Popper’s Paradox of Tolerance with Chinese Characteristics


Europe finds itself in an ambivalent position. On the one hand, repelled by Trump’s style of politics. On the other, fearful of Kissinger’s scenario materialising: Europe’s decline towards an appendix of a Chinese Eurasia.

From Kuka’s industrial robots over Silex’s micro-electrical systems to Krauss-Maffei’s machines: European craftsmanship, creativity, and innovation are the envy of the world. The many European hidden champions are embedded into a deep web of suppliers and partners extending into the smallest corners of Europe. Their operations not only safeguard the old continent’s prosperity, but also form the backbone of its societies.

While open markets have benefitted both China and Europe since the PRC’s opening in 1978, the playing field has become increasingly uneven. Or rather, the playing field has never been even. But Europe was too greedy to see it.

Although there have recently been announcements about an easing in joint venture constraints for car manufacturers in China, forced technology transfer is still happening en masse. A recent study by the EU Chamber of Commerce in China found that ‘unfair technology transfers continue despite government assurances.’ 19% of the 532 respondent chamber members reported that they were affected by forced technology transfer. The number of unreported cases is probably even higher due to retaliatory concerns.

Most policymakers have (or should have) woken up to the fact that elites at Zhongnanhai have chosen ‘Perestroika without Glasnost’. China’s system depends upon the symbiosis of the state and the economy. The trade negotiations of the US administration with China (while dubious in style) show that China does not intend to change its economic system any time soon.

Now what might a European response look like? The great Karl Popper might provide some insights:

  • ‘Unlimited tolerance must lead to the disappearance of tolerance. If we extend unlimited tolerance even to those who are intolerant, if we are not prepared to defend a tolerant society against the onslaught of the intolerant, then the tolerant will be destroyed, and tolerance with them.’

It would be naïve to wait until the sell-off of European companies to China is over. After all economic policy is a means to an end – and not an end in itself. Policy should be guided by reason and providence. The time for dogmata and ivory tower theories is up.

© Photo: https://www.acflondon.org/events/sir-karl-popper-memorial-lecture-professor-abdulka/




Making Sense of Italy’s 65th Government in 73 Years

What happened?

A new Italian government, composed of the populist Five Star Movement and far-right Lega Nord, has been sworn in on Friday (01.06). Giuseppe Conte, a former law professor, will lead the coalition as prime minster after months of political deadlock.

Why does it matter?

While Italy’s political future seems sorted for now, the wider repercussions for the European Union (EU) will only start unfolding now. Both parties have announced their intention of introducing a 15% flat tax rate and basic income. The proposed policies can be expected to further worsen Italy’s public debt levels (132% of GDP), putting the country on collision course with the EU’s budget rules.

As a result of the mounting public debt, ratings agencies would likely further downgrade Italy’s credit-rating, making it more expensive for the government to service its debt. Because Italy, accounting for 15% of the Eurozone’s GDP, is far bigger than Greece (the epicentre of the last Eurozone’s crisis), fears about the Euro’s future emerged.

What’s next?

A more confrontational relationship between Italy and the EU over matters ranging from fiscal rules to refugees can be expected. Special attention will be given to Mario Draghi, President of the ECB, to see how he deals with the Eurozone’s latest headache. An unfortunate side-effect of the Italian drama will be a further postponement of much needed European reforms. EU officials will be busy firefighting while domestic politicians will have a hard time convincing their constituencies of the benefits of more European integration against the backdrop of the rhetoric abroad.




© Photo: https://www.investing.com/news/economy-news/weekly-comic-italy-fears-on-hold-for-now-but-uncertainty-remains-1469590