Maonomics

by Loretta Napoleoni (Seven Stories Press, £17.99)
Morning Star Tuesday 14 February 2012
by Ben Chacko

Across the West the story is the same. It's ever more obvious that the market has failed, unregulated financial giants have brought poverty and insecurity rather than the wealth they promised and relentless privatisation has gutted services from water to rail and left them more expensive, less reliable and less safe.
Politicians continue to recommend more of the same - don't interfere with the banks, bring private providers into the NHS, flog off Royal Mail. They're seemingly blind to the fact that these policies have all been proven disastrous in the very recent past.
It's time for a rethink and Loretta Napoleoni's Maonomics is exactly that. She argues that this is a watershed moment for the West, requiring a hard look at how our society is structured and whether we might do things differently.
Maonomics notes that "democracies" which take orders from a tiny financial elite are not democracies at all. In a wide-ranging study centred on China but looking carefully at other examples, including neoliberal experiments in Chile and Iceland and the development of Islamic finance in the Middle East, Napoleoni illustrates dramatically how the Chinese economy has prospered precisely because it never bought into the neoliberal dream.
This does not mean that she whitewashes what has been a complex and painful transition for China. The superexploitation of labourers by foreign firms in the special economic zones is covered in detail.
But the government, she argues, never lost sight of the ends - a China in which people are richer, healthier, live longer and lead more comfortable lives, with no pseudo-religious obsession with markets.
The myopic attitude of Western pundits is based partly on self-censorship, as Napoleoni points out when looking at the development of local democracy in China. "By 1994 half the villages are going to the polls and by 1998 they all are," she comments. "No-one in the West receives the update; the bombshell comes and goes completely unobserved."
This has enabled a simplistic and inaccurate view of China to persist.
The book is not perfect. Napoleoni's interpretation of Marxism is idiosyncratic and China's path has neither been as smooth nor as uniformly positive as she says.
She even betrays a slapdash approach to detail at certain points by, for example, quoting claims from Gavin Menzies's widely discredited 1421: The Year China Discovered The World as fact or bizarrely describing the Cultural Revolution as an attempt to preserve traditional Chinese culture against Western influences.
The book's title is odd too - the form of economics Napoleoni studies has nothing to do with Mao as it's the course the country has taken since he died.
But for all its faults Maonomics is an extremely important book. People are waking up to the fact that our system is broken but so far have very little idea what to do about it.
Napoleoni certainly does not have all the answers.
But in urging the West to abandon its prejudices and fundamentally rethink its ideology, she is asking the right questions.