That's a lot of copper and cobalt
Check it out, China making the big deals. I have no real analysis for this and so will substitute flippant remarks:
1. The fact that they're calling it a "Marshall Plan" is unlikely to be unintentional; political influence is being bought here along with the copper.
2. Is China in danger of buying at a high point in the copper price? Maybe, but as I kept on telling people who were making confident assertions about their willingness to acquire dollar assets, communist economies don't use mark-to-market accounting. If they've acquired reliable supplies of commodity inputs to secure their production plan, they're happy.
3. I wonder whether the world community is about to discover that the DR Congo is an appalling regime which ought not to be allowed control over its natural resources?
4. Maybe if we all whine really hard about the Olympics the deal will be called off.
communist economies
ReplyDeleteWot?
Oh yeah, China is one for sure. They have a certain amount of the market system and private ownership, but they also have a big old planning department and that planning department carries out calculations in terms of socially necessary abstract labour-time. If I could be bothered looking up the figures I suspectI could prove that the majority of the world's economists are Marxists.
ReplyDeleteAnyway, about that contrarianism...
ReplyDeleteCome on ejh, search your feelings, you know it to be true....
ReplyDeleteHere's Tyler Cowen:
"The Chinese state remains deeply entrenched in the economy. According to official data for 2003, the state directly accounted for 38 percent of the country’s GDP and employed 85 million people (about one third of the urban workforce). For its part, the formal private sector in urban areas employed only 67 million people. A research report by the financial firm UBS argues that the private sector in China accounts for no more than 30 percent of the economy. These figures are startling even for Asia, where there is a tradition of heavy state involvement in the economy. State-owned enterprises in most Asian countries contribute about 5 percent of GDP. In India, traditionally considered a socialist economy, state-owned firms generate less than 7 percent of GDP."
Mmmm. I wonder what proportion of the UK's GDP and employment the state provided at its height? Possibly I'll find out that I grew up in a Communist country....
ReplyDeleteAs far as GDP goes, I think it was around a fifth in 1979. I read somewhere that France runs pretty steady at 40 odd percent, like China.
ReplyDeleteBut the stuff about free markets is basically crap anyway. The type of market you have is always down to the policies of your government.
See! We're all communists after all! All that crap about 1989.
ReplyDeleteSomeone better phone the SWP and tell them they're not required anymore.
Oh.
There's an old joke in which a Russian ambassador remarks that France was the only country in the world to have created a successful communist society...
ReplyDeleteDo Chinese economists really make calculations in terms of socially necessary abstract labour time - or is it all done to impress visitors? Like the North Korean Arirang. If they really do then that's made my day.
Actually that's probably pretty ludicrous hyperbole; the published five year plans are all in terms of fairly normal national accounting concepts like GDP. But the influence of Marxist economics is still very strong in the bureaucracy, and a lot of the behaviour of the Chinese economic planners (like running the structurally undervalued exchange rate policy) makes a lot more sense in that kind of a framework; also the very high priority they seem to place on long term supply contracts for natural resources like this one.
ReplyDeleteApologies for the ignorance, but why is a structurally undervalued exchange rate policy a consequence of Marxist economic policies?
ReplyDeleteBasically if you're thinking about cash-on-cash return, then the undervalued exchange rate means you're selling yourself short and leaving profit on the table. If you're thinking commodities on commodities, then the cheap exchange rate makes a lot more sense. Also (and this is what I was really thinking of), a lot of people thought that the Chinese had a big, big problem because they had bought so much US dollar assets and the dollar was depreciating. Which makes sense in a cash P&L world, but in a classical/Marxist world, those dollars still buy the same amount of US goods and services.
ReplyDeleteejh said: I wonder what proportion of the UK's GDP and employment the state provided at its height? Possibly I'll find out that I grew up in a Communist country....
ReplyDeleteI've long harboured the suspicion that the Second World War was the world revolution, and that ever since then the West has been a dictatorship of the proletariat within which capitalist roaders come to power from time to time ...
Summarised for a T-shirt: The West Is Red.