Monday, March 22, 2021

Jack Ma is not the problem — Li Xuran

Excellent analysis of capitalism with Chinese characteristics

It is about the opportunities, challenges and dangers that capitalism entails, and how to deal with these issues in a developing socialist country. There is little or no development outside of capitalism but unbridled capitalism will take over everything and eventually run amok. The Chinese leadership understands this, and the example of the West stands as a warning, showing the pitfalls to avoid without throwing the baby out with the bathwater. In the author's view is on the right track.

The analysis is highly sophisticated, but it is put in a way that any educated person can understand.

MR Online
Jack Ma is not the problem
Li Xuran, originally published in Chinese in Utopia (乌有之乡)


Ralph Musgrave said...

Jack Ma runs an online bank. I suspect that mixed up in all this is the long standing argument as to whether private banks, like Ma's, should be allowed to create money, or whether a country should go for full reserve banking, i.e. ban privately created money.

As followers of MNE will have noticed, I back full reserve, as does Andrew Anderson, far as I can see.

Andrew Anderson said...

Actually, I advocate 100% private banks with 100% voluntary depositors.

Then they can create all the deposits/liabilities for fiat they dare to and be ruthlessly foreclosed on when they can't fully meet a single one.

Who can legitimately object to that?

Peter Pan said...

China is going to follow the west down the tubes. There is no alternative to commodity production, and its impact on the biosphere.

Peter Pan said...

New line for James Cagney before he goes kaboom: "This is all your fault, Ma!"

Ralph Musgrave said...

Andrew, If you're in favour of letting private banks offer deposits which are NOT BACKED by the FDIC, and which are thus not entirely safe, and which are advertised as being not entirely safe, then I agree with that. But at the same time, I think everyone has a right to a totally safe, government backed account: maybe actually at the Fed (a la CBDC), or maybe administered by private banks.

Whether the above unsafe accounts really count as money is debatable, and it's also debatable how popular they'd be. They could be counted as equity on the grounds that those holding those accounts stand to lose money. Or if they get to be widely used and accepted as money, then they would in effect be money.

Andrew Anderson said...

or maybe administered by private banks. Ralph

No, since that violates "100% private banks with 100% voluntary depositors."

Instead, we need an entirely separate, convenient, inherently risk-free, fiat debit and checking service that EVERYONE, including foreigners, can use and which individual citizens can use FOR FREE up to reasonable limits on account size and transaction rate.

Andrew Anderson said...

And once we have that, then all other privileges for banks can be responsibly abolished and that would include Steve Keen's "A Modern Jubilee" and an on-going equal Citizen's Dividend to replace all fiat creation for private interests.