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Is the fourth lockdown still livable? But compared to Shanghai, I'm a little worried about Melbourne's prospects

author:Australian financial news

1

Melbourne's four lockdowns remain among the top 10 most livable in the world

On Wednesday, The Economist released the 2021 Global Livability Cities Survey.

Despite Australian cities dominating the top ten, Sydney's ranking fell from third to 11th, falling out of the top ten.

Melbourne, which has been the world's most liveable city for several consecutive years, lost its first spot in the 2021 rankings, and Melbourne's latest rankings lag behind New Zealand, Switzerland and Japan.

Is the fourth lockdown still livable? But compared to Shanghai, I'm a little worried about Melbourne's prospects

Melbourne fell from second place to eighth, while Adelaide quickly moved up to third and Perth came in sixth.

Melbourne scored highest in cultural education and infrastructure, while Brisbane and Adelaide scored higher on healthcare.

Brisbane and Sydney are ranked 10th and 11th respectively.

The study pointed to several reasons for the change in rankings, mainly due to the fact that covid-19 and the lockdown "caused huge fluctuations.".

The study notes that "the global average livability score has fallen by 7 points compared to the pre-pandemic average score".

Auckland was rated as the most livable city because of its ability to quickly control the number of COVID-19 cases, so restrictions were lifted earlier than most other parts of the world.

You know, Melbourne topped the list for seven consecutive years from 2011 to 2017.

But in terms of measures of city stability, healthcare, education, culture and environment and the size of infrastructure, Australia's coffee capital has dropped a few orders this year to tie for eighth with Geneva, Switzerland.

At the same time as the Economist Intelligence Unit released its research report on Wednesday, Melbourne entered the final day of the lockdown period.

The extent to which city border closures are protected, the ability to deal with public health crises, and the speed of vaccination dominate the rankings.

However, while Melbourne remains livable across Australia, I am more worried about Melbourne's future.

Take Shanghai and Melbourne. Some people will ask, can Shanghai be compared with Melbourne?

3 questions to ask first!

Why has Shanghai grown by leaps and bounds from a rather backward city to today's continuous ranking of the world's most livable cities?

Why is Melbourne in such good terms but slow to develop?

Why is Shanghai full of problems and hidden crises?

Shanghai's rapid development and hidden crisis are undoubtedly closely related to the introduction of the market economy, and indeed, analyzing the impact of the market economy on social form is the key to answering the above questions.

Is the fourth lockdown still livable? But compared to Shanghai, I'm a little worried about Melbourne's prospects

2

The end of history?

According to the free-market economics school, the essence of the market economy is that private ownership of capital investment in production, while capital creates profits, creates jobs, pays wages and provides taxes, thereby improving the living standards of the masses and social stability.

However, according to Marx's theory of surplus value, the wages of workers are only the embodiment of the value of labor, the cost of maintaining the survival of workers and ensuring the reproduction of workers.

In addition to wages, the workers create surplus-value; this part of surplus-value is appropriated by the capitalists without compensation, creating proletarian poverty.

Widespread poverty among workers led to underconsumption and cyclical overproduction, and economic crises were inevitable. The constant intensification of social contradictions has led to a proletarian revolution.

The European workers' movement was in full swing in the 19th century.

But in the late 19th century took place the revision of Marxism by Bernstein, Kautsky and others.

Bernstein proposed that socialism could be achieved through parliamentary struggle within the framework of constitutional democracy, without the need for violent revolution.

Bernstein's revision of Marxism ushered in social democracy, which surged in the West after World War II with the economic recovery.

In 1956, for the first time, white-collar workers in the United States surpassed blue-collar workers who worked primarily by manual labor.

"White-collar workers" are widely regarded as belonging to the "middle class", and the term "proletariat" is gradually becoming marginalized in the West.

Against this background, the Social Democratic Parties of Western Europe have successively issued the Frankfurt Declaration, the Gothenburg Programme and other documents declaring their acceptance of the capitalist market economy, abandoning the Marxist theory of class struggle, and declaring that the ideological origins of democratic socialism in Europe come from Christianity, humanitarian philosophy, Enlightenment thought, Marx's historical and social theory, and the experience of the workers' movement.

The Social Democratic parties of the West gradually evolved into the backbone of Western politics: the Social Democratic Party in Germany, the Socialist Party in France, and the Labour Party in Britain, Australia and New Zealand.

Although the Democratic Party of the United States and the Social Democratic Parties of Western Europe do not have the same roots, they influence each other in concepts and policies and are highly consistent.

They and the right-wing Republicans, Conservatives and Liberals have repeatedly campaigned and rotated the governing power, jointly dominating the direction of these countries.

What led to the radical antagonism between the bourgeoisie and the proletariat in the 19th century moving towards the reconciliation of the 20th century?

The key factor is that the Third Industrial Revolution, which took place after World War II, and the exploitation of the world market, allowed capital to share the profits of the working class in Western countries to a certain extent, provided that it obtained enough profits.

At the same time, the Social Democratic parties have promoted this reconciliation by winning great interests for workers in Western countries in terms of wages, taxes, and social security through a multi-party electoral system.

The Third Industrial Revolution, spearheaded by the United States after World War II, produced a series of new industries represented by atomic energy, semiconductors, synthetic materials, aerospace technology and biotechnology.

The emergence of a large number of new industrial products has led to a rapid rise in the total amount of international trade.

Is the fourth lockdown still livable? But compared to Shanghai, I'm a little worried about Melbourne's prospects

From the 1950s to the 1980s, the share of Western exports in world gross output increased from 7.7 percent to 26.8 percent. Gdp per capita in Western countries rose from $14,800 in the 1950s (comparable in 2011) to $51,300 in 2016.

The OECD countries (OECD) saw their highest share of GDP as a share of GDP in 1979, at 63 percent. A large number of middle classes have emerged in Western countries, and Western society has shown a phenomenon of affluent life, social prosperity, and political stability.

The collapse of the Soviet Union in 1991, considered the landmark victory of Western democratic politics and capitalist economic systems over the socialist blocs of Eastern Europe at the time, seems to have validated the efforts of the American political scientist Francis B. Fukuyama's 1989 assertion that a democratic parliamentary form of government is "the ultimate form of government for the whole world" and "the end of history."

3

Globalization, hollowing out, polarization

History has not ended, and mankind has entered the era of globalization.

The capitalist market economy and democratic politics have encountered unprecedented contradictions in the era of globalization: the profit-seeking nature of capital has promoted the global flow of capital and technology, which means that different classes of people in developed countries are divided in their ability to obtain wealth and income inequality is expanding:

A small group of people with capital and technology can make high profits through globalization, while the average worker in traditional industries faces unemployment and long-term stagnant wage growth.

From 1980 to 2016, the income of the top 1% of the wealthy groups in Europe and the United States increased by about 200%; the income of workers in emerging countries increased by about 100%, while the average income of the 90% group in Europe and the United States increased by only 50%.

The Multi-Party Election System in the West is difficult to fundamentally bridge the differentiation of social interests, but instead leads to the formation of a welfare society and raises the cost of business. This in turn has further promoted the flow of capital and technology to low-cost countries, resulting in a decline in domestic employment and tax revenues, an expansion of the international trade deficit, an increase in government fiscal deficits, rising government and household debt, and an overall unstable financial situation in the country.

In November 2018, the unemployment rates in France, Italy, and Greece were 9.1%, 10.6% and 18.6%, respectively.

In the face of challenges, various parties in the West take turns to appear. Conservatism, represented by Margaret Thatcher and President Reagan, believed in the invisible hand of the market, advocated the government's less control, the better, privatized state-owned enterprises, weakened trade unions, and supported tax cuts for private enterprises and high-income people to increase economic vitality.

The counterpart to conservatism is progressiveism, (i.e. the collection of social democrats, socialists, anti-racists, environmentalists, pro-immigrants, and pro-homosexuals).

Democratic Presidents Clinton and Obama are representatives of this faction, preferring to stimulate the economy through government investment and increased social benefits, such as raising the minimum wage, reforming the Health Insurance system, and investing in new energy development. This faction often levied more taxes on the wealthy to balance government welfare spending and investment programs.

However, no matter how long-sleeved and skillful the Western parties and leaders are, it is difficult to change the hollowing out trend in the West due to the continuous flow of capital and technology to developing countries.

With the gradual transformation of post-war developing countries from the original raw material bases and dumping markets of developed countries to industrialization, the technological advantages and market advantages of the West have been constantly challenged.

Is the fourth lockdown still livable? But compared to Shanghai, I'm a little worried about Melbourne's prospects

Developing countries accounted for 20 per cent of global GDP in 2005, 30 per cent in 2014 and 60 per cent in 2030.

In the 21st century, the shrinking real economy in the United States can no longer support the excessive expansion of finance into real estate at low interest rates, and the financial crisis broke out in 2008, severely impacting the Western economy and society.

If we say that the Third Industrial Revolution and the formation of the world market after World War II have opened a window for Western countries to bridge the contradictions between labor and capital and develop democratic politics.

Well, with the rise of the third world and the globalization of capital, this window is closing.

Western countries are once again facing the differentiation and erosion of capital into society, and no matter how "perfect" their political systems are, they cannot stop polarization, the shrinking middle class, and the intensification of ethnic conflicts.

The polarized status quo of Western societies calls for Marxism again.

Is the fourth lockdown still livable? But compared to Shanghai, I'm a little worried about Melbourne's prospects

In 2014, the French economist Thomas Piketty published the widely publicized Capital of the Twenty-first Century. Based on more than 300 years of data, Piketty summarizes that the return on investment averages 4–5% per year and the annual GDP growth rate averages 1–2%.

A 5% return on investment means that wealth doubles every 14 years. Therefore, the possession of capital is the primary factor that determines people's wealth.

Although people today are generally richer than in the past, the gap between rich and poor is still widening in developed countries because of the amount of capital they have.

Piketty stressed that the distribution of capital in Western societies is largely determined by family and ancestry, and that the gap between rich and poor is an inherent phenomenon of capitalism.

1990s by Samuel L. Huntington's theory of the clash of civilizations cannot be ignored.

Contrary to popular theories, he argues that globalization will not bring about the integration of civilizations, but rather that Western Christian civilizations are under the combined offensive of Islamic civilization and East Asian Confucian civilization.

Huntington said in the 1990s: "If China's political stability is maintained for 20 years, if China's rapid economic growth is maintained for 20 years, China's challenge to the world order at that time is certain."

This theory reflects Anglo-Saxon fears of a possible loss of global dominance; subtly it has become one of the important ideological foundations of today's resurgence of racism and populism in the West.

4

Questioning the management and wealth distribution models of Western societies

Slow economic development and polarization have exacerbated another essential phenomenon in Western countries: people have begun to question the rationality and effectiveness of Western social management and wealth distribution models.

United States

In the Occupy Wall Street movement, the protesters' slogan is "We represent 99% of society, and we can no longer tolerate the greed and corruption of the 1% (Wall Street capital giants and elites)."

The American people are disillusioned with the establishment, both conservative and progressive.

United Kingdom

The chaos of Brexit once again reflects the disconnect between Western democratic politics and social reality. 52% of the people support Brexit, which exposes the gulf between the British political elite and the people they claim to represent on the major issue of Brexit, as well as the fact that Western-style democracy is inefficient in social management and prone to chaos.

France

France is not much better, after the French middle and lower classes are reluctant to endorse the reforms of the Macron government, starting from opposing the fuel tax, evolving into a nationwide continuous street protest, forcing Macron to retract a series of reform policies, and France's prospects are uncertain.

Zheng Ruolin, a veteran commentator who has lived in France for more than 20 years, believes that the Yellow Vest Movement is "a general outbreak of strong dissatisfaction accumulated in France for many years against the entire left- and right-wing ruling system, the Foundation of the French Economic Structure and Western Democracy, "Representative Democracy". ...... The movement showed distinctly populist overtones, especially fierce opposition to the control of finance capital over the French economy. A famous slogan has resounded throughout France: référendum d'initiative citoyenne, which refers to the referendum initiated by the people".

Former German Foreign Minister Fisher said in an article published in Project Syndicate that in most Western countries, the toiling middle class increasingly felt that the social consensus and contractual spirit formed after the war were no longer valid.

Hard work can no longer ensure a steady increase in economic income and social status, and the public is full of discontent.

If Western elites cannot effectively explain and respond to this dissatisfaction, the political democratic institutions and other key social management institutions in Western countries will not function.

Australia

Compared to chaotic Europe, Australia is much luckier.

Thanks to the strong demand of the Chinese economy, Australia has maintained economic growth for many years, and the developed countries are unique, and the polarization phenomenon is much lighter than that of other developed countries.

But even so, Australia suffers from social divisions.

There is a new term in Australian politics and the media called "identity politics", which means that society is divided into different sections according to wealth standards, social hierarchy, ethnic origin, ideology, attitudes towards environmental protection and homosexuality.

Is the fourth lockdown still livable? But compared to Shanghai, I'm a little worried about Melbourne's prospects

According to the past law, the Australian government in the period of economic growth is quite likely to be re-elected.

But even so, Australia's lower classes, immigrants and progressives in universities seem determined to support Labour's pulling down the Liberal government.

In order to ensure the victory of the general election, the Labor Party introduced a tax reform policy of "killing the rich and helping the poor", the main points of which are to tax the dividends earned by retirees on investment in enterprises, abolish the "negative leverage" loan scheme (except for new houses) that is conducive to the investment of the rich in real estate, and increase the capital value-added tax on the sale of houses.

The Liberals' plan to attack Labour is to cut off the way for Australians to invest in domestic assets and to channel Australian money to foreign assets. The Liberals have accused Labour of economic policies that will lead to an expansion of tax revenues, an expansion of the government deficit and an expansion of government debt.

Are the Accusations of the Liberal Party justified?

But even if it makes sense, why do so many Australians still support Labour's policies?

This can only be explained from the perspective of "identity politics": many Australians believe that the Liberal Party does not belong to them, and that the Labor Party's policy of "killing the rich and helping the poor" represents their interests.

Some would argue that this is an exercise of their democratic rights by Australians, but ironically, Australians' confidence in the country's governing system is waning.

According to a previous social survey, only 34% of respondents believe that MPs can competently face complex and difficult government affairs. 73% of respondents complained that politicians only care about their short-term interests and not the long-term interests of the country and voters. Only 60 per cent of voters believe that Australia's political system is better than other institutional options, compared with 52 per cent of young people aged 18-29.

At present, the West, including Australia, is indeed higher than China in terms of social management and social morality, but this is based on the more material basis that the West and Australia have, that is, the so-called "barn is realistic and knows etiquette, and has enough food and clothing to know honor and disgrace."

But the key is that as developing countries catch up, the foundation for supporting western "etiquette honor and disgrace" is shrinking, and anyone who observes the Western media for a long time can appreciate the concern and helplessness of Western society and the nostalgia for the "good old days".

Many Australian commentators believe that social division, political ridicule, and the short-term behavior of the government may be the root cause of Australia, including Melbourne, holding a good hand of cards and developing slowly.

5

It cannot be used in the name of developing a market economy

Capitalist economies have the natural function of dividing societies.

Democratic politics in capitalist countries can only nurture the middle class and form a stable society under certain conditions.

These conditions include technological, market, financial, military, legal and voice advantages. When these advantages are weakened or cease to exist, the inherent contradictions of the capitalist system are revealed and even intensified.

Establishing a market economy in China is extremely complex, and the process has been mixed up for 40 years.

The upside can be summed up as:

First, marketization has paved the way for China to be globalized, and China's hundreds of millions of rural laborers have been able to combine international capital with international markets and thus lift themselves out of poverty.

Second, marketization has magically transformed land, state-owned and collective enterprises into huge capital, and decades of strong investment have promoted China's comprehensive industrialization, built an international advanced level of infrastructure, bid farewell to the shortage economy, and moved to the forefront of the world in the use of network technology and digital economy.

Third, it has created hundreds of millions of middle-class people and formed a huge Chinese market.

But the disadvantages are also obvious and sharp.

The initial accumulation of capital in the Chinese market economy mainly comes from the transformation of state-owned and collective assets under the leadership of the government.

Formed an over-reliance on real estate situation, lack of safety valves.

In today's China, the handling of the state-owned economy, the relationship between the state-owned economy and the private economy, and how to treat marketization have become the focus of social debate. It is not possible to make a comprehensive presentation of the above issues here, but there are still a few points to be raised.

First, we cannot use the name of developing a market economy

Why is that?

This is related to the beginning of China's reform and opening up at the peak of the West.

Since then, many people in China have planted the seeds of worship for the West, believing that all problems of moving the capitalist market economy to China can be solved.

In fact, the West itself is a bit mud bodhisattva crossing the river itself is difficult to protect.

Starting from Thatcher and Reagan, the Set of Theories offered by the West, including the neoliberal Hayek, the Reagan supply school, the neo-Keynesian Samuelson, and the Monetary School Friedman can only have a headache and a sore foot, and has not fundamentally reversed the decline of the West.

A market economy divides societies. A society that is internally divided or even antagonistic cannot unite the strength of the state and the nation to withstand international storms; such a society cannot achieve long-term economic development and cultivate a national spirit of high social and moral standards.

Second, China should cherish tradition.

Throughout the world, it is the Nordic countries that have done a better job of establishing a market economy while preventing social differentiation.

The Swedish economic system basically belongs to the capitalist market economy, but the Swedish personal income tax plus the sales tax makes the tax standard of the Swedes reach about 70% of the income, and the high tax policy of Sweden makes Sweden maintain a high socialist element in the redistribution of social wealth.

In dealing with the state-owned economy, do not believe that it is worth giving up a certain amount of fairness for efficiency.

It should also be noted that the market economy and private enterprises are already indispensable in China, but as long as there is a reasonable wage, tax, labor protection and social welfare system, it should be able to prevent large-scale two-level differentiation.

Competition among today's great powers is no longer primarily about war by military power, but more about expanding international influence and spheres of influence through the ability to build an attractive system.

In the final analysis, the dispute between China and the United States is which country can provide a better development model to the world.

Since the reform and opening up, China has been praised internationally for its rapid development, large-scale poverty alleviation, and fast and good infrastructure construction; even if China's development speed is slower in the future, it must take the road of common prosperity for the people of the whole country.

In the hundreds of years from the Spring and Autumn Period to the Warring States in ancient China, the masses rose together and the overlords took turns, and only after the Shang Martingale changed the law, the barren Qin state in a remote corner was able to stand out and dominate the world.

Since Columbus discovered the New World, the worldwide Spring and Autumn Warring States have lasted for more than five hundred years, and mankind has been looking for a way to achieve the unity of the world.

Old-fashioned socialism and today's capitalism cannot fulfill this human mission, and perhaps today's China can offer new answers.

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