Authoritarian Capitalism

CoronaVirus could possibly, spell the end for some Eurozone banks as by pushing the Eurozone ito recession it could make their lives very difficult. It is certainly true that the German economy particularly, export orientated as it is, has suffered since the Chinese downturn and CoronaVirus cannot be helpful.

I would not be surprised if European banks wobbled or worse in the face of a significant Chinese downturn. Equally I wouldn’t be surpised if HSBC was similarly vulnerable.

Having accepted the Anglo-American system of capitalism, this is undoubtedly Europe’s vulnerability – and Britain is, this time included in Europe…

But the Chinese have been called – tellingly – ‘Authoritarian Capitalists’ and that is why they are highly likely to win any economic war with the Anglo-American version – which, though it is more widespread, is, in effect, far weaker.

As the first state to issue paper money, China probably knows more about money than most. Whereas the West still thinks money is pretty mysterious.

Thus the Chinese banks may issue money and, when it is not repaid, just move on – no write-off required, as of course if you are in charge, it isn’t.

Debts to the state – which, in issuing money actually creates debt – can be ignored with impunity.

There is much fuss about Quantitative Easing but that, although, I’d suggest much less honest, is the Western equivalent of leaving the debts hanging.

Yet because the West think there is some shame in this – which of course as these debts are owed to private ‘incorporated’ companies (ie companies that act as individuals – but are protected from any individual liability) these are indeed shameful debts. But shameful only in the Western Capitalist system.

If you are an authoritarian capitalist you really do not need to worry. You know that you create the money, so if it is not repaid you can simply create some more and there is no bother that results.

Having read widely (regrettably only in English) I fear this is why a Trump/ China conflict is never going to be won by the Americans…

Once again where money comes from has to be overtly understood.

Yet with Johnson’s bridges in the air – with seemingly no budget required – (he may need some sort of bridge as a sop to the DUP. Perhaps to discourage Northern Ireland from uniting with the South, or even as some sort of personal triumphal arch which he has shown an affinity for in the past) could it be that the UK might be starting to realise its own version of Authoritarian Capitalism?

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