Financial crisis

Show your patriotism through spending

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Weathering the global financial downturn requires a strong commitment from every citizen and, at least in the minds of certain economists and government officials, a willingness to open up your pocketbook and spend for the good of the country.

Writing in yesterday's Shanghai Daily, columnist Wang Yong turns an incredulous eye on recent exhortations to engage in patriotic consumption:

"Buy an apartment, and you are patriotic," says a local Chinese official in her bizarre call to beggar the poor to bail out housing speculators.

Wang Aihua shocked the nation with her bold statement last Monday, delivered live on a local TV station in Hefei, capital of Anhui Province. Wang is the director of the city's urban planning bureau.
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Last Tuesday, one day after Wang's buy-a-condo plea, Li Zhe, a member of the Beijing Committee of the Chinese People's Political Consultative Conference (CPPCC), said: "I suggest patriotic consumption. Everyone and every institution should spend what they make in one year just on consumption."

How about two years' income? How about your life's savings? It seems that the one-year figure came to his mind as a passing whim.

An op-ed piece in Xinhua's Outlook Weekly magazine takes this idea further, drawing on Marxist theory to argue that spending is a patriotic necessity when a country's economy is sluggish.

Although the authors (one of whom is an economist at a central party school) do devote one paragraph to the high cost of education and health care that has the vast majority of China's population holding tightly to their savings, they still conclude with an optimistic prediction that those problems will soon be solved, freeing Chinese consumers to be truly patriotic in their spending habits.

Here's a partial translation (minus two paragraphs that cover certain ideas raised in the 17th Party Congress and China's dependence on foreign trade):

Active Consumption is Patriotic

by Han Baojiang and Dou Yong / OW

When people speak of patriotism, they tend to think of war and of deeds on the battlefield. But even in peacetime, patriotism can actually be found in every facet of life. More than simply an idea, patriotism is an action. Today, as China faces serious difficulties and challenges both domestic and international, active consumption is a form of patriotism.

The US subprime of early 2007 has turned into a global economic crisis whose worsening effect on China is becoming more apparent every day. And having undergone thirty years of swift growth, the Chinese economy is facing transitional pressures. For this reason, the central government sized up the situation, made timely adjustments to macro-economic regulations and policy priorities, resolutely implemented active fiscal policies and appropriate relaxations on currency policies, and issued a series of specific measures designed to stimulate consumption, increase domestic demand, and drive stable, relatively quick economic growth. However, the ultimate effectiveness of these policies depends on whether or not ordinary people are willing to consume.

Consumption is an inherent requirement of economic development and is crucial for the national economy. Marx pointed out, "Production is thus at the same time consumption, and consumption is at the same time production....Without production there is no consumption, but without consumption there is no production either, since in that case production would be useless."* On the one hand, only through consumption do products thus produced become real commodities, and only through consumption can commodities realize their value. On the other, consumption can generate new demand and new motivations for production.

We elevate consumption to the level of patriotism because broadening consumption is particularly important for China's economic development right now.
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Active consumption is patriotic, and loving your country means loving yourself. If demand is insufficient, the economy will remain sluggish, commodities will not sell, and businesses conditions will inevitably deteriorate, leading to a risk of salary reductions or unemployment. In response to the financial crisis that is sweeping the globe, Premier Wen Jiabao said that confidence is more important than gold or currencies. For each individual consumer, having confidence in consumption is actually having confidence in the country's future, and having confidence in their own future.

Calling for patriotic consumption does not mean blindly beating the drum for consumption. Rather, it is based on the fact that spending among the country's citizens lags behind economic growth. Both under-consumption and over-consumption are unscientific consumption models; only by upholding the principle of "appropriate consumption" and keeping consumption growth in line with the conditions and objective developmental demands of social reproduction will the domestic economy be able to preserve fast-paced, healthy growth. The deep-seated reasons for the outbreak of the sub-prime crisis in the United States were over-consumption and deficit spending, which sapped its economic development capacity. That was a sobering lesson. The situation in our country, however, is precisely the opposite: because of various reasons including cultural traditions, historical customs, ideology, and economic system, consumer spending growth is seriously lagging. Although consumption has grown steadily in recent years, it is still a weak link in our national economy. Overall, there is still excellent consumption potential and massive room for growth in consumer demand.

In calling for active consumption, the starting point should be that it is "person-centered." The fundamental contradiction in early-stage socialism is between increasing demand for material culture and social production that lags behind. Through thirty years of fast-paced economic growth, China has long since bid goodbye to a shortage economy, letting the multitude of consumers fully enjoy the fruits of their labors. What is key right now is to create an environment that gives consumers the ease and peace of mind to consume.

To that end, the government is drafting and implementing a series of policies, such as expanded social security efforts (a new medical plan was put online to garner public response and is currently under revision), and a new education reform program drawn up by Premier Wen Jiabao, which is already soliciting reactions from all sectors of society. Long-range expenditures in these two areas, seen by consumers as heavy burdens, may soon be alleviated, stimulating consumers' short-term consumption. Or take for example the program underway to bring household appliances to the countryside. More effective measures will be necessary to guarantee that the people truly benefit from government subsidies, that they actually reach the hands of farmers, while at the same time preventing inferior and counterfeit products from cheating and harming them. In addition, the disparity between urban and rural electricity prices under which some rural areas pay so much for power that they can't afford to use household appliances even when they can afford to buy them is another issue that awaits a speedy resolution.

In conclusion, once the problems facing rural and urban consumers are resolved, their actual and potential spending power will be fully unleashed, allowing them to use active consumption to help the country ride out the present storm.


What if you can't spend? "The poor aren't even qualified to be patriotic," wrote one commenter in response this post by "Old Man of the East Pole" on the People.com BBS:

The media have reported that Outlook magazine recently published an article calling for the public to actively consume. The article said, "as China faces serious difficulties and challenges both domestic and international, active consumption is a form of patriotism."

Those who beat the drum for "active consumption" are obviously talking to consumers, and by "active consumption" they mean that consumers should actively spend money. In addition, because "active consumption is patriotic," there is reason to suspect the patriotism of consumers who do not actively consume. I trust that none of those non-active consumers wants to be slapped with the "unpatriotic" label.

Captial — money — is a precondition for active consumption, and you've got to have a lot of it or else you can't accomplish active consumption. However, only the rich have enough money in today's society, and they're only a minority, a small one at that. The majority live in fairly tight circumstances. CEOs have money, white collars have money, officials have money from shady sources, the so-called "elite" have money, and it's because they have money and a lot of it that they can spend freely to live in fine homes, drive BMWs, visit prostitutes, keep mistresses, and go abroad to gamble.

Of course, common people have money too, but their money is countable, and those few coins are needed for emergencies. This is because they need to keep doctor visit money, live-saving money for when they're critically ill, school money for their child, and money to buy a home when their child gets married. (And of course for this they'll spend their entire lives enslaved to their home loan!) This is all "dead money." In addition to daily expenditures, there's also the water bill, the electric bill, the gas bill, the heating bill, the garbage collection bill, and building management fees, so how much extra money will ordinary people have lying around? Active consumption: who wouldn't like to actively consume, and spend big? Everyone wants to buy a good house, a nice car, high-end appliances, and top-shelf health supplements, everyone wants to eat delicacies every day, but the condition you have to meet is that you need lots of money! Without money, "active consumption" is bullshit!

Active consumption is only for the ears of the rich, and whether they'll listen is up to them. But you can't slap the label "unpatriotic" on ordinary people simply because they're unable to actively consume.


Note: Quoted from Introduction to a Contribution to the Critique of Political Economy. This translation by S.W. Ryanzanskaya, hosted on Marxists.org.

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There are currently 3 Comments for Show your patriotism through spending.

Comments on Show your patriotism through spending

why not?

seems less preposterous than the notion that boycotting a foreign country's goods is somehow patriotic.

Echoes of soon-to-be former president GW Bush

I think the idea that spending is patriotic (and that not spending is somehow selfish) is a symptom of the shallowness of modern economies, and the culture of consumerism in general. As economies become more 'developed' and people have more money to spend, there are more businesses providing luxury goods as opposed to necessities. This kind of economy is more fragile and suffers more in an economic downturn (think of the stores that have closed in Hong Kong for example - electronics, designer clothing and beauty parlours). No one is under a moral obligation to buy luxury goods - if someone provides something that I don't need, why am I selfish for not buying it?
As an extreme example, there's a Dilbert cartoon that shows a man selling 'nose puppies' - ceramic models of dogs that you stick up your nose. If that man is about to go out of business, is it 'patriotic' to buy a nose puppy? The human cost of a business failing is often tragedy, but the answer is not to support businesses that should fail.

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