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From the International Herald Tribune (New York Times international edition) comes some interesting news concerning the continuing meltdown of the Shanghai stock Index. Other commentators have noted that mainly poor and elderly investors have put their savings in the market but are afraid to speak up "since the government knows everything". Managerial societies do occasionally give an impression of economic determinism. But reading the INTELLIGENT business press we see everywhere stories emphasizing a fear that "politics" is the real "guiding" force behind market "determinism". Here are stories of bad loans ie. about a trillion US dollars while some analysts are actually afraid to say anything against the mainland. The Shanghai index had dropped 47 percent from last October as of last Saturday. It it now sitting at 2866 points (Monday) a drop from a high point of 6082 last October. The flood of new shares derived from state companies ie. "G-shares", appears to be the result of rationalizing state assets. These were held artificially high by insulating them from the market. These can now be traded and could lose value.


It was a mantra for investors in mainland Chinese stock markets in the heady days of the boom: "The government won't let the stock market fall ahead of the Beijing Olympics."

It proved spectacularly wrong. With the Olympic Games less than two months away, the Shanghai composite index has lost about 16 percent in the last month and more than 50 percent from its peak of 6,092 in October.

Hopes of a pre-Olympic revival seem thin.

The collapse, prompted by worries of contagion spilling from the U.S. subprime loan crisis, is not unique. Among other emerging Asian markets, the benchmark index in India has fallen by about 32 percent since its high in January and the main Vietnam index by about 65 percent from its peak in October.

The government has tried cutting the stamp duty on stock trades, and there has been talk of allowing margin trading, to stimulate buying. Recently, the China Securities Regulatory Commission, the mainland market regulator, lectured fund managers on the need to consider market stability; the measures have met with scant success.

Still, though obscured by the gloom, the fact remains that the Shanghai market was one of the world's best performers last year, rising 97 percent. From its 2005 trough, following a previous blowout, the index soared 424 percent to its October peak.

It has been a wild ride for investors, who bought $100 billion of equity in almost 200 newly listed companies between May 2006, when China lifted a yearlong ban on initial public offerings, and February.

The flood of listings was a turning point for China's financial markets. For the first time, they became an important source of funds for many companies.

About 58 million trading accounts were opened by Chinese investors in 2007. About a third of these have since been closed, according to Xinhua, the official news agency, citing government statistics.

Jonathan Garner, head of global emerging markets equity strategy at Morgan Stanley, says that, despite the slide, there are hopeful signs. Emerging market exports, for example, have remained strong through the current U.S. slowdown.

"This is because you have a number of large emerging economies such as China, India, Brazil and Russia that to varying degrees have embraced market capitalism and are growing very quickly," Garner said.

Still, concern about the effect of a U.S. slowdown is only one of several negative factors in play. Others include rising inflation in mainland China and the government's tightening of credit by increasing bank reserve ratios and restricting lending, possibly affecting company earnings.

The regulatory measures to cool the economy have put pressure on mutual funds to restrict net market inflows, while an unusually cold winter, riots in Tibet and the Sichuan earthquake all have unsettled investors.

"It seemed that every time sentiment showed signs of improving, an event came along that undermined it," said Peter Alexander, the head of Z-Ben Advisors, a research firm in Shanghai.

Still, he and many analysts say that rising domestic consumption in Beijing, Shanghai and Guangzhou, as well as in many second-tier cities, should prevent the economy from being derailed by a U.S. slowdown.

Also, Alexander said, rising institutional investment should help the market. Fund managers say that between a third and half of the ownership and volume of trading on mainland markets can be attributed to institutional investors. Five years ago, trading was dominated by individual speculators.

"More buying and selling decisions are being made by fund managers and insurance companies on the back of fundamental research," Alexander said. And, other analysts noted, institutions are sitting on large piles of cash, ready to invest once confidence returns.

One of the main factors that set off the recent boom was a government decision that resolved the issue of state-owned shares that were overhanging the market. These shares in state-controlled industries were not traded but were equivalent to two-thirds of the existing market capitalization.

In 2005, China started a process of swapping these nontradable shares into tradable shares, and compensating existing shareholders for any consequent dilution of their investment. To avoid having the newly tradable shares, called G-shares, hit the market simultaneously, many were subject to a lock-up period, during which they could not be sold.

Now, the lock-up period is coming to an end and investors again fear that prices could be depressed further by a flood of G-shares onto the market.

Many analysts, including Alexander, say those fears are unfounded.

Rather than selling and losing control of their companies, the holders of G-shares are using them to acquire competitors through mergers and acquisitions, he said. Not only does this make companies more competitive, it makes them more appealing to institutional shareholders, who prefer to buy into larger companies.

The new issue of the French-language Offensive bears the title "Un commerce sans capitalisme." It asks the question: "Et si le commerce et l’échange étaient indissociables de la création de véritables espaces de résistance ?" / "And if commerce and exchange were inseparable from the creation of real spaces of resistance?"

This one looks well worth tracking down. (Hat tip to the Research on Anarchism list.)

The Tucker translation of What Is Property? is prefaced by a translation of J. A. Langlois' "P. J. Proudhon: His Life and Work," the biographical introduction to Proudhon's collected Correspondence. Tucker includes a disclaimer regarding Langlois' account, and it would be nice if we had the ability to easily judge Proudhon by his works, but with so much still to be translated, the careful use of commentary is necessary for most of us. Most of what Langlois wrote rings true to me, and the chronology provided is extremely useful. I recommend the account for all participants in the Proudhon seminar, and anyone else interested in understanding Proudhon's work.

[cross-posted at Liberty & Power]

So the pundits (including people who are usually smarter) are howling because Wesley Clark made what ought to be a patently obvious and uncontroversial observation: “I don’t think riding in a fighter plane and getting shot down is a qualification to be president.” This, apparently, amounts to “belittling” McCain’s war record.

Huh? Even for those who regard McCain’s war record as a valuable achievement, how is it “belittling” one achievement to point out that it’s not a relevant qualification for another achievement? Would you agree to be operated on by someone whose sole qualification is that he can speak fourteen languages? Or would you accept as a translator, for your visit to the headhunters of the Amazon, someone who could boast only surgical proficiency? And if not, are you “belittling” linguistic competency (or, in the second case, medical skill)?

Thomas Jefferson once silenced a proponent of hereditary monarchy by suggesting that the professorship of mathematics might also be made hereditary. Ah, why not make military service the basis for the professorship of mathematics too? How does combat experience qualify anyone to be president (assuming counterfactually that someone could be qualified to be president)? Does McCain run the risk of being kidnapped and tortured by Nancy Pelosi? Or will he need to bomb the Supreme Court?

So anyway, tonight Clark goes on Dan Abrams’ show and falls all over himself to assure us that nobody denies that McCain is a war hero. Well, I deny it. McCain was a serial killer in what by his own virtual admission was an unjust war. Heroism this is not.

As announced, I'll be doing a close reading of Proudhon's first memoir from What Is Property? during the month of July, and I am inviting one and all to read along. I have set up a discussion list and wiki page on the anarchylist.org site. Please subscribe to the list if you are interested in participating in the main discussion. If you're not up to that kind of commitment, I will be posting material on this blog, and compiling a running list of seminar-related material on the wiki page.

My ambitions for the reading are fairly simple: I would like to provide an opportunity for individuals, anarchists of whatever school or non-anarchists, to read (or reread) this very important text, in a context where it is also possible to develop a reading of the material. Developing a reading—really coming to terms with the text—is a bit more complicated process than just going the distance through it. But if Proudhon's argument, that "property is theft," is to be more than just an empty slogan, it is necessary to engage with the complexities involved. There are all kinds of complicating issues: Proudhon's very specific definitions of "property" and "possession," potential inconsistencies in Proudhon's various treatments of the question of "property," subsequent developments in Proudhon's property theory, idiosyncratic or period-specific use of terms, etc. The text treats certain conventional libertarian approaches to property, such as "self-ownership," rather obliquely. In my running commentary on the work, I hope to clarify some issues, and highlight the difficulties with regard to others. I'll try to provide some context from other of Proudhon's writings, including some that remain untranslated.

Contrary to my original posting, I intend to spend the entire month of July dealing with the text, and will extend the seminar if it seems desirable. I'll begin slowly this week, with some general comments, and some discussion of the first chapter. The Tucker translation of the first memoir is a little less than 300 pages long, making the pace around ten pages per day. I'll try to give some guidance for the busy about which sections are must-reads.

I'll post links to some biographical material later this evening. Sign up for the discussion list if you're interested in reading along.

(Via Democracy Now! - 6/30/2008)

Wonderful news for the forces of tyranny! In order to protect us from the terrorists, the federal government has instituted a nifty new program where police, firefighters, and even private citizens spy on us, documenting not only illegal but legal activity, such as buying disposable cell phones in bulk.

Colorado is one among of handful of states where hundreds of firefighters, paramedics, police, and even corporate employees are being trained to hunt down and report a broadly defined range of “suspicious activities.” They are called Terrorism Liaison Officers. The federally supported initiative trains them to look out for “observed behavior that may be indicative of intelligence-gathering or pre-operational planning related to terrorism.” The list of suspicious behaviors includes taking photographs or videos of no apparent aesthetic value, making measurements, drawings, or taking notes, and conversing in code.

The program is gaining traction and Terrorism Liaison Officers, or TLO’s, have been deployed in at least 8 states including Arizona, California, Colorado, Florida, Illinois, Tennessee, Washington, DC., and Wisconsin. According to the Denver Post, the Office of the Director of National Intelligence is advocating for a nation-wide implementation of the program.

But only evildoers must fear, right?

The idea is to gather as much information as possible about as many people as possible and put this all together, allow it to be accessible to government officials who supposedly can analyze the patterns and determine which of those patterns are indicative of possible terrorist activity. The trouble with that, besides sacrificing so much of our privacy for dubious results, is that there will be thousands and thousands and thousands and thousands of false positives, completely innocent people going about completely innocent and legal activities who are going to be kicked up by whatever computer logarithm they use. And what is going to happen with the people who are somewhat suspicious or very suspicious in these government programs and government databases? We have already seen the Terrorist Watch List and all of the false positives and all of the innocent people who are detained or singled out for extra scrutiny simply because their names are spelled somewhat similar to the name of somebody who might be a terrorist.

Maybe not...I truly fear for our comrades in Denver. Given the historic repression of anarchists in the United States and widespread association of anarchism with terrorism, I wouldn't be surprised if anarchists, along with other radicals and people named Muhammad, are among those given "special treatment". However, I doubt the federal government is very worried about anarchism, so don't be too paranoid. (I remember some mainstream media anchorman remarking to his co-anchor the other day something like, "This isn't the 19th century anymore; we don't have to worry about anarchists!" Actually, anarchism was at its strongest in the early 20th century, buddy, but don't count us out just yet anyway!)

At any rate, it's definitely something to be aware of. Soon coming to a state near you, if you don't reside in one of the eight states or one district which are already known to have programs (Arizona, California, Colorado, Florida, Illinois, Tennessee, Washington, D.C., and Wisconsin).

Over at the RLLA blog, I wrote an article reporting on a talk I attended in Richmond on alternative decision making mechanisms in anarchist organizations. Check it out! Here’s an excerpt:

The talk’s emphasis was on large scale organizational behavior: who makes the decisions, how they are arrived at, and what conditions are attached to those decisions. By “prefigurative”, Keyser was referring to the need for groups and practices which are structured according to the principles and values we’d like to engender in the world at large. While postulating decision making mechanisms that could scale up to the kind of mass movement we all want to build, he was cognizant of the immediate application of these ideas to our small activist groups. Certainly if we intend to be successful, we cannot ignore the challenges that growth poses to our organizations, let alone to the future anarchist society we envision.

From Wendy McElroy’s excellent article on entitled The Thin Blue Lie:

‘The police’ is an institution designed to enforce the law, whatever the law may be, and to process those suspected of violating it. Only if the law is just does an individual policeman stand any chance of ‘producing’ justice. To a large degree, current law is designed to produce morality (e.g. enforcing victimless crimes), social ‘ideals’ (affirmative action) or the protection of political power (gun control). As long as the well-intentioned policeman uses the institution’s materials - the law - and complies with its procedures, he will not produce justice. All he can do is to minimize the viciousness with which unjust laws are enforced.

I do not belittle the importance of reducing police brutality. Yet I believe attempts to reform this aspect of the problem are doomed as well. I do not use ‘bad apples’ like Officer Justin Volpe, who sodomized suspect Louima with a broom, as a paradigm around which to level criticism. I am willing to believe that Volpe’s sort is as unusual as the idealistic policeman who treats suspects with real compassion. The vast majority of people in any profession fall in the middle of the bell curve, not at either end. I think most officers simply wish to process the goods - that is, the suspects - with as little trouble as possible. When the goods resist processing, the police respond with the same frustration anyone would feel. Only police carry guns. They often view suspects as less than human. And, as with domestic violence, their brutality has the protection of occurring behind a closed door.

The example I use to argue that a few well-intention officers will not reduce brutality is Sgt. Michael Bellomo. He is one of the other four defendants in the Louima matter and the only one not charged with some form of assault. Bellomo went on trial for lying to the FBI about Louima. He is, more credibly, the typical policeman. He protected the unbelievable brutality of a fellow-officer rather than tell the truth. I believe Bellomo is the norm that good intentions will not overcome.

(emphasis and links mine)

Like McElroy, I’m not so much interested in the “bad apples” as I am in the normal, everyday policemen and -women who think they’re doing the right thing by covering up their co-workers’ misconduct. When the good cops don’t stand up to the bad cops, they are complicit - after all, it is they who claim the power to uphold the supposedly inviolate state law, not us. Decent officers, acting out of an institutional loyalty that somehow trumps their conscience, are the ones responsible for the “blue wall of silence” - not the ones who are violent or mischievous.

[cross-posted at Liberty & Power]

A friend sends me a link to this story about several counties in California responding to the recent legalisation of same-sex marriage by refusing to perform any marriage ceremonies at all, whether same-sex or hetero. My friend asks whether this is a positive or negative development from a libertarian standpoint; although the motive may be homophobic, isn’t this policy a step in the right direction, i.e., toward getting the state out of the business of defining and regulating marriage, leaving it to private contract and custom?

Well, I think it’s a mixed bag. Recent events have actually gotten the separation of state and marriage onto the table in broader-than-libertarian circles, which is surely a good thing even if some of the motives are questionable. But under present circumstances, county governments refusing to perform marriages has a serious downside.

As things stand, the state imposes a variety of legal burdens on unmarried couples from which married couples are exempt; these range from higher taxes to restrictions on inheritance, refusal of right to make medical decisions on a partner’s behalf, and, in the case of citizen/alien couples, liability to deportation for the alien. In this context, when one branch of the state, charged with providing the only legal means of avoiding certain forms of aggression imposed by another branch of the state, refuses to provide those means, it arguably becomes an accessory to the aggression – while still collecting salary from the taxes of the victims, to boot. Now if county employees wish to resign their tax-funded jobs, that’s another matter. But in the meantime, it’s as though my henchman Sluggo says he’s going to rob you unless my other henchman Thuggo says not to, while Thuggo remains silent (and collects his share of the take).

Incidentally, another friend who’s doing academic research on marriage asks me for citations to articles (preferably though not necessarily in academic journals) by “prominent libertarians” who argue that the state should stay out of marriage. Any suggestions? (So far all my friend has found is Jennifer Roback Morse’s argument that a libertarian state should not permit divorce! For the honour of libertarianism we must do better.)