RUTHFULLY YOURS

Razeen Sally is Associate Professor at the Lee Kuan Yew School of Public Policy, National University of Singapore.

China’s “market Leninism” graphically illustrates the tension between a static political system and a fast-changing, globally integrated market economy. Will China’s party-state adapt, or will it stagnate and get stuck in the middle-income trap? The auguries are not good.
Without innovations, no entrepreneurs; without entrepreneurial achievement, no capitalist returns and no capitalist propulsion. The atmosphere of industrial revolutions—of “progress”—is the only one in which capitalism can survive. —Joseph Schumpeter, Business Cycles, 1939

My last Quadrant essay (November 2015) was on economic liberalism in Asia. Here I switch focus to capitalism in Asia. I say “capitalism” deliberately. What does it mean?

A capitalist economy is, of course, a market economy: the exchange of goods and services at freely forming prices in a system that unites production and consumption. This was what Adam Smith meant by a market economy; he also emphasised property rights and “natural liberty”, or what we now call economic freedom—the individual’s freedom to produce and consume, and to use his property rights, as he sees fit. But capitalism suggests more than “market economy”. I use it in the Schumpeterian sense. For hovering above this essay is Joseph Schumpeter, one of the great twentieth-century economists; he was also perhaps the greatest historian of economic thought of all time, and surely one of social science’s most colourful and dazzling performing artists.

Karl Marx wrote about “capital”—the stock of wealth around which production and class relations are structured. Werner Sombart, from the last generation of Germany’s Historical School of economics, was the first to refer to “capitalism”. But Schumpeter had a different vision of capitalism. Vision was one of his favourite words. Today the word is debased, for everyone has a “vision”, just as everyone has a “philosophy”. But Schumpeter meant something precise: a vision is a personal conception of how a whole system works, before filling in its compartments and its nuts and bolts. He laid out his vision of capitalism first in The Theory of Economic Development, and later, encompassingly, in Capitalism, Socialism and Democracy.

Sweden is a country where using the word “mass immigration” usually gets criticized just for sounding racist. Only anti-Semitism does not get criticized. In Sweden, all other forms of racism — even things that some say could be classified as racism — are criticized, and ruthlessly.

TV4, one of the most important Swedish media outlets, in 2015 described anti-Semitism as simply a “different opinion.”

“What is history for us is not the history of others. … When we have other students who have studied other history books, there is no point in discussing facts against facts.” — The administration of an adult-education school, in a reprimand to a teacher who said the Holocaust actually took place.

“The Jews are campaigning against me.” — Swedish Foreign Minister Margot Wallström.

There are fewer than 20,000 Jews in Sweden; more than 20,000 Syrians received asylum in 2014 alone. That is why so few politicians — who are eager to win the votes of immigrants — talk about Arab anti-Semitism.

President Obama imagined he could end his second term with an arms-control detente with Iran the way Ronald Reagan did with the Soviet Union. It looks instead that his nuclear deal has inspired Iran toward new military aggression and greater anti-American hostility.

The U.S. and United Nations both say Iran is already violating U.N. resolutions that bar Iran from testing ballistic missiles. Iran has conducted two ballistic-missile tests since the nuclear deal was signed in July, most recently in November. The missiles seem capable of delivering nuclear weapons with relatively small design changes.

The White House initially downplayed the missile tests, but this week it did an odd flip-flop on whether to impose new sanctions in response. On Wednesday it informed Congress that it would target a handful of Iranian companies and individuals responsible for the ballistic-missile program. Then it later said it would delay announcing the sanctions, which are barely a diplomatic rebuke in any case, much less a serious response to an arms-control violation.

JERUSALEM—A gunman opened fire outside a popular bar in the coastal Israeli city of Tel Aviv on Friday afternoon, killing two people and wounding at least three others before he fled the scene, police said.

The motive for the shooting spree, which took place on a busy street, wasn’t immediately clear, police said. Media reported the assailant was a member of Israel’s Arab minority and called it a nationalistically motivated attack, but police refused to comment, saying the investigation was under way.

Israeli Channel 10 TV showed CCTV footage of the incident, obtained from a health-food shop next to the bar. The video showed a man with short hair, glasses and a black bag over his shoulder scooping up some nuts, putting them in a plastic bag, then emptying them back. The footage then showed the man walking toward the entrance of the store, placing his backpack on a shopping cart and taking a gun out of it. He then stepped outside and started shooting, after which he ran away.