Neoliberalism is Not a Game China is Winning

by William Skink

We are on the precipice of a “correction” in the stock market. How’s that for semantics? After years of zero interest liquidity pouring into banks like booze down an alcoholic’s throat, it’s about to get real ugly again. When alcoholics who can’t quit are at the end-stage of their disease, going cold turkey can kill them. If Yellen holds to raising interest rates next month after 6 years of a liquidity bender, which no one of course expects the Fed to actually do, ugly could get catastrophic.

There’s another malady many Americans suffer from: American Exceptionalism. I hope The Polish Wolf keeps writing, because he’s such a great example of this debilitating mindset.

Case in point, a post up today, titled China Beats the US at Neoliberalism.

It’s a curious post that takes China to task for propping up it’s crashing stock market with state pensions:

In an effort to boost its flailing stock market, and apparently learning nothing from the US experience, China has authorized local pension authorities to put workers’ pensions into national stocks, bonds, and derivatives. This is in fact a much bigger deal than the same thing happening in the US (where local and state level pensions have been playing the stock market, and not always winning, for years), because not only does it strip away some of the last facades of socialism from China’s capitalist core, but this affects virtually every worker in China, because unlike in the US almost all Chinese pensions are run through local bodies. This is risky to say the least, and seems to vastly widen the potential fallout of another financial crisis.

Since we are quickly approaching another financial crisis, it might be more helpful to figure out why instead of bashing China for going into damage control mode. If figuring out why is something you’re into, Michael Whitney has a piece worth reading about why China’s market volatility might not be the underlying reason for last Friday’s plunge.

That said, I do appreciate PW’s effort to cast China’s pension gambit as somehow beating the US at Neoliberalism (like it’s some sort of game) because he produced this gem of exceptionalist thinking (“It” refers to China’s ploy to prop up its stock market):

It also has implications for foreign policy, especially for those on both the far right and far left who are rightly concerned about the power of global plutocrats. If we’re really concerned about the spread of a ‘neoliberal’ mindset, which sees the government as merely an apparatus to appease the markets (what Paul Krugman brilliantly describes as the ‘confidence fairy’ theory of laissez faire economics), China’s willingness to risk its people’s pensions to re-inflate the stock market should be solid evidence, nay, proof positive, that a ‘post-American world’ will not have any more humane or less capital-dominated goals than an American one. While in Western Europe and increasingly in the US there is real resistance to this shift, China (and Russia), far from being bastions of resitance to neoliberal inhumanity, are out at the forefront of it.

I’m very familiar with this kind of argument, not because I studied rhetoric in college, but because I have a 7 year old that likes to say “but so and so did it to” when he’s caught doing something he knows he shouldn’t be doing. The evidence that someone else is doing the wrong thing as well doesn’t get him out of trouble.

Worrying about a post-American world is just bizarre to me. I don’t get it. Personally, I’m worried about a post-collapse world. And so are the uber-wealthy:

Super rich hedge fund managers are buying ‘secret boltholes’ where they can hideout in the event of civil uprising against growing inequality, it has been claimed.

Nervous financiers from across the globe have begun purchasing landing strips, homes and land in areas such as New Zealand so they can flee should people rise up.

With growing inequality and riots such as those in London in 2011 and in Ferguson and other parts of the USA last year, many financial leaders fear they could become targets for public fury.

The vast majority of humanity—Americans, Russians, Chinese and everyone in between—will be the ones left behind to suffer if things get really bad. At that point it won’t matter who beat who at Neoliberalism. It will be all about survival.

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About William Skink

I'm a poet and political cynic living and writing in Montana. You can contact me here: willskink at yahoo dot com
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15 Responses to Neoliberalism is Not a Game China is Winning

  1. JC says:

    China’s willingness to risk its people’s pensions to re-inflate the stock market should be solid evidence, nay, proof positive, that a ‘post-American world’ will not have any more humane or less capital-dominated goals than an American one. — Polish Wolf

    I’d have to ask PW which is worse: China’s use of pensions to inflate its stock market; or the Fed’s use of quantitative easing and printing phony money to buy banks’ bad debt at near 0% so the banks can inject all that liquidity into the great morass of the stock market to keep it afloat?

    And after all, what is it that the EU is asking Greece to do? Tap pensions to pay off the IMF. What do neolibs in Congress want to do with pensions (i.e. the social security trust fund)? Tap it to give tax breaks to the wealthy, or setup up private retirement accounts to invest in the stock market.

    Why beat up on the Chinese for this? And who ever claimed that a Chinese future would be any better than a U.S. dominated hegemony? PW complains about us building strawmen to attack. Well, he’s built a pretty thin strawman here, and proceeds to beat on it with a whisk broom.

    Neoliberalism knows no (national) boundaries, and has no alliance to any nation state. Any economic structure or resource is fair game to raid and consolidate wealth. And contrary to his assertions, I don’t see any evidence that “in Western Europe and increasingly in the US there is real resistance to this shift [to neoliberal policies]”. As they say in Missouri: “Show Me (the resistance)”…

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    • that part confused me to. it’s like he has an ethnocentric blindness that glosses over little moments in our recent history, like the West subverting the Arab Spring.

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    • “And who ever claimed that a Chinese future would be any better than a U.S. dominated hegemony?”

      Tokarski, for one, has consistently argued that a growing China would create a safer, fairer, bipolar world. Also, Counterpunch, Lizard’s favorite authority on Eastern Europe, claims here: http://www.counterpunch.org/2014/04/11/ukraine-lies-and-realities/ claims Russia as a deterrent to neo-liberalism (despite failing to educate or care for its people as effectively as the much-poorer Bulgaria). This one:
      http://www.counterpunch.org/2012/03/30/five-challengers-of-the-neoliberal-jackboot/

      adds China to the mix.

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      • I should clarify: I’m not saying either of you hold this position. You both have rather more nuanced views. Which is why I’m also not saying, in the post, that you do: merely that some on the far left and far right hold these views (the right wing, I think, has the more absurd infatuation with Russia; even “real” candidates like Trump). As this is clearly true, there’s no strawman here, just an argument against a position that may not be, and I never claimed to be, yours.

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      • PW, I don’t have a good understanding of economics, so while you accurately reflect my words, I want to clarify a bit. I think in terms of violence inflicted in others. That’s why I think a bipolar world is a safer one.

        I’ll repeat the example I used in our exchange elsewhere: when the U.S., and the U.S. alone had the atomic bomb, it quickly used it to incinerate two cities. They did that because they could. There was no blowback. When the Soviets got the bomb in 1949, and later China, the U.S. was constrained in its use, and has not been able to use it since.

        Granted we’ve been fighting smaller regional wars, killing humans by the boatload since, but our means of destruction, conventional weaponry, is different because our leaders know that they can be wiped out too if they push the button.

        Now that I’ve said that, I see my understanding of warfare is about as clear as economics. Dead is dead.

        Paul Marshall is my porn name, PW, in case We meet again. I am trying, like you, JC, Skink and the others, to anonomyze.

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  2. Liz, you may benefit from looking up the definition of ‘exceptionalism’, because what I’m doing here is the opposite. I’m saying that China and the US are not at all unalike – in fact, I’m saying exactly what JC is saying, that “Neoliberalism knows no (national) boundaries, and has no alliance to any nation state.” So far, you’ve attacked two posts of mine without actually disagreeing with them at all. It’s not, after all, your position I’m attacking; I’m attacking publications like Counterpunch that see Russia and China as standing up to neoliberalism, when in fact they are implementing it more effectively even than the US, which has kept its own pension system away from the stock market (for now).

    As to resistance to neoliberalism in the US and Western Europe: First, you have the fact that the US largely beat back austerity, and has openly broken with the ECB about Greece. You have Syriza in Greece, Podemos in Spain, a real chance for an actual Labour leader in the UK, the crowds that congregate around Bernie Sanders and Elizabeth Warren. Some people, though not enough, are still defending their beleaguered welfare states, and it appears momentum is growing.

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    • Big Swede says:

      “For now”.

      “The U.S. Consumer Financial Protection Bureau is weighing whether it should take on a role in helping Americans manage the $19.4 trillion they have put into retirement savings, a move that would be the agency’s first foray into consumer investments.

      That’s one of the things we’ve been exploring and are interested in in terms of whether and what authority we have,” bureau director Richard Cordray said in an interview. He didn’t provide additional details.

      The bureau’s core concern is that many Americans, notably those from the retiring Baby Boom generation, may fall prey to financial scams, according to three people briefed on the CFPB’s deliberations who asked not to be named because the matter is still under discussion.

      The Securities and Exchange Commission and the Department of Labor are the main regulators of U.S. retirement savings vehicles and funds. However, the consumer bureau — established by the 2010 Dodd-Frank Act — sees itself as a potential catalyst for promoting a coherent policy across the government, the people said.”-Bloomberg.

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  3. Big Swede says:

    Neoliberals, I like the term. Von Mises should have coined it.

    “They call themselves liberals, but they are intent upon abolishing liberty. They call themselves Democrats, but they yearn for dictatorships. They call themselves revolutionaries, but they want to make the govt. omnipotent. They promise the Garden of Eden, but they plan to transform the world into a gigantic Post Office. Every man but one a subordinate clerk in a bureau. What an alluring utopia! What a noble cause to fight for!”- Ludwig von Mises.

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    • Neoliberals are neither new, nor liberal. To me they look just like neoconservatives. They are all thugs. But right wing economics, Randian or the more nuanced Austrian school, is a tool of enslavement as surely as any other school, be it Marxist or Maoist. It is the philosophical key that unlocks constraints on private power. Slaves don’t care if the guy holding the whip is a bureaucrat or a banker.

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      • Big Swede says:

        So the people who scaled the fences between east and west Germany or around Laredo TX or boated the 90 miles between Cuba and Florida are misinformed?

        Leaving one enslavement for another?

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      • Sweatshop workers abound to make out clothing and gadgets, real slaves still exist. kids are lured into student loans that cannot be paid off or gotten rid of. health care, even with insurance, is a gamble. Pensions outside of Social Secuity are paltry and rare. Most of us are wanting to get old, wanting to be 65, to escape the health insurance/drug cartel.

        Meanwhile, countries that do not knuckle under to Wall Street/London are attackEd, embargoed, squeezed till they bleed, and when people leave those places, people like you say “See, what a bad system they have!”

        You spend too much time validating your existing beliefs, not enough questioning them, in my humble opinion.

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  4. steve kelly says:

    Oligarchs and plutocrats are always seeking that perfect balance between slavery and a slave revolt that might end up boomeranging back at them. What the middle class in the U.S. is experiencing now is what the working poor in all countries have lived with since New Deal strategies to “save capitalism” peaked sometime in the 1950’s.

    Be patient, eventually, if current trends bear fruit for TPTB, it won’t make much difference which side of the border wall/fence you live on. That is the ultimate plan/goal isn’t it? Global markets for capital, goods, services and labor? Privatize profits, socialize costs.

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    • Big Swede says:

      Yearning for dictatorships.

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    • “Global markets for capital, goods, services and labor?” Except it never seems to work that way for labor, except in the EU. That’s what I see as the main problem with globalization – it creates a global market for purchasing labor, but one must still sell one’s own labor locally, and thus at a discount. If that were not so, it would only take a few decades for global markets to roughly equalize, and the world as a whole (though not necessarily less skilled people in rich countries) would be better off. Of course, that would defeat the actual purpose of globalization, which is to make international trade a more valuable resource that only large firms can fully utilize.

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