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Sorry, No Post Today.
Sorry, no post today.
The heating installation for the block I am living in failed yesterday. It is supposed to be up again only late this evening. It is freezing not only outside and typing with mittens on is just too inconvenient.
Use as open thread …
What I’m posting below is the heart of Putin’s Davos Speech where he lays out Humanity’s problems as he sees them and what he and Russia see as solutions that are also Russia’s major policy goals. Pepe Escobar directed his readers to this Ishchenko analysis of Putin’s speech that provides a different POV that IMO can be used productively. While reading, try to keep in mind what Hudson’s described as the forces in play and what their aims are to understand the challenge both Xi and Putin represent. And for those needing it, here’s Xi’s Davos Speech transcript.
“In this context, I would like to speak in more detail about the main challenges which, I believe, the international community is facing.
The first one is socioeconomic.
Indeed, judging by the statistics, even despite the deep crises in 2008 and 2020, the last 40 years can be referred to as successful or even super successful for the global economy. Starting from 1980, global per capita GDP has doubled in terms of real purchasing power parity. This is definitely a positive indicator.
Globalisation and domestic growth have led to strong growth in developing countries and lifted over a billion people out of poverty. So, if we take an income level of $5.50 per person per day (in terms of PPP) then, according to the World Bank, in China, for example, the number of people with lower incomes went from 1.1 billion in 1990 down to less than 300 million in recent years. This is definitely China’s success. In Russia, this number went from 64 million people in 1999 to about 5 million now. We believe this is also progress in our country, and in the most important area, by the way.
Still, the main question, the answer to which can, in many respects, provide a clue to today’s problems, is what was the nature of this global growth and who benefitted from it most.
Of course, as I mentioned earlier, developing countries benefitted a lot from the growing demand for their traditional and even new products. However, this integration into the global economy has resulted in more than just new jobs or greater export earnings. It also had its social costs, including a significant gap in individual incomes.
What about the developed economies where average incomes are much higher? It may sound ironic, but stratification in the developed countries is even deeper. According to the World Bank, 3.6 million people subsisted on incomes of under $5.50 per day in the United States in 2000, but in 2016 this number grew to 5.6 million people.
Meanwhile, globalisation led to a significant increase in the revenue of large multinational, primarily US and European, companies.
By the way, in terms of individual income, the developed economies in Europe show the same trend as the United States.
But then again, in terms of corporate profits, who got hold of the revenue? The answer is clear: one percent of the population.
And what has happened in the lives of other people? In the past 30 years, in a number of developed countries, the real incomes of over half of the citizens have been stagnating, not growing. Meanwhile, the cost of education and healthcare services has gone up. Do you know by how much? Three times.
In other words, millions of people even in wealthy countries have stopped hoping for an increase of their incomes. In the meantime, they are faced with the problem of how to keep themselves and their parents healthy and how to provide their children with a decent education.
There is no call [IMO, there’s a translation issue here; savior seems more appropriate] for a huge mass of people and their number keeps growing. Thus, according to the International Labour Organisation (ILO), in 2019, 21 percent or 267 million young people in the world did not study or work anywhere. Even among those who had jobs (these are interesting figures) 30 percent had an income below $3.2 per day in terms of purchasing power parity.
These imbalances in global socioeconomic development are a direct result of the policy pursued in the 1980s, which was often vulgar or dogmatic. This policy rested on the so-called Washington Consensus with its unwritten rules, when the priority was given to the economic growth based on a private debt in conditions of deregulation and low taxes on the wealthy and the corporations.
As I have already mentioned, the coronavirus pandemic has only exacerbated these problems. In the last year, the global economy sustained its biggest decline since WWII. By July, the labour market had lost almost 500 million jobs. Yes, half of them were restored by the end of the year but still almost 250 million jobs were lost. This is a big and very alarming figure. In the first nine months of the past year alone, the losses of earnings amounted to $3.5 trillion. This figure is going up and, hence, social tension is on the rise.
At the same time, post-crisis recovery is not simple at all. If some 20 or 30 years ago, we would have solved the problem through stimulating macroeconomic policies (incidentally, this is still being done), today such mechanisms have reached their limits and are no longer effective. This resource has outlived its usefulness. This is not an unsubstantiated personal conclusion.
According to the IMF, the aggregate sovereign and private debt level has approached 200 percent of global GDP, and has even exceeded 300 percent of national GDP in some countries. At the same time, interest rates in developed market economies are kept at almost zero and are at a historic low in emerging market economies.
Taken together, this makes economic stimulation with traditional methods, through an increase in private loans virtually impossible. The so-called quantitative easing is only increasing the bubble of the value of financial assets and deepening the social divide. The widening gap between the real and virtual economies (incidentally, representatives of the real economy sector from many countries have told me about this on numerous occasions, and I believe that the business representatives attending this meeting will agree with me) presents a very real threat and is fraught with serious and unpredictable shocks.
Hopes that it will be possible to reboot the old growth model are connected with rapid technological development. Indeed, during the past 20 years we have created a foundation for the so-called Fourth Industrial Revolution based on the wide use of AI and automation and robotics. The coronavirus pandemic has greatly accelerated such projects and their implementation.
However, this process is leading to new structural changes, I am thinking in particular of the labour market. This means that very many people could lose their jobs unless the state takes effective measures to prevent this. Most of these people are from the so-called middle class, which is the basis of any modern society.
In this context, I would like to mention the second fundamental challenge of the forthcoming decade – the socio-political one. The rise of economic problems and inequality is splitting society, triggering social, racial and ethnic intolerance. Indicatively, these tensions are bursting out even in the countries with seemingly civil and democratic institutions that are designed to alleviate and stop such phenomena and excesses.
The systemic socioeconomic problems are evoking such social discontent that they require special attention and real solutions. The dangerous illusion that they may be ignored or pushed into the corner is fraught with serious consequences.
In this case, society will still be divided politically and socially. This is bound to happen because people are dissatisfied not by some abstract issues but by real problems that concern everyone regardless of the political views that people have or think they have. Meanwhile, real problems evoke discontent.
I would like to emphasise one more important point. Modern technological giants, especially digital companies, have started playing an increasing role in the life of society. Much is being said about this now, especially regarding the events that took place during the election campaign in the US. They are not just some economic giants. In some areas, they are de facto competing with states. Their audiences consist of billions of users that pass a considerable part of their lives in these eco systems.
In the opinion of these companies, their monopoly is optimal for organising technological and business processes. Maybe so but society is wondering whether such monopolism meets public interests. Where is the border [dividing line] between successful global business, in-demand services and big data consolidation and the attempts to manage society at one’s own discretion and in a tough manner, replace legal democratic institutions and essentially usurp or restrict the natural right of people to decide for themselves how to live, what to choose and what position to express freely? We have just seen all of these phenomena in the US and everyone understands what I am talking about now. I am confident that the overwhelming majority of people share this position, including the participants in the current event.
And finally, the third challenge, or rather, a clear threat that we may well run into in the coming decade is the further exacerbation of many international problems. After all, unresolved and mounting internal socioeconomic problems may push people to look for someone to blame for all their troubles and to redirect their irritation and discontent. We can already see this. We feel that the degree of foreign policy propaganda rhetoric is growing.
We can expect the nature of practical actions to also become more aggressive, including pressure on the countries that do not agree with a role of obedient controlled satellites, use of trade barriers, illegitimate sanctions and restrictions in the financial, technological and cyber spheres.
Such a game with no rules critically increases the risk of unilateral use of military force. The use of force under a far-fetched pretext is what this danger is all about. This multiplies the likelihood of new hot spots flaring up on our planet. This concerns us.
Colleagues, despite this tangle of differences and challenges, we certainly should keep a positive outlook on the future and remain committed to a constructive agenda. It would be naive to come up with universal miraculous recipes for resolving the above problems. But we certainly need to try to work out common approaches, bring our positions as close as possible and identify sources that generate global tensions.
Once again, I want to emphasise my thesis that accumulated socioeconomic problems are the fundamental reason for unstable global growth.
So, the key question today is how to build a programme of actions in order to not only quickly restore the global and national economies affected by the pandemic, but to ensure that this recovery is sustainable in the long run, relies on a high-quality structure and helps overcome the burden of social imbalances. Clearly, with the above restrictions and macroeconomic policy in mind, economic growth will largely rely on fiscal incentives with state budgets and central banks playing the key role.
Actually, we can see these kinds of trends in the developed countries and also in some developing economies as well. An increasing role of the state in the socioeconomic sphere at the national level obviously implies greater responsibility and close interstate interaction when it comes to issues on the global agenda.
Calls for inclusive growth and for creating decent standards of living for everyone are regularly made at various international forums. This is how it should be, and this is an absolutely correct view of our joint efforts.
It is clear that the world cannot continue creating an economy that will only benefit a million people, or even the golden billion. This is a destructive precept. This model is unbalanced by default. The recent developments, including migration crises, have reaffirmed this once again.
We must now proceed from stating facts to action, investing our efforts and resources into reducing social inequality in individual countries and into gradually balancing the economic development standards of different countries and regions in the world. This would put an end to migration crises.
The essence and focus of this policy aimed at ensuring sustainable and harmonious development are clear. They imply the creation of new opportunities for everyone, conditions under which everyone will be able to develop and realise their potential regardless of where they were born and are living
I would like to point out four key priorities, as I see them. This might be old news, but since Klaus has allowed me to present Russia’s position, my position, I will certainly do so.
First, everyone must have comfortable living conditions, including housing and affordable transport, energy and public utility infrastructure. Plus environmental welfare, something that must not be overlooked.
Second, everyone must be sure that they will have a job that can ensure sustainable growth of income and, hence, decent standards of living. Everyone must have access to an effective system of lifelong education, which is absolutely indispensable now and which will allow people to develop, make a career and receive a decent pension and social benefits upon retirement.
Third, people must be confident that they will receive high-quality and effective medical care whenever necessary, and that the national healthcare system will guarantee access to modern medical services.
Fourth, regardless of the family income, children must be able to receive a decent education and realise their potential. Every child has potential.
This is the only way to guarantee the cost-effective development of the modern economy, in which people are perceived as the end, rather than the means. Only those countries capable of attaining progress in at least these four areas will facilitate their own sustainable and all-inclusive development. These areas are not exhaustive, and I have just mentioned the main aspects.
A strategy, also being implemented by my country, hinges on precisely these approaches. Our priorities revolve around people, their families, and they aim to ensure demographic development, to protect the people, to improve their well-being and to protect their health. We are now working to create favourable conditions for worthy and cost-effective work and successful entrepreneurship and to ensure digital transformation as the foundation of a high-tech future for the entire country, rather than that of a narrow group of companies.
“We intend to focus the efforts of the state, the business community and civil society on these tasks and to implement a budgetary policy with the relevant incentives in the years ahead.” [All Emphasis Mine]
Yes, Putin’s plan is very Bismarckian and differs little from China’s Socialeconomy in that it’s conceived by civil society and directed by the state, not farmed-out to unregulated private entities. And what of the philosophy behind it? I see it as some form of Collectivism given the aim is the uplifting of the entire populous along with an attempt to level/even-out the stratification/equitability problem. There are also degrees of Liberalism and Conservatism in freeing people to do what they’re best at while also promoting the familial base from which all people emerge and the core values that surround both. Clearly, this is Putin’s Win-Win vision. In his recap, Ishchenko provides us with the following tidbit:
“And look, 80 people from among the most influential people on the planet did not laugh in Putin’s face, as it was in 2007 in Munich, and without noise and dust immediately after his open speech signed up for a closed conference with him.”
I’d very much like to know what was said in that closed conference. Hopefully, Putin will write of it in his memoirs as I don’t expect a leak. And finally, what will the Neoliberal Parasites do as I rather doubt they’ll want to make any accommodations to Putin, Xi, or anyone else since they’ve been growing ever stronger since their wave began rolling some 170 years ago, which is to say I still sense some sort of confrontation. Perhaps it will be China who acts over Taiwan as suggested here.
Posted by: karlof1 | Jan 29 2021 20:38 utc | 215
@232 karlof1
I’m glad you caught my comment, I was afraid the thread had died and you might miss it.
But to your concerns, here’s what I think. I think the mass culture will miss what Putin and Xi said, but the principals of nations will not. Look at what Ishchenko noted, that 80 players signed up for the private conference with Putin. So the principals heard these speeches, and their diplomatic efforts will turn any questions into ultimate agreements.
We must ask, what value is the popular opinion in its ability to change national policy? Yes, in exceptional moments it can change an entire direction, but in large part, policy proceeds regardless of what the people think. I don’t make light of the people’s view, but I have to acknowledge this.
And so, the fact is that Russia and China are changing the world, and leading the new world, which is composed of all the other nations of the world that are not the USA…and then, finally, last of all, the USA will join in too – because there will be no isolated victims left, and all the rest of the world will be united.
In this view, some years from now, it could even be a happy event. Maybe so , maybe not, we shall see how it plays out.
But as the nations make their agreements, their media will come to reflect this, and portions of the global narrative will change, until finally the whole narrative will cross its tipping point and flip. And then even the people of the US will hear the new story.
~~
So this is a big change for me in what we here in this forum have discussed. Personally, I’m no longer saying we in the US must change the view of the populace. I’m saying the world will change it for us and the populace at large will be brought along.
I didn’t have this luxury of passivity in earlier years. But Russia and China and the rest of the world – including Europe – are changing and influencing change to such a great degree that I have to look at their effect in this world. And I see it as a greater change agent for the US than any force within the US. And the US undergoes its own extraordinary eruptions too, from its own dynamics – and who can guess what these will be?
I ask myself, what if the US cannot be changed and it all goes down? Yes, this will hurt me, far more than my supposed altruism will bear with equanimity, but then who are we really in the US, with our population of 330 million, against the world’s billions? Maybe I just take the hit, I tell myself, and bear it gladly because I know the rest of the world has escaped the trap, and will live on and flourish.
I’m not advocating a policy here, by the way, simply sharing with you as a colleague where my personal thinking has gone. I wanted to be clear. I would still rally to the flag if I could see the battle able to be won. And I would love to see that battle. But I think even if we lose, the world will now win.
~~
And I thought after my comment that I was maybe too taken with Ishchenko’s view of Putin talking to the whole world. He was, I believe, but one should not ignore the huge play he made to Europe. He threw out, didn’t he, the gambit of Russia being a European culture, all the way to Vladivostok, just to lull the Europeans into a comfort zone that could extend all the way there, to the very eastern edge, and all the way from Lisbon, at the Eurasian western edge, at the Atlantic. I loved that.
If Putin and Lavrov by their efforts – coupled with the security guarantees of friend Shoigyu – can lever Europe away from the Atlantic and all the way to the China seas, then it will be the masterstroke of the age. And it seems to me to be happening.
~~
I haven’t studied Xi’s speech, but I’m wired into lots of China sources so I get the daily triumphs of the Chinese surge forward that often number greater than the fingers of one hand. But Putin, yes, I will take it to heart as the new Munich.
And remember that what Putin said in 2007 is still being made famous today, so whether his Davos speech gets to be breaking news today matters hardly at all. It lives, and can become famous in its own time, as it prevails.
Be of good heart, karlof1. You have striven mightily to present a point of view, and I appreciate it. And it has a life of its own as well. And it is growing legs, and taking root, and spreading as mycelium throughout the good earth.
Salut, comrade.
Posted by: Grieved | Jan 31 2021 6:20 utc | 235
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