Category Archives: economics

by | 22 November 2012 · 8:08 am

Just Another Imperial Expansion

From Seven Myths of the Spanish Conquest, by Matthew Restall (Oxford, 2004), Kindle Loc. 3230-3243:

If we focus only on the century following Columbus’s voyages we see Mexica and Inca warriors as losers, West Africans as fighting slaves, and Spaniards as quite reasonably contemplating a world empire. But the age of expansion began with the rise of empires outside Europe, with the Mexica fanning out across Mesoamerica and the Inca dominating the Andes, and in West Africa with the rising of the Songhay empire from the ashes of that of Mali. In Europe, the Ottomans and the Muscovites began empire building before the Spaniards, as did the Portuguese—who beat their Iberian neighbors in the race for a sea route to East Asia. And after the sixteenth century the Spanish empire was gradually eclipsed by the trading and colonial networks of the Dutch, English, and French.

Looking at human history over thousands of years, the Spanish Conquest is a mere episode in the globalization of access to resources of food production. The plants and animals of certain Old World environments and regions have a greater potential as food, and the peoples of those regions have enjoyed advantages over others as a result. But eventually, through uneven encounters, those advantages have been introduced to the previously disadvantaged regions. In the case of Europeans introducing new foods to Native Americans, the parallel introduction of Old World diseases made the encounter especially uneven, while colonialism hindered native access to these new resources. This process is too broad and complex to be understood in terms of the alleged and simple “superiority” of one group of people over another. It is also a process that is incomplete. We are still living through the long period of uneven encounters and the gradual globalization of resources.

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Filed under Africa, Asia, disease, economics, Europe, food, labor, Latin America

by | 3 November 2012 · 2:48 pm

Charles V, Holy Roman Spendthrift

From Imperial Spain: 1469-1716, by J. H. Elliott (Penguin, 2002), 2nd ed., Kindle Loc. 3427-3580:

From the moment of his Imperial election Charles V found himself saddled with enormous commitments. The struggle with France in the 1520s, the offensive and defensive operations against the Turks in the 1530s, and then, in the 1540s and 1550s, the hopeless task of quelling heresy and revolt in Germany, imposed a constant strain on the Imperial finances. Always desperately short of funds, Charles would turn from one of his dominions to another in the search for more money, and would negotiate on unfavourable terms with his German and Genoese bankers for loans to carry him over the moments of acute penury, at the expense of mortgaging more and more of his present and future sources of revenue. This hand-to-mouth existence had prompted, in the very first years of the reign, gloomy prophecies about the certainty of financial shipwreck, but, in fact, it was not until 1557, when Philip II had succeeded his father, that the expected bankruptcy materialized. Until then, Charles’s appeals to the generosity of his subjects and his constant recourse to loans from the bankers somehow managed to stave off the moment of disaster; but the price paid was a renunciation of any attempt to organize the Imperial finances on a rational basis and to plan a coherent economic programme for the various territories of the Empire.

The main cost of financing Charles’s imperialism was borne by different territories at different times, depending on their presumed fiscal capacity and on the facility with which money could be extracted from them. The territories concerned were primarily European, for the part played by the new American possessions in financing Habsburg policies during the first half of the sixteenth century was relatively very small. Until the 1550s the Crown’s revenues from America averaged only some 200,000–300,000 ducats a year, as compared with the 2,000,000 ducats a year of the later years of the reign of Philip II. This meant that the real entry of the New World into the Habsburg empire was delayed until the decade 1550–60, and that Charles V’s imperialism, unlike that of his son, was essentially a European-based imperialism. Among the European territories of Charles it was the Netherlands and Italy which bore the brunt of the Imperial expenditure during the first half of the reign. But as each in turn began to be squeezed dry Charles was compelled to look elsewhere for further sources of revenue, and by 1540 he was writing to his brother Ferdinand: ‘I cannot be sustained except by my kingdoms of Spain.’ Henceforth, the financial contributions of Spain – which meant essentially Castile – assumed a constantly increasing importance in relation to those of the Low Countries.

Within Spain there were several potential sources of revenue, both secular and ecclesiastical. The financial contribution of the Spanish Church to Habsburg imperialism in the sixteenth and seventeenth centuries still awaits an adequate study, but its importance would be difficult to overestimate. If the Lutheran princes of Europe were to gain great benefits from breaking with Rome and despoiling the Churches in their territories, the kings of Spain were to show that despoiling the Church was equally possible without going to the lengths of rupture with the Papacy, and that the long-term advantages of this method were at least as great, and probably greater. It was difficult for the Papacy to refuse new financial concessions when the, Faith was everywhere being endangered by the spread of heresy; and the Spanish Crown, by placing no restrictions on mortmain, could further the accumulation of property in the hands of the Church, where it was more readily available for taxation.

…

Charles V’s fantastically expensive foreign policies and his dependence on credit to finance them therefore had disastrous consequences for Castile. The country’s resources were mortgaged for an indefinite number of years ahead in order to meet the Emperor’s expenses, a large proportion of which had been incurred outside Spain. His reliance on credit contributed sharply to the prevailing inflationary trends. Above all, the lack of provision in the Crown’s financial policies – its inability to devise any coherent financial programme – meant that such resources as did exist were squandered, while the methods used to extract them might almost have been deliberately designed to stunt the economic growth of Castile. The reign of Charles V, in fact, saw three dangerous developments that were to be of incalculable importance for sixteenth- and seventeenth-century Spain. In the first place, it established the dominance of foreign bankers over the country’s sources of wealth. Secondly, it determined that Castile would bear the main weight of the fiscal burden within Spain. In the third place, it ensured that within Castile the brunt of the burden was borne by those classes which were least capable of bearing it.

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by | 31 October 2012 · 9:18 pm

Odessa’s meshchane estate

From Odessa: Genius and Death in a City of Dreams, by Charles King (W. W. Norton, 2011), pp. 134-136:

From the perspective of the tsarist state, Russian society was divided into identifiable and highly regulated “estates,” or sosloviya in Russian. Membership could be fluid, at least across several generations, and in many cases one’s estate was never as predetermined or immutable as one’s sex or eye color. But it was still a fundamental part of a Russian subject’s social identity. In contrast to what Marxists would identify as “class,” an individual’s estate membership had little to do with his or her place in the hierarchy of economic production, much less with wealth or income. Like for the impoverished nobles in the works of Tolstoy or Chekhov, estate status was part of one’s birthright, the genetic code of Russian society as a whole, not a reflection of economic power. When the state came to sort and categorize its own citizens, the labels that presented themselves in the late nineteenth century were clear: nobles, clergy, military, civil servants, and a group known as the meshchane—by far the largest estate in Odessa.

The meshchane—a word that might be translated as the petty bourgeoisie—were the large group of semi-skilled workers, tradesmen, shopkeepers, and Russian subjects caught between the castes of large-scale landowners and their former serfs living in grinding poverty in the close-in suburbs. They eked out a living on the fringes of Odessa’s trading economy, vulnerable to the pendulum swings of commerce and the periodic blights afflicting agriculture. Unlike the wealthiest members of society, they had little recourse when times were hard, other than to join the day laborers hanging around the docks or hoping to pick up a job as a porter at one of the city’s bazaars. Unlike their peasant neighbors, they had few real connections to the countryside that might allow them to weather economic fluctuations in town. Already by the middle of the nineteenth century, Odessa was largely a city of these vulnerable meshchane. In 1858 the nobility comprised 3 percent of the city’s population, merchants nearly 5 percent, foreigners (that is, people who were not Russian subjects) just over 4 percent, peasants nearly 4 percent, and the military under 7 percent. The remainder—nearly 70 percent of the city’s total—were meshchane.

With a transient foreign population and a constant stream of newcomers arriving by ship and overland carriage—far moire than in the empire’s twin capitals, St. Petersburg and Moscow—Odessa was ripe for the kind of swindles, trickery, and palm-greasing that helped ease the economic burden of the petty bourgeoisie. When visitors complained of the hotelier who charged extra for bedding, the cobbler who charged twice to repair the same shoe, or the droshky driver who charged different rates for the same ride, it was the city’s huge estate of meshchane who were the makers of the city’s reputation. They could be found in virtually any profession. In 1892 over half the city’s 607 prostitutes reported that they were meshchane by estate.

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by | 25 October 2012 · 7:12 am

Odessa, a “Russian Chicago”

From Odessa: Genius and Death in a City of Dreams, by Charles King (W. W. Norton, 2011), pp. 109-112:

Until the 1860s, Odessa was the breadbasket for much of the Western world, feeding a hungry European and, increasingly, global market. Foreign consuls sent breathless dispatches to European capitals about fluctuations in the prices of wheat and barley. Foreign ministers contemplated the effects of diplomatic squabbles on the supply of foodstuffs. Only with the discovery of oil farther to the east, in the Russian Caucasus and the Caspian seaport of Baku, was Odessa’s chief cash export exceeded by that of a rival Russian city.

Odessa’s commercial success lay in its position at the intersection of flatlands and seascape, where the produce of the former could be sent to markets across the latter. But a series of fortunate accidents allowed the city to enhance this natural gift. Talented administrators such as Vorontsov argued for maintaining the freeport status, which was a considerable inducement to foreign and local entrepreneurs. Improvements in the harbor allowed larger ships to enter and lie safely at anchor. The fall-off in plague outbreaks around the Black Sea reduced much of the time that ships, goods, and passengers spent in quarantine. When the Peace of Adrianople was signed between the sultan and tsar in 1829, ending nearly a decade of diplomatic bickering, trade squabbles, and outright war, Russian secured a historic set of concessions from the Ottomans, including an end to the Ottoman practice of boarding and searching Russian merchant ships. The period of relative peace that followed—from the late 1820s to the early 1850s—provided ease of shipping through the Bosphorus and Dardanelles straits.

The economic results were immense. Grain exports from all the Russian Black Sea ports stood at a yearly average of under two million chetverts (a unit of Russian dry measurement equal to 5.77 U.S. bushels) before 1813, but by the 1860s that figure had risen to over sixteen million chetverts. Over half those exports were coming solely from Odessa. Between the 1840s and 1850s, the annual volume of grain exports to Italian ports more than doubled, while the French were importing ten times as much Odessa grain at the end of that period as at the beginning. After the late 1840s, the easing of restrictive import laws in England the introduction of hardier wheat varieties in Russia opened new markets for Odessa’s produce, well beyond the traditional Mediterranean destinations. By the middle of the century, well over a thousand ships were leaving Odessa each year. The number of British ships sailing into the Black Sea increased sevenfold between the mid-1840s and the early 1850s, with Britain accounting for a third or more of all destinations of vessels exiting the port. Wheat, barley, rye, and other grains filled the holds of long-haul sea vessels flying flags of most major European powers.

Of all these goods, the queen was wheat. Ninety percent of Russian wheat exports flowed out of the empire’s Black Sea ports, and many of the sights, sounds, and smells of Odessa derived from its production and sale. Immense herds of cattle provided manure for fertilizer in the countryside and pulled the thousands of wooden carts that bore the harvested grain from field to storage centers….

Some carters would return north with cloth, wine, or other imported goods offloaded from merchant vessels in the harbor, while others chose to transform their infrastructure into capital. The dried dung could be collected and sold as fuel to poor families, and the animals could then be given up to slaughter for meat and hides. The sweet smoke of burning, grass-rich manure mingled in the air with the reek of tallow vats and the sharp odor of tanneries, the factories that produced the bricks of processed fat and bundles of unworked leather destined for Turkey, Italy, or France.

With hundreds of thousands of head of livestock coming through the city each harvest season, dust and mud were constant features of Odessan life. Choking, white-yellow clouds, stirred up by hooves and swirled about by the prevailing winds, powdered residents like talcum. Rain turned inches of accumulated limestone grime into impassable sloughs….

An open, brick-lined drainage system, about two feet deep, ran alongside the major thoroughfares, crossed by occasional footbridges and wooden planks. But the rivulets they contained—the wastewater runoff and solid offal of houses and hotels, as well as animal dung and mud from the streets—could gag even the toughest pedestrian. The blooms of acacia trees and oleander fought back with their perfume, but it usually took a change in wind direction, blowing off the plains and toward the sea, to unburden the city of its own stench.

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Filed under Britain, economics, food, France, industry, Italy, Russia, Turkey, U.S., Ukraine

by | 9 September 2012 · 1:52 pm

Reassessing Ferdinand and Isabella’s Legacy

From Imperial Spain: 1469-1716, by J. H. Elliott (Penguin, 2002), 2nd ed., Kindle Loc. 2181-2234:

The reign of Ferdinand and Isabella was called by Prescott ‘the most glorious epoch in the annals’ of Spain. Generations of Spaniards, contrasting their own times with those of the Catholic Kings, would look back upon them as the golden age of Castile. The conquest of Granada, the discovery of America, and the triumphant emergence of Spain on to the European political stage lent unparalleled lustre to the new State created by the Union of the Crowns, and set the seal of success on the political, religious, and economic reforms of the royal couple.

Against the conventional picture of a glorious spring-time under Ferdinand and Isabella, too soon to be turned to winter by the folly of their successors, there must, however, be set some of the less happy features of their reign. They had united two Crowns, but had not even tentatively embarked on the much more arduous task of uniting two peoples. They had destroyed the political power of the great nobility, but left its economic and social influence untouched. They had reorganized the Castilian economy, but at the price of reinforcing the system of latifundios and the predominance of grazing over tillage. They had introduced into Castile certain Aragonese economic institutions, monopolistic in spirit, while failing to bring the Castilian and Aragonese economies any closer together. They had restored order in Castile, but in the process had overthrown the fragile barriers that stood in the way of absolutism. They had reformed the Church, but set up the Inquisition. And they had expelled one of the most dynamic and resourceful sections of the community – the Jews. All this must darken a picture that is often painted excessively bright.

Yet nothing can alter the fact that Ferdinand and Isabella created Spain; that in their reign it acquired both an international existence and – under the impulse given by the creative exuberance of the Castilians and the organizing capacity of the Aragonese – the beginnings of a corporate identity. Out of their long experience, the Aragonese could provide the administrative methods which would give the new monarchy an institutional form. The Castilians, for their part, were to provide the dynamism which would impel the new State forward; and it was this dynamism which gave the Spain of Ferdinand and Isabella its distinguishing character. The Spain of the Catholic Kings is essentially Castile: a Castile, overflowing with creative energy, which seemed suddenly to have discovered itself.
…

The Court was the natural center of Castile’s cultural life; and since Spain still had no fixed capital it was a Court on the move, bringing new ideas and influences from one town to another as it travelled round the country. Since Isabella enjoyed a European reputation for her patronage of learning, she was able to attract to the Court distinguished foreign scholars like the Milanese Pietro Martire, the director of the palace school. Frequented by foreign scholars and by Spaniards who had returned from studying in Italy, the Court thus became an outpost of the new humanism, which was now beginning to establish itself in Spain.

One of the devotees of the new learning was Elio Antonio de Nebrija (1444–1522), who returned home from Italy in 1473 – the year in which printing was introduced into Spain. Nebrija, who held the post of historiographer royal, was a grammarian and lexicographer, and an editor of classical texts in the best humanist tradition. But his interests, like those of many humanists, extended also to the vernacular, and he published in 1492 a Castilian grammar – the first grammar to be compiled of a modern European language. ‘What is it for?’ asked Isabella when it was presented to her. ‘Your Majesty,’ replied the Bishop of Avila on Nebrija’s behalf, ‘language is the perfect instrument of empire.’

The Bishop’s reply was prophetic. One of the secrets of Castilian domination of the Spanish Monarchy in the sixteenth century was to be found in the triumph of its language and culture over that of other parts of the peninsula and empire. The cultural and linguistic success of the Castilians was no doubt facilitated by the decline of Catalan culture in the sixteenth century, as it was also facilitated by the advantageous position of Castilian as the language of Court and bureaucracy. But, in the last analysis, Castile’s cultural predominance derived from the innate vitality of its literature and language at the end of the fifteenth century. The language of the greatest work produced in the Castile of the Catholic Kings, the Celestina of the converso Fernando de Rojas, is at once vigorous, flexible, and authoritative: a language that was indeed ‘the perfect instrument of empire’.

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by | 9 September 2012 · 8:47 am

Two Separate Spanish Economies c. 1500

From Imperial Spain: 1469-1716, by J. H. Elliott (Penguin, 2002), 2nd ed., Kindle Loc. 2149-2165:

Two separate economic systems continued to exist side by side: the Atlantic system of Castile, and the Mediterranean system of the Crown of Aragon. As a result of the expansion of the wool trade and the discovery of America, the first of these was flourishing. The Crown of Aragon’s Mediterranean system, on the other hand, had been gravely impaired by the collapse of Catalonia, although there was some compensation for Catalonia’s losses in the increased economic activity of late fifteenth-century Valencia. Ferdinand’s pacification and reorganization of Catalonia, however, enabled the Principality at the end of the century to recover a little of its lost ground. Catalan fleets began to sail again to Egypt; Catalan merchants appeared once more in North Africa; and, most important of all, a preferential position was obtained for Catalan cloths in the markets of Sicily, Sardinia, and Naples. But it is significant that this recovery represented a return to old markets, rather than the opening up of new ones. The Catalans were excluded from direct commerce with America by the Sevillian monopoly, and they failed, for reasons that are not entirely clear, to break into the Castilian market on a large scale. They may have shown a lack of enterprise, but they also seem to have suffered from discrimination, for as late as 1565 they were arguing that the Union of the Crowns of 1479 made it unreasonable that Catalan merchants should still be treated as aliens in Castilian towns. As a result of this kind of treatment, it is scarcely surprising that Catalonia and the Crown of Aragon as a whole should have continued to look eastwards to the Mediterranean, instead of turning their attention towards the Castilian hinterland and the broad spaces of the Atlantic.

Castile and the Crown of Aragon, nominally united, thus continued to remain apart – in their political systems, their economic systems, and even in their coinage. The inhabitants of the Crown of Aragon reckoned, and continued to reckon, in pounds, shillings, and pence (libras, sueldos, and dineros). The Castilians reckoned in a money of account – the maravedí [named after the Moorish Almoravid dynasty]. At the time of the accession of Ferdinand and Isabella the monetary system in Castile was particularly chaotic.

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Filed under economics, industry, Mediterranean, Spain

by | 9 September 2012 · 8:29 am

Castilian Economy, 1501: All for Wool

From Imperial Spain: 1469-1716, by J. H. Elliott (Penguin, 2002), 2nd ed., Kindle Loc. 2057-2076:

In spite of the increasingly grave problem of the national food supply, Ferdinand and Isabella adopted no vigorous measures to stimulate corn production. On the contrary, it was in their reign that the long-continuing struggle between sheep and corn was decisively resolved in favour of the sheep. The great expansion of the mediaeval wool trade had revitalized the economic life of Castile, but there inevitably came a point at which further encouragement of Castilian wool production could only be given at the expense of sacrificing agriculture. This point was reached in the reign of the Catholic Kings. The importance of the wool trade to the Castilian economy, and the value to the royal treasury of the servicio y montazgo, the tax paid the Crown by the sheep-farmers, naturally prompted Ferdinand and Isabella to pursue the policies of their predecessors and to take the Mesta under their special protection. As a result, a whole series of ordinances conferred upon it wide privileges and enormous favours, culminating in the famous law of 1501 by which all land on which the migrant flocks had even once been pastured was reserved in perpetuity for pasturage, and could not be put to any other uses by its owner. This meant that great tracts of land in Andalusia and Estremadura were deprived of all chance of agricultural development and subjected to the whim of the sheepowners. The aims of this policy were obvious enough. The wool trade was easily subjected to monopolistic control, and, as a result, it constituted a fruitful source of revenue to a Crown which, since 1484, had found itself in increasing financial difficulties, exacerbated by the flight of Jewish capital. An alliance between Crown and sheepowners was thus mutually beneficial for both: the Mesta, with its 2½ to 3 million sheep, basked in the warm sunshine of royal favours while the Crown, whose control of the Military Orders gave it some of the best pasturing lands in Spain, could draw a regular income from it, and turn to it for special contributions in emergencies.

There were no doubt certain unintended advantages to Castile, in the intense royal encouragement of the wool industry. Sheep-farming requires less labour than arable farming, and the vast extent of the pasture-lands helped to produce a surplus of manpower which made it easier for Castile to raise armies and to colonize the New World. But on the whole the favouring of sheep-farming at the expense of tillage can only appear as a wilful sacrifice of Castile’s long-term requirements to considerations of immediate convenience. It was in the reign of Ferdinand and Isabella that agriculture was confirmed in its unhappy position as the Cinderella of the Castilian economy, and the price which was eventually to be paid for this was frighteningly high.

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by | 12 August 2012 · 7:31 am

How the South Saved the North in Vietnam

From: Vietnam: Rising Dragon, by Bill Hayton (Yale U. Press, 2010), Kindle Loc. 4187-4227:

The Vietnamese combatants in the Vietnam-American War were not fighting because they hated ‘northerners’ or ‘southerners’. Both sides were heirs to nationalist movements which stressed their attachment to national unity. Their divisions were over ideology, the role of the state in society, religion and many other political issues.

In this long view of Vietnamese history, the 21 years between the division of the country into capitalist and communist in 1954 and its reunification under communism in 1975 seem less important than what went before and after. But those 21 years meant there was continuity in the south between the freewheeling capitalism of French Cochinchina and that of the ‘American’ Republic of Viet Nam (RVN), which was never truly suppressed after reunification before economic reforms began in socialist Vietnam in 1979. Capitalism is a relatively recent introduction in the north but it has been southern Vietnam’s default position for almost all of the past 150 years.

When the communist People’s Army crashed through the gates of the Presidential Palace in Saigon in April 1975, it seemed, in the minds of the northern leadership, to confirm Hanoi’s superiority: militarily, ideologically and historically. The north had beaten the Americans. Triumphalism reigned. Hanoi sent another army to the south, an army of northern bureaucrats which tried to remould it into an image of the north without regard to its very different economic situation. But bureaucratic ideology met its match: capitalism was never truly eradicated. More humiliatingly for the ideologues, in those parts of the country where socialism prevailed, hardship endured. Gradually they had to face up to the reality that Hanoi communism couldn’t solve all the country’s problems. Hubris would soon be humbled.

Even now, the extent to which Hanoi’s rule was saved by the south is unacknowledged in public discourse: the ‘Official History’ of Hanoi’s supremacy endures. But if it hadn’t been for that legacy of southern entrepreneurialism, Vietnam might have collapsed. Despite Hanoi’s draconian campaigns in favour of collectivisation and against ‘comprador capitalists’ (mainly ethnic Chinese), old trading arrangements survived. In 1979, when the failure of Hanoi’s policies had become obvious, southern leaders, such as the then Party boss of Ho Chi Minh City, Vo Van Kiet, authorised ‘pragmatic’ steps to make ends meet. The city authorities bought rice from farmers at market prices and allowed those Chinese entrepreneurs who hadn’t fled the country to make contact with traders in Hong Kong, Singapore and Taiwan to keep imports and exports flowing. Such fence-breaking broke the rules imposed by Hanoi, but kept the economy alive.

When, eventually, the failure to make state socialism pay the bills forced Hanoi to open up the economy, the south was ready to take full advantage. The first foreign investors to arrive were the trading contacts of the Chinese community. They found the south more conducive to business: less rule-bound, less ideological. In addition the south had the benefit of roads and ports paid for during the war years by American taxpayers. Between 1990 and 1994, 60 per cent of all foreign direct investment went to Ho Chi Minh City and three of its neighbouring provinces: Binh Duong, Dong Nai and the ‘oil province’ of Ba Ria-Vung Tau. These advantages for the southern provinces were multiplied by a curious arrangement, initially begun as an incentive to encourage economic growth.

The Vietnamese government allowed (and still allows now) provinces to retain any revenue they earn above a set target. In the north, most provinces tried to boost their income by developing the state sector. But leaders from those four southern provinces – more open-minded, less suspicious of foreigners – looked abroad for investment. It worked. Labour-intensive industries such as textiles, garments and food processing flocked in and the taxes and tariffs they paid made their host provinces rich. The surplus (after deductions for kickbacks and patronage) was reinvested in better infrastructure and services, which encouraged other investors to locate there, creating a virtuous circle of growth. Southern leaders, who had been largely excluded from the pinnacles of power since reunification, knew they were unlikely to make it to the top of national politics. Instead, they concentrated on keeping their own constituents happy, untroubled by the need to break national rules to keep the income flowing.

While some in Hanoi disapproved, they couldn’t stop the fence-breaking because the country needed the cash. In the 1980s provinces had depended upon the central government for the allocation of subsidies from the Soviet Union. By the early 1990s the central government was dependent upon the surplus being generated in the south. The quid pro quo was a strong policy of redistribution. Southern surplus still funds government spending across the country, lifting the standard of living in northern and central areas closer to the national average and helping to preserve national unity and the Party’s hold on power.

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by | 11 August 2012 · 4:54 pm

Vintage Year for Vietnamese Dissidents: 2006

From: Vietnam: Rising Dragon, by Bill Hayton (Yale U. Press, 2010), Kindle Loc. 2486-2519:

2006 was a unique opportunity for Vietnamese dissidents. The country was in the final stages of joining the World Trade Organisation. Negotiations with individual WTO members were followed by drawn-out multilateral talks and then an equally drawn-out process in the US Congress to award Vietnam Permanent Normal Trading Relations (PNTR) status, an adjunct to WTO membership. In addition, Vietnam held the rotating chair of APEC, the Asia-Pacific Economic Co-operation group, during 2006, and was due to host its annual summit in November. Twenty-one leaders had been invited, including the presidents of the USA, Russia and China and the prime ministers of Australia and Japan. Vietnam was also seeking a non-permanent seat on the United Nations Security Council. All of this meant the Communist Party was vulnerable to criticism from abroad and therefore less able to crack down on dissent with its usual efficiency.

There was another factor too. By 2006, broadband had fully penetrated Vietnam; internet shops were available on most city streets. Through the net, dissidents managed to surmount the physical barriers the state had erected around them and bridge the gaps of physical distance, of ideology and – at least as important – of ego, which, until then, had kept them divided. Services originally intended to allow teenagers to flirt with each other provided invigorating links with Vietnamese exiles in the United States and elsewhere. Websites such as PalTalk host chat rooms in which hundreds of people can type messages to each other and simultaneously listen to an audiostream or watch video. In effect, each chat room is an interactive radio ‘narrowcast’. Narrowcasters can give out information, make speeches, discuss developments and take questions and comment from the other participants. Suddenly dissidents in Vietnam had access to a new world of ideas and to a reservoir of supporters. Until then many people had been reluctant to trust each other, never knowing who was an informer; but a few overseas activists acted as ‘brokers’ – in effect vetting the dissidents who contacted them and putting them in touch with one another. They also began to provide cash.

With the cost of living so cheap in Vietnam, relatively small amounts of money raised abroad could go a long way. Supporters groups sprang up in Australia (Bloc 1–7–06), the US (Bloc 1–9–06) and the UK (Bloc 10–12–06) and sent in money for dissidents’ living expenses and equipment. With hundreds of thousands of overseas Vietnamese remitting money to relatives each month it was easy to disguise the transfers. They weren’t particularly clandestine; most went via Western Union. Once inside Vietnam, the money was moved by couriers to where it was needed. When police stopped the car of one dissident, Nguyen Phuong Anh, on 15 December 2006, they confiscated 4.5 million Vietnamese dong, the equivalent of about $300, about six months’ wages for the average worker. He told them he had planned to buy clothes for needy paper boys. The money was crucial. It paid for computers, dozens of mobile phones, and hundreds of SIM cards to enable the dissidents to stay in touch even as the security services tried to disconnect them.

But useful as the internet was to the dissidents as an organising and discussion tool, it was much less effective as a proselytising force. The national firewall prevents the casual web-surfer accessing dissident websites and intercepts unwelcome emails. That didn’t stop one middle-aged Ho Chi Minh City-based activist, though. At night, after his family had gone to bed, he would trawl Vietnamese discussion sites and blogs harvesting the email addresses of anyone making critical comments. Then, with his harvest complete, he would send out two or three hundred emails with details of dissidents’ activities. He would tell them about strikes and how to form trade unions and about lobbying activities in the United States. But he couldn’t send all the messages from one email address because he feared the security services would soon track him down. So instead, he laboriously maintained dozens of different accounts and sent just a few messages from each one. It worked, and he managed to stay below the police’s radar. But even this very direct mailing had limited success; the phantom spammer estimated his response rate was less than 1 per cent. So even with all these technological innovations the number of active dissidents remained small.

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by | 11 August 2012 · 4:33 pm

Changing Role of Media in Vietnam

From: Vietnam: Rising Dragon, by Bill Hayton (Yale U. Press, 2010), Kindle Locs. 2931-2947, 3019-3044:

Right from the beginning of doi moi, Party leaders wanted the media to act as an agent of reform. The Politburo knew that hundreds of thousands of people had grievances about corruption and mismanagement by local officials and that it didn’t have the capacity to address them all. So, in effect, it delegated some of the power of inspection and exposure to the media. A new Press Law, formally approved in 1990, specifically gave journalists the right to gather their own information and made it an offence to obstruct their work. Simultaneously the end of Soviet aid meant the end of subsidies. Newspapers and magazines had to actively sell their product – and therefore offer something readers actually wanted to buy. Just as in every country with a freer press, editors discovered that the best thing for selling papers was crime. And who better to publish crime stories than a newspaper owned by the police themselves? Readers of Cong An Thanh Pho Ho Chi Minh (Ho Chi Minh City Police) are treated to a diet of sex and murder – with reportage straight from the horse’s mouth. The editorial line of the paper both terrifies the audience and reassures it that the police are on hand to catch the bad guys and keep the streets safe. It’s a successful mix, making it easily one of the country’s biggest selling papers.

The once near-monopolistic Nhan Dan, on the other hand, is kept afloat by the obligation placed upon every Party and government office to buy a copy. If it were left to survive on its street sales it would have gone bust long ago – it’s almost impossible to find in newspaper kiosks. The people don’t want to buy ‘The People’. Nhan Dan is not alone. Quan Doi Nhan Dan (the army newspaper) and Hanoi Moi – published by the Hanoi City Communist Party branch – are also kept going by compulsory purchase arrangements. Instead consumers have turned to papers which have built a reputation for uncovering corruption, exposing malpractice and widening the boundaries of what it’s acceptable to print.

…

The search for profit usually tops almost all other considerations – including, from time to time, ideological instructions. It’s sometimes a major battle for the Party to keep control. The local TV networks in Hanoi, and particularly in Ho Chi Minh City, now make so much money from advertising that they don’t need state subsidies – and if they don’t need the money why should they take the state’s instructions? The answer so far is that Party discipline has been stronger than the lure of cash but such divided loyalties are becoming more and more difficult to manage. So much so that the Prime Minister was forced to issue his December 2006 directive ordering tighter control over the press, in which he said Vietnam would never allow privately owned media.

But one media outlet is already almost entirely privately owned. The hugely popular online site, vnexpress.net, started life as a project of FPT, the Corporation for Financing and Promoting Technology, wholly owned by the Ministry of Science and Technology. Under its highly entrepreneurial management (led by Dr Truong Gia Binh, former son-in-law of General Giap: see Chapter 1) FPT has grown from its original 13 employees into an employer of several thousand, with a series of IT outsourcing contracts for companies in Japan and Europe. It is also one of Vietnam’s largest internet service providers and telecoms companies. In 2001 it set up its own online news site – and just like VietNamNet-TV it did so without a government licence. Initially vnexpress.net was classified as an ‘internet content provider’, meaning that it could only publish material that had already been published elsewhere. By selecting the stories which the site’s editors thought would most interest readers and by focusing on information rather than ideological comment it rapidly reached a huge audience. Its business plan required it to reach 200,000 users within a year and a half. It achieved this within four months. But by the end of its first year in business it had already made profits from advertising of $70,000. It was the only unsubsidised website in the country. After more than a year of lobbying, vnexpress.net eventually received its licence from the Ministry of Culture. It was surprisingly easy. At the time it seemed to the leadership of vnexpress.net that the Ministry didn’t really see the point of an online newspaper or understand its potential significance.

As it has evolved, the parent company of vnexpress.net, FPT, has grown far away from its roots. Just 8 per cent of its stock is still owned by the state, around 80 per cent by its employees and foreign investors (including the venture capital arm of the US chip-maker Intel), with the remainder held by investment houses based in Vietnam. Thus one of the most important Vietnamese news outlets is almost wholly owned by private interests in contradiction of government policy. Its survival rests less on the law than on the balance of relationships between the company’s patrons and potentially hostile forces in other parts of the Party and government. FPT has become one of Vietnam’s biggest companies and its connections run deep into the Party leadership and into the boardrooms of some of the biggest global corporations. It has no shortage of allies to call upon if it’s ever put in a difficult position. For the time being vnexpress.net, its most controversial subsidiary, exists in a curious legal limbo.

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