Keith Hudson and I had a brief exchange on the merits of Chrystia Freeland's
"Plutocrats". Both of us were bored after the first forty pages or so. He
suggested that I read the concluding chapter and give up on the rest of the
book. I almost did that but then decided I'd look at the book here and there
and, lo and behold, I've found some interesting things. Thus far I've read
some of the material on "rent-seekers", plutocrats who capture an increasing
portion of existing wealth rather than producing "value-added" wealth
themselves. The American and European financial sectors are outstanding
examples. Working in an environment of decreasing regulation, many people in
the field have become very rich via the invention and refinement of a large
variety of securities and by shifting much of the risk of doing so onto the
public sector, knowing full well that government would see them as too big to
fail and bail them out if things went wrong. Things did indeed go wrong in
2008, and with some exceptions like Lehman Brothers, government did bail them
out, imposing enormous costs on the public sector.
I guess those of us who've paid any attention to the economy in the past few
years already knew much of that, but Freeland includes a lot of extra
information and detail that we couldn't have known unless we were journalists
in the middle of it all, as she was. However, there was one thing that was new
to me in what I read this morning. That was the role played by "rent-seekers"
in China's conversion from what was supposed to have been a workers' paradise
into plutocrat run state capitalism. According to Freeland, China is as
corrupt at the top as America, Europe and oligarchic Russia. I found that
rather painful because it wasn't supposed to be like that. When I was young
and highly idealistic, I followed the Chinese Revolution very closely and
greatly admired Mao Zedong. Mao was going to show us all what the world could
really be like. Well, what seems to have transpired in reality is another road
to hell paved with good intentions.
I'll quit here, but may post more as I read more bits and pieces of Freeland's
book.
Ed
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