Had a week off from these China posts because of another trip to France and Italy… but now it’s back to business, or politics, that is.
Politics in China. Can I even blog about this subject? Do they blovk my entry to the country the next time? I don’t belive so. It turned out that politics is actually quite a separate metaphysical state of affairs in China today.
Politics is largely separated from the economy to start with. You can run business as usual and the state is quite ok with that. The state still owns all the land, and even has a kind of residual right to buildings. But that’s nothing sensational, as today businesses lease everything in the west as well.
Politics is also separated from the academia. There is no sign of the sulture revolution anywhere around. For example academic cooperation between Chinese and Taiwanese – or Chinese Taipe if you like – universities seemed flexible and intense. This is all in par with the political idea of “Greater China.”
I know there are issues of free speech and a number of “chinese scandals” because the state is obsessed with controlling the flow of information. The good side of the control regime is absolute efficiency in issues like building a modern Beijing in just five years.
In the latest Kanava, Matti Wiberg delivers an observation I can fully agree with:
Kids are taught in the school that the parliament decides on the big picture and the bureaucracy focuses on details. In fact, it may be the other way around: civil servants decide on principles, and the parliament mainly deals with irrelevant side-issues.
He motivates that conclusion by finding out that 40% of the parliament’s lawmaking activities are about changing one random paragraph in a given statute. If you work with such crap, you just don’t have time to focus on the relevant issues.
I’m currently visiting Bologna for a couple of days. Sort of an academic trip, I’m having a presentation on patents & standards and seeing what’s up in Italy in the first place.
I see Bologna has tons of red buildings. This city is also famous for red ideas. As a case in point, yesterday a noisy student (?) street demonstration passed my hotel. This inspires me to continue my work with mapping the public domain… but on the other hand here at the department of management I feel like traditional American values rule and red ideas are not in fashion…
Latest Economist summarizes elegantly the problem of the regulator:
The tempting answer is to try to wriggle free from the dilemma with a compromise that would permit innovation but exert just enough control to squeeze out financial failure. It is a nice idea; but it is a fantasy… They are paid less than those they oversee. They know less, they may be less able, they think like the financial herd, and they are shackled by politics. In an open economy, business can escape a regulatory squeeze in one country by skipping offshore. Once a bubble is inflating many factors conspire to discourage a regulator from pricking it.
The article talks about financial markets. I’d say the same applies to almost any markets where the regulator has a major role. Take for example intellectual property or consumer protection.
So it wasn’t quite over like I thought a month ago. Clinton came back – for a moment. I still believe Obama wins dem nomination and the eventual race against McCain. But that’s just my belief. What the last month shows more than anything else is the fact that US elections have a close resemblance to stock markets. Booms, busts, unpredictability, everything. Fundamentals do matter, but not much.