China and Liverpool
The news that the Chinese state investment arm, CIC, is funding a bid for Liverpool F.C. is at some level the most important piece of news today, notwithstanding floods and other human suffering. This is because as it emerges as one of the the world’s financial mega powers, the concept of Communist State Capitalism is more obviously revealed. This is a far cry from the moribund and stagnating Soviet model, which was echoed in the manner in which our own public utilities were nationalised and run.
The Chinese model is much more dynamic, based upon the principles of investment rather than ownership. It is very successful. Much more so than the old system of ownership of everything ‘by the people’ and arguably as good as, or even better, than free market capitalism, with which it works in partnership. This is very important, not least because of the unresolved issues left by the financial crisis and the large government holdings of shares in rescued banks.
It can have political consequences in the West. Socialist groupings which have had a lean time electorally for some years may find a revival in their fortunes if they promote not public ownership, but public investment, giving to taxpayers the same control of key financial and energy companies through shareholdings as other shareholders enjoy. The difference is that the dividends and profits would help fund the public services provided by the state. If Labour finds the centre ground too crowded to offer a convincing electoral opportunity, a fact finding trip to China by the newly elected Labour leader could provide some interesting food for thought.