Aleksey Maslov: “Coronavirus has stimulated the self-cleaning of world economy”
The director of the Institute of the Far East of the Russian Academy of Sciences about the difference between Chinese and Western approaches to fighting epidemics. Part 2
“The reaction of the world economy is inadequate to the virus. Just two crises, two cycles have coincided. By regulating itself, the world is bringing down stock markets. After that, people return to real production. And those who have their own real economy — their own food production, their own factories — will ultimately benefit from this crisis," says Aleksey Maslov, the director of the Institute of the Far East of the Russian Academy of Sciences, in the second part of the interview with Realnoe Vremya. Read the first part here.
“The self-cleaning phase of the economy has suddenly coincided with the coronavirus”
China during the coronavirus epidemic demonstrated a high level of organization and a high speed of state machinery. Against this background, the West looks very slow and lagging.
You see, the Western model hasn't worked in this situation. We see several depressing moments.
First, for some reason, Western countries saw their only salvation in complete isolation from each other. We do not see any swift establishment of joint laboratories in Europe, and we do not see constant contact between the leaders of the countries, for example, prime ministers. The European market, which was built so carefully and should be based on open borders and transparency, hasn't worked. There've turned out to be many contradictions between European leaders.
Second, the management system has shown its inefficiency with a large freedom of individual territories. For example, in the United States, states enjoy broad rights. But without mobilization economy, it is impossible to effectively cope with the current situation. What do city mayors do in the United States? They ask money from the central budget. And there trade begins: give — not to give.
It's not just that a certain economic model is better or worse. In a crisis or disaster (no matter which), an illiberal economy works better. In a war, there must always be one commander, and the others must obey his orders. But in the conditions of quiet life and prosperity, the model of the economy does not matter. It doesn't matter whether this model is liberal or not. It matters only in the sense that the people who live in the country share its principles. Because you can admire how well China has responded to these events, but it is unlikely that the average European will be able to live in China as the local people live there. Not because it is bad there but because the European is simply not used to not having access to Facebook, Skype, that he is constantly in a completely transparent environment (over the past three months, they can easily track where a person has been, with whom he has communicated, and so on). The concept of personal freedom for a European is much higher. The economy manifests itself only in a crisis situation. Now there is a crisis, and we can see which economies are working.
And all the recent crises have occurred almost because of the same thing: because the securities market was much more important than the market for real production. To develop real production, to build a factory, you need to take a loan, then work for five or seven years to promote this production and pay off the loan. Only then you can earn money. And if it is a small factory, you have a great chance to go broke and not stand up to competition. To stand up to competition, you need a lot of money.
All the recent crises occurred almost because of the same thing: because the securities market was much more important than the market for real production
And then the question arises: at what interest? The bank rate is a very important point. So most people go to stock markets and siphon money there. This does not mean that everyone personally trades on the stock market. In the US, it is estimated that from 60% to 90% of people are involved in the stock market, not directly but indirectly. For example, they keep their money in a pension fund, and the pension fund itself places money on the stock market. The latter often turns out to be a market for inflated, “garbage” securities. There is no industrial reality behind it. And from time to time, the world economy moves towards papers in the literal sense of the word. And this is the main contradiction because the number of goods is not growing. By regulating itself, the world is bringing down stock markets. After that, people return to real production.
And now we see the same situation. There is coronavirus, which is actually not very scary — neither in terms of contagiousness nor in terms of lethality. Yes, it is unpleasant, it is worse than any flu. But the reaction of the world economy is inadequate to the virus. Just two crises, two cycles have coincided. And those who have their own real economy — their own food production, their own factories — will ultimately benefit from this crisis. Most of all those who play in the securities market will lose because there may be nothing behind securities at all. This is a self-cleaning economy that has suddenly coincided with coronavirus. That is, the coronavirus stimulated the processes that do not depend on it at all.
“China and India were ahead of Europe both in terms of labour productivity and the number of kilocalories per capita”
You spoke (in the first part of the interview — editor's note) about the plague of the 14th and 19th centuries. What were the consequences?
In 2010, DNA studies were conducted on people who died during the plague in both Europe and Asia. They became convinced that the plague of the 14th century came from the central regions of China. There are historical descriptions of how this happened. Most importantly, the plague quickly came to European cities, most likely along the Great Silk Road. Then, for some time, the flow of goods stopped, and the infrastructure collapsed. Most importantly, cities with a high density of population, such as the city of London, in the 14th century decreased because of the plague, according to various estimates, by from a third to a half. The number of deaths was such that the city had to be moved along the Thames. The plague triggered a large-scale peasant uprising. Also, the plague covered Paris. It was made famous by Boccaccio in the Decameron. It is believed that Petrarch lost his Laura, to whom he dedicated all his poems, during this period.
We see an interesting thing in this plague of the fourteenth century. It was almost untreated and, strictly speaking, they did not even know how to treat it. The only thing they did to prevent it from spreading was to burn the corpses or bury them very deep. And it came to an end on its own, because, apparently, the virus mutated. And there was the collapse of the economy. Here we also see two models. In China, as well as in India, it was not the population that suffered most in times of a crisis but the material resources. China and India suffered the most from floodwaters that demolished houses, locust attacks, and plant diseases. But at the same time, human resources remained, and after disasters, people came and restored everything.
China and India suffered the most from floodwaters that demolished houses, locust attacks, and plant diseases. But at the same time, human resources remained, and after disasters, people came and restored everything
Europe has a different system of economic crises. It is human capital that was under attack there. So we see a good example: in England and Germany, the houses are made of stone, they can not be demolished by the wave or flood of rivers — but people died. In China, houses were often lightweight constructions, and these constructions were easily torn down by a hurricane or wave, but then they could be just as easily restored. And since human experience and human resources were not destroyed, the recovery was quite rapid.
In this regard, China and India in the pre-industrial era were almost all parameters ahead of Europe — both in terms of labour productivity and even in terms of the number of calories per capita. It's just that the traditional economy of these countries had not been studied for a long time, and there was a perception that they had always lagged behind Europe. No, they were almost in all respects ahead of Europe until the seventeenth century.
“Buddhism and Taoism resist the panic”
How does the traditional religion of China affect the perception of the epidemic and death?
In the popular consciousness and on popular resources, there is a somewhat distorted idea of what the Chinese believed in the past. In reality, the Chinese religion (like any Asian religion) is not institutionalized. It is more a complex of worship of spirits and graves of ancestors and offering them prayers. Taoism and Buddhism — this is a small institutionalised pieces of popular religions. And the number of Taoists and Buddhists as monasticism in China was not very large.
Rather, we should talk about the religiosity of consciousness. In China, there is no concept of a single God, in his place, there is the Emperor, ruler or chairman, he is above all spirits and it is he who saves or helps. Therefore, in the Chinese mind, there is a clear concept of a mandate to rule — “the Mandate of Heaven”: when a leader can do something for the country, it means that Heaven has given him a mandate to rule. If the rivers begin to flood and the economy collapses, it means that the Heaven has deprived the ruler of this mandate and a new ruler must be brought to power. This religious idea still lives in the minds, just formulated in a different way. China's modern leadership has confirmed its “mandate to rule”.
In China, there is no concept of a single God, in his place, there is the Emperor, ruler or chairman, he is above all spirits and it is he who saves or helps. Therefore, in the Chinese mind, there is a clear concept of a mandate to rule — “the Mandate of Heaven”
The attitude to death among the Chinese today, in my opinion, is the same as that of European peoples. The vast majority of Chinese are afraid of death, like Europeans. The only thing is, given the large Chinese population, that death does not become such a tragedy. This is an everyday part of this life. Therefore, the funeral procedure there is much simpler and less tragic than in Europe. Plus, the country has always lived in the conditions of a huge number of deaths. China has become accustomed to that death roams around. And it is no coincidence that there used to be whole “streets of the dead”. In any city there could be a street where an old man came to die in a special room. Relatives paid for his funeral. It was a normal mechanical part of life. This is now prohibited for sanitary reasons. In a more relaxed form, such traditions have been preserved in Hong Kong.
There is also a group of people who believe in reincarnation, the immortality of the soul. I have personally known Taoists and Buddhists, and they were calm about their deaths, as were their families. And in real Taoism and Buddhism, people believe that there is no physical rebirth, just another phase of existence. For a while, we come to this physical body and experience different states in it — fear, love, the desire to eat well and live comfortably. We can experience it and overcome it. And when we get the experience of overcoming, the body is no longer needed. This is a very different approach to the cycles of life and death. It is, oddly enough, very utilitarian. At some point, you just need a physical body.