Short Quiz - Suggested Answers

[johnkarls]

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Keeping in mind for Questions 1-2 that Martin Jacques begins "When China Rules The World" with an extensive review of Japan --

Question 1

Are China and Japan similar to most cultures that were historically agrarian (vs. those that comprised hunters and gatherers) with respect to attitudes toward the individual?

Suggested Answer 1

Yes.

Historically agrarian societies, typical of Asia, produced tremendous population densities while hunter-and-gatherer societies (typical of Africa and the pre-European-settler Americas) produced very sparse population densities.

The population-dense agrarian societies typically placed societal needs first and stressed consensus/cooperation, while population-sparse hunter-and-gatherer societies stressed individual resourcefulness and competitiveness.

Question 2

In the case of Japan, what examples of actions stemming from differences in cultural beliefs have seemed incomprehensible to Westerners?

Suggested Answer 2

The mal-treatment of POW’s during World War II by the Japanese has always seemed incomprehensible to Westerners!!! The best account was written by Stanley L. Falk (former chief historian of the U.S. Air Force) and originally published in 1962 with the title “Bataan, the March of Death.” It recounts how American POW’s captured in The Philippines (which was then an American colony) were simultaneously worked and starved to death, with the survival rate in the low single digits.

However, Japan had no cultural concept of a POW!!! Rather than suffer capture, a soldier is supposed to do the honorable thing and fall on his sword in an act of hari-kari, or ritual suicide!!! Because of this, the Japanese had never signed the post-World War I international agreements concerning the treatment of POW’s. Their attitude during World War II was that enemy soldiers who failed to do the “honorable thing” and commit suicide should be treated like the “human scum” that the Japanese believed them to be!!!

*****
Although seeming incomprehensible to Westerners, the Japanese believe (to this day) that the Japanese Emperor is divine (i.e., he is God). Accordingly, he exercised dictatorial control of the Japanese government until the end of World War II.

Interestingly enough, the U.S. post-war occupation of Japan 1945-1952 under Gen. Douglas MacArthur (see, for example, William Manchester’s “American Caesar: Douglas MacArthur”) capitalized on this belief and, instead of prosecuting Emperor Hirohito as a war criminal, eliminated Japanese resistance to the American occupation by securing Hirohito’s agreement to act as a puppet with MacArthur as the ventriloquist!!!

However, the failure to prosecute Hirohito as a war criminal has produced lasting bitterness to this day in the countries occupied by Imperial Japan, even though Hirohito died in 1989 at the age of 87.

Question 3

Is the view of Martin Jacques correct that China's growth will produce greater per capita wealth/income than the West?

Suggested Answer 3

I’m too old to believe this claim!!! For two reasons.

First, this claim was made with respect to the old Soviet Union following World War II when its growth rates were, by far, the largest in the world!!! Any country trying to modernize can produce prodigious growth rates as it starts from nothing and adopts already-developed technology from the rest of the world.

Indeed, as has been detailed on our bulletin board = http://www.ReadingLiberally-SaltLake.org (please see “Exhibit C: Exempting Out-Sourcing Profits from Income Tax” which is the fifth posting under “Participant Comments” for our 14 February 2008 topic of “The Best Government Money Can Buy: Bribery and Extortion”), virtually all “growth” to date registered by China has been produced by American- and European-based multi-national companies (MNC’s) outsourcing American manufacturing jobs to China where the MNC’s need only offer a higher wage than prevails in Chinese agriculture to get their products destined for the American market manufactured in China using the technology of the MNC’s under the supervision of, and to the specifications of, the MNC’s.

Let’s see what the Chinese economy does after its labor force has been fully exploited by the American/European MNC’s, and after China is forced to depend for growth on developing new technology (which is when the phenomenal growth of the old Soviet Union lost steam!!!).

Question 4

What is the size of China relative to the West and to India in terms of population, natural resources, etc.?

Suggested Answer 4

A “rough rule of thumb” is to think of China’s population, India’s population, the population of “The West” and the population of the Muslim world as each being approximately 1 billion.

China, although it does have significant coal reserves (think “global warming” and “acid rain”), is otherwise very poor in terms of natural resources, just like Japan. Indeed, the standard of living of both countries is extremely low, despite the common perception that Japan is wealthy (primarily because it has always accumulated large amounts of foreign currency by running a trade surplus which, incidentally, China has also done without anyone jumping to the erroneous conclusion that the Chinese population is wealthy).

The lack of natural resources has contributed greatly to the poverty of both China and Japan. As, incidentally, has the unfortunate location of Japan geographically – as can be understood by pondering briefly whether it would make sense to take iron ore from India (where most of the world’s high-grade iron ore is located) to be transported to Mars to be used to manufacture goods such as cars that must then be transported back to the world’s large consuming nations on earth. The answer, of course, is that transportation to Japan for manufacturing doesn’t (and historically hasn’t) made a lot of sense unless Japanese workers are willing to accept meager enough wages to overcome the adverse transportation costs.

For anyone tempted to consult a map to see how far out of line Japan is from India to the U.S., there are two considerations that are apt to be overlooked = (1) the adverse distances suggested by the reference to Mars are even more adverse with respect to, for example, the oil needed to power Japanese industry, and (2) it always makes more sense to transport for manufacturing in the ultimate consuming country the oil in super-tankers and the iron in huge ore-carriers, than hauling refined products in small product tankers/barges and hauling manufactured products now occupying many times the space as the iron ore in cargo ships.

Question 5

How will China, the West and India compete for natural resources such as oil?

Suggested Answer 5

Vigorously -- though the competition will be based on who has the economic wherewithal to be able to afford it.

Question 6

How will China, the West and India compete in terms of science and technological development?

Suggested Answer 6

I am willing to cover all of the bets of everyone who believes China and India will maintain anything close to their present growth rates once their labor forces have been fully exploited by the American- and European-MNC’s with work “out sourced” from America and Europe.

The American government historically has funded extremely high levels of basic research compared to other countries, including Europe. And although we might not want to admit it, a high proportion of the American scientific discoveries resulted from basic research that was funded as part of the U.S. military budget and, no surprise, many of the scientific military discoveries have civilian applications.

Question 7

Is there any reason to think that China will use its future economic wealth to threaten other countries militarily?

Suggested Answer 7

Not in the opinion of “yours truly” – they are too pragmatic and materialistic (please see the Q&A No. 9 below on communism vs. capitalism). Though unlike post-war Japan, China will probably develop its military forces sufficiently to avoid being bullied by other nations (Japan depends on the U.S. for such protection).

Question 8

What will happen to the U.S. dollar as the principal currency for international transactions?

Suggested Answer 8

In today’s financial world, international financial transactions are increasingly based on “notional” (think “virtual”) rather than “real” amounts of various currencies. Indeed, all of the major financial institutions that provide clients with the ability to hedge currencies and/or interest rates already maintain mind-bogglingly-large “books” of off-setting "notional principal contracts" (what outside observers would call “virtual loans"). When “yours truly” was associated with Dresdner Kleinwort Benson 1997-2002, Dresdner Bank and 6-7 of the other large “players” each maintained a “book” of “notional principal contracts” each of whose total dwarfed the American GDP!!!

So the real question is the extent to which international financial “players” will continue to calculate the Las Vegas-style “books” of “virtual loans" by reference to U.S. dollars rather than other currencies.

However, regardless of the answer, the need for any “actual” (vs. “virtual”) currencies will soon disappear – even for the ordinary commercial transactions of individuals.

And the massive U.S. debt held by foreigners (currently approximately $1 trillion by the Chinese and approximately $1 trillion by the Japanese and approximately $1 trillion by a combination of various oil-producing countries) will be used to buy up American goods (displacing American consumers) before the U.S. dollar becomes worthless.

Incidentally, IT MAY BECOME IMPOSSIBLE FOR AMERICA TO “INFLATE AWAY” ITS FOREIGN DEBT BECAUSE, AS IS OFTEN REPORTED, THE U.S. HAS PROMISED THE CHINESE AND THE JAPANESE AND VARIOUS OIL-PRODUCING COUNTRIES IN ORDER TO PREVENT THEM FROM DUMPING THEIR DOLLARS THAT (1) THEY CAN OPT TO BE REPAID THE U.S. GOVERNMENT DEBT THEY HOLD IN EUROS AT EXCHANGE RATES PREVAILING WHEN THE DEBT WAS ACQUIRED, AND/OR (2) THE INTEREST PAYABLE ON THE DEBT IS SUBJECT TO A MINIMUM EQUAL TO THE RATE OF INFLATION OF THE U.S. DOLLAR. THIS IS IDIOTIC UNDER ANY CONDITIONS, MUCH LESS THE IMPENDING OBSOLESCENCE OF “ACTUAL” CURRENCIES.

Question 9

Where does China stand vis-à-vis communism and capitalism?

Suggested Answer 9

China has never been the same following the death of Mao in 1976 in many respects.

Marshall Goldman (Associate Director of Harvard’s Russia Research Center) used to write frequent columns for the NY Times whenever the subject of the Soviet Union or China arose.

Goldman loved to contrast the capitalist reforms of Mikhail Gorbachev (leader of the old Soviet Union 1985-1991) with those of China during the same period.

Goldman was amazed that the principal “capitalist reform” of China during this period was to permit Chinese farmers (China was still overwhelming agrarian) to retain 50% of whatever they produced for whatever they saw fit – the equivalent of a pure capitalist system with a 50% income tax rate!!!

Meanwhile Goldman was always incredulous that the principal “capitalist reforms” of Gorbachev were that Russian businesses would no longer be subsidized by the government – that they would have to turn a profit or be shut down!!! The political problem, which made Goldman incredulous over what he always predicted would be Gorbachev’s downfall, is that the Soviet economy was much more industrialized than the Chinese and, whereas the Chinese government was permitting Chinese farmers to do what they wanted, Gorbachev was threatening the typical Soviet worker with unemployment if his industrial employer couldn’t turn a profit.

*****
Another amusing (though little known) truth about the Chinese Politburo (aka, the Politburo of the CPC Central Committee) is that it became the world’s largest billionaires club!!! Not too long after the death of Mao and his long-time comrades, the “new guard” decided to divvy up among themselves all of the government-owned companies and a good friend of “yours truly” (a British-trained American-based attorney who was still a native citizen of Hong Kong, then still a British colony) “took public” in New York and/or London on behalf of each of the Politburo members all of the companies he had selected in the divvying up. Thereupon, my friend became an investment banker specializing in raising financing for Chinese companies and Chinese industrial projects.

Question 10

Even if China does not threaten other countries militarily, what is the prospect for Chinese cooperation on such international problems as global warming?

Suggested Answer 10

Nil.

Unless someone is willing to invade China to prevent them militarily from continuing to build coal-fired electric-generating plants on a prodigious scale.

Global warming will have to be solved by alternate energy that is cheaper than carbon fuels.

And even then the problem will still be challenging because human beings themselves use oxygen and produce carbon dioxide – and the world’s human population (much less the animals used by humans for food) is projected to increase drastically (the “elephant in the room” that nobody wants to discuss because limiting or reducing the world’s human population is not pleasant to contemplate).

Question 11

In addition to the issues raised in Questions 5-10, are there any additional reasons to be concerned about the Chinese development? (After all, China "ruling the world" does sound ominous, as presumably intended by Martin Jacques.)

Suggested Answer 11

Let’s discuss this on February 10th!!!

[SirArthurC]

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---------------------------- Original Message ----------------------------
Subject: Re: Suggested Answers to Short Quiz
From: Sir Arthur Collingsworth
Date: Sat, January 30, 2010 4:22 pm
To: John Karls
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John,

I wish that I could attend your sessions. I have a few observations re your proposed questions and responses.

You said that Japanese had no cultural concept of POW's. The Japanese treated the Russian POW's very well after the Japanese defeat of their Baltic Fleet after the Battle of Tsuchima (sp?). They were put in Buddhist monasteries, well taken care of and the officers were even given allowances for personal purchases! I don't know any country that did such an honorable treatment.

You said that the Japanese standard of living was extremely low. I have visited Japan scores of times and lived there for three years and can NOT agree with this assessment. Some living quarters may be small but the living standards that I have observed in many homes is good.

In many ways China is making greater progress in coping with global warming than the US. Our per capita contribution to global pollution is the highest in the world and we are making minor progress. The Chinese are far ahead of us in solar and wind energy. We should not forget our poor legacy in this area. The American lack of commitment in Copenhagen was embarrassingly disappointing!!!

Cheers, ARTHUR


---------------------------- Original Message ----------------------------
Subject: Re: Re: Suggested Answers to Short Quiz
From: John Karls
Date: Sat, January 30, 2010 11:04 pm
To: Sir Arthur Collingsworth
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Dear Arthur,

Thank you very much for your e-mail!!!

Quite a few recipients of the weekly newsletter live outside Utah but enjoy our newsletters & bulletin board, and participate in our six-degrees-of-separation e-mail campaigns. (I still travel quite a bit, but usually manage to make it to Utah once a month for attending the RL meetings and seeing my son Michael.)

Re the Japanese treatment of American POW's, you were the one who many decades ago put me onto the Japanese refusal to sign the post-World War I international accords on the treatment of POW’s and the Japanese cultural view of POW's as the reason for the refusal, but I have since read quite a few books focusing on, or dealing tangentially with, the issue.

I wasn't aware of the Japanese treatment of Russian POW's, and I'm embarrassed to admit that I am unfamiliar with the naval battle that you referenced. Though, of course, I am well aware that Stalin declared war on Japan just before Truman dropped the two atomic bombs in a blatantly overt (but unsuccessful) attempt to earn a say in governing post-war Japan similarly to the way Germany was divided. If my suspicions are correct that this all occurred just before the end of the war, I would imagine that the Japanese treatment of the Russian POW's was a practical attempt to ingratiate themselves with the Russians in anticipation that they would be participating in the post-war governing of Japan.

Re the poverty of Japan, there have been quite a few books on the subject, most of which were written long after you lived there (I would also guess that with your life style, you did not have many contacts among the vast majority of the population). You are right that Japanese living quarters are extremely small, reflecting their poverty -- they ruefully are accustomed to refer to their living quarters as "rabbit hutches"!!! However, the main problem seems to be that the large Japanese companies employ virtually nobody with most of the work contracted out to smaller concerns. The reason for this structure is that the large Japanese companies, as the foreign-exchange value of the Japanese yen has trended upwards over the decades, are then able to continue to export by pushing price reductions back to their suppliers which then push wage reductions onto the real workers who are on the payrolls of the suppliers.

Re global warming, no quarrel with anything you say. However, I didn't claim that the U.S. record is anything but abysmal, or that American wind/solar technology is superior to what the Chinese may have developed. However, it seems to me that you are raising a "red herring" since nobody's wind/solar technology is economic and the last time I looked, the Chinese were building another huge coal-fired electric-generating plant at a rate of more than one/day!!!

Re Copenhagen, you can't get me to defend the American performance!!! Though everything I have read about the European cap-and-trade policy in place since Kyoto seems to indicate that it is a fraud!!! At first masking an attempt to provide Russia with foreign aid to keep it from reverting to its old Soviet ways!!! But quickly devolving into competing armies of explorationists vastly outnumbering the number of explorationists in the world's oil industry -- except the cap-and-trade explorationists were searching for companies with unused pollution rights that they could acquire for a song. The studies show that relatively recently, when pollution rights were finally beginning to achieve a significant value with, of course, no reduction in carbon pollution in the E.U., the E.U. cap-and-trade program was effectively gutted by changing the rule that the explorationists were restricted to searching for pollution rights inside the E.U. so that the explorationists are now permitted to explore for pollution rights anywhere in the world!!!

Sorry to be so cynical.

But perhaps you can understand my exasperation (as reflected in Suggested Answer 10, though the comment should not have been limited to China) over whether there will ever be any politicians anywhere in the world willing to impose on their constituents any significant cost in order to fight global warming.

I hope all is well with you and Brian -- please give him my best. Are you going to have a big 35-year-anniversary celebration in October next year??? (It's easy to keep track of your anniversaries because your big 25-year-anniversary celebration in Prague was 4-5 weeks after 9/11.)

Your friend,

John K.

PS - Although you didn't inquire, I'll send you an update in the next week or so about what is happening with the California law suits against the 15 international financial institutions.

[SirArthurC]

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---------------------------- Original Message ----------------------------
Subject: Re: Suggested Answers to Short Quiz
From: Sir Arthur Collingsworth
Date: Sun, January 31, 2010 1:22 pm
To: John Karls
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John,

Great to hear from you so promptly. I was speaking of the Japanese treatment of the Russian POW's after the Russo-Japanese War in 1905. It was fought over Russian and Japanese control and spheres of influence in Korea and the northern Far East of China (what became Manchuria). The Japanese decimated the Russian Baltic Fleet in the decisive naval battle in the Straits of Tsushima in May, 1905. Several hundred thousand Japanese and Russian troops fought in the prior land battles. As you may recall the final outcome was determined in the Treaty of Portsmouth (NH) with Theodore Roosevelt as mediator (it was the pretext for his being awarded the Nobel Peace Prize). I thought that the Japanese were very generous in their treatment of Russian POW's at that time considering the unfair way in which the spoils were decided by Roosevelt and the Japanese xenophobia at the time. The defeat of European Russia by the "yellow people" was a great psychological blow to Russia and a colossal miscalculation by Nicholas II. It caused considerable domestic anger in Russia (e.g. Bloody Sunday tragedy in St. Petersburg). Few Americans know much about the war or its aftermath considering the Roosevelt-Portsmouth involvement.

I think that there is greater poverty in the US than Japan. It is true that Japanese housing is much smaller than in the West, but the Japanese have a different conception of space. I think that they have been very creative and resourceful in configuring space and that we have been profligate with the use of space (not to mention our MacMansions) and energy. We live is a cozy but very pleasant apt. (only 900 sq. ft.) in a very good part of Berlin during our summers. One should not judge Japanese or Chinese by Western standards, we are too ethnocentric. They have adapted to their unique historical and geographical circumstances. In my opinion that have evolved a quality of life within their cultural context. Their diet is also more healthy than our's. Let us not forget Appalachia, Watsonville, Detroit, etc., etc. In my opinion Japanese educational standards are higher than here. They also benefit from having a more homogeneous population.

Did you read the article of the front page of today's NYT re China becoming the leader in solar and wind technology and production? They are making great strides. My understanding is that their new coal fired plants use the most technologically advanced scrubbers and equipment. Our per capita consumption of energy is multiples of their's. We have been particularly profligate in our use of energy over the decades as we built our industrial capacity. We expect the Chinese to make sacrifices that we never considered making. I am not an apologist for China re global warning but I think that we are arrogant in preaching to others!!! We are unable to deliver our fair share of aid required by the developing world in their efforts to adjust to the imperatives of global warming. We are FAR behind Europe in dealing with energy issues.

I think that we are overly obsessed re Iran and that neither Obama nor Clinton have made a serious effort to constructively engage them. I can understand the Russian and Chinese unwillingness to support more Draconian sanctions. We have destabilized the Middle East from Lebanon to India and are becoming overextended in an unwinnable quagmire!!! We are going to alienate the entire Muslim world!!! If Israel bombs Iran it will have terrible consequences for everyone. We have not employed the carrot and stick approach that we attempted with North Korea. We have never made an effort to apologize to Iran for our earlier misdeeds. Our credibility of convincing the world of the potential Iranian nuclear threat has been seriously tarnished by our WMD pretext for going to war with Iraq. Our arrogance is alienating more and more of the world. I supported Obama but have been greatly disappointed that he has adopted and amplified much of the UNWISE policies of Bush. Sending 30,000 more trrops to Afghanistan and turning the Pakistani military into mercenaries is very short sighted and UNWISE. I fear that we shall pay a high price for this foolish and unwinnable strategy!!!!

Why don't you come here for a few days so that we can continue our exchanges? Our guestroom awaits you.

Cheers, ARTHUR

[SirArthurC]

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---------------------------- Original Message ----------------------------
Subject: Re: Re: Suggested Answers to Short Quiz
From: John Karls
Date: Sun, January 31, 2010 3:21 pm
To: Sir Arthur Collingsworth
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Dear Arthur,

Thank you for your additional comments.

I don't have any time at the moment to comment on your observations, except to say that generally we agree, as usual.

However, since you were the person decades ago to originally tip me off about the Japanese cultural attitude that a soldier should commit hari-kari rather than become a POW, that this was the reason why the Japanese did not sign the post-World War I international accords regarding the treatment of POW's, and that this was what produced the abysmal treatment of American POW's at the hands of the Japanese during World War II -- I am curious regarding your description of the wonderful treatment of Russian POW's at the hands of the Japanese during the Russo-Japanese War of 1904-1905.

1. Do you still adhere to your original views??? NB: there have since been quite a few books written about the abysmal Japanese treatment of American POW's during World War II that agree with your original views.

2. What explains the wonderful treatment in 1905 of Russian POW's??? Is the answer simply that then-Emperor Meiji was a "nice guy" and took steps to insure that the natural cultural tendencies of his military personnel were reined in???

3. And what explains the systematic starving/working to death of American POW's by the Japanese during World War II from which the survival rate was low single digits??? Is the answer simply that Emperor Hirohito was only 11 when his grandfather, Emperor Meiji, died so that Emperor Hirohito was influenced instead by prevailing Japanese cultural attitudes??? Or was Emperor Hirohito uninterested in the treatment of American POW's whose treatment was then determined by the prevailing Japanese cultural attitudes of the various Japanese military units that had custody of the POW's???

After all, there was an interesting series 20-30 years ago on PBS' Masterpiece Theater about the Japanese treatment of British women and children captured by the Japanese when Singapore fell on 15 February 1942, a mere 70 days after Pearl Harbor -- and how they were forced to tramp across the Malaysian countryside for the remainder of the war because, upon arrival in each Japanese military district, the commander didn't know what to do with them other than order them to continue marching. (Which sounds a lot like George Orwell's "Down and Out in Paris and London" in which he describes the time limit imposed by British government flop houses before derelicts had to walk to the next flop house -- from which derives the term "tramp" since "tramping" across the English countryside is what Orwell and the other derelicts were forced to do and the constant sight of "tramps" everywhere became, according to Orwell, so omnipresent that the "tramps" effectively became invisible to the more fortunate).

4. Incidentally, was the relatively-benign treatment of the British women and children captured upon the fall of Singapore the result of a Japanese perception that women and children were not soldiers who were expected to commit hari-kari rather than be captured???

*****
Thank you for renewing your standing invitation to visit - I take it you are based in California, as usual, for the winter???

Your friend,

John K.