Home > Uncategorized, Unstructured thoughts > Historical snapshots in time – July 1 & July 4 2009

Historical snapshots in time – July 1 & July 4 2009

These two days represent important dates in history. July 1 in particular is a major milestone for Hong Kong’s history as the day marks the birth of the Hong Kong Special Administrative Region.

Hong Kong Skyline Night View

Hong Kong Skyline Night View

Often viewed as the major gateway into China historically, it presently faces a bit of a difficult cross-roads, economically, politically, and socially. Democracy still lives as Tens of thousands march for democracy in Hong Kong. But not all is well in this city state – focus and direction for itself under the big shadow cast by China is always present.

July 4, America’s day of freedom, is under threat and it’s not an external one. Felix Rohaytan writes in his recent op-ed piece: Saving American Capitalism. The so-called American Dream has come under serious re-evaluation since the excesses of the US capital markets are directly responsible for missives like Rohatyn’s.

Rohaytn writes:

Market-based capitalism requires a platform of political freedom, the creation of wealth and fairness in its distribution. These values were reflected in the American economy until the 1980s, when American capitalism and European social democracy created reasonably similar economic outcomes.

It’s no wonder that both the US & HK feels itself at a cross-roads given the above truth between economic and political freedoms and social health.

There road ahead isn’t all that clear, in HK, universal suffrage won’t come at least until 2017. In the US, the excesses continue unabatted. If the greatest crisis to happen to the US since the Great Depression can’t be reigned in by reason, then there is even less hope.

However, both Hong Kong (by extension China) and the US can find the future roadmap in the “idea of an “ownership society” mentioned by Rohatyn. It’ll require stricter regulation to ensure human nature doesn’t prevail, sacrifices across the board to ensure equity. Ultimately the system must be fair, it must be regulated, and it must be ethical.

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  1. July 6, 2009 at 9:29 AM

    Lui,

    nice to see that you care about HK and America. I can’t comment much about HK. It is certainly a gateway into China and one has to wonder, as this economic crisis continues, if it doesn’t become a gateway out of China.

    But that is just uneducated speculation, let me comment about something I might have some insight into, how America is changing.

    I was interested in Felix Rohatyn’s essay. I hadn’t seen in earlier and probably wouldn’t have read it if you hadn’t commented on it. It’s a very heartfelt essay which is wistful about a time that has passed, but the time he describes has passed and hopefully never happens again. Let me explain.

    Rohatyn’s image of what market-based capitalism should be comes from the period in America from about 1940 till about 1980. That was a magical time and I have wonderful memories of growing up at the tail end of that period in an idyllic Midwestern town. Life was simple, business was booming and America was selling everything it produced. It was a wonderful time to be in America, but I hope to god that time never occurs again. Why?

    I hope it never occurs again because it’s occurrence was the result of WWII. Other than America, the war had destroyed the major economic centers of the world at that time (England, Germany, Japan, France etc.) and so there was really only one economic center that could produce goods, America. It essentially took 20 or so years to rebuild the rest of the world, satisfy the needs of the free world population, explore space and wage the most productive war ever, The Cold War, against communism – i.e. central planning.

    I hope to god that that situation never occurs again, because I hope there are no wars that kill that many people, destroy that many countries and lead half the world to be enslaved under a horrible economic and political system.

    But understand that what happened in that period – with all it’s supposed equality in America, wasn’t market-based capitalism, it was an anomaly. This is where I really differ from Rohatyn. There is nothing in capitalism that implies fairness. In fact, capitalism is inherently unfair.

    If you date capitalism from the publication of Adam Smith’s “The Wealth of Nations” For about 200 out of it’s 233 year history, it’s been grindingly unfair. It’s crushed 90% of the population for the benefit of 10%. If you don’t think so, read anything by Charles Dickens. Upton Sinclair’s “The Jungle” or pretty much anything written about the horrors of life during that period. The period from 1940-1980 was the anomaly, but it just happened to be the period Rohatyn knew and we are most familiar with.

    Now, I absolutely agree that the post WWII world order has come to an end. I would date the end as having started with the fall of the Berlin Wall and say that the end of the WWII world order ended with the fall of Lehman Brothers. Fully twenty years.

    What we are seeing now, I think, is the working out of a new world order. It will probably take another twenty or so years to fully work itself out. Will America be dominant? Will China or India or some other country dominate? Or will no country dominate?

    In Europe, until Martin Luther pinned up his 95 Theses in 1517, religion was far more important than nationality. In European and later American thinking, nationality has only been meaningful from sometime after that. For 500 years, we’ve lived in a world where your country defined who you were as much as anything else, but it doesn’t have to be that way. The internet, life experiences and travel may mean that I have more in common with you, whom I’ve never met, than I do with the person who lives next to me. Our hopes, dreams, education, goals and ways of thinking may well be more similar than 95% of the people I meet in LA. (Of course, I don’t like LA and so would never claim to have much in common with the people here, so I might be biased…)

    So is the world order we grew up with dead? Yes. Is the “market-based capitalism” we experienced from 1940 till 1980 dead? Yes. Will America continue down it’s road of economic inequality and separation or will a system more closely resembling socialism redistribute wealth? I have no idea. But the resolution and creating of the new world order will dominate most of the remainder of our working lives.

    In a world where individuals can accomplish amazing things; where wealth can move around the world in split seconds; where laws are not uniform and capital and people can move fluidly; life will be very different, but I’m pretty confident we will both do well.

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