Saturday, September 15, 2012

Winner take all?


by Daphne Liddle
Winner Take All – China’s race for resources and what it means for us: By Dambisa Moyo Allen Lane; hardback £20 (£12 from Amazon) 272pp including index and notes. ISBN 978-1-846-14503-2

Dambisa Moyo is a young African economist, born and raised in Lusaka, Zambia. She has studied classical capitalist economics at Oxford and Harvard and worked for the World Bank and Goldman Sachs. But she sees the world of international capitalism very much through the eyes of an African and understands the impact of capitalism on Africa and what we call the Third World.
 She has already written a few books, including Dead Aid – a parody of Live Aid, explaining how western aid to African countries is destructive to those countries’ attempts to achieve economic independence and keeps them poor and dependent.
 Her book Winner Takes All is aimed at western capitalists as a warning that our planet’s resources are limited but the demands on them are steadily rising as living standards in places like China and Brazil rise, and that China is the only world player that is acting in a planned and organised way to secure for itself the supplies it is going to need in the future.
 But it is a very useful book for those comrades who are struggling to work out whether modern China’s relations with global capitalism are a good thing or a bad thing. Has China sold out to the West? Or is China freeing the Third World from the shackles of imperialism and perpetual poverty and allowing it to progress and develop; for living standards in the poorest places on earth to rise – and in the process to develop a potentially powerful proletariat?
 Moyo begins with a summary of the basic resources that are going to be in serious short supply soon: land, water, oil, food and minerals.
 She also discusses the growing world population, at seven billion now and set to rise another two billion within a generation. World demographers expect that rise to level off later this century as education living standards rise throughout the world and women chose to have fewer babies. But in the meantime the increasing demand on resources comes not only from the increasing numbers but from the rising living standards and expectations of people in Africa, Asia and Latin America who justifiably want the same living standards that we have.
 Then Moyo explains how China behaves differently to other major economic powers; how is can plan strategically because capitalism in China is tightly controlled by the state. The Chinese state has a major stake in all the major capitalist enterprises and its five-year plans coordinate the whole country’s economic activities, giving it an ability to plan for the future that western governments can only dream of.
Chinese companies do not compete with each other but work together with the support of the state. Western capitalists howl that this is unfair practice.
 This is what has enabled China’s rapid and sustained growth while the western economies have been rocked by banking collapses and recession.
 She writes: “China is now the main trading partner of many of the most influential economies in both the developed and developing world. In just a few short decades it has become the most sought-after source of capital infusions. Indeed, rich countries and poor alike do not wait for China to come calling; they actively court and seek out Chinese investments.
 “China now funds foreign governments (providing loans and buying their bonds), underwrites schools and hospitals, and pays for infrastructure projects such as roads and railways (particularly across the poorest parts of the world) catering to the needs of the host nations and making China an altogether more attractive investor than international bodies such as the World Bank, which often tie loans to harsh policy restrictions.”
 Moyo points out that in international markets China does not play by the capitalist rules. It pays above market prices for resources that it knows will later be in short supply in order to establish friendly relations with developing countries that are rich in resources but poor in terms of living standards.
 Western powers have accused China of developing a new colonialism – ignoring their own record on this. But China’s deals with Third World countries do not come with strings. They allow these countries to develop economically and wherever they invest living standards begin to rise; education and health improve giving these countries more, not less, control over their own destiny.
 Moyo also deals with accusations that China is shipping in its own workforce to other countries. She says that allegations that China is using its own prison population as slave labour in Africa have no evidence to back them up. Chinese companies do bring in skilled and technical workers but in virtually every project more local labour is used than imported Chinese labour – creating hundreds of thousands of jobs.
 Her final chapters are a call to western governments to come to their senses, get together and start planning for the control and conservation of resources in the same way that China is doing. If not, she foresees serious conflict in the future over resources. She berates western capitalism for being unable to see or plan beyond the short-term.
 Throughout the book she writes very clearly and explains economic terms like monopsony (the mirror image on monopoly, where there are many suppliers but only one buyer) and uses plenty of well-sourced statistics.
 She assumes all governments, including those in the West, are seeking to improve the general fortunes of their populations. But she does not see that the very nature of capitalism – competitive and driven by the need to maximise profit at every turn – makes the long-term strategic planning that she calls for impossible.
 Some readers will be relieved to learn that there is at least one rising economic power that is taking seriously the future of this planet and its resources and is, because of its political structure, capable of doing something about it.