, RBS, Barclay’s, Credit Lyonnais, Credit Agricole anything but sovereign funds by another name? Was the Western housing bubble anything but an ‘efficient’ cash-tranfer mechanism? US-Fed printed money and the banks distributed – and the State bailed out the banks. A welfare scheme by another name.

And no! I solemnly declare that there was and is no conflict of interest in all this.

Voter apathy is the real objective behind the mock-fights and pseudo-competition - a facade for collusive power-sharing. (Artist - Jeff Parker, from Florida Today, 7/30/2010, 2.02.01 PM)

Voter apathy is the real objective behind the mock-fights and pseudo-competition - a facade for collusive power-sharing. (Artist - Jeff Parker, from Florida Today, 7/30/2010, 2.02.01 PM)

The incestuous bureaucracy

This kind of co-ordination, without an explicit policy, is possible in a close-knit, group, which has a shared value system, and is accepted by the general population. National bureaucracies have followed similar paths across nations.

What is good for General Motors is good for America. In the USA, Fortune 500 corporations, Wall Street firms, top banks serve as recruiting and training grounds for top bureaucrats. In China and the ex-USSR, the overtly political Communist Party was the training and recruiting ground for bureaucrats.

In most other countries, certain ‘secular’ institutions covertly work as training and recruiting rounds for creating an aligned bureaucracy. Top Japanese and French bureaucrats strangely come from one university. For instance, in Japan from The University of Tokyo, Law Faculty and the French ‘enarques’ cut their teeth at Ecole National d’Administration (ENA). The role of Oxbridge in the British Government cannot be understated.

Making the 'right' noises is 'modern' politics! (Artist - Peter Brookes, Published - The Times, 21 Sep 2002).

Making the 'right' noises is 'modern' politics! (Artist - Peter Brookes, Published - The Times, 21 Sep 2002).

Between 1900 and 1986, 45 per cent of permanent secretaries –or administrative heads of government departments –came from Oxford, 23 per cent from Cambridge.

Like Secretary Hillary Clinton correctly pointed out to business leaders in Pakistan, “we tax everything that moves and doesn’t move, and that’s not what we see happening in Pakistan.” Compared to G7, the share of the State in the BRIC nations would be less than 25% of the national GDP.

The nature of the beast is the same, Mr.Bremer. And this goes for you too, Mr.Barman. The world, these days has become ideologically standardized. Welcome to globalization. No difference at all!

And to think! Ian Bremmer accuses the BRIC countries of practicing ‘state capitalism’. Mr.Bremmer, these arguments are futile. Much like the futile British charge of the Light Brigade in the Crimean War, against the Russians. Like the French general said, it is C’est magnifique, mais ce n’est pas la guerre, c’est de la folie. (It is magnificent, but it is not war, it is folly).

Extract from Ian Bremmer in Foreign Affairs

From The End of the Free Market | The Call.

A generation ago, the collapse of communism made clear that government can’t simply mandate lasting economic growth. To fuel the rising prosperity on which their long-term survival will depend, political leaders in China, Russia, the Arab monarchies of the Persian Gulf and other authoritarian states have accepted that they have to embrace market-based capitalism. But if they leave it entirely to market forces to determine winners and losers, they run the risk of enriching those who will use their new wealth to challenge the state’s power.

Instead, they have embraced state capitalism. Within these countries, political elites use state-owned and politically loyal, privately owned companies to dominate entire economic sectors — like oil, natural gas, aviation, shipping, power generation, arms production, telecommunications, metals, minerals, petrochem­icals, and other industries. They finance all these institutions with the help of increasingly large pools of surplus foreign cash known as sovereign wealth funds.

State capitalism isn’t an ideology. It’s more a set of management principles. It can never match the hold that communism once had on the popular imagination, because it wasn’t born as a response to injustice. It was created to maximize political leverage and state profits, not to right historical wrongs. The system is not the same from one country to another, because the ruling elites in Beijing, Moscow, and Riyadh use it to meet distinctly different sets of needs. And no two state capitalist governments can ever fully align their interests. By its very nature, it’s exclusionary; like mercantilism, it promotes one state at the expense of others. That’s why there can’t really be any kind of “state capitalist consensus.”

Instead, you get client states — mainly smaller Asian countries in China’s shadow and energy exporting governments in Africa and Latin America badly in need of friends with deep pockets. Brazil, India and other big emerging markets that have elements of both free market and state capitalist systems have seats at the G20 table alongside some serious free market skeptics. The developed states don’t have much to offer them at the moment that looks attractive for their economic stability.


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