Injecting nuance into the debate about China

Posted on by

It wasn’t until reading Jonathan Fenby’s [amazon_link id=”1847394116″ target=”_blank” ]Tiger Head, Snake Tails[/amazon_link] that I realised how polarised some of my previous reading on China had been. While I’ve read some superb reportage/analysis such as Leslie Chang’s [amazon_link id=”033044736X” target=”_blank” ]Factory Girls[/amazon_link] and Richard McGregor’s [amazon_link id=”0141975555″ target=”_blank” ]The Party[/amazon_link], there is definitely a strain of the literature that is either ‘China will conquer the world’ (eg Martin Jacques in [amazon_link id=”0140276041″ target=”_blank” ]When China Rules The World)[/amazon_link] or ‘China is doomed’. Mr Fenby is an experienced journalist – a former editor of the South China Morning Post – and the extent of his knowledge about the country is clear on every page.

[amazon_image id=”1847394116″ link=”true” target=”_blank” size=”medium” ]Tiger Head, Snake Tails: China Today, How it Got There and Why it Has to Change[/amazon_image]

As always, the scale of anything about China is staggering – to give just one example from the book, China’s foreign exchange reserves in 2011 were enough to buy Italy; or all of the sovereign debt of Portugal, Ireland, Greece plus Spain, and also Google, Apple, IBM and Microsoft and all of the real estate in Washington and Manhattan, and the world’s 50 most valuable sports franchises. There are lots of fascinating insights too. I was struck by the information on market structure – many markets have a few state giants but are otherwise highly fragmented and regionalised. There are 121 very large state firms, another 114,400 smaller state owned enterprises, and a vibrant competitive fringe. In retail, the very biggest firms have less than 6% of the market each. Rare earth mining – surely somewhat capital intensive? – is carried out by small family-owned enterprises. Of the half million food producers, 80 per cent have fewer than 10 employees. The book has other interesting insights. For instance, China excels at individual sports – golf, table tennis, gymnastics – but fares poorly at team sports.

Like many commentators, Fenby highlights the enormous challenges facing China as it makes the transition from relying on cheap, abundant labour to drive rapid export growth and infrastructure (often debt funded) at home. These include the political conundrum of how the Communist Party will try to keep control – and whether it will succeed – and the enormous demographic challenge. He writes about the endemic corruption and absence of trust, the environmental horrors, the need for better social welfare including ending the distortions created by the ‘hukou’ system of residence permits. However, the book does not despair. All countries face difficult transitions at various points in their history, and China also has great resources for addressing the challenges. Tiger Head, Snake Tails is a cracking read, and I really like its injection of nuance into the debate we in the west have about China.

Who cares about GDP?

Posted on by

My new book is due out in March and it’s starting to feel real. Bound copies of the proofs arrived here this week, and now it’s in the Princeton University Press spring 2014 catalogue! You can even pre-order from Amazon – the title is [amazon_link id=”0691156794″ target=”_blank” ]GDP: A Brief but Affectionate History.[/amazon_link]

[amazon_image id=”0691156794″ link=”true” target=”_blank” size=”medium” ]GDP: A Brief but Affectionate History[/amazon_image]

I gather that foreign rights sales are already going very well, too.

OK, it’s about GDP, something I find more interesting than do many other people. But I think it’s a jolly good read, and the subject is certainly important.

Existential times

Posted on by

In my teenage years, a serious-minded and rather eccentric girl seemingly dropped by aliens in a small Lancashire mill town, I was determined to be an existentialist philosopher when I grew up. I could imagine nothing more glamorous than spending my working life writing in a notebook in a Parisian cafe (I’d never been abroad). This despite having been tortured by a French syllabus that included Sartre’s [amazon_link id=”2070368076″ target=”_blank” ]Huis Clos[/amazon_link] and [amazon_link id=”2070384411″ target=”_blank” ]Les Mains Sales[/amazon_link]. The fact that he was neither a good philosopher nor a good writer didn’t put me off. For there was Simone De Beauvoir, whose novels like [amazon_link id=”207036769X” target=”_blank” ]Les Mandarins[/amazon_link] are ok, and whose [amazon_link id=”009974421X” target=”_blank” ]The Second Sex[/amazon_link] is a seriously important book.

[amazon_image id=”207036769X” link=”true” target=”_blank” size=”medium” ]Les Mandarins 1: 001[/amazon_image]

And above all, Albert Camus, the archetype of the honourable man in a dishonourable world, and a great novelist. I read [amazon_link id=”B006E3KCT6″ target=”_blank” ]La Peste[/amazon_link] tucked up in bed with an old fashioned metal hot water bottle that my mother had covered with a sock so it wouldn’t burn me. The sock had a hole and the bottle raise some small blisters on my arm. I was so wrapped up in the book that I didn’t notice the burn, but when I spotted the blisters later, ran downstairs to my bemused mum, shouting that I had caught the plague.

[amazon_image id=”B006E3KCT6″ link=”true” target=”_blank” size=”medium” ]La peste[/amazon_image]

So reading about Camus on the occasion of what would have been his 100th birthday this week – a brilliant essay by Claire Messud in the NYRB and Michael Azar in Glanta – I bought the new book of Camus essays, [amazon_link id=”0674072588″ target=”_blank” ]Algerian Chronicles[/amazon_link], edited by Alice Kaplan and translated by Arthur Goldhammer. I set aside Jonathan Fenby’s (so far) excellent [amazon_link id=”1847394116″ target=”_blank” ]Tiger Head, Snake Tails[/amazon_link] about modern China and plunged instead into Algeria at the tail end of France’s colonial occupation. Alastair Horne’s [amazon_link id=”1590172183″ target=”_blank” ]A Savage War of Peace[/amazon_link] is still as far as I know the best single book on the conflict.

[amazon_image id=”0674072588″ link=”true” target=”_blank” size=”medium” ]Algerian Chronicles[/amazon_image]

What these essays by Camus – appearing for the first time in English – add to the history is that same sense as from Camus’ wartime years of the near-impossibility of morality in polarized times. The pressures to say one side or the other is all right, the opposing side all wrong, to justify any means in terms of ends, are almost irresistible. It is very interesting to read Camus on terrorism and counter-terrorism – there is an obvious parallel with our own times. More generally, the polarization of politics away from the centre ground in the context of slow economic growth and the extreme tone encouraged by online discussion, make it interesting to look once again at existentialism. For decades it has seemed hopelessly retro (only an ignorant teen in a provincial backwater could have found it glamorous even as long ago as the 1970s); but maybe the times have circled back and ‘authenticity’ is having another moment.

Saying, doing and being

Posted on by

In my coffee break, as the wind howls and the rain lashes down outside the window, I got absorbed in the chapter of [amazon_link id=”0199605068″ target=”_blank” ]The Oxford Handbook of Adam Smith[/amazon_link] on rhetoric and character. It concerns Smith’s less well-known book, [amazon_link id=”0143105922″ target=”_blank” ]The Theory of Moral Sentiments[/amazon_link].

[amazon_image id=”0199605068″ link=”true” target=”_blank” size=”medium” ]The Oxford Handbook of Adam Smith (Oxford Handbooks in Economics)[/amazon_image]

The author of this essay, Jan Swearingen, traces Smith’s views about the importance of rhetoric – the way someone communicates – as an indicator of character to classical authors. I learn that Cicero prescribed, “The cultivation of virtue through an education emphasizing self-control, moderation and civilized verbal behaviour,” and that Scottish education in Smith’s time was strongly geared towards the teaching of verbal or rhetorical style. For Smith in the [amazon_link id=”0143105922″ target=”_blank” ]Theory of Moral Sentiments[/amazon_link], humans as social beings constantly and strongly influence each other, often via verbal communication. A virtuous character could be internalized through an appropriately clear and straightforward style. Language and moral sentiment are learned together.

[amazon_image id=”0143105922″ link=”true” target=”_blank” size=”medium” ]The Theory of Moral Sentiments (Penguin Classics)[/amazon_image]

This is fascinating in many ways. One currently on my mind is the emphasis all employers place on the importance of communication skills, and their lack in young people. Another is my firm belief that people who truly understand something can explain it clearly. I also read recently Albert Hirschman’s [amazon_link id=”067476868X” target=”_blank” ]The Rhetoric of Reaction[/amazon_link]. It also, of course, relates to the very interesting notion of performativity – the capacity of language to amount to action in some circumstances.(My Tanner Lectures in 2012 discussed this in the context of economics.)

I’ve got no idea what modern scientific evidence says about the causality if any between language and character but Smith’s notion that language and ‘moral sentiments’ are so tightly bound is intuitively appealing.

Enlightened banking

Posted on by

Adam Smith had firm views about the banking industry. He believed that services in general were unproductive, and would clearly have taken a dim view of claims about the contribution of banking to GDP (see my forthcoming Feb 2014 book, [amazon_link id=”0691156794″ target=”_blank” ]GDP: A Brief and Affectionate History[/amazon_link]).

[amazon_image id=”0691156794″ link=”true” target=”_blank” size=”medium” ]GDP: A Brief but Affectionate History[/amazon_image]

I was just looking at the new [amazon_link id=”0199605068″ target=”_blank” ]Oxford Handbook of Adam Smith[/amazon_link] (editors Christopher Berry, Maria Pia Paganelli and Craig Smith) as I prepare for a panel session on banking at the Festival of Economics in Bristol later this month.

[amazon_image id=”0199605068″ link=”true” target=”_blank” size=”medium” ]The Oxford Handbook of Adam Smith (Oxford Handbooks in Economics)[/amazon_image]

The essays in the section on money, banking and prices underline Smith’s caution. It describes a metaphor in The Wealth of Nations (I didn’t remember it) comparing banking to a wagon road through the air – immensely useful in helping business expand beyond its earth-bound confines, but in danger of melting if it gets too close to the sun. He was explicitly opposed to banks investing in real estate, and his descriptions of what they should be lending for are exactly the kind of provision of working capital to business that modern banks hardly do at all – it amounts to just 3% of UK banks’ total lending. A figure worth bearing in mind when the banks claim that higher equity capital requirements would restrict their ability to lend to business, as a small decline in next to nothing is less than next to nothing….

The Handbook, by the way, is a great resource for Smith-ites. I’ve dipped into it, and found some great chapters, including those on his Enlightenment context and (by Amartya Sen) on his contemporary relevance. One part covers economics; others are on the entire range of his work – for example on history, civil society, moral society. I also liked the introduction from Nicholas Phillipson, who write an excellent biography of Smith, [amazon_link id=”0713993960″ target=”_blank” ]Adam Smith: An Enlightened Life[/amazon_link] (which I reviewed for the New Statesman).

[amazon_image id=”0713993960″ link=”true” target=”_blank” size=”medium” ]Adam Smith: An Enlightened Life[/amazon_image]