China's ruling Communist Party is demanding a show of greater loyalty from the sprawling private sector as the world's second-largest economy grapples with growing external risks, from open U.S. hostility to the coronavirus pandemic.
By virtue of a government official stepping in as an officer of the firm, can the firm then begin to operate at a profound loss, like losing money hand over fist?
No, obviously not. It will go out of business, and investments will be pulled because the investors are losing money on their investments. The government could then step in to actually nationalize the company, to itself own the company, but that's not what's happening here. The business is still subject to the profit motive, it is still owned by capitalists, and capitalists have all the usual incentives to maximize profits, and they will maximize profits.
You're literally making an argument for "compassionate capitalism." You are mounting a defense of capitalism. Capitalism has never been compassionate and it's not compassionate now because you, or Xi, want it to be.
Are we talking about private firms taking on government officials as officers, or are we talking about the government employing people to run an agency or something? It's fucking mind-boggling how delusional your argument is.
By virtue of a government official stepping in as an officer of the firm, can the firm then begin to operate at a profound loss, like losing money hand over fist?
glances at AIG, the '08 Financial Sector, and the '10 Auto Sector
Yes.
You’re literally making an argument for “compassionate capitalism.”
I'm making the argument that Chinese state bureaucrats, not private investment capitalists, are the final arbiters of the national economy.
glances at AIG, the '08 Financial Sector, and the '10 Auto Sector
It's almost like these companies got massive government loans meant to prop up their private operations, and this didn't happen by virtue of putting a government employee in the C-suite.
What a fucking joke of a comparison, except for the part where those companies went back to extracting surplus value from their workers, which is the same thing private firms in China are going to do whether or not there's a bureaucrat in their boardrooms.
And the comparison is especially fitting, because the role of the Chinese state is to defend capitalist relations, same as in the US. Thanks for pointing that out.
But yes, draw a comparison to the vultures of finance capital in the US, say Chinese capitalists are comparatively better and magically not subject to any of the laws of capitalism, and then act like your bourgeois apologism is actually woke.
I’m making the argument that Chinese state bureaucrats, not private investment capitalists, are the final arbiters of the national economy.
You wish this was true, but it's not, and it's certainly not more true based on the policy from the article which is literally, once again, not a policy for nationalization.
It’s almost like these companies got massive government loans meant to prop up their private operations, and this didn’t happen by virtue of putting a government employee in the C-suite.
If only there was a comprehensive system of state-initiated loans in China, so that companies following the party line could be insulated from not ravenously following the profit motive. Something like, say, the nationalisation of all major banks.
Wow, almost like state loans from national bank to prop up capitalist businesses in China don’t insulate them from the profit motive any more than Fed loans or legislated bailouts in the United States insulate US capitalists from the profit motive.
Any other arguments in defense of the bourgeoisie over there?
It’s a 1-1 equivalence (and an equivalence you drew), two examples of states stepping in to prop up capitalist businesses.
You have literally any evidence that, in China, state loans are uniformly given to businesses that operate at a loss due to focus on social concerns?
Also your initial argument was that the presence of a government official as an officer insulated companies from the profit motive, so we’re now on the third iteration of you rehashing the delusional argument that the private sector in China doesn’t operate by basic rules of capital accumulation.
This isn’t some big secret—China’s use of its state-controlled banking sector in this way has been a very public, very prominent sticking point in western media. It’s usually couched in terms of ‘market distortions’, or ‘non-performing loans’.
Cool. The businesses you mentioned haven’t been exempted, or even really insulated, from the profit motive. Like you said “sure” and then gave me non-responsive examples. So I’ll ask again, can you link to a business in China that is operating at a loss and exempt from the profit motive (you can’t btw).
Bill Gates also gets preferential treatment from the US government and (coincidentally) does philanthropy.
I literally showed you an industry-based example in Laos, as well as a wider study demonstrating preferential loans being given to companies engaging in philanthropy. That’s not just a single example of some billionaire deciding to give money away—it’s evidence of an institutional practice of state owned banks insulating companies from the consequence of non-profitable activities.
If this stuff doesn’t persuade you, I’m not sure what else will. What I’m saying is not at all controversial. You don’t even have to think it’s a good thing. A big part of Xi’s reforms have been trying to curb the degree to which unprofitable firms keep getting loans.
The Chinese copper mining firm NFCA, in contrast, aims not only to pursue profits but also to accrue political capital
What the entire article actually argues is that Chinese policy incentivized the collection of a “strategic resource” (rubber), by protecting rubber exporting firms’ profit margins through tariffs and other mechanisms.
And we aren’t talking about state-owned enterprises!! Like, holy shit, it would be nationalization if the new policies converted private businesses to state-owned enterprises, but that isn’t what the policies do, or are designed to do.
And that’s actually the rub of why you’re wrong: propping up private businesses doesn’t remove the need for return on investment for private capital investors. It just makes it easier for capitalists to realize profitable return on investment in conditions where operations might otherwise not be profitable enough to pursue. In the case of state-owned enterprises, yes the profit motive would be different, because it’s not private capital investment behind the enterprise.
A big part of Xi’s reforms have been trying to curb the degree to which unprofitable firms keep getting loans.
Xi’s policy change is to curb the degree to which unprofitable SOEs are allowed to exist without turning a profit by allowing them to fail (and have their operations replaced by private, for-profit, capitalist investment). It’s literally the opposite of nationalization, it’s privatization.
What the entire article actually argues is that Chinese policy incentivized the collection of a “strategic resource” (rubber), by protecting rubber exporting firms’ profit margins through tariffs and other mechanisms.
Yes. So let’s recap. Without state protection, the profit motive would force a firm to say ‘fuck this, it’s not profitable. Let’s get out of here.’ With the state protection, it does what the state wants.
Yes, some capitalist is still getting more money. M -> M’ holds true. But the things the capitalist has to do to get more money are dictated by the Party not just the market.
Xi’s policy change is to curb the degree to which unprofitable SOEs are allowed to exist without turning a profit by allowing them to fail (and have their operations replaced by private, for-profit, capitalist investment). It’s literally the opposite of nationalization, it’s privatization.
While there are more state-owned zombie firms, there are still a substantial number of zombie private firms. It’s slightly over twice as many state owned to private.
Yes, some capitalist is still getting more money. M -> M’ holds true.
If the government didn’t incentivize (not control) an unprofitable economic activity, it wouldn’t happen. But when they make that activity profitable, it does happen. Wow, seems like there’s a profit motive.
This is also the same principle by which many western, capitalist governments incentivize private investment (New Market Tax Credits for example). Again, I have no idea what connection this has to socialism, working class power, or working class ownership of the means of production.
ALSO NONE OF THIS IS THE ORIGINAL POLICY AT THE TOP OF THIS THREAD THAT YOU FALSELY CLAIMED CONSTITUTES NATIONALIZATION.
You keep backtracking and shifting goal posts, and even then, none of what you’re talking about is nationalization. Literally all of these policies are attempting to influence private businesses without nationalizing private businesses. How intellectually bankrupt can you be?
Look at the usernames in the comment thread. I jumped in purely to discuss the effectiveness of the party-state in bending private industry to the Party’s goals.
If you wanna call that nationalisation, socialism, etc, go for it.
I definitely don’t want to call that socialism, because it’s
the opposite. Also not nationalization, which is a straightforward concept that doesn’t apply here.
I’m not going to celebrate the CPC’s selling out workers and defending capitalist relations to the point where the CPC is now itself captured.
By virtue of a government official stepping in as an officer of the firm, can the firm then begin to operate at a profound loss, like losing money hand over fist?
No, obviously not. It will go out of business, and investments will be pulled because the investors are losing money on their investments. The government could then step in to actually nationalize the company, to itself own the company, but that's not what's happening here. The business is still subject to the profit motive, it is still owned by capitalists, and capitalists have all the usual incentives to maximize profits, and they will maximize profits.
You're literally making an argument for "compassionate capitalism." You are mounting a defense of capitalism. Capitalism has never been compassionate and it's not compassionate now because you, or Xi, want it to be.
Are we talking about private firms taking on government officials as officers, or are we talking about the government employing people to run an agency or something? It's fucking mind-boggling how delusional your argument is.
glances at AIG, the '08 Financial Sector, and the '10 Auto Sector
Yes.
I'm making the argument that Chinese state bureaucrats, not private investment capitalists, are the final arbiters of the national economy.
It's almost like these companies got massive government loans meant to prop up their private operations, and this didn't happen by virtue of putting a government employee in the C-suite.
What a fucking joke of a comparison, except for the part where those companies went back to extracting surplus value from their workers, which is the same thing private firms in China are going to do whether or not there's a bureaucrat in their boardrooms.
And the comparison is especially fitting, because the role of the Chinese state is to defend capitalist relations, same as in the US. Thanks for pointing that out.
But yes, draw a comparison to the vultures of finance capital in the US, say Chinese capitalists are comparatively better and magically not subject to any of the laws of capitalism, and then act like your bourgeois apologism is actually woke.
You wish this was true, but it's not, and it's certainly not more true based on the policy from the article which is literally, once again, not a policy for nationalization.
If only there was a comprehensive system of state-initiated loans in China, so that companies following the party line could be insulated from not ravenously following the profit motive. Something like, say, the nationalisation of all major banks.
Wow, almost like state loans from national bank to prop up capitalist businesses in China don’t insulate them from the profit motive any more than Fed loans or legislated bailouts in the United States insulate US capitalists from the profit motive.
Any other arguments in defense of the bourgeoisie over there?
You: party members in private business can’t force a business to defy the profit motive, or it’d go out of business
Me: State banks can give preferential loans to businesses following party orders, to keep them in business if it’s unprofitable
You: ah, but the USA also has loans to business and it’s capitalist
Like, are you even following this discussion chain, or are you just throwing out false equivalencies and gotchas?
It’s a 1-1 equivalence (and an equivalence you drew), two examples of states stepping in to prop up capitalist businesses.
You have literally any evidence that, in China, state loans are uniformly given to businesses that operate at a loss due to focus on social concerns?
Also your initial argument was that the presence of a government official as an officer insulated companies from the profit motive, so we’re now on the third iteration of you rehashing the delusional argument that the private sector in China doesn’t operate by basic rules of capital accumulation.
Sure. Here’s research into how China uses state subsidies and tariffs to enable rubber investment in Laos, which both allows for national self-sufficiency in rubber, as well as crowding out opium crops.
And here’s research that finds that non-state firms that engage in prominent corporate philanthropy tend to get more preferential loans than those that don’t.
This isn’t some big secret—China’s use of its state-controlled banking sector in this way has been a very public, very prominent sticking point in western media. It’s usually couched in terms of ‘market distortions’, or ‘non-performing loans’.
Cool. The businesses you mentioned haven’t been exempted, or even really insulated, from the profit motive. Like you said “sure” and then gave me non-responsive examples. So I’ll ask again, can you link to a business in China that is operating at a loss and exempt from the profit motive (you can’t btw).
Bill Gates also gets preferential treatment from the US government and (coincidentally) does philanthropy.
I literally showed you an industry-based example in Laos, as well as a wider study demonstrating preferential loans being given to companies engaging in philanthropy. That’s not just a single example of some billionaire deciding to give money away—it’s evidence of an institutional practice of state owned banks insulating companies from the consequence of non-profitable activities.
Here’s another example, this one of a SOE, running itself hard in an inopportune market, for the purposes of, presumably, job creation.
Here’s the IMF telling China to stop loaning money to non-profitable companies.
If this stuff doesn’t persuade you, I’m not sure what else will. What I’m saying is not at all controversial. You don’t even have to think it’s a good thing. A big part of Xi’s reforms have been trying to curb the degree to which unprofitable firms keep getting loans.
From your article:
What the entire article actually argues is that Chinese policy incentivized the collection of a “strategic resource” (rubber), by protecting rubber exporting firms’ profit margins through tariffs and other mechanisms.
And we aren’t talking about state-owned enterprises!! Like, holy shit, it would be nationalization if the new policies converted private businesses to state-owned enterprises, but that isn’t what the policies do, or are designed to do.
And that’s actually the rub of why you’re wrong: propping up private businesses doesn’t remove the need for return on investment for private capital investors. It just makes it easier for capitalists to realize profitable return on investment in conditions where operations might otherwise not be profitable enough to pursue. In the case of state-owned enterprises, yes the profit motive would be different, because it’s not private capital investment behind the enterprise.
Xi’s policy change is to curb the degree to which unprofitable SOEs are allowed to exist without turning a profit by allowing them to fail (and have their operations replaced by private, for-profit, capitalist investment). It’s literally the opposite of nationalization, it’s privatization.
Yes. So let’s recap. Without state protection, the profit motive would force a firm to say ‘fuck this, it’s not profitable. Let’s get out of here.’ With the state protection, it does what the state wants.
Yes, some capitalist is still getting more money. M -> M’ holds true. But the things the capitalist has to do to get more money are dictated by the Party not just the market.
While there are more state-owned zombie firms, there are still a substantial number of zombie private firms. It’s slightly over twice as many state owned to private.
If the government didn’t incentivize (not control) an unprofitable economic activity, it wouldn’t happen. But when they make that activity profitable, it does happen. Wow, seems like there’s a profit motive.
This is also the same principle by which many western, capitalist governments incentivize private investment (New Market Tax Credits for example). Again, I have no idea what connection this has to socialism, working class power, or working class ownership of the means of production.
ALSO NONE OF THIS IS THE ORIGINAL POLICY AT THE TOP OF THIS THREAD THAT YOU FALSELY CLAIMED CONSTITUTES NATIONALIZATION.
You keep backtracking and shifting goal posts, and even then, none of what you’re talking about is nationalization. Literally all of these policies are attempting to influence private businesses without nationalizing private businesses. How intellectually bankrupt can you be?
Look at the usernames in the comment thread. I jumped in purely to discuss the effectiveness of the party-state in bending private industry to the Party’s goals.
If you wanna call that nationalisation, socialism, etc, go for it.
I definitely don’t want to call that socialism, because it’s
the opposite. Also not nationalization, which is a straightforward concept that doesn’t apply here.
I’m not going to celebrate the CPC’s selling out workers and defending capitalist relations to the point where the CPC is now itself captured.