Wednesday, June 15, 2005

Capitalommunism, Part 2

China's Haier considers Maytag bid

Haier Group, China's largest home appliance maker, said on Wednesday it could make a bid for Maytag Corp. (NYSE:MYG - news), the struggling maker of Hoover vacuums, pitting it against two big U.S. buyout firms.

Trying emulate the global success of rivals such as South Korean appliance maker LG Electronics (066570.KS), Haier would have to top a $1.13 billion bid for Maytag from Ripplewood Holdings and discourage the Blackstone Group, which has expressed interest in the appliance maker.

This article refers to the Haier group as if it were a private company. By definition, they are not. They belong to Communist China. This is no different than finding out that the United States Postal Service or the (Your state here) Department of Justice was bidding on buying Maytag.

Apparently, the distinction between capitalism and communism is lost on the author of the article. Who knows? Maybe someday one of us will be blocking a "Haier Group"-"owned" tank before we get carted off to jail for having an opinion.

Isn't it amazing that after 40 years of Cold War that two polar opposites can merge so neatly together?

As Bokonon says:

The Fifty-third Calypso [ 2 ]

Nice, nice, very nice;
Nice, nice, very nice;
Nice, nice, very nice--
So many different people
In the same device.


Anonymous said...

I was given to understand that in communist countries, all businesses are run by the government. I would like to ask how they do that, because that would mean that everyone working in China is a government employee. So who do they collect taxes from?

Don Snabulus said...

My understanding is that people basically get "after-tax" wages. Considering the normal wages there, the government must keep almost all of what we might call taxes. Since Communists hate business, I think "collective" is a more proper term. Business implies a voluntary arrangement and this is not the case in China. In any case, it sucks for pretty much everyone there except the Communist party leaders and Wal*Mart management.

The Moody Minstrel said...

Actually, from the 1980s, particularly (ironically) following the Tiananmen Square crackdown/massacre, China has been allowing private enterprise to an ever-increasing extent. You'll find that more and more businesses in China are actually privately owned, and the number of such firms (and capitalist entrepreneurs in general) has grown considerably over the past two decades.

China has also been allowing its citizens to invest abroad. It's at the point now where many if not most major businesses in Malaysia, Singapore, and Indonesia are owned by Chinese. (I got this info from Malaysians, Singaporeans, and Indonesians who said they were actually frightened by this trend. What China failed to do with exported revolution they are succeeding in with massive investment.)

On the other hand, the Chinese Communist Party, while currying favor with its own population and plunging headlong into international economics by allowing "controlled capitalism", has actually become alarmed at how far it has gone. One of the last things former president Jiang Zemin did before retiring was replace his Western-style suit with a Mao suit and make an impassioned speech calling for the elimination of "encroaching Westernization" and the "reestablishment of pure socialist values".

They say the Chinese population has become much too enamored of its current level of runaway affluence to do an about face and go back to government-enforced poverty, but that doesn't mean the Party might not attempt a massive crackdown. Young Chinese in particular are extremely patriotic and nationalistic right now (as the recent violent anti-Japanese protests attest), but they would quickly combust if the government started coming down on them. They've become a power in and of themselves. We could wind up with a VERY ugly civil war.

I think the current Chinese administration understands that. The question is whether the old guard, which still has its heads shoved up its collectivized arses, does.

Pandabonium said...

China is not a communist country, no matter what they call themselves. Watch C-SPAN when their leaders speak. They sound like western capitalists and make refernces to intellectual property rights, economic reforms and so on.

In fact, they are a fascist oligarchy. Only in the case of China, the corporations formed from the government, where in Western countries, the governments derive power from the corporations. In the end it matters little to the people who must work under either system.

All countries on the earth today (including the USA, Japan, et al) are variations of Mussolini's fascist state, a system which he termed "corporatism". It is a marriage of the monopoly of force of the State with the economic power of corporations.

Thus, people in China are made slaves to toil in factories owned by government corporations or foreign by corporations. It is a union of the brute force of government and the money of supra-national corporations who have alligience to no country and no one. (This is a nightmare I wrote about in my college papers in the early 1970's come true. Sometimes I hate being right. It can haunt one.)

Even though the good people of the USA benefit from the suffering of Chinese labor in the form of lower priced goods, they too are caught up in a system that leaves them no choice and often costs them their own jobs and the burden of an increasing trade deficit.

In answer to "pa've", the Chinese government collects from the profits, not from the employee's meeger wages. In other words the "taxes" come out ahead of the wages rather than after as Snabulus pointed out.

Snabulus hit it right on the head. This system benefits no one but the elite in China and the corporate elite abroad. The rest of us are victims.

The way out, in my humble opinion, is to abandon the materialistic lifestyle that measures happiness by the volume of one's consumption. Without our consumption, there can be no exploitation of either workers or consumers.

Pandabonium said...

While I was writing my previous comment, the moody minstrel weighed in with his insightful comments as well, which I feel compelled to voice my agreement with. (I admit I am slow).

I would add that the major problems facing the world today - including the frictions between China and Japan - are due to all of us being enamored with a "runaway affluence" that cannot possibly be sustained by our finite globe.

Don Snabulus said...

In fact, they are a fascist oligarchy.

Cuba falls and the former Soviet Union fell into this category too. In fact, there hasn't been a true Communist state yet.

I defer to Moody and Pandabonium on the details of China. I still wouldn't call what they are doing there private, but then I am increasingly disinclined to call what we are doing in America private either.

Nonetheless, I think we are all explaining roughly the same thing although we are taking different roads and may not agree on terminology or every particular.

The main point of disagreement is I don't believe China is influenced by "the power of the people" in any way or by their relationship with the US. If and when they decide to re-proclaim their power, they will and nobody will stop them and all of our "R&D" departments over there will start to look like a national security risk as we gave away our knowledge base. That is only my opinion though, not a statement of fact.

"Where are we going and why are we in this handbasket?"

Anonymous said...

To hell in a hand basket we created, I think. If the US didn't buy so much from China, they would not have such a fast growing economy, but we are not the only country to buy from China either.

I think that depsite the power of the Chinese Elite Government, the power of the Internet, which allows the ordinary citizen to explore the world outside of China has opened many eyes not to be so quickly shut.