kenny hodgart


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How China farted under poor Americans’ noses

This blog post can also be read at SCMP.COM –

http://www.scmp.com/comment/blogs/article/1846695/hogging-industry-chinese-conglomerates-pork-prerogative-gets-under

Time was they were sort of unreceptive when it came to Communists, the Americans – a bit disobliging, all things considered. Not to overstate matters, during the Cold War normal human vitality often seemed indivisible in the American imagination from a desire to kick Bolshevik butts. That was the main thing I took from watching the 1984 version of the film Red Dawn, at any rate.

For better or worse – the former, one supposes – American attitudes towards modern-day Communist China are several degrees mellower. Indeed, tacit acceptance of China’s rise looks at times to have given way to a new dread of upsetting it and being thus dis-invited to the party. Being nice about China in blockbuster movies is one manifestation of this. Giving Chinese state-backed companies a role in the immiseration of America’s poor would seem to be another.

Smithfield Foods, until recently the world’s largest pork producer and processor, used to own hundreds of pig farms in North Carolina alone. These farms consist of three important elements: pigs, giant sheds for housing them and adjacent “lagoons” into which millions of gallons of their faeces and urine are deposited. The cesspits are emptied at intervals, their contents sprayed as a noxious mist over nearby fields.

In 2013, Smithfield sold out to Shuanghui, China’s largest pork producer, for US$4.7 billion, a 31% premium on the company’s publicly traded share price. The two had been weighing a partnership deal before the Chinese firm made a bolder offer, financing the purchase with a US$4 billion loan from the state-owned Bank of China.

Now effectively the owner, at a conservative estimate, of 1 in 4 American pigs, Shuanghui has been busy expanding production for export back to China, where the middle classes prefer not to eat anything reared in the motherland for fear of it being contaminated. This in turn appears to have increased levels of hydrogen sulphide and ammonia wafting into properties near U.S. farms, causing complaints of burning eyes, breathing difficulties, headaches, hypertension and anxiety.

Many of those affected in North Carolina are on low incomes. Many are black. Most have little option to move away. But a fightback of sorts is underway: in the last year some 500 individuals in the state have filed two dozen lawsuits against Shuanghui’s subsidiary, Murphy-Brown, complaining about the smell from its farms.

Initially, these actions sought to fix ultimate responsibility on the Chinese Communist Party. “Red China has taken a huge dump under the noses of the American people and been allowed to get away with it,” ran one writ – which, mark you, I have paraphrased. Last month, however, Shuanghui’s attorneys got their way, as a judge ruled any references to China, pork exports thereto, the CCP or even Smithfield being Chinese-owned, were inflammatory, irrelevant and off limits. Meanwhile, state lawmakers have proposed debarring newcomers to hog farm neighbourhoods from filing nuisance lawsuits and making losers in court pay corporate farms’ legal bills.

Voices were raised at the time of the takeover as to the wisdom of green-lighting Chinese control over such a large segment of the U.S food chain. Daniel M. Slane of the US-China Economic and Security Review Commission told Congress he had concerns over Shuanghui’s strategic ties to the Chinese government, preferential access to subsidies, and so on. Debbie Stabenow, Democratic Senator for Michigan, worried that the Chinese company meant to use Smithfield’s processing technology to build up its own capabilities at home and undercut U.S. pork exports to the Pacific Rim. In the end, though, faith in open markets, and in Chinese money, prevailed.

Simply a case of one private company buying another is how Smithfield’s CEO, Larry Pope, described the merger in a Senate hearing. Only it clearly never was that simple, was it? In-keeping with its efforts in the field of currency manipulation, credit from Beijing gives Chinese companies a huge advantage over competitors in the U.S. and elsewhere.

What we’re seeing here is partly about China securing stable food supplies for itself – the country already consumes about 50% of all pork globally and demand is rising sharply. In line with the government’s soon-to-elapse 12th Five Year Plan, Chinese businesses – state-owned or otherwise – have been investing in food assets around the world. Americans are far from alone in worrying about their producers being undercut or about Chinese corporations cornering markets. It may be tempting to shrug those concerns off as paranoid, but it’s probably judicious to wait until deals comparable to the Smithfield one are being sanctioned the other way round.

For America, making its own poor folks sick through turning swathes of itself into a hog farm capable of sustaining expanding waistlines in a formerly hermetic Communist state whose ruling party used to order its own agriculture along collective lines is perhaps both an achievement of sorts and further evidence of a crisis in the idea of American exceptionalism. After all, the whole point of an American-led world order was surely to encourage strains of American-style capitalism elsewhere. But being stung on the buttocks by globalisation was always a possibility too.

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Political books of 2008

This article appeared in The Herald

Many of the books on the politics shelves this year have been overtaken by events. As crisis became crash, the realisation that political economy is to politics what money is to banks was a little late in dawning, but there were at least one or two lonely voices who claimed to have seen the whole thing coming in time to dash off guides to where it had all gone wrong.

Robert Shiller’s The Subprime Solution: How Today’s Global Financial Crisis Happened and What to Do about it (Princeton, £9.95), a short expose of the lax borrowing that led to America becoming the world’s first subprime superpower, falls into that category. Niall Ferguson’s The Ascent of Money (Allen Lane, £25) does too but isn’t just a paean to capitalism’s convulsions: it’s also a thorough-going history of the rise of capital (the foundation, Ferguson believes, of human progress).

For anyone who takes fright at mention of stocks and bonds, securities, bears, bulls and hedge funds, it is essential reading. Ferguson’s lessons are that sooner or later every bubble bursts and that human greed and ignorance, rather than the financial system itself, created the current crisis.

There’s something atavistic about AN Wilson’s Our Times (Hutchinson, £25), an indictment of Britain’s national collapse. Wilson is a cultural conservative, yet there’s nothing rigid or canonical about him: neither the old establishment nor the new, the Britain of aristocratic humbug nor of health and safety tutorials, is spared his vituperation.

Britain’s shared sense of identity and purpose has been undone since the war, he believes, by political elites, mass migration, yoof culture, the demise of organised Christianity and the replacement of trains by cars. He can be contradictory, factually wayward, even scurrilous, but he is always entertaining and always illuminating.

China’s story over the last two decades – thanks to its economic reforms – has been one of rise rather than demise. Philip Pan’s Out of Mao’s Shadow: The Struggle for the Soul of New China (Simon & Schuster, £14.99), challenges utterly, however, the notion that democracy will be the inevitable corollary. In a sobering, saddening study he narrates the stories of men and women, dead or imprisoned, who dared to break rank. Their heroism, obscured and written out of history by the Party, a de facto “mafia”, deserves to be honoured everywhere.

Left-wing commentators lobbed so much mud at Martin Amis this year that even his virtuoso prose style was filed as a charge against him. Too clever, not self-effacing enough, crowed one reviewer, a marginally more coherent remonstrance than the view, expressed by the Marxist academic Terry Eagleton, that one should no more listen to a novelist talking about Islamism than a window cleaner.

The Second Plane (Jonathan Cape, £12.99), a collection of essays and short fiction written in response to 9/11 and all its consequences and bifurcations on the world stage, is a brilliant riposte to that view. Literature, for Amis, is “reason at play”; religions are repositories of “ignorance, reaction and sentimentality.” Islamism (“an ideology superimposed upon a religion – illusion upon illusion”) is a death cult every bit as pernicious as Nazism or Stalinism and the novelist – for whom morality and reason are, in the end, all – has in fact a duty to say something about it.

When confronted by Islamist terror, Amis believes, too many on the liberal left evade the truth: they see not a desolate and implacable ideology but misguided liberators whose cause is fundamentally righteous.

Where Amis’s eloquence is trained on anti-Americanism as an ideology, Simon Schama proffers instead its antidote. His The American Future (Bodley Head, £20) is both a history and a treatise on that most nebulous of constructs, hope. Our television don assumes a triangular perspective – daydreaming about the future as the past looms like a gently stirring branch at the window of the here and now. America’s history of violence is explored in considerable detail: from the obliteration of the Cherokee, to Gettysburg, to Vietnam. The liberty so prized by the early settlers, then, came at a cost to others; on the other hand, the country’s enduring racism and paranoia should be understood as inevitable by-products of being the world’s melting pot.

Convinced of America’s ability to reinvent itself once more in the 21st Century, Schama hoped for an Obama victory, and he got it. In the president-elect he sees a Jeffersonian figure salving the wounds of the bedraggled republic and renewing a sense of “common purpose.” Others tend, similarly, to see what they want to in Obama. One hopes he can be something more than that: his own man.


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Review: The Post-American World, by Fareed Zakaria

This article appeared in The Herald

A certain shock value attends the title of this book. John McCain’s friends might think twice, at any rate, about buying him it as a Thanksgiving present, although both he and Barack Obama would do well to read it. Any divining of anti-American sentiment would be wide of the mark, however. The American imperium has been bitterly savaged by authors in recent years, but in Fareed Zakaria’s work there is, sensibly, nary a hint of glee at its convulsions. Zakaria grapples with the impending shift away from American dominance in the world as new, emerging powers – China, India, Russia, Brazil, Mexico – begin to assert their interests with greater confidence, but, crucially, he does so without resort to scaremongering or hyperbole and with a keen understanding of his adopted country’s real strengths and real interests.

An Indian emigre, he believes America’s openness remains key among those strengths. That he arrived in the States as an 18-year-old student in 1982 and was last year named as one of the world’s 100 leading public intellectuals by Foreign Policy and Prospect magazines, is perhaps as good an illustration as any of his point that immigration is part of what gives the country its edge. Equally his Indian childhood and adolescence burnish his account of the “rise of the rest” with an authority forbidden a more Waspish scholar.

The new reality is that while, for the time being, America remains the world’s only politico-military superpower, in almost every other sphere – industrial, financial, educational, cultural – the global distribution of power is shifting. By 2040, the five emerging powers mentioned are expected to have a larger combined economic output than the G7 countries. Zakaria devotes chapters of his book to the two fastest-growing of these new powers, China and India; by his reckoning the former is already “the second most important country in the world.”

Over the last two decades the Chinese Communist Party has, he says, flouted the general rule that autocratic governments are “insular, corrupt and stupid.” Not having to respond to an electorate has helped Beijing carry out reforms on a scale unimaginable in the west and while suspicion of widespread corruption lingers, the country now has one of the most open economies in the world.

While many industries in China are still under state control, the backbone of the Indian economy, expected to be the world’s third-largest by 2040, is its private sector. India has emerged a clear winner from globalisation: its exports include software and services as well as cars and steel. Consumer spending, meanwhile, makes up a massive 67 per cent of GDP. The country’s extant political class, suspicious of change, muddles along improvidently – nearly a fifth of Indian members of parliament have been accused of crimes, including embezzlement and corruption as well as murder and rape – but in its favour India has sound democratic institutions, bequeathed to it by the British, and “a vibrant model of secularism and tolerance.”

Many in the west are scared witless at the prospect of rivals to America’s might deciding to flex their muscles – a serious US-Chinese rivalry would doubtless set back growth, trade and globalisation – but Zakaria argues there is little to suggest this will happen, and certainly not imminently. As he notes, “Indians are extremely comfortable with and well disposed toward America,” while “Beijing tends to avoid picking a fight with other governments,” preferring to focus on growing its economy.

His rationalisation of Chinese involvement in Africa is not wholly convincing, however. Beijing’s policies of selling arms to Robert Mugabe, in return for platinum and ore, and Sudan, for oil, in addition to its general disinterest in anything to do with human rights around the world, are, Zakaria postulates, the result of a foreign policy based on pragmatism rather than idealism. China is not a Protestant, proselytising power, he says; Confucianism doesn’t hold to “universal commandments or the need to spread the faith.” Far worse behaviour than that of the Chinese has been explained away with religion, but the idea that they’ve been getting up to no good because they didn’t go to Sunday school requires quite some leap of faith.

Zakaria’s contention that the threat of Islamist terrorism is overhyped is more compelling, although his claim that much of the Muslim world is “modernising” does seem a jot counter-intuitive. He does not seek to deny that the threat exists, but argues we may be winning the war on terror with greater ease than we are led to believe: “since 2001 governments everywhere have been aggressive in bursting terrorist networks, following their money, and tracking their recruits – with almost immediate results.” He adds that sectarian conflict within Islam itself and the desire in many Muslim societies for stability has made jihad increasingly unpopular.

This book, indeed, does rather a nice job of allaying a number of other fears about the “post-American world” it is supposed we are entering. Zakaria’s outlook is fundamentally optimistic: as he points out, while the last ten years are perceived as having been ridden with wars and global strife, in actual fact organised violence has declined dramatically since the 1980s and by the end of 2004 was at its lowest level since the late 1950s. It may be simply that the immediacy and intensity of the 24-hour news cycle makes us believe the world is a more dangerous place than it actually is. Moreover, these years have seen most economies experience unprecedented growth. Due in large part to capitalism, poverty is falling in countries housing 80 per cent of the world’s population; China’s growth alone has already lifted more than 400 million out of poverty. In all but the world’s 50 or so poorest countries, “basket cases that need urgent attention”, the poor are being absorbed into open, productive and growing economies. And while growth may now be slowing somewhat, “the diverse new sources of growth and massive quantities of capital have given the global economic system as a whole greater resilience.”

More exclusively American fears are allayed too. The American economy has its problems – the loss of key industries, the credit crunch – but it remains the most competitive in the world, according to the World Economic Forum. America has most of the very best universities in the world, while American companies are better than anyone else at turning ideas into marketable and lucrative products. The country’s relative economic weight may fall, says Zakaria, but if it resists the temptation to become insular and it does not turn its back on free trade, it can respond to the new reality.

“For all its abuses of power,” he writes, “the United States has been the creator and sustainer of the current order of open trade and democratic government – an order that has been benign and beneficial for the vast majority of humankind.” After Iraq, that reputation is “sullied”, but Zakaria believes Washington can be the world’s honest broker once more, provided it can also reacquaint itself with bi-partisanship and multilateralism, and assert itself against ideological attack groups, vested interests and a sensationalist media. His book – measured, erudite, thrilling in its breadth of reference – is a timely reminder of why the world needs a strong, engaged America.