Cowboy Capitalism with Chinese Characteristics, Part 2: A View from the Street

Despite the growth of inequality in contemporary China and the precarious means of subsistence for the lowest rung, few voices have shouted above the parapet to protect or increase the lot of the poorest. If we take Beijing, a seemingly booming metropolis, visible indications of inequality and economic problems can be found almost everywhere. In a brief walk through the prospering nanluo guxiang alleyways (南锣鼓巷) of the drum tower area, one can take in street after streets of trendy coffee shops and ‘international bars’, pay 40 kuai for a drink (equivalent to the daily wage of a waitress serving it), or be caught in the jam-packed streets of fashionable young Chinese shoppers dazzled by various arty, luxury consumer fashion items. In less upmarket areas 9 kuai can buy you a relatively healthy meal of noodles. Instead one can consult international entertainment guides printed in English to see adverts for concerts such as ‘progressive’ metal band Opeth for 680 kuai, about three times the price of a comparable UK concert (an upcoming Avril Lavigne concert costs 1700 kuai, about 170 UK pounds). You can then turn a corner and within seconds the streets are empty, the residents are aging, and the homes are without heating, running water, and toilets. The generation gap and the income disparities are visibly staggering. This is not simply about inequality per se but about access to the means of subsistence- a basic income, health, and education. Accessing largely privatised social services is not cheap and housing prices have exploded. For example, it costs about 400 pounds a month to rent a small studio flat with no cooking facilities in the Xiaoxitian area (a relatively affordable district adjacent to Beijing Normal University). This is much the same as a one person flat with separate rooms, a full kitchen and bathroom in Manchester, UK. Average income in the UK is $38,540 compared to China’s $4,260. No surprise then that small shop-owners still have beds in their stalls all over Beijing and rely on small heaters or electric blankets though the winter. Capitalism seems to inevitably produce winners and losers and this is perhaps most dramatic in its global phase where wealth and goods are not confined by national borders. The winners and losers here are worlds apart and there is little responsibility being shown by the winners.

Pun Ngai, author of Dagongmei, brings to light a serious contradiction in the claims of China’s opening up in the reform era. We ordinarily expect capitalism and wealth creation to thrive on social and spatial mobility; business and people have to be willing to move to where money can be made and profit found. However, while the Chinese system has privatised social services and to some extent opened its markets to global capital, it has not abandoned the household registration system (hukou). This divides citizens into urban and rural residents and ties residents to their place of birth if they wish access discounts to the most basic healthcare and early schooling still available under the system. This means the rich are increasingly mobile both in global terms (they can afford to travel abroad or go to see Opeth in Beijing) and in national terms because they can move to other cities and pay for private healthcare and schooling. This maintenance of immobility combined with skyrocketing housing prices has led to the phenomenon of what Pun Ngai termed “dormitory capitalism”; not only does the hukou system make the millions of migrants who move to the city de facto illegal aliens in their own country but due to the cost of housing many have to live in dormitories in basements owned by their employers rather than be made homeless. This provides a lifestyle completely at odds with representations of a rising, powerful China and in utter contrast to the nouveau-rich playing on their laptops and sipping high status coffee. Coupled with the fact that trade unions are de facto outlawed in China, this also enables the owners of such businesses a level of control over their employees such that the most marginalised (poor, rural women) are “instantly disposable” and in many cases cannot refuse to sell their bodies. Approximately 12% of China’s GDP can be accounted for by the sex trade.

I’ll offer a brief personal story of how the process of renting a house works in Beijing. This is written from the relatively privileged perspective of my partner and me. However, much can be gleaned from it to tell us where wealth goes and the attitudes towards it in Beijing today. We were advised by both Chinese and foreign friends that to find a house in Beijing, going through an agency would cost more but it would save us a lot of trouble and avoid the risk of being ripped off later. We explored the xiaoxitian area and discovered that there are perhaps half a dozen of such firms on every street! These firms manage large amounts of property for landlords who often own entire apartment blocks. The streets are not only decked in adverts everywhere but you can see their staff standing on most street corners waiting for clients or waiting for people to look at their adverts which also adorn many street corners. This is big business. Overhearing conversations on the street and in restaurants, housing seems to be the hot topic of the day- everybody needs it but most seem to be struggling to pay for it. We looked at a number of flats and studio apartments to little avail as our rough budget of 4,000 kuai (about 400 pounds) would only cover decaying flats with broken toilets or a tiny studio. Eventually we received a phone-call from an unknown number offering us help to find a flat. We assumed he was from one of the companies we had consulted but we eventually discovered he was actually a middle man to the middle men at the estate agents. He provided clients to the firms who make money finding clients for the under-rich landlords. We eventually met with him and spent the best part of a day or two chatting with him as we looked for accommodation. He offered us a reasonable deal, he said, because we were British. This was an offer he wouldn’t extend to Greeks and Italians in the Eurozone who renege on their debts! As most young men in Beijing, his life revolved around making as much money as he could to pay for housing, keep his family afloat, and save for the future. He claimed his wage for acting as a middle man to the middle men was about 10,000 kuai per month – light years ahead of the national average and equivalent to our individual incomes in the UK. When we discussed tax, he mocked the UK tax system for taking money away from people (China’s income tax is a rate of about 20% for those making more than a very healthy 5,000 kuai a month). He audibly scoffed at our suggested notion that this money could be used to help society. Socialism remains comedic and kitsch amongst China’s youth. In fact, he described life and business in China, in the same way as many here, as “people-eat-people” (ren chi ren; 人吃人). Competition is so fierce here that people believe it demands that one pursues wealth and self-interest without responsibility to others outside one’s family, let alone any socialist commitment to aiding the poorest rungs of society.

After looking at a half a dozen flats with him, we eventually had to lower our standards. We accepted a reasonably sized but decaying and concreted floored flat with a bathroom I could barely stand in. It seemed quite pleasant compared to others we could afford. When we arrived to sign the contract, a problem emerged. Every foreign national in China has to register themselves and their address with the local police station. However, the landlord insisted we register with a fake address at a different station because it would be “more convenient”. This was a way for them to avoid taxes on the rental income as well as the fee associated with this registration. They either had relationships (guanxi; 关系) with police or a landlord in another part of town. Knowing that if anything went wrong we would be the ones in trouble and would probably be sent home, we opted to find somewhere else despite having spent the better part of a week looking at houses. The only way we could both afford to live in Beijing would be in a small and relatively old studio flat. We found such a studio flat in the xiaoxitian area thanks to our anti-Euro middleman to the middlemen in a relatively nice apartment block. We were quite satisfied.

At this stage we still thought our man was just an ordinary middle man but on settling to sign the contract, we realised that this wasn’t the case. An employee of an estate firmed arrived with the contract, refused to say a word, drew up the details, pointed and said ‘sign’. We insisted we read what we were signing up to. He was clearly annoyed but would tolerate this. Our man told him “don’t worry, foreigners are all like this, they just take contracts seriously”. Relationships may be more important than law in China but as travelling foreigners without any networks we opted to stick to the law. On perusal of the contract it turned out they were adding 9 days onto the 6 month lease we agreed. The company man repeatedly urged us to sign as it was “much the same” and would only grin when I said if it is much the same, then change it! After much to-ing and fro-ing I told the company man that I didn’t want to give 1,000 kuai for nothing to a rich landlord. This he found amusing. He agreed to reduce the additional time to 7 days, even though he had claimed it was impossible due to the contract he had with the company who had a contract with the landlord! We both realised this was how these cowboys make lots of money. He, along with hundreds of other agents, was travelling round town all day. If they made a free thousand kuai off every customer they were raking it in without even considering the profit from their legitimate business. After much consternation and urging us to sign, the agreement was made that the original middle man would take the additional cost out of his ‘finder’s fee’. He had of course told us that this would be reduced earlier but now there was no chance- we had to pay him a full month’s rent in cash with no tax paid just for the sake of a few phone calls. No wonder he makes a good wage. The pair of us were then hurled onto the back of a small motorbike and driven to the company office bouncing off a taxi on the way. The company man, who had seemed so aloof and high status from our first meeting, refusing to even engage with our middle man, was suddenly in a different social position. He was being shouted at by his boss and providing us with a place to sit and a drink in this bustling office where multiple deals were being negotiated all round us. The boss grilled him on how much he had got for the flat. He seemed pleased with the 3,500 kuai per month we agreed to pay. All of a sudden, the rate seemed like it had been negotiable and we guessed that the company weren’t just making money as a set fee from the landlord but were probably creaming extra cash off by charging us a higher rate than what they were telling him. I would doubt the taxes are being paid.

The inconvenience of all this was tiresome but quite amusing and a good learning experience. The real story is that so much money is slushing around, tax-free and destined for landlords’ pockets, that multiple middle men can still make a healthy, largely tax-free living by knowing the market but doing very little. This opportunity would not be available to the additional illiterate 30 million adults who merely happened to be born in a poorer hukou (household registration area). Adam Smith and Karl Marx both agreed that under capitalism, the arduousness of labour is inversely proportional to the profit made from it. When we think back to those having to live in their shop-stalls to survive or living in dormitories and basements selling their bodies, this is clearly the case in contemporary China. National television (CCTV) devotes hours to heart-warming stories of peasants, who have to work endlessly without complaint to pay healthcare bills or send their kids to school, as examples to be admired. Perhaps regulating the cowboy capitalists and using taxes to pay for schools and hospitals, instead of mega-pr events like the Olympics or indeed a nuclear arsenal, would mean the poorest wouldn’t have to be admired for the hardship they endure.

Apple and the Symbolic Construction of the Self/Other

It is not unusual to send condolences to family and friends of a recently deceased loved-one. What is unusual is when people are moved to grief for someone they have never met. It is not unusual to enquire why this is so. The death of Steve Jobs, CEO of Apple, led to a global outpouring of grief in the form of shrines from Beijing to California and from Seoul to Sydney. However, these are globalised, metropolitan centres where people who can afford to buy Apple’s exuberant products are concentrated. This is not reflective of some human community transcending divisions of geography and social class. These are relatively fortunate people commemorating the death of an incredibly wealthy man. Nonetheless, this public outpouring goes way beyond brand loyalty or the usual arguments that Macs are faster than PCs. These are highly symbolic rituals which tell us about who and what we value and who and what we do not. Jonathan Jones of the Guardian gushed that Apple products “made the world more beautiful” and “more human” such that Steve Jobs changed how “we” see the world. “We” refers here to people in metropolitan centres with enough disposable income to be part of this in-group. The inevitably corresponding “they” are the rest of the world, “outside” this group and presumably less human for their inability to enjoy these products.

It is tempting, as Alex Massie does in The Spectator, to dismiss these outpourings of attachment, grief, and worship for the CEO of a company whom they never met as "members of a cult that's just as stupid as any other and equally deserving of scorn and pity". However, this downplays the social significance in terms of both sheer numbers of people involved and the transnational scale on which unbridled admiration for the contribution of Apple to people’s lives we have witnessed. Massie also called this phenomenon iReligion and this seems a fairly accurate description given the blind faith and ritualised shrines we have witnessed. The Apple logo and Steve Jobs have become powerful symbols people express loyalty to and through which they identify themselves as free-thinking, modern individuals. Apple personifies something people want to be. The long running Mac advert series on UK TV exemplified this personification of the brand. It successfully anthropomorphised PCs to be like their users: old, traditional, and behind the times. Mac users then are symbolically articulated as young, fresh, and driving the times. The argument here is not to say Apple products are not fun to play with. They are. The argument is to say people in positions of relative fortune are investing their self-identifications in such products. These self-identifications are to the exclusion of the poor, globally marginalised Other. Ironically, these identifications are ultimately to the detriment as opposed to the enrichment of the individual.

Anthony Cohen’s 1985 classic The Symbolic Construction of Community applied decades of fieldwork in social anthropology on the intersection between social and personal identities. He produced a compelling argument to explain traditional community and nationalist loyalties. However, it equally illuminates why in the contemporary world when people are bombarded by commercial advertising demanding brand loyalty, and where struggles over local, ethnic, religious, national, transnational, and global forces regularly spill over into violence, we are still constantly trying to discover and rediscover where “we” belong and who “we” are:

“(symbols) ‘express’ other things in ways which allow their common form to be retained and shared among the members of a group, whilst not imposing upon these people the constraints of uniform meaning. Because symbols are malleable in this way, they can be made to ‘fit’ the circumstances of the individual. They can thus provide media through which individuals can experience and express their attachment to a society without compromising their individuality…what is actually held in common is not very substantial, being form rather than content.”

Apple and Steve Jobs like all the most socially effective symbols have no fixed content. They are pure form and they are malleable. They mean everything because they mean nothing. They are so abstract and open to interpretation that they are a marketing dream. Apple allows the individual to feel as if they retain and even enhance their individuality while at the same time spending more and more of their income on products they do not need and even worshipping at shrines of a dead man they did not know. The Apple logo perhaps speaks for itself. It is just an apple, it imposes little if any content yet people wear clothes and bags emblazoning the symbol on their journeys to find who they are. The soundbites of Steve Jobs, which appeared in their thousands across Facebook and Twitter on the day of his death, are a case in point. So devoid of content are they that people can imbue their own significance in them, participate in a social ritual, yet believe they retain some sense of individuality at the same time. “Stay hungry, stay foolish” is so open to interpretation that, as Cohen says, what is being shared by repeating it across the internet is insubstantial; form rather than content. This was of course a remarkably skilful and rhetorical manipulation of human needs for social and individual identities on Jobs’ part. People could be Apple users, a group, yet imbue their own supposed individuality on what that means. All the while Jobs got richer and richer. The most powerful of all the soundbites was perhaps “don’t waste time living someone else’s life”. In other words, buying Apple products, a socially significant action, allows one to be and become an individual. The irony is staggering when millions of individuals believe that by listening to another individual telling them to be an individual and buy his products he spent his life producing is somehow living one’s own life. Choosing to worship Apple and reproduce its messages across the potentially limitless discourse of the internet is a fundamentally selective social activity. People can say anything on the internet yet they choose to let Steve Jobs speak for them as if they are endorsing individuation. Monty Python once hilariously captured the irony of how groups can be convinced they are individuals in their film Life of Brian yet it seems to have been forgotten by Apple worshippers.

The power of Apple is remarkable. The internet has provided most people with staggering access to instantaneous information. This has led to unparalleled growth in global movements for social justice, human rights, and environmental protection. Yet while Twitter is used to organise the occupation of Wall Street in the world’s most “advanced” capitalist nation, we hear nothing from Apple users of Apple’s deplorable environmental record (reportedly the worst for any foreign firm in China) and disregard for labour rights across the world. Apple’s power is such that this information is freely available yet people choose not to google it and then choose to ignore it when it is presented to them. Karl Marx would say the exploitative social relations behind the product are concealed but here they are not. In today’s world, the information is there, yet most of us choose to ignore it. We do not let this uncomfortable information influence our consumerist decision-making in our supposed struggle to find ourselves and “not live someone else’s life”. The people who suffer due to the policies of Apple most notably in China are simply not part of the “we” that people are choosing to become, otherwise “we” would not allow it to happen. The environmental damage and exploitation would simply not be allowed if it was in “our” country or “our” community. Where Marx was right (Capital Volume I and III) is that commodity fetishism links the subjective aspects of economic value and objective reality. The value groups assign to material objects are transformed from arbitrary social impositions into very real social forces in the form of prices, which for Apple are sky-high. Marx argued that “primitive” societies fetishised unexplainable phenomena as magical and thus they became sacred or taboo. Under capitalism, people attribute special powers to objects and imbue them with symbolic meaning which then became part of an objective reality reflected in prices. What Marx did not predict was that people would attribute special powers to brands and individuals who are powerful agents in reproducing the exploitative and environmentally destructive social relations, which Apple users celebrated on the 6^th October 2011. Globally dispersed shrines to Steve Jobs do not merely fetishise products they fetishise a brand and a person as symbols of who we are and the world we want to live in. This is a world which celebrates gadgets and instantaneous yet transient pleasure to the detriment of the lives and life opportunities of the poor and globally marginalised.

It is appropriate in all discussions of identity to ask where we-ness comes from, who it includes, and who it excludes. Here, we turn to the ancient Tibetan philosopher, Nagarjuna:

“The essence of entities

Is not present in the conditions,

If there is no essence,

There can be no otherness-essence.”

There can be no Self without Other and there can be no Mac user without a PC user to define itself against. Our identities have no essence. They can only be defined by what they are not. We are who we become and how we define ourselves to the exclusion of others. We can choose to become globalised citizens who take responsibility for our actions or at the very least acknowledge their implications. We are choosing not to. There is little about the symbolism of Apple which is young, fresh, and innovative. Apple is reflective of far older forms of community boundary drawing which divide people into us and them through the manipulation of symbols which demand loyalty and convince people they are all individuals. Steve Jobs was a smart man. He once said "Remembering that I'll be dead soon is the most important tool I've ever encountered to help me make the big choices in life". If only those worshipping at his altar could heed this advice when they ask “who am I?” and “what type of world do I want to live in?”. When we face death Apple will provide no solace.

Civilising Globalisation?

During his scientific socialist phase Karl Marx predicted the inevitability of capitalism’s demise. He predicted that logic of capital was such that capitalist’s drive for ever-increasing returns would result in a spiralling reduction in wages. The increasing squeeze of capital from workers, who would eventually be unable to purchase the products of their own labour, would result in revolt and the seizure of the means of production. This self-defeating nature of capitalism would lead workers to reorganise the social relations of production such that wealth would be distributed more or less equally. Marx was of course writing about 19^th century international capitalism not 21^st century global capitalism characterised by the increasingly free flow of goods and services across national borders. Michael Hardt and Antonio Negri’s Empire argued that with the growth of the power of transnational corporations and global financial institutions, power has been taken out of the hands of the state and dispersed. As globalisation decentres power, resistance too is decentred. Today, capitalism’s discontents don’t simply seize government buildings or factories. They destroy McDonald’s, Starbucks, and other powerful symbols of transnational capital. Thanks to globalisation, it no longer makes sense to talk of the ‘1^st world’ and ‘3^rd world’ as fixed, national, geographical categories. Within the same cities we have pockets of economically prosperous, socially mobile, and aesthetically pleasing districts surrounded by residential areas with stagnating growth, high rates of crime, unemployment, and poor standards of health (Ealing Green/Ealing, Kelvinside/Parkhead, Beverly Hills/South Central). The World Health Organisation’s 2008 report found that in Glasgow, the postcode lottery is such that life expectancy for men living in Calton is as low as 54 years old but for those living in Lenzie, a 15 minute car ride away, life expectancy is 82. There are worlds still far away from what Michael Camdessus, the former director of the IMF, described as the civilising forces of Globalisation.

Recent events across England have led many people ask what is the rioters’ ‘cause’ and indeed many politicians to insist that we do not even ask such questions; it is criminality, end of story. Yet ask we must. It may be that these are rebels without causes for there were no attempts to seize the means of production. But where and what are the means of production today in a globalised economy? Ford makes more money from insuring cars than building and selling them. Pieces of paper which symbolise wealth lead to a greater accumulation of other pieces of paper which symbolise wealth; much more so than actually producing anything in today’s global economy. Wealth is primarily generated through services so seizing factories would be senseless. In the age of globalisation we have seen major protests at every G8 gathering with highly symbolic sites of transnational capital, such as Starbucks and McDonalds, bearing the brunt of the anger. As power becomes globalised and decentred so too has resistance. Today resistance focuses on attacking these global nodes of power, these symbols of transnational capital. What we have seen across England in August 2011 may have started as a response to police brutality but it spiralled rapidly and morphed into something we can’t yet understand. What we saw was different to the transnationally organised protests at G8 meetings. This was not an attempt to seize the means of production or resist the transnationalisation of capital. Through the looting of clothes stores and electrical appliances brands, goods deemed to be of high status or symbolic value, we see attempts to seize the products of capitalism and bathe in the status they bestow. We don’t see a revolution to radically restructure social order. We see attempts of individuals to reposition themselves in more favourable positions within it. The seemingly chaotic mode of resistance reflects the seemingly chaotic mode of power and of social organisation we enjoy today.

One response to this is of course to reject the very possibility of meaning behind these acts, file them under irrational, focus solely on punishment, and get back to business as usual. Another counter-argument is that not all participants are poor or even particularly socially marginalised as the prosecution of primary school teachers and the “millionaire’s daughter” attest. However, the chaotic events and the participation of individuals from various sectors of society cannot conceal that every city affected saw young, angry men who see themselves as disenfranchised take to the streets to steal and destroy high status symbols of consumerism. Are we really surprised that generations who have been encouraged to be selfish and have been told by Margaret Thatcher that “there is no such thing as society” feel little moral responsibility towards people outside of their personal, social network? If there is no such thing as society, then outside of the family and the personal network, there can be no bonds and no restrictions regulating the relationships between human beings other than legal ones. Time and time again we hear interviews with participants saying things like “we’re taking from the rich” or “we’re doing it because the government can’t stop us” (Radio 5 Live, 10/8/11, 13:07). If you tell children you have no responsibility to other people unless you can be legally stopped, then when those restrictions disappear as happened when the police lost control, people will indeed steal, rob, and hurt other people. This selfishness is not a disease of any “underclass” or a “sick” section of society as David Cameron lamented. It is everywhere. Next time you are waiting on a train, notice how half the people around you are waiting to jump in front of you. Or in the supermarket, when people park their trolleys in front of what you want to buy and don’t seem to care that you are standing waiting. These are minor, anecdotal examples but I would argue they reflect a self-centredness that is allowed and encouraged. As long as you can get away with it, anything goes- business is business after all. We normalise and we encourage selfishness into norms of behaviour such that those with power are allowed to be selfish but we call it business or profit maximisation. Most people in the UK will tell you, when bankers steal they are given bonuses and when members of parliament steal they only have to pay half of it back.

David Cameron thankfully acknowledged that this is not simply about all young people in Britain simply being bad. In his terms, many young people live in fear from these supposed ‘bad’ people. But why this sudden admission? What political party has seriously addressed violence and its causes on our streets in the UK? Most young people I know have witnessed assaults on young men by other young men in our city centres whereby police stand on the other side of the road and wave away people’s calls for something to be done. I have visited casualty wards after being the victim of assault and all the medical staff wanted to know was how much I had to drink and then placed me at the back of the queue. This is not because I am marginalised, I am not. Nevertheless, it belies an assumption that as a young male in Britain you will be subject to violence and you are likely to cause it. It’s what young men do. However, as David Cameron admits, this is not just what young men do and often violence is impossible to avoid if one wishes to socialise in Britain’s city centres. One has to ask, why is violence against young men tolerated? It is very telling that when Miss Selfridge’s on Market Street in Manchester is in flames moral outrage is not simply expressed but demanded. However, when young men are assaulted usually by other young men every night in our cities, we hear little outcry. Is it simply that those who are morally outraged don’t see this violence with their own eyes so they leave it be? Are we morally outraged now because it interrupted our selfish desire to go shopping in our city centres and acquire more high status goods from the global economy?

What we become outraged about and choose to label as violence reflects our values. When a young man sets fire to a chain-store we call it violence. These same chain-stores, which most of us buy from, operate in “Export Processing Zones” across the developing world. This strategy is in place to bypass national laws which regulate labour conditions, wages, and indeed safety standards to prevent violence in the workplace. So why do we call it “profit maximisation”? What is ‘violent’ about stealing an ipad but not so when apple uses microchips produced under slave-like conditions in the South of China and which irreparably damage the environment? The important difference is not material, it’s ideological. It’s called socially constructed values. A young man taking a mobile phone from a looted Carphone Warehouse is theft because it is called theft. When Vodafone forego £4.8 Billion in tax payments it’s called the “maximisation of shareholder value” because it was permitted by HMRC. Stealing from apple is theft because it is called theft. However, when Apple bypass the rule of law in order to pay South East Asian workers a low wage it is called “outsourcing”. This is because we encourage people to make lots of money more than we encourage them to consider human rights. Angry young men stealing stereos is theft because it is called theft but when bankers steal, it’s called business because we value banks more than we value young men. This is normalised, permissible, and ‘civilised’ theft but it is still theft. This hypocrisy has produced a widespread, popular perception that there is one law for them and another for us. It de-legitimises the very idea of equality before the law, a central principle of democracy, such that people start to believe there is indeed no such thing as society- you take what you can unless you can be stopped. The chaotic and unpredictable power relations of our so-called global age have no written rules and have produced resistance that is equally chaotic, unpredictable, and without rules. If people wish to see ‘civilised’ resistance they had best work towards ‘civilising’ power.