Interesting comment on Brad Setser’s economics blog:
August 3rd, 2009 at 11:29 am
bsetser: Not quite sure how this “It is for the citizens of the investing country to hold their gvts accountable” is possible in a world where many funds are managed by unelected govs without clear ways for the citizens of said country to hold the gov. responsible.
In the case of China, it’s relatively easy, there is this agreement between the people and the government. You give us our money, and we don’t riot. If the banks collapses, we’ll beat you up if you are lucky, and if you are unlucky we shoot you.
I think when people talk about accountability people have an “election’s fetish.” It’s possible to have elections that are useless, and it’s possible to have accountability mechanisms that don’t have anything to do with elections.
It’s also ironic to me that people talk a lot about democracy when the major institutions that run the world economy aren’t particularly democratic. The Communist Party of China is far, far more accountable to the Chinese population, than the World Bank, IMF, WTO, Goldman-Sachs, Harvard, or the Federal Reserve.
bsetser: And a host of financial firms in OECD countries get significant fees for helping said funds invest …
And then they take some of those fees, form political action committees which hire lobbyists and give campaign donations to politicians so that they can run 30-second ads to convince people that they really have some choice.
It’s actually not a bad system. If you have a couple of thousand people that have an interest in financial transparency, it’s not that hard to create a PAC and hire lobbyists. The problem is finding people who make money off financial transparency.
The Communist Party doesn’t have to worry about elections but it does have to worry about mobs with pitchforks. Same thing for the big Wall Street banks. One reason everyone did whatever they could to prevent the financial system from collapsing was that if the system did collapse, then the mobs start screaming for banker bonuses and massive and intrusive state regulation of the financial industry. As it is, things are rapidly going back to business as usual.
The above commentator wields his iron(ic) knife deftly, slicing away illusory scales. Rather keen eyes and insight.
Here’s another perceptive account of the millennia-old relationship between the Chinese state and its masses, as a veritable resonance (an unisolable superposition) between Equality and Terror.
Alain BADiou, threading a fine parallel between the Maoist reaction to Stalinist objectivism in the 1950/60’s, and the vigourous debate during the Han Dynasty in 81 BC between the Legalists seeking state activism and the Confucian conservatives advocating immutability (Badiou quoting from the Discourses on Salt and Iron, itself an important treatise on “power and economy, agriculture and industry and commerce, production and consumption”):
This truth is the following: political decision is not fettered by the economy. It must, as a subjective and future-oriented principle, subordinate to itself the laws of the present. This principle is called ‘confidence in the masses’. Now, this is also what is advocated by the Legalist advisors of the emperor Wu, despite their constant appeals to implacable law and repression; even though, quite obviously, the stakes of confidence are entirely different, or even opposed. The Confucian scholars defend the immutable cycle of peasant production and oppose all novelties in artisanship and trade. They argue that all is well when ‘the people devotes itself body and soul to agricultural tasks’. The (Legalist) Great Secretary retorts with a vibrant encomium for commercial circulation, voicing complete confidence in the multiform development of exchange. Here is an admirable monologue:
If you leave the capital to travel through peaks and valleys in all directions, through the fiefs and principalities, you will not find a single large and handsome city that is not traversed from one end to the other by great avenues, swarming with traders and grocers, brimming over with all kinds of products. The wise know how to profit from the seasons, and the skilful how to exploit natural riches. The superior man knows how to draw advantage from others; the mediocre man knows only how to make use of himself. […] How could agriculture suffice to enrich the country, and why would the system of the communal field alone have the privilege of procuring the people what it needs?
In these lines we can make out a singular correlation between will and confidence, rupture and consent. It constitutes the kernel of a trans-temporal political truth, of which Mao’s meditations on Stalin of 1959 and the Great Secretary’s diatribes against the Confucians in 81 BC are instances: forms of its appearing in separate worlds. But what is worthy of note is the fact that there corresponds, to these totally distinct or even opposed instances of a kernel of truth, a recognizable subjective type, that of the state revolutionary. This type too may be read through the four terms of the generic correlation (will, equality, confidence and terror). I will show this now with regard to the classical pair equality/terror, discontinuous instances of which we could also find in the likes of Robespierre or Thomas Müntzer.
The Legalist advisors of the emperor Wu are known for their apologia for the most ferocious repression in the implacable application of laws:
The law must be implacable in order not to be arbitrary, it must be inexorable in order to inspire respect. These are the considerations that presided over the elaboration of the penal code: one does not flout laws that mark with red-hot iron the slightest of crimes.
The Confucian scholars counter this repressive formalism with the classical morality of motive:
Penal laws must above all take motives into account. Those who stray from legality but whose motives are pure deserve to be pardoned.
–Alain Badiou, Logics of Worlds