Do you really want a socialist or communist country? Why?

 Yes! Because socialism and communism mobilizes societies resources for the common good, strives for equality and solves poverty and unemployment problems. Also the living proof is that Communist China is the leading world economy.

But… Communism with its rigid centralized system of government tends to breed corruption that creates the inequalities that it has proclaimed to be fighting against. Also, communism and socialism tend to stifle innovation - the iPhone was invented in America - but, of course, is made in China. On the other hand the Soviet Union beat America to space.

Communism is an old idea - since the time of Plato and Aristotle, even Jesus preached against private property. Still it has too many weak points and it is free markets and democracy that have brought humanity prosperity and technological progress (and that includes China).

https://www.quora.com/Do-you-really-want-a-socialist-or-communist-country-Why/answer/Alex-Great-5

First, I thought communism was good and capitalism bad.

Then, capitalism is good and communism bad.

 Democracy and market forces should take care of that….

 

 

And that seemed to be so true because then we won the Cold war – Soviet style communism crumbled under its own stupidity eager crowds dismantled the Berlin war and turned the pieces of the hated barrier into souvenirs – under the sounds of Pink Floyd singing “break down the wall…” Then the US bombed the Serbs!

Then NATO didn’t disband and kept going for no obvious reason. Then the Chinese communist system managed to bring their country out of poverty to the leading position in the world economy.

Then America is in multi trillion-dollar debt…

I still believe that it’s not by the benevolence of baker and shoemaker that we enjoy prosperity and that we have those inalienable rights.

What I don’t know is – what went wrong?

I know Marx does – he was confident that it was the ownership of the means of production that was the problem but while that does seem to be true with China’s success and the recent economic crisis triggered by US financial institutions it doesn’t seem to explain everything. Communism did fail in Russia and Eastern Europe.

Capitalism or Communism? Or Do We Have a Choice?

 At the end of the eighties things were crystal clear: communism lost, capitalism won and we will all live together happily ever after in material abundancy and liberal bliss, at last.

Now thirty years later the Chinese Communist Party has declared victory over poverty while in the US the middle class is slowly withering away while the media is increasingly turning into a propaganda machine of those in power.

Not only is the trend pointing to China becoming the #1 economy in the world but the US is foolishly isolating Russia (and increasingly the EU) thus pushing them to look for more reliable friends in the East.

How did that happen? Why? Can we do anything about it? Perhaps organize a demonstration on Tiananmen square or march on the Capitol or the Kremlin, or maybe break down the Berlin wall (that’s already broken) but we can always try the Korean demilitarized zone? Revolution?  I hope that will never happen because revolutions usually hurt the innocent and cement the power of the corrupt elite.

I do believe in unity in diversity. That we the people can and will unite and acknowledge that everyone has a right to an opinion (and that means everyone including those you don’t like or don’t agree with) as long as that opinion does not involve hate, or planning to harm someone, or planning to coerce someone into changing their opinion or choice. And that unity will bring reason, stability and abundance.

You may say I’m a dreamer but I hope I’m not the only one….

North Korea - What Now?

What will happen in North Korea?

The regime seems far less stable than the Arab dictatorships or even the USSR by the end of the 80s.
For there is no doubt that North Korean regime will collapse most probably sooner than later and in any case not later than the end of this decade if not in the first half of it.
The problem is how the world or the major interests involved will deal with it. If there are any particular plans they don't seem to be public if they exist at all so I will feel free to speculate.
Questions to be answered:

First, what could happen?
Second, who are the major players and what are their interests?
Third, what can they do to promote them or what can be expected that they may do?

Possible answers to the first question – possible developments :

1. Russian scenario. A Gorbachev style move towards reforms starts well but ends in Yeltsin type chaos of crime and corruption until the Putin type strongman regulates corruption in favor of his clique and puts the losers in jail
2. Chinese scenario. Deng Xiaoping style reforms lead to improved living standards while preserving the rule of the communist party and postponing the inevitable collapse.
3. East German scenario. South Korea absorbs North Korea and the North Korean communist elite melts into obscurity.

Additional questions stemming from the proposed answers to the first question:

• Which is the preferred scenario?
• Which is the most probable one?
• Which is the most dangerous?

Answer to the second question – major stakeholders :

1. The people of North Korea – interested in survival, development, democracy and opportunities
2. The communist elite of North Korea – interested in preserving their privileges
3. South Korea – interest in dealing with the military threat from the North and reunification.
4. China – interested in stability in Korea to prevent destabilization of its regions bordering Korea.
5. Japan – interested in removing the threat from North Korea and a host of problems.
6. USA – a peaceful Korea will reduce the need for US military presence but open opportunities for trade.
7. Russia – has shown remarkable indifference for a country so close and the importance accorded by the government to the development of the Russian Pacific region so close to North Korea.

So far all stakeholders (with the notable exception of the sovereign – the people of North Korea) have pledged to work with the elite in North Korea to facilitate a smooth transition. Russia has warned against “provocations” by North Korean neighbors probably meaning that the Russian government won't tolerate a repeat of the Libyan scenario.
That may be the most sensible foreign policy in response to the contingency of the moment but what should the main stakeholders do to secure the promotion of there strategic interests in the future?
And what those interest may be? (I am aware that the concise list provided here is far from complete and may be even off the mark.)

Russian Spring and US National Interest

One night the Khalif Harum al Rashid summoned his vizier Jafar and said to him: “I wish to go into the city to find out what is happening and to question the people about the conduct of my administrators so that I may dismiss those who they complain of and promote those they praise...”
from the Tale of Three Apples not Newton's, Beatles' and Steve Jobs' but the one from The Thousand and One Nights

The Khalif in Moscow seems to have forgotten that he has to check what people think of his administrators and confident in his popularity after ruling uncontested for over 12 years was unpleasantly surprised by his party's loss of more than 20 per cent of their seats in the Russian parliament regardless of the intimidation of his opponents and his control over the media (perhaps that was caused in part by the 20 per cent increase of internet penetration among the highly literate Russian population). Even worse he seems failing to acknowledge that the people have genuine concerns and dismisses the protesters in true Leninist style as paid by the West. To top it up US Secretary of State Hilary Clinton expressed her concern with the rigged elections, prompting Mr Putin to retaliate that she was instigating the protests which is hardly try. Try spending several hours outside in the Russian winter. No matter how big a fan of Mrs Clinton you may be that thought won't be enough to keep you warm. Just how shaky Putin's position is at the moment can be discerned by his nervousness and lack of confidence (this is the man who rides his horse half-naked even when Sarah Palin is not watching from Alaska) but making the allusion that the white ribbons used by the protesters look like condoms is pretty low (and exposes ignorance that condoms may come in different colors). Gorbachev too (hardly a political competitor anymore) incurred the wrath of Putin by calling for a rerun of the elections.
Having said all that most of the protesters have spent most of their creative lives under the relatively secure, stable and prosperous rule of Putin and his political allies especially if compared with the chaotic Yeltsin regime. Those are the less flamboyant KGB guys (the more extravagant ones are in London dazzling the UK public with extreme wealth obtain though unthinkable corruption) and they may continue to rule Russia for quite some time with or without Putin mostly because they are unlikely to give up their positions without a fight. On the other hand the protestors are not the workers, soldiers and sailors of the October Revolution from the previous century. They are mostly middle class people who are looking for a government that can provide for more opportunities for development and innovation besides selling oil and gas to the West and China.
And that is where the interests of the people standing in the cold in Russia coincide with US national interest. A more democratic Russia where innovation and development will create more markets for US products and more products for US markets can only benefit the US middle class.
In that line of thought it was lucky timing that Russia was accepted as a member of the WTO just when it needs a boost. US – Russia relations cannot be fully covered by the philosophy of a “reset”. They need much more creative thinking to build a whole new system of interdependence and cooperation that will not only boost domestic economies but help create the conditions for stability and prosperity across Eurasia where pockets of volatile conflicts and regional animosities threaten to blow out of proportions, not to mention the imminent collapse of Chinese communism with yet unknown and unpredictable consequences.
The most precious legacy of the G.W. Bush era is the expensive lesson that the US cannot and should not act alone attempting to resolve international issues no matter how well-intentioned and powerful it may feel. It is debilitatingly expensive and the results are at best inconclusive if not disastrous.
The cheapest and most effective way to promote US national interest globally (and in space) is through cooperation – Marshal Plan style, or Kissinger's policy towards China style or International Space Station style. That is not confined to US international experience. Post WWII French policy to entangle Germany in an EU, (I remember it was originally an US idea) but it only became successful after France started pursuing it with religious fervor, and has managed to forge fascinating unity on the Old Continent torn by the most devastating wars in human history less than a century ago, and that united continent is one of the most reliable US trade partners and military allies.
Russia has moved a long way since the stagnation of the Brezhnev era. It is not perfect but it is moving slowly forward. It's in our interest to support that movement.

… the great thing in this world is not so much where we stand as in what direction we are moving: To reach the port of heaven, we must sail sometimes with the wind and sometimes against it— but we must sail, and not drift, nor lie at anchor...
--- Oliver Wendell Holmes, Sr.

China US Economic Relations

This is an attempt to look at the economic aspect of US - China relations from a Chinese perspective. This approach may yield interesting insights in the most important economic axis of economic interdependence of the modern world, and generate innovative ideas about how to approach existing and future issues.

Theoretical background
The contemporary phase of US-Chinese relationship characterized by high level of economic interdependence can be analyzed from a realist perspective. Henry Kissinger was working towards a classic “realist” balance of power arrangement by seeking closer relationship with China to counterbalance Soviet influence in Asia after the end of the Vietnam war. In Dr. Kissinger's own words with Nixon they “had ideas for the construction of peace on a global scale”. Consequently it could be argued from a constructivist perspective that this classic 'realist' foreign policy act created a reality that will develop into the most remarkable phenomenon of modern politics the economic interdependence between the world's leading liberal free market democracy and the last explicitly communist state. The impressive rise of the economic exchange between the two countries after the reforms introduced by Deng Xiaoping in 1979 led to the current situation in which they dominate world trade and global economic stability is dependent on their successful development. The management of these relations and the interlinked political and security implications require skillful economic statecraft to resolve the issues bound to arise from the unparallelled scope of the economic interdependence and the structural differences between the communist rule over an economy in transition to free market in the case of China and an economy in transition from the 'laissez-faire ' principles of the Reagan era to increasing calls for more regulation after the global financial crisis of 2008.

Historical Context
The relationship between US and China began to develop in in a new direction after Henry Kissinger approached China and the economic relationship picked up particularly after the reforms of Deng Xio Ping in 1979. Trade with the US has helped China achieve dramatic success in improving the quality of life of the most populous country in the world. Chinese political life has advanced towards more openness, democracy and accountability and the protection of private property has given the opportunity for a prosperous middle class to emerge. At the same time China remains a Communist country ruled by Communist Party which is far even from the notion of something resembling Gorbachev's perestroika, let alone more comprehensive political reforms. The remarkable economic development has been accompanied by extensive environmental damage. Some of the new rich have earned their wealth through corruption and the lack of effective judiciary to deal with the problem is due in part to the CCP opposition to political reform. The livelihood of a large part of the population though better than the starving populations of sub-Saharan Africa is still precariously close to the poverty line. The economic development is based on cheap labor and has yet to show signs of achievement into more technologically advanced areas as Japan, and the Asian Tigers have done.
The US approach to China has ranged from the desire to ensure good relations to alleviate the security threat in the 70s through the remarkable period of the growth of economic relations starting with Deng's reforms and culminating in China gaining the top spot among US trading partners and world wide prominence leading to US uncertainty as to how to treat China: as a rival, an ally or controversial partner-difficult to deal with but impossible to reject.
Floating exchange rage for Chinese currency.
The Chinese government has strongly resisted international pressure led by the US to float Chinese currency. The Chinese complain that now after the financial crisis the problem is not the exchange rate of their currency but the value of the dollar or more correctly not the value but the stability of the dollar which is dependent on the stability of US policy. The above conclusion of the Wang Qing, an economist from Morgan Stanley in Hong Kong make the US government responsible for exchange rates linking their stability with the stability of policy. While a link between policy and currency values may be established it is not that direct. There was no observable policy change when the financial crisis struck in the latter days of the Bush administration. It is more the adequacy of particular policy that may affect the exchange rate. In any case the huge Chinese trade surplus has materialized in US dollars mostly in the form of Treasury bonds.

“We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.” The problem is that The Chinese cannot undertake a massive sellout of US treasury bonds as this will cause their price to fall. But even if they hold them massive US stimulus will mean the US government selling more bonds and the market may demand higher interest rate for them than the interest rate for the bonds the Chinese hold. That scenario will result in a price drop of bonds held by the Chinese. Alternatively if the US government chose to limit the borrowing and respectively the stimulus may mean slower recovery for the US economy which will hurt Chinese exports to the US. Another scenario involves reduced US trade deficit because of the crisis resulting in less Chinese purchases of US bonds. In any case the financial crisis confronts the Chinese leaders with a difficult dilemma. The US sees the solution in encouraging Chinese domestic consumption. The Chinese government sees a solution in decreasing its reliance for its reserves on the US dollar and dependence on US financial policies outside its control, by calling (alongside Russia) for the establishment of an internationally managed reserve currency that will increase the stability of world financial markets and have the added benefit of more freedom for the financial policies of reserve currency polities like the US, the EU and Japan.

2. What China expects from the US

Budget deficit control
Following the financial crisis and the implementation of stimulus measures the primary concern of China is the US government's resolve and ability to bring the budget deficit under control. From the perspective of Chinese national interest their ability to deal with the adverse effects of the global financial crisis depend on the value of their national reserves which is dependent on US policies. Commentators speculate on whether China will continue to buy US securities to and thus finance US government spending. The obvious answer is yes because there is no substitute for US government bonds in terms of secure investment even when taking into account all the pitfalls of using them as financial reserve instruments. A logical consequence of improving trade balance between China and the US will be that China will buy less US securities as it will have less free funds to use for bonds purchases but will use the money gain from export to the US to pay for imports instead. To conclude if China had a financially viable option to switch reserves to other safe haven like IMF Special Drawing Rights or Euro they would have done so and they will not hesitate to do it if it becomes viable in the future. The current calculations though make the US dollar most attractive despite its contradictory position of serving as an international currency but held under US national control. China will continue to keep their national reserves in US dollars and attempt to influence the US government to pursue policies that will prevent the dollar from losing value.

Free trade not rotectionism
The other most important economic statecraft policy issue that China would like to see positively resolved in their relations with the US is how the administration will go about with dealing with protectionist pressures from Congress. China is understandably suspicious on the true US intentions. On one side we have the resolute declarations of president Obama on several G20 meetings warning against the dangers of protectionism and on the other the controversial imposition of tariffs on tires imported from China.

New US financial regulations to prevent crises
China is concerned with the negative impact of the current financial crisis that has exposed their economic vulnerability to events beyond their control. Understandably, China wants to see better regulation to ensure the smooth operation and predictability of the US financial system as the world trade is dependent on its health.

Increased role for China in IMF
At the 20th meeting of the International Monetary and Financial Committee of the Board of Governors of the International Monetary Fund in Istanbul the Deputy Governor of the Central Bank of China Yi Gang made a point for a larger quota for the developing nations and better monitoring abilities for the International Monetary Fund. He accused the IMF of failing to foresee the global financial crisis and blamed this failure on mismanagement stemming from skewed representation in IMF governing bodies. That is a valid Chinese complaint as they have done what was expected from them: efficiently produced goods for export and the financial collapse adversely affected them without warning. That the IMF is in need of structural and administrative reform including quota revision is acknowledged supported by the US government.

Recognition of the status of China as a market economy.
The recognition of China as a market economy affects the way the fair market value of goods is calculated to determine whether the country engages in subsidies or dumping. As China is not recognized as a market economy by its main trading partners the US and the EU they can more easily apply punitive measures against China as was in the latest case of US tariffs on tires imported from China. Theoretically the question has two sides. The first one is can China be considered a market economy? The prevalence of state enterprises and the strict control over the national currency points towards a negative answer. On the other hand the remarkable development of China towards establishing efficient enterprises including private ones successfully working towards ever increasing export capacity points to a conclusion that China is making considerable effort to implent an market driven system. The results of the latest China - US Strategic Dialogue show that there are no insurmountable obstacles on the way of US recognition of China's market economy status which will materialize sooner or later depending on political developments in both countries.

While official Chinese policies may be concerned with the continuing dominance of the Communist Party and Marxist ideology from the Russian (and Yugoslav) experiences suggest that the true interests of the ruling elite may be the more material than ideological centering on the perpetuation of their economic power. The metastasis of corruption feeding on China's economic boom points int that direction Bearing that in mind three scenarios can be discerned for the future development of China. The most desirable, but maybe not the most probable will be the gradual political development of the Chinese society towards democracy following the consolidation of the market principles in the economy. The most dangerous would be a slip backwards under the pressure of economic duress into the oppression and belligerence of the Mao era. The most probable though will be the collapse of the Communist party and transfer of power into the hands of corrupt officials and mafia like structures. US inducement for democratic reforms in China may diffuse the dangers of chaotic collapse of communism and the and the considerable security implications that may cause. Ultimately it can be concluded that there is a convergence of interests between the Chinese Communist Party, the entrepreneurs and the people of China and that leads to peaceful economic development as a way to solve all problems facing modern China. That position can find understanding in the US and the rest of the world because it is in harmony with the long term interests of all countries interested in developing economic relations with China on a win-win basis.

Henry Kissinger sent to Russia by Obama: what to expect?

If Henry Kissinger is up to some secret negotiations dramatic results are bound to follow. Usually good for the US and the rest of the world: like the end of the Vietnam war, transforming China from worst enemy to best trading partner, and ending hostilities between Israel and Egypt. What can we expect now?
Russia has been steadily antagonised by withholding their WTO membership for no valid reasons, promoting NATO expansion while Russia is not invited they have no choice but regard NATO as a hostile organisation, prod neighbours like Georgia to physically attack Russian soldiers. Not the best trust building policies. But what should be done?
I think the best approach will be to hug the bear so hard it will find it hard not to respond. Let me explain:
1. That's the approach the US used successfully in post-war Germany and Japan, that was the approach used successfully by the brilliant Nixon-Kissinger team towards communist China. (I wonder how the US would have managed in a world where the worlds most powerful economies were hostile).
2. The mindless foreign policy of the Bush administration has successfully alienated the US from most of the civilized world and has left the current administration with almost no alternative than try and repair the eroded trust (which ultimately may be a good thing: nothing wrong with consistently positive foreign policy for a change).
3. Siemens (from Germany) is developing nuclear cooperation with Russia, Areva (from France) with China, Iran is sending a satellite in space with Russian help and Russo-Chinese and Russo-Indian military cooperation (not without their own problems) is developing. It looks like Joe Biden is on his way to start repairing the damage done by the Bush administration in alienating the Europeans. The alternative will be an undesirable anti-American Euro-Russo alliance (or even worse Euro-Russo-Chinese or Indian alliance. Unlikely because of the the importance of the US for these countries that will neutralize their interest in anti US arrangements. Possible US protectionism though could make that option more viable.

That's why I think Afghanistan is the smallest American foreign policy problem. I regret to be cynical but who cares about that illiterate mountain people and a bunch of smelly Taliban with flea infested beards. No one! Just cut of their sources of international currency and they will literally have no money to travel abroad to cause trouble. (If you really care about the Afghan people think about how to offer them better livelihood than growing poppies for the Taliban instead of how to send more troops that might be cheaper and more effective).

So I suggest:
1. Get Russia into the WTO, NATO and the EU which will lead to better transparency and trust. Keeping them out gives the government the excuse to brake international norms.
2. Get the Russian army into Afghanistan (if they are to share the fruits of democracy they should share the responsibilities too).
3. Increase academic exchange between the two countries for two reasons:
a) that may actually benefit the US in the flow of technology and b) that will increase understanding and good will between the two countries and make it more difficult for the ruling elites to resort to war mongering and scare tactics.
c)send government funded consultants to help improve Russian economy (no one want's to fight on a full belly:)

Passion or Reason? Coercion or Cooperation? War and Peace!

Passion or Reason? Coercion or Cooperation? War and Peace!
I believe both. Passion to tell me what I want and Reason to tell me how to get it.
I don't believe passion should be suppressed.
If it is there it must be for a reason.
Yet it can wreck havoc.
Reason left on its own tends towards confusion wondering what's the meaning of life.
Yet people should be free to follow their passions in any way they choose (if they live by themselves in the jungle). If they choose to live with other people and enjoy civilization they they agree not to harm others or get in their way and even better help them follow their passions and they will probably help you follow yours. That sounds good but is often so hard to achieve. It requires communication, compromise, consensus which so often lead to endless delays and feared dead ends.
The alternative is easy: coercion does not require endless communication, painful compromise or elusive consensus. It has worked during the ages. In fact it has worked successfully over the ages in conjunction with cooperation. People united in families, tribes, nations, classes and castes to be able to oppress and enslave and reap the benefits. And it worked. It worked so well that it turned war into the pinnacle of human aspirations of achievement. The best inventors, thinkers, strategists and politicians put their efforts in war and it paid until war grew out of proportion with the industrialized massacre of WWII and especially with the resultant nuclear weapons and systems for their delivery with global access.
At that time one of the creators of these weapons Andrei Sakharov found out that science and technology can only develop in free discussion and so does society.
The new weapons made war not only unreasonable but unthinkable.
Unfortunately some of these weapons were in the hands of despotic and corrupt communist regimes. The United States government undertook two dramatically different approaches both of them successful. Passionately defending human rights in the USSR and its satellites led to the premature death of European communism. In China the pragmatic reasonable approach of improving relations and trade preferences led to the only successful communist country in modern times continuing to exist with US help though no longer that hostile if at all..
How is peace better achievable?
Reason without passion can lead to brilliant solutions and enhance understanding. Yet passion I believe should tell us what we really want. Not what other tell us but that what our heart wants deep inside. The passion that is the source of our fondest dreams. The dreams that always come true.
If the USSR and China problems were solved so easily then the Middle East should be far easier bearing in mind the relative weakness of the corrupt regimes there. It will be extremely easy if the goal is set properly: what we really want. What is that that we want and the people there want and will wholeheartedly support. The solution is simple.