Communist Chinese Paper To Raise $250 Million From Capitalist Pig Investors

4 comments

Rankled by federal funding to National Public Radio and the Public Broadcasting Service? Check out the People’s Daily, owned by China’s Communist Party, which hopes to raise $245 million in a public offering of shares in its online news business.

From paidContent:

People’s Daily, which also publishes in English, wants “to maintain and enhance the company’s competitive position in the industry, thus further improving the company’s profitability and social impact.”

The irony of communists striving to improve profitability aside, the People’s Daily offering is instructive. Defenders of public subsidies for media organizations cite the need for editorial independence and wonder who would support serious journalists–“boring vegetables,” according to Gawker founder Nick Denton–absent federal funding.

But the People’s Daily offering suggests private capital markets are up to the task:

The price range, which represents 34.60-38.92 times the company’s earnings per share, is a sign of strong investor demand and bodes well for other upcoming state-controlled media IPOs.

So long as there is robust demand for a high-quality product–in this case, propaganda for a totalitarian regime–investors will eagerly back it. For this reason, fluid capital markets are essential to social welfare. As American lawmakers debate new tax legislation, they should consider the efficacy of private lending in the Chinese city of Wenzhou:

Official statistics show that the private capital in Wenzhou amounted to 600 billion yuan ($95.2 billion) last year. Small and medium-sized enterprises accounted for 99 percent of the city’s total.

Private capital, if the state permits it to flow freely, finances goods and services of social value, thereby strengthening a free society.

The People’s Daily offering expands on the lesson of successful Chinese media explained by James Bond. Metro-Goldwyn-Mayer underwrote that film production because movie goers would happily watch it. Likewise, capitalists and communists are coming together in this instance because it is mutually advantageous. Capital markets, the media industry and society will be better of on the whole.

4 comments on “Communist Chinese Paper To Raise $250 Million From Capitalist Pig Investors”

  1. The leftward tendencies of capitalism are under-appreciated–people aren’t generally led to contemplate left-capitalism. Yet Marx praised capitalism for its destructive force and effectiveness in severing the archaic social and communal ties of feudal regimes. (He just happened to think it was time for the next stage, in which capitalism would be displaced.)

    By the time of Gramsci, Marxists were appreciating that victory did not come with literal economic control. That meant it was time for culture war, and in the culture war capitalism is hugely effective. As in, McDonald’s and Wal-Mart do a great job of effing up local habits and traditions and re-orienting everyone around consumerism.

    In this case I don’t know that there are quite the same cynical angles. But, there’s more compatibility between capitalism and the forces of the left than is usually spelled out. (The Chinese often strike me as more interested in what’s best for the Chinese than they are in any particular ideology. Their ethno-nationalism is healthier it is in the U.S., where any departure from “equality” is met with pious shrieking.)

  2. Or, orrrrrrr, McDonalds and Wal*Mart provide products and services that people actually want?

    Evan, China is much more diverse than you give it credit for. What “ethno-nationalism” there is, important to hyphenate because they two are not really exclusive of one another, comes at the harsh expense of many minority ethnic groups or political groups who don’t acquiesce to the political system. There’s nothing to admire about China. Nothing. There’s real human costs to their “ethno-nationalism” and “leftist-capitalism.”

    1. Okay, but that’s the debate. Does consumer capitalism merely satisfy want and need? Or, does it do something more worrisome and exaggerated?

      Observe the downside of the mass consumerist habit of interpreting human want and choice. It’s easy to express want for a hamburger (and apparently easy to translate that want into the cheapest, most accessible-to-all “hamburger”). But eventually you’d be stuck arguing that, because a lot of people wanted hamburgers, they were also asking for an asphalt-covered landscape crammed with fast-food restaurants, peopled by the victims of a worsening obesity epidemic all driving their cars and SUVs. Yikes.

      This is why economics is limited. We are not a reduction of our momentary explicit rational choice. It ends up being bad for the soul to approach things that way.

      Unfortunately it won’t do to say that, because ethno-nationalism has costs and puts people and groups on unequal footing, the Chinese are therefore bad. The same is true of every arrangement and attempt at running things. Ethno-nationalism happens to be a strong, perhaps the strongest, organizing force among peoples. Ignoring it, criminalizing it, and insulting it may not suffice as a response, especially as the strength of the West declines and China’s rises.

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