But now, it seems, just to help things along the Obama administration has decided to throw some petrol on the flames.

Specifically:

• The proposed arms sales to Taiwan valued at 6.4 billion USD
• The proposed meeting between President Obama and the Dalai Lama

If it was of vital importance that these things had to be done it would be understandable — but it’s not. In which case are they not an indication of an administration that has simply lost its way?

What is the political justification of meeting with the Dalai Lama? Just what is it going to achieve except to sour relations even further? As for the arms sale to Taiwan, China has threatened to hit back with sanctions on American suppliers if it goes ahead. Imagine the effect on a company like Boeing? 6.4 billion USD in arms sales sounds like a lot but compared to the total value of trade between China and the USA it’s nothing.

So what’s going on?

That the meeting with the Dalai Lama will cause trouble is certain just as it did when President George W Bush met him in October 2007 and French President Nicholas Sarkozy in December 2008. After the latter there were widespread demonstrations in China. I actually saw one firsthand outside a French-owned superstore, Carrefour, in Wuhan. I was struck by the strength of feeling against such "meddling" in Chinese affairs. Indeed, I don’t think foreigners have any understanding of just how much resentment and anger this kind of intervention causes.

Down the line, nothing positive will come out of this meeting.

The same can be said for the arms sales to Taiwan.

Here’s some background — usually referred to as the three communiqus.

The first in February 1972:

"The United States formally acknowledged the desire of all Chinese for a unified and undivided China."

The second in January 1979:

" … [T]he United States recognized that the government of the People’s Republic of China was the sole legal government of China. In addition, the United States government declared that it would end formal political relations with the people of Taiwan while preserving economic and cultural ties."

The third in August 1982:

"Both sides … reaffirmed the statements made about the Taiwan issue in the previous communiqué. Although no definitive conclusions were reached on the issue of arms sale to Taiwan, the United States did declare its intent to gradually decrease its sale of arms to Taiwan."

Putting them together they say two main things. First, an acknowledgement that China is a sovereign state and that Taiwan is a province of this state and second, a statement of intent to reduce arms sales to Taiwan.

Twenty eight years later neither is being honoured. How can the USA justify this?

"The United States … is mandated under the 1979 Taiwan Relations Act to aid Taiwan’s self-defense. The law was enacted when Washington switched diplomatic recognition to Beijing from Taipei." Reuters

This is known variously as "covering your back," "giving with one hand and taking with the other," or, better still, "having your cake and eating it!" It provides us with a glimpse into the workings of the mind of that entity known as the "career politician."

What a miserable business politics really is!

But anyway.

When Bush met the Dalai Lama and then initiated the current arms sales the following year there were vociferous protests from China but nothing of great substance. However, as the financial crisis has unfolded it is clear that things have changed dramatically — that the G7 world no longer exists — neither, in reality, does the G20 — what we now inhabit the world of G2. And they better learn to get along with each other for all our sakes. Unfortunately, the present situation is beginning to resemble some kind of strange staring contest. Who’s going to blink first?

China has made the strongest diplomatic representations it can but, so far, to little effect. I don’t believe that sanctions are an idle threat. For China the stakes are high. The meeting with the Dalai Lama will have serious de-stabilizing effects in Tibet down the road and the arms sale will wreck all the bridge-building work which has gone on between Taiwan and the mainland over the last two years.

If the USA goes ahead and China retaliates, both sides lose. It’s a negative sum game.

Maybe, just maybe, someone in the Obama administration will take stock of what is going on at home — of the ongoing economic chaos and social unrest — of the growing secessionist sentiment which was dismissed at first but now seems to be gathering pace. Maybe, just maybe, someone will stop and take a good long hard look at just what is happening in their own back yard instead of meddling, for no good reason or effect, in the internal affairs of other countries.

On current trends it’s the USA which is in the greater danger of falling apart — not China.

Chris Clancy [send him mail] is Associate Professor of Financial Accounting at Zhongnan University of Economics and Law in Wuhan, Hubei Province, People’s Republic of China.

The Best of Chris Clancy

It was not bedtime reading.

However, I’m glad I persevered because some things I believed previously about China’s development have now been revised.

Just how "rapid" has this development been?

Well, try this:

Last week the Chinese government released its figures for last year’s exports.

"The figures suggest China will surpass Germany’s export total for the whole of 2009." BBC.

Thereby making them the world’s largest exporter. Far from heaping praise on them this will inevitably lead again to yet more demands for China to revalue its currency upwards.

"Led by the US, [China's trading competitors] say it is unfair that China has been able to make its good [sic] cheaper by keeping the yuan weak, but Prime Minister Wen Jiabao has said China “will not yield” to foreign demands that it revalue the currency."

Because:

"Beijing has long said that it will not allow the yuan to trade freely until its domestic economy was strong enough to pick up any resulting decline in exports." BBC.

So when is this likely to happen?

No time soon is the answer.

The great value of reading Professor Huang’s book is that it traces the development of China’s trading surplus and explodes some myths along the way.

One of the biggest myths is that China managed to succeed with heavy central planning on the one hand and no property rights on the other — an impossibility unless China had found a new way of doing things!

The truth was that that the amazing speed of economic activity in the 1980s had little to do with planners and everything to do with property rights.

In 1958 the agricultural commune system was imposed by the government. For farmers and their families it was little more than serfdom, or slavery, by another name. It was a disaster.

For the next 20 years they laboured and suffered under an unworkable system. Then in 1978, two years after Deng Xiaoping assumed the leadership, something remarkable happened.

Picture this.

A poverty stricken farming community in a tiny village called Xiaogang, in Anhui Province, one of the poorest provinces in China. Late in 1978, the actual date is uncertain, 18 impoverished farmers met. They agreed to break up the land between each household and farm it individually. They would not ask the government for money or grain, they would meet their quotas, but whatever was left they would keep and sell themselves. This was against the law.

Fearful of what might become of their families they drew up an agreement which said that if any of them were arrested and imprisoned everyone else in the village would look after their children until they reached 18 years of age. It was signed with signatures and thumbprints.

And this, according to the story, was how it all began.

The following year the grain harvest was 6 times what it had been in 1978. They easily met their quotas and then sold the excess — many by the roadside. Per capita incomes jumped by a factor of 20. The Party Secretary, Wan Li, who was in charge of Anhui Province at that time, heard of and then approved of the "trial."

Word spread quickly to other communities throughout China. Such were the amazing improvements in productivity and output that it was given official approval by Deng in 1980. Four years later the commune system had all but disappeared.

Throughout the 1980s rural per capita incomes rose by an average of 9% pa. This extra spending power encouraged non-farm businesses to spring up. These became known as Township and Village Enterprises (TVEs). They were actively encouraged by the government and given easily obtained loans and lower tax rates. Having been virtually excluded from China’s welfare system, such as it was, peasants saw this as their opportunity to provide their own safety net. They went for it, not in their tens of thousands, but in their millions.

Here, the unbelievable depth of Huang’s research is revealed; he delved into the archives of the Ministry of Agriculture. For the year 1985 he found that, of the 12 million officially recognized TVEs, more than 10 million were privately owned and run by individuals and their families.

They had the right to own their own businesses, make what was demanded, sell to whom they wanted and keep the profits they generated.

Rural reforms made the whole thing possible but it was the emergence of free markets and property rights that made it happen.

“The diversity of production, commodity economy, and all sorts of small enterprises boomed in the countryside, as if a strange army had appeared suddenly from nowhere. This is not the achievement of our central government.” Deng Xiaoping, People’s Daily, 13 June 1987. (Emphasis added).

The 1980s finished with Tiananmen Square.

In passing, Huang explodes another myth here:

"After the collapse of the Soviet Union, many western and Chinese analysts came to the conclusion that China was spared the same fate in 1989 because it did not liberalise its political system. This is a flawed reading of history. The reason why China did not collapse in 1989 has very little to do with lack of political reforms … The real reason China did not collapse was that its rural population was reasonably content … At the height of the Tiananmen turmoil, Deng reportedly made the following remarks to other Chinese leaders: u2018The economy is still the base; if we didn’t have that economic base, the farmers would have risen in rebellion after only 10 days of student protests — never mind a whole month’.”

Huang writes that his research proves that there was a deliberate switch in policy in the early 1990s under the leadership of Jiang Zemin and then Zhu Rongji. The switch was from the rural economy to urban centers. When asked directly why this happened in this video he is honest enough to say that he doesn’t know exactly why. However, Tiananmen Square was a significant factor.

Rural reforms were scaled back along with liquidity flows; in the 1980s 30% of rural households had access to some kind of credit — in the 1990s this fell to less than 10%. Higher taxes were imposed along with more expensive health care and higher education fees. These policies were used to fund the investment in urban centers. The result was that per capita increases in rural incomes fell to less than 4% pa for most of the 1990s.

Thus, the rapid growth in the countryside of the 1980s ended in the early 1990s.

However, as a whole, the economy continued to grow at more than 9% pa. Huang argues that foreign academics and researchers failed to see what was really going on because they simply concentrated on figures for GDP and Foreign Direct Investment. The truth is that most couldn’t do much else anyway. There is no shortage of material. If there is a problem it’s with its reliability. However Huang could read the original source documents and this he did with a vengeance (e.g. as part of his research he combed his way through 22 volumes of internal bank documents; yes, 22 volumes!).

Chinese manufacturers were forced to sell abroad, not simply because domestic consumers saved too much but, more importantly, because the fall in disposable incomes in the countryside meant they simply didn’t have the money to soak up all of the output. Using an undervalued currency to promote exports was not a deliberate development strategy as such — they didn’t have much choice — there was no other way of shifting their output.

This, he argues, was the beginning of a global trade imbalance which just grew and grew. What Bush and Greenspan did in 2001, was to greatly exacerbate a serious problem which was already there.

When recovery comes the jobs will not return with it. As things stand they simply cannot until countries like China, in particular, start spending and countries like the USA, in particular, start exporting. China has to find a way of re-generating its rural economy. The USA has to find some way of drastically restructuring its economy. And there’s no choice here — Margaret Thatcher said it all back in the 1980s — if you cannot compete in a market you have to get out!

Until this happens the only thing that we’re going to "recover to" is a terrible kind of economic stalemate.

"Everyone … agrees that these imbalances involve too much spending and borrowing by Americans and too little of both by the Chinese and other developing nations … Once they start spending more of their incomes on themselves, those funds will no longer be available for us to borrow. Unfortunately, that is when our real economic crisis will begin." (Emphasis added). ~ Peter Schiff.

What a terrible conundrum — for all of us.

My thanks to Professor Huang.

Chris Clancy [send him mail] is Associate Professor of Financial Accounting at Zhongnan University of Economics and Law in Wuhan, Hubei Province, People’s Republic of China.

The Best of Chris Clancy

There have certainly had to endure a few broadsides during this period. The following come to mind straight away.

• October last year. Just when we thought it couldn’t get any worse — Paul Krugman becomes a Nobel laureate in economics — much to the disbelief and despair of many.

E.g.

“What’s wrong?” my wife asked anxiously as I looked at the computer screen. I didn’t answer, except to blurt out another, “Oh, no!” Finally, I looked at her and said quietly, Paul Krugman won the Nobel in economics.”

“Whew!” she answered. “I thought maybe one of your parents had died.” “No,” I replied. “This is much worse.”

• In the New Year — "Obamanomics" hit town and continued what was started under George W.

"His intentions are good. However, his actions have already laid the foundation for a gigantic bubble and a further weakening of economic fundamentals." ~ Frank Shostak.

Translation — he and his advisors haven’t got a clue what they’re doing!

• The madness continued month after month — stimulus, bailouts, quantitative easing, cash for clunkers, mortgage relief, near zero interest rates, cap and trade, the public option, Iraq, Afghanistan etc, etc, etc.

"Gawd ‘elp us!" — came the cry from the great unwashed.

• October — Obama wins the Nobel Prize for Peace.

Nominations for this award finished about two weeks after the start of his presidency.

Just who is fooling who here?

• November — The BBC World Service survey on free-market capitalism. Only 11% of those polled were in favour of it! — one commentator almost loses it here.

It’s understandable.

• December — recognition of one man’s "achievements."

"Ben Bernanke is Time’s "Man of the Year." Reading the commentary, it is clear that the popular press has even less of an idea of what is going on than Bernanke himself." ~ Bill Bonner.

Throughout we witnessed the disaster that is Keynesianism being tried yet again and failing yet again.

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The result?

A complete vindication for what the Austrian school has been saying for decades.

High-profile historian and economist Niall Ferguson concludes here:

"[Who are] the biggest winners, among economists at least? Step forward the “Austrians” — economists like Ludwig von Mises (1881—1973), who always saw credit-propelled asset bubbles as the biggest threat to the stability of capitalism."

As we head into 2010 this was indeed most welcome.

Even more so was the fiasco that was Copenhagen. The first step on the way to a global government turned out to be a giant step backward. How lovely to see public choice theory kicking in so predictably — explaining why politicians behave the way they do and why modern democracies have evolved in such a way that it was inevitable they would spawn two-party systems. Much to the detriment of the rest of us.

In truth, there is no difference between them. Commentators often liken them to professional wrestlers who snarl at each other in the ring and then go for a bite to eat afterwards.

The center ground is where the most votes lie and that is where they both end up. If you’ve always suspected that politicians were a bunch of rogues and rascals, but were never quite sure why, then this link is for you.

Given the results of the BBC survey it would be easy to start thinking about buying a gun and heading for the hills. However, if not for Ron Paul’s run at the presidency in 2008 and the crucial role played by the internet, the result would have been worse.

We’ve had a year of "Obamanomics." There is no recovery. Just a pause before the next nose-dive. Just imagine what it’s going to be like a year from now, never mind in three years time? Will the Obama administration even make it that far?

In reality there is no credible alternative to Austrian economics.

I hope Ron Paul makes another run in 2012. If he does I feel confident that the support which he garnered in 2008 will pale by comparison to what he would get in 2012.

By then it should be obvious to everyone that it is Keynesian economics which is fatally flawed, not free-market capitalism.

2010 may well prove to be a year of momentous upheaval and change.

A year to remember?

I pray it will not turn out to be one we would all rather forget.

Chris Clancy [send him mail] is Associate Professor of Financial Accounting at Zhongnan University of Economics and Law in Wuhan, Hubei Province, People’s Republic of China.

The Best of Chris Clancy

Given the events of just the last two weeks:

• The leader of the Liberal Party in Australia, Malcolm Turnbull, has been toppled on the issue of cap and trade and replaced by an avowed climate sceptic, Tony Abbott
• The news from New Zealand that raw data on weather had been blatantly manipulated by pro-climate change scientists
• The revelations about what’s been going on at East Anglia University’s Climate Research Unit
• And more

One would think that most people would say to themselves "Hey, wait a minute, there may be a problem here?"

Unfortunately, we can only assume that this is not the case. Yesterday, protests took place in the UK calling for greater action on climate change? Included in their ranks were the usual useful idiots from the world of entertainment. That they attach themselves to "causes" rather than partying themselves into oblivion is a good thing. But, given the enormous influence that they can exert over their millions of fans, they owe it to them to at least do a bit of reading beforehand.

But we shouldn’t be that surprised. They are just as easily influenced as everyone else by the anti-sceptic bias in the MSM. Here’s a good example from just two days ago — can it get any more biased or obvious than this?

We live in a statist world of lies and deceit all made possible by fiat money — the root cause of so many of our problems. If you can’t tax or borrow enough to pay for all the lies, hoaxes and scams then, hey, just print the damned stuff!

It has fed the growth in statism. It is feeding the wars in Iraq and Afghanistan as it has fed so many others in the past. It has also fed the far more insidious perpetual wars, the so-called wars on concepts.

Then there’s the scams like HIV and H1N1 — and right up there is one of the biggest and one of the brightest of the lot — the climate change fiasco.

So many lucrative and high-profile careers and reputations in politics, science and the media have been built on this lie. If they didn’t know it was bogus at the start they must know it by now. But still they keep going

This is perhaps the most wretched part of the whole story.

When Al Gore’s film An Inconvenient Truth was premiered at the Sundance Film Festival in January 2006 it appeared to be lapped up by everyone. The central thrust of this film was that climate change was man-made (anthropogenic); the main culprit was rising levels of carbon dioxide (CO2) in the atmosphere as a result of burning fossil fuels.

At the time when it was screened the general "consensus" was that the arguments were over. CO2 emissions were driving weather change. The whole thing was done and dusted so full speed ahead.

The following year, in March 2007, Channel 4 broadcast a TV documentary called The Great Global Warming Swindle. It was produced by Martin Durkin. The central thrust of this film was twofold.

The first was that it was sunspot activity which drove climate change not CO2 emissions.

The second was that the climate change movement was, first and last, a political movement. With the collapse of Communism the Left found itself in a boat without a paddle. Driven by their hatred of Capitalism, left-wing activists hijacked the "Green" movement for their own ends.

They set about using that old political trick of giving people something to worry about and then converting this fear into votes. This they did in expert fashion.

From about 1990 onwards these political activists, euphemistically known as "environmentalists", consolidated their power base. All people had to do was utter the magic words "climate change" and career paths opened and research funds flowed. As time passed it started to become an ideology — anyone who spoke against it was shouted down

The pro-climate-change movement reached its zenith with Gore’s film. It won two Oscars and an Emmy and earned him a share of the 2007 Nobel Peace Prize. Martin Durkin, for his efforts, was slaughtered on the internet and everywhere else.

However, in retrospect, his film it did prove to be a turning point for many people.

They went to the internet. They learned that there was another side to the story. They learned that there were many highly qualified people in this field who disputed cause and effect — who argued that it was changes in the weather that drove changes in CO2 — not the other way around. They claimed that the whole thing was a scam and a hoax. People like Prof. Richard Lindzen, William M. Gray and John Coleman.

For Al Gore’s film the honeymoon period came to an end when Christopher Monckton decided to go after him. In March 2007 he ran a series of newspaper advertisements challenging Gore to an internationally televised debate on climate change. Gore did not respond. Given Monckton’s demolition of Gore’s film this was a sensible decision.

Monckton’s onslaught can be tracked here.

Joanne Nova in this quote goes to the heart of the debate:

"[T]he only thing that matters here is whether adding more CO2 to the atmosphere will make the world much warmer … If carbon dioxide is not a significant cause, then carbon sequestration, cap-and-trade, emissions trading, and the Kyoto agreement are a waste of time and money."

The same can be said for Copenhagen.

The case for Anthropogenic Global Warming (AGW) has not been proved — far from it in fact.

To cap it all the U.S. Environmental Protection Agency commissioned its own report by one of its own people, Alan Carlin, into the validity of the science behind AGW.

His conclusion was that the science was no longer defendable!

Given all this and more we have to ask the question — why are we even having Copenhagen?

Chris Clancy [send him mail] is Associate Professor of Financial Accounting at Zhongnan University of Economics and Law in Wuhan, Hubei Province, People’s Republic of China.

The Best of Chris Clancy

As he passes each floor he thinks to himself, "Well … so far so good."

I don’t believe it’s any exaggeration to say that the US economy, and therefore the world economy, is in a very similar position. The nonsense being talked about a "recovery" and the general level of ignorance, both in and out of government, is mind-boggling.

Stimulus packages, bailouts, the "Cash for Clunkers" fiasco, proposals for socializing health care, cap-and-trade madness etc. etc. etc. What the hell is going on?

The current administration inherited a disaster; but with President Obama a real opportunity was missed. Given the man and his background, he could have held many disparate groups together. Had he chosen small government, non-interventionist, free market advocates as advisors I believe there was a good chance that the majority of American people would have stuck with him — that they would have put up with the tough medicine which would have brought about real "change" rather than just more of the same.

But that’s all water under the bridge now.

Frank Shostak begins this article with a quote from Obama:

"I know how to ask good questions of my doctor. But ultimately, he’s the guy with the medical degree. So, if he tells me, you know what, you’ve got such-and-such and you need to take such-and-such, I don’t go around arguing with him or go online to see if I can find a better opinion than his."

This makes perfect sense providing your doctor knows what he’s talking about. Unfortunately, whatever Obama’s talents, he is not a businessman and certainly not an economist — of any stripe. He has put his faith in a bunch of economic quacks and the result is, and will remain, a moribund economy for years to come.

Frank Shostak goes on in his article to leave the economic policies of the present administration in shreds — he does so in a very patient and erudite fashion. It’s clear, it’s logical and it’s a must-read for anyone who wants to get a no-nonsense explanation of just why "Obamanomics" won’t work.

But it’s not as if we haven’t been here before. We even know the cause — fiat money!

"[The current crisis is] payback for a decade of reckless monetary policy … The recession is not the problem, the recession is the cure. It’s not fun, just like heroin withdrawal is not fun … but it’s necessary.” ~ Peter Schiff.

The problem is that no-one in government has either the guts or understanding, or both, to do what is needed. The last time anyone had the courage was during the Regan administration. Fed Chairman Paul Volcker stopped pushing counterfeit money into the system and let interest rates soar. In spite of incredible public hostility Ronald Regan stood by him. Of course, the healing process was painful but recovery followed and the USA, as usual, dragged the rest of the world back with it. Nothing has changed here. Recovery in the USA is still required before the global economy can recover.

But "real" recovery in the USA is no-where in sight.

The fact is we are no longer in a boom-bust cycle. We are in a Depression. And there’s worse to come. The next shock is imminent. Adjustable rate mortgages on commercial property are due to begin re-setting upwards:

"By some estimates, two out of every three will no longer meet the original loan conditions and won’t be able to refinance … [a]nd with prices for commercial properties expected to plunge … [t]he falling prices in commercial real estate will lead to additional bank losses at a time when banks are sapped by home mortgage defaults and soaring credit card defaults."

Worse still:

"This could lead to future additional taxpayer assistance for the banks."

I wouldn’t bet against it. As regards any semblance of sane economic policies, the current administration is, like the previous one, intellectually bankrupt. They will carry on blindly trying to dig themselves out of the same ever-growing hole.

Amongst currently elected politicians there are very few voices of reason. Ron Paul is of course the most notable. Peter Schiff is thinking about throwing his hat into the ring and running for the US Senate.

I’d vote for him. Why? Because first, he is a highly successful businessman, second, he has been spot-on with many of his predictions about the economy and, third, his understanding of Austrian economics is fundamental. On all three counts that puts him miles ahead of the vast majority of career politicians.

Visit his archives. If you haven’t read any of his articles you’ll be pleasantly surprised. No formulae, graphs, tables or charts — just plain speech and common sense (e.g. "Cash for Clunkers"). No-one needs a degree in economics to understand what he’s saying — in fact, it may well be an advantage not to have one!

He focuses on the repercussions of economic policies not their initial impact. Down the line their effect is almost invariably adverse. In a word, like Ron Paul, he’s "honest" about what the future holds if we continue on our present course:

"Unlike most politicians, he does not traffic in unbridled optimism … if painful and drastic changes aren’t made soon, he foresees an economic depression lasting at least a decade. The future … will be marked by rampant inflation … food shortages and rolling blackouts, unless government sharply shrinks and the free market is allowed to flourish."

Until this happens, we continue the inevitable plunge into economic catastrophe.

However, ask one of Obama’s Keynesian advisers how we’re doing and the reply would probably be:

"Well … so far so good."

Chris Clancy [send him mail] is Associate Professor of Financial Accounting at Zhongnan University of Economics and Law in Wuhan, Hubei Province, People’s Republic of China.

The Best of Chris Clancy

Not one of the emails I received was in favour of this legislation — not one.

What I clearly detected were feelings of frustration and impotence. There’s a silent majority out there and it’s massive.

Is this not a classic example of the old adage about hard cases and bad laws (i.e. minority groups and hate crime legislation)?

"It is sometimes said that hard cases make bad law because logic is often shortcut in a hard case, and later attempts to justify the new law thus created often compound the original inadequacy of reasoning." ~ Answers.com

And so say all of us!

Who have been the beneficiaries of this legislation?

It’s not that easy to say since there’s little or no discussion. This leaves us in the realms of speculation about fact and perception.

But somebody, somewhere, must be doing well out of it?

Here’s my suggestion.

How about those who cynically use the legislation for their own advancement — those who see a gravy train and ride it for all it’s worth — those who couldn’t give a damn about equality of opportunity or tolerance — those who almost dare others to criticise them on the pretext that they occupy (or squat on) some kind of moral high ground.

In reality they have no consensus — but don’t much care — they have manoeuvred themselves into positions where they have become, in effect, bullet-proof.

People dare not speak out against them or any other group — except their own.

This is where the real damage is done, this is where the real anger begins and this is where groups like the British National Party get their foot in the door.

But no-one is saying anything.

It’s unhealthy and it’s dangerous.

Without free speech things which should be said are left unsaid — they fester and rot — like sweeping food under a carpet. As time passes the stench gets so bad that someone is forced to lift the carpet and clean up the mess.

Of course, free speech means that some people on the fringes get the opportunity to peddle their poison — but free speech also means that they can be challenged openly — and they will be found wanting. Such groups will always come and go but will remain where they belong — on some isolated idiot fringe. Persuasion, education and open and free discussion should be the way ahead, not legislation. We cannot legislate against the feelings or motivations of such groups any more than we can legislate in favour of everyone loving each other.

Dr. Martin Luther King. Jr. put it very well here:

"The law cannot make you love me, but it can prevent you from lynching me. And if you don’t lynch me, you may eventually come to love me."

and here:

"Men often hate each other because they fear each other; they fear each other because they don’t know each other; they don’t know each other because they can not communicate; they can not communicate because they are separated."

In the absence of hate crime legislation will we all come together like some great big happy family? Of course not, to think so would be both absurd and delusional.

In time people will come together if they are left alone — for no other reason that it’s in their interests so to do — not because they all suddenly learn to love each other.

As an example, I was in Hong Kong a few weeks ago. The place was still buzzing in spite of the current downturn. You’ll find every race, creed and colour working and trading with each other. Whether they love or even like each other is immaterial — they were all making money.

By working with, rather than against each other, they are all better off.

In what direction are we going with all our legislation?

Backwards — and it’s getting worse.

People accused of voicing hate crimes have only one defence — the right of free speech — I defend this right regardless of how disagreeable I might find it.

The government sought to introduce a bill which would have undermined this right. It was defeated in the House of Lords.

The government’s response:

"The Ministry of Justice said the defeat was “disappointing” and that it would seek to overturn it when the bill returned to the Commons later this year."

The whole process seems to be relentless.

But no-one speaks out. We have become afraid to speak.

Does that make us a "nation of cowards" in the sense that Attorney General Eric Holder said of his fellow Americans in a recent speech (primarily about race relations)?

No, I don’t believe so. But PC madness and hate crime legislation just makes it seem like that.

Chris Clancy [send him mail] is Associate Professor of Financial Accounting at Zhongnan University of Economics and Law in Wuhan, Hubei Province, People’s Republic of China.

The Best of Chris Clancy

Not one of the emails I received was in favour of this legislation — not one.

What I clearly detected were feelings of frustration and impotence. There's a silent majority out there and it's massive.

Is this not a classic example of the old adage about hard cases and bad laws (i.e. minority groups and hate crime legislation)?

"It is sometimes said that hard cases make bad law because logic is often shortcut in a hard case, and later attempts to justify the new law thus created often compound the original inadequacy of reasoning." ~ Answers.com

And so say all of us!

Who have been the beneficiaries of this legislation?

It's not that easy to say since there's little or no discussion. This leaves us in the realms of speculation about fact and perception.

But somebody, somewhere, must be doing well out of it?

Here's my suggestion.

How about those who cynically use the legislation for their own advancement — those who see a gravy train and ride it for all it's worth — those who couldn't give a damn about equality of opportunity or tolerance — those who almost dare others to criticise them on the pretext that they occupy (or squat on) some kind of moral high ground.

In reality they have no consensus — but don't much care — they have manoeuvred themselves into positions where they have become, in effect, bullet-proof.

People dare not speak out against them or any other group — except their own.

This is where the real damage is done, this is where the real anger begins and this is where groups like the British National Party get their foot in the door.

But no-one is saying anything.

It's unhealthy and it's dangerous.

Without free speech things which should be said are left unsaid — they fester and rot — like sweeping food under a carpet. As time passes the stench gets so bad that someone is forced to lift the carpet and clean up the mess.

Of course, free speech means that some people on the fringes get the opportunity to peddle their poison — but free speech also means that they can be challenged openly — and they will be found wanting. Such groups will always come and go but will remain where they belong — on some isolated idiot fringe. Persuasion, education and open and free discussion should be the way ahead, not legislation. We cannot legislate against the feelings or motivations of such groups any more than we can legislate in favour of everyone loving each other.

Dr. Martin Luther King. Jr. put it very well here:

"The law cannot make you love me, but it can prevent you from lynching me. And if you don't lynch me, you may eventually come to love me."

and here:

"Men often hate each other because they fear each other; they fear each other because they don’t know each other; they don’t know each other because they can not communicate; they can not communicate because they are separated."

In the absence of hate crime legislation will we all come together like some great big happy family? Of course not, to think so would be both absurd and delusional.

In time people will come together if they are left alone — for no other reason that it's in their interests so to do — not because they all suddenly learn to love each other.

As an example, I was in Hong Kong a few weeks ago. The place was still buzzing in spite of the current downturn. You'll find every race, creed and colour working and trading with each other. Whether they love or even like each other is immaterial — they were all making money.

By working with, rather than against each other, they are all better off.

In what direction are we going with all our legislation?

Backwards — and it's getting worse.

People accused of voicing hate crimes have only one defence — the right of free speech — I defend this right regardless of how disagreeable I might find it.

The government sought to introduce a bill which would have undermined this right. It was defeated in the House of Lords.

The government's response:

"The Ministry of Justice said the defeat was “disappointing” and that it would seek to overturn it when the bill returned to the Commons later this year."

The whole process seems to be relentless.

But no-one speaks out. We have become afraid to speak.

Does that make us a "nation of cowards" in the sense that Attorney General Eric Holder said of his fellow Americans in a recent speech (primarily about race relations)?

No, I don't believe so. But PC madness and hate crime legislation just makes it seem like that.

Chris Clancy [send him mail] is Associate Professor of Financial Accounting at Zhongnan University of Economics and Law in Wuhan, Hubei Province, People’s Republic of China.

The Best of Chris Clancy

At school there was a lot of teasing, name-calling, mimicking our accents, Irish jokes and so on — but it was bearable — just.

I have to say that we were never hit or beaten up. This was probably due to the fact that we had an older brother who would take on anyone. Mess with us and you messed with him. Mess with him and you wouldn’t bother again — it just wasn’t worth it.

When the "The Troubles" erupted in Northern Ireland at the end of the 1960s feelings towards us took a turn for the worse and stayed that way for many years. We were getting a taste of what other minority groups had had to put up with for far longer than us. I won’t bore you with stories about how we "suffered," if that’s the right word, but we lived through it and learned to cope with varying shades of open hostility. As such, therefore, I feel well qualified to write about prejudice, hate and discrimination, having been at the sharp end of it.

Things started to change in the late 1980s. I don’t know how much this had to do with what was going on in schools but certainly the arrival of new wave comedians went a long way to making entertainment based on crude, insulting and vulgar jokes about race, religion etc. a thing of the past. Why did they make such a difference? Because they were original, talented and damned funny; they reached a hell of a lot of people.

Much of what had passed for humour beforehand gradually came to be regarded as cheap, boring and tasteless. Things were changing for the better, things were evolving by themselves — human action in action if you like — a growing realisation that we were all in this together, no-one was leaving — so we’d better just learn to get on with each other.

OK, things weren’t perfect — there was still a long way to go — I’m not looking back at the past like some old fart wearing rose-tinted glasses, but things were changing.

However, that didn’t stop the state and getting more and more involved. Here was yet another gravy train for career politicians. The upshot is that we now have a raft of legislation to do with "hate crime."

If free speech means putting thoughts into words then this must be the ultimate in statism — be careful what you think!

What does "hate crime" mean anyway?

This, from the UK Home Office:

"Hate crime is any criminal offence committed against a person or property that is motivated by an offender’s hatred of someone because of their:

• race, colour, ethnic origin, nationality or national origins
• religion
• gender identity
• sexual orientation
• disability"

Hate crime can take many forms including:

• physical attacks — such as physical assault, damage to property, offensive graffiti, neighbour disputes and arson
• threat of attack — including offensive letters, abusive or obscene telephone calls, groups hanging around to intimidate and unfounded, malicious complaints
• verbal abuse or insults — offensive leaflets and posters, abusive gestures, dumping of rubbish outside homes or through letterboxes, and bullying at school or in the workplace

Did we really need new legislation to deal with this?

I can hear Bastiat beginning to turn in his grave — yet again.

What were the unseen affects of this legislation?

How many people do you know who would actually carry out hate crimes as detailed above? Not many I bet, if any. The people who do actually carry out such crimes are a tiny minority who will do so anyway regardless of whether the legislation is there or not.

The effect of this legislation was to erect barriers where there were none before, to create division and resentment where there was none before and to achieve precisely the opposite of what was intended. Twin this with the multi-cultural mantra of "celebrating diversity" and we have a very nasty cocktail being mixed for the future.

Art Carden in this piece writes about tolerance and pluralism — about how "thoughtcrime" legislation serves only to create "us versus them" situations.

Coerce people to come together and you’ll only drive them apart.

"There is no surer way to infect mankind with hatred — brute, blind, virulent hatred — than by splitting it into ethnic groups or tribes." ~ Ayn Rand

Leave people alone and they will come together.

"The great virtue of a free market is that it enables people who hate each other, or who are from vastly different religious or ethnic backgrounds, to cooperate economically. Government intervention can’t do that. Politics exacerbates and magnifies differences." ~ Milton Friedman.

The last part of this quote bears repetition.

"Politics exacerbates and magnifies differences."

Isn’t this, ultimately, what hate crime legislation does?

Chris Clancy [send him mail] is Associate Professor of Financial Accounting at Zhongnan University of Economics and Law in Wuhan, Hubei Province, People’s Republic of China.

The Best of Chris Clancy

Paradoxically, the problem was that it worked too well and just got too big.

I hope you stay with the story until its denouement. Maybe you’ll be gobsmacked. If it moves you to go out and start looking for suitable lamposts — then it’s understandable.

When a business makes a loan to another party it can insure against the risk of default. This would be prudent behaviour if the lender had concerns about the borrower not repaying everything which was due.

Insurance companies, like all industries, work to a set of fundamental principles. Two of their most fundamental principles are indemnity and insurable interest.

Indemnity simply means that no-one should "profit" from making an insurance claim. Instead, the money received should be enough to restore you financially to the position you were in before the reason for making the claim occurred.

Insurable interest means that you cannot insure something unless you have a legitimate interest in protecting yourself against something bad happening to that thing. So, for example, you can insure your car or the life of your spouse. You cannot, however, insure the car or the spouse of a complete stranger since your only incentive would be the hope that something bad happens to either or both. In fact, you would have a very strong motive for making sure that something bad actually does happen to either or both!

What has the above got to do with the present mess?

Everything unfortunately.

Understanding the gravity of the situation we are now in means getting to grips with the dreaded "D" word — and I don’t mean "Depression" — I mean "DERIVATIVES"! Few understand them. The following quote refers to Gordon Brown:

"He … made the extraordinary confession that as Chancellor he ‘didn’t know a lot about’ sub-prime mortgages — a key banking practice that sparked the economic collapse."

Mention of the u2018D’ word is usually enough to turn most people off instantly — therefore in what follows I have attempted to keep it as brief and clear as I can and to avoid mentioning this heinous word. Instead I’ll refer to them as Gherkins, Sprouts and Bananas.

The current crisis was started by cheap money being kept cheap for too long. It found its way into the housing market where things escalated as a result of government encouragement for lenders to make bad loans. The lenders who made the bad loans didn’t care since they could sell them on to someone else.

The buyers of these loans didn’t care either since they knew the government would bail them out if they got into trouble. These loans were then securitised; in other words, they were divided up into securities (financial instruments) called "Gherkins" and then sold on to the financial industry.

The financial industry then employed very clever people to mix these securities up in all sorts of permutations and combinations. By the time they had finished splicing and dicing, mixing and matching a new generation of financial instrument had emerged — these were called "Sprouts."

Why did they do this?

It was done to hide the fact that many of these securities were based on bad loans. As such they could only attract a "junk" credit rating which made them more difficult to sell on. By combining them with good loans in incredibly complicated mathematical models, using all sorts of weird and wonderful statistical techniques, this new generation of financial instruments could all attract a triple-A credit rating. Obviously this made these things highly marketable.

Sprouts were sold in vast quantities all over the world. The buyers simply looked at the credit rating. They didn’t know how these things were constructed. They didn’t realize that the models were flawed — Austrian economics tells us again and again that predictions involving human action cannot be reduced to mathematical formulae. (If you’re into self-abuse and really want to put yourself through it go here for a simplified example of how to create a Sprout — and more).

Let’s return to the world of insurance.

Organizations which had purchased Sprouts in huge quantities wanted to reduce their risk. Companies like AIG, for example, offered them insurance policies. In return for regular monthly premiums they could insure against their Sprouts going bad. This was quite legitimate since they had an insurable interest — they owned what they were insuring — and would be rightly indemnified in the event of default.

What happened next was that the insurance policies themselves were then securitised and another generation of financial instruments emerged called "Bananas."

These things have been loosely described as "insurance policies." Nothing could be further from the truth! These things had nothing whatever to do with indemnity and insurable interest. The buyers of Bananas were given the mysterious title of "counterparties." Nobody actually knows who they are.

What was their incentive in purchasing Bananas?

Put simply, Bananas were a bet in which the die was loaded in favour of the gambler, or counterparty. They were betting on the failure of bad loans which were purchased and then re-packaged into Sprouts and then sold on! For those in on the scam there was simply no reason to buy Bananas unless they were confident that the sub-prime market would collapse — which it did. They then claimed on their "insurance" policies.

No. Don’t reach for the bottle just yet. You’ll need a clear head for what comes next. Because it actually gets worse.

Just to recap. The housing food chain spawned three types of financial life form — Gherkins (Mortgage Backed Securities), Sprouts (Collateralised Debt Obligations) and Bananas (Credit Default Swaps).

In this must-read article by James Lieber (which I hope you pass on to as many people as possible) he argues that it was Bananas which turned what should have been a recession into a depression — that the failure of the sub-prime market and its concomitant Gherkins and Sprouts by themselves would not have landed us where we are now.

Why?

Because the amount of money which is still out there waiting to be claimed on Bananas is mind-boggling!

How did it become so large?

The answer is the word "replication." One Sprout could be "insured" time and time again. This is why the thing became so large.

Lieber, writing in Jan. 2009, estimated that the Banana liability was in the region of $600 trillion. In fact, Ellen Brown, writing in Sep. 2008, put total trade in Gherkins, Sprouts and Bananas in excess of $1,000 trillion. The latter is called a quadzillion. If so then we’ve made it — not billions or trillions any more — now we’re into quadzillions!

And just where has all this bailout money paid to financial institutions gone? There’s no way of telling because the Fed’s not saying. How much has gone straight into the pockets of the counterparties, whoever or whatever they are?

I pray HR 1207 makes it all the way. Maybe it will yield up the truth about what has been going on — the fact that it didn’t just happen — it was quite deliberate. And let’s be clear, as Lieber points out in his article, it simply could not have been done without collusion between major players.

Is there a way out of this nightmare? Well, call me an optimist, but there must be. If people can devise a system whereby a tiny elite run the world on money created out of thin air, and get away with it, then surely we have the wit to devise a method of neutralising or cancelling these things — of evaporating them into thin air!

Then go after the counterparties who have already received money and prize every stinking penny from their filthy money-grubbing fingers.

This is no conspiracy theory — it’s fact. See here and here for two articles recently published on LRC — laugh or cry, it’s up to you — but we’ve all been conned, scammed, stiffed or any other word you can think of — yet again.

The greatest scam in history has littered the world with banana skins. There’s a lot more slipping and sliding to go before we emerge from this one — if we ever do — and in one piece at that!

Chris Clancy [send him mail] is Associate Professor of Financial Accounting at Zhongnan University of Economics and Law in Wuhan, Hubei Province, People’s Republic of China.

The Best of Chris Clancy

Its been a bit like playing a new golf course — one which has been cunningly designed with all sorts of traps and hazards — to play this course properly a new approach is needed. Every hole has been a challenge. Each has had its own tricks and quirks. Each has its own special name — like the opening one — the ominous sounding "What is Seen and What is Unseen." Then a few holes on the terrifying "Keynesian Menace"; then later the forlorn and deadly "More Tragedy Than Hope." The front nine finished with a deceptively easy looking Par 3 which had a name similar to many pop groups which thrived in the 1970s and faded in the 1980s — "Milton Friedman and the Monetarists!"

I reached a turning point in my round when I found that I could read people like Frank Shostak without having to go on a paper chase. In a recent article he demolishes "Obamanomics" with remarkable calmness and patience.

I find it difficult to be as calm and patient. I’m in good company.

The fact that they’re only making things worse is depressing. I’m not saying that I sit by myself in the kitchen, in the small hours of the morning, with a bottle of scotch in one hand and a loaded revolver in the other — but it is depressing.

All is not lost however. I haven’t completed the round yet. I’m somewhere on the back nine but just not too sure where. I’ll never get to the eighteenth — I don’t think anyone ever does — it’s the nature of the subject.

At the moment I’m standing at the tee of a monstrous Par 5. Double-bogey strength — at least.

It’s called "The Barbarous Relic."

I’ve been dreading this one because I’ve known all along that all of my unlearning, learning and relearning would inevitably have to converge at some point.

Well this is it and the question is critical.

How do we escape from our fiat money system?

The legitimacy of Austrian economics as a realistic and workable alternative centers on a return to sound money.

" … [S]o many of the policy ideas suggested within the Austrian framework can be subsumed under the need to abolish the central bank." ~ Lew Rockwell.

Things have begun to happen on this front. The campaign to "End the Fed" is growing — ably aided and abetted by Ron Paul’s efforts.

If successful it would be a start, in fact it’s the only way that a return to sound money can ever begin.

Austrian economists are united in their views about the disaster of fiat money; its history, without exception, has been one of abuse by those running it. They simply cannot be trusted, — it has happened time and time again — they just can’t help themselves.

We used to have a global currency system that worked — the gold standard. Currencies were backed by something which was reliable and stable. It could not be created out of nothing. If governments and banks behaved irresponsibly there was no protection — they went bankrupt — they were forced to behave with honesty and integrity or else.

The case for abandoning fiat money is clear. However, even Austrian economists begin to break ranks when it comes to the feasibility or probability of returning to a commodity based system.

It’s all very confusing.

Will we ever, or can we ever, return to a gold standard? Here’s just five examples of the diversity of views amongst Austrian advocates.

1. Back in 1977 F. A. Hayek said here:

"[Any] hope of returning to the kind of gold standard system which has worked fairly well over a long period is absolutely vain." (Emphasis added).

2. Murray Rothbard argued here (1995), that the job of privitizing money, of returning it to the market economy, was not as impossible as it seemed. By way of example he says the job would be:

" … much less difficult than [was] the daunting task of denationalizing and decommunizing … the former Soviet Union." (Emphasis added).

3. When asked if he would see a return to the gold standard in his lifetime Peter Schiff replied in this interview:

" Yes, I will — it has to happen.." (Emphasis added).

This is a prediction. Given his track record it is worth bearing in mind.

4. Byron King suggests that China has taken the first tentative steps back to something partly resembling a gold standard system by building up and then monetizing its gold as reserves.

5. Gary North, writing here (Chapter 14 — Conclusion), doubts if gold will become money in his lifetime.

"A return to gold as money in the West will take a cataclysm … " (Emphasis added).

Where does all this leave us?

Hayak said it would never happen, Rothbard said it’s not as difficult as we think, Schiff says it has to happen, King says it may already have started to happen and North says it will only happen following some monumental disaster.

Who’s right?

If I had to go for just one right now it would be the "North Criteria." Given the power of the vested interests and the apathy and ignorance of the general public the whole thing would first have to come crashing down before it could be rebuilt with sound money. It’s a frightening prospect:

" [L]ife-threatening, in my view" — Gary North here (Chapter 14 — Conclusion).

Anyway, a mist has descended on The Barbarous Relic. I’m not quite sure which line of attack to take. But here goes anyway. I tee the ball up. I select a driver with a sweet-spot almost as big as the ball itself — I’m going to need it. I check my grip, check my stance and then address the ball. I’m going to give this sucker one God-Almighty smack!

Let’s just see where it leads me.

Chris Clancy [send him mail] is Associate Professor of Financial Accounting at Zhongnan University of Economics and Law in Wuhan, Hubei Province, People’s Republic of China.

Chris Clancy Archives

There’s one I’ve come across in Chinese which translates exactly as the English proverb — "Interest is the best teacher." I find this one particularly apt as my journey into the world of libertarian thought and Austrian economics continues.

Many new and interesting doors have opened since I began my journey. One of the most fascinating has been the world of investment; or, not so much the world of investment, but rather the people who inhabit this world.

I recall one or my aged professors at university solemnly telling us that the days when a man could start out life with a few pounds in his pocket and single-handedly turn it into millions were over.

"Gentlemen," he said lamentably to his mixed audience, "I fear the only way ahead now is to join the corporate ladder."

This was back in the 1970′s. It was a different world. Unfortunately, we believed him and, for the most part, followed his advice.

But he was wrong — he was ignoring a special breed — by which I mean a small band who did start with a few pounds (or dollars) in their pockets and who have actually made money — lots of it. By now I can reel off a long list of people I never knew existed before, starting with the likes of Bill Bonner and Peter Schiff. The corporate ladder was never the way for these people, or if it was they didn’t stay that long. I think of them as the high-plains drifters of the modern world of investment — the last gunslingers!

They are solitary hunters. They see opportunities, get in first, and sure as hell know when to get out. They don’t do what everyone else is doing — they’re contrarian — which is what makes them a special breed. These modern day gunslingers have traded the Wild Wild West for the World Wide Web.

What qualities set these guys apart from the rest of us? Well, let’s just say it’s a combination four things:

1. Blazing intelligence.
2. The ability to spot opportunities before everyone else.
3. Fiercely independent — trust no-one, accept nothing and question everything.
4. A sound take on Austrian monetary economics.

Of the four it’s the fourth that really makes the difference. This is their great advantage since the vast majority of people simply do not understand monetary economics of any stripe. Most people find just the thought of it incredibly boring — their eyes glaze over if the subject is even mentioned.

Suffice it to say that what the most successful investors nearly all seem to have in common is that they ally themselves to the Austrian school of economics. For anyone of modest means, thinking about a career where they can make some real money, the connection here should be going in like a six-inch nail!

Crucially, our modern-day gunslingers understand how the political system works. They know that it’s nothing short of mob rule by another name. Not much different from a lynching. The instigators manipulate the mob for their own ends. The mob hasn’t got a clue about what’s really going on. They’re so far into it they actually trust and believe the wretched hypocrites who are running them. A few stand by on the sidelines and observe — they see what’s going on — but they know you can’t reason with a mob when it has been so expertly groomed. So they just shrug and leave them to it — they have other fish to fry.

We must admire them for their insight, admire them as they ride into town alone and leave the same way with their saddle-bags bulging. They are lone wolves who cannot he handled or led — not that they are averse to running with the buffalo when there’s a profit to be made — but it’s rare.

Are they cynics? Why yes of course they are. Can you blame them?

They see so much mayhem going on around them, fantasy and farce, mistakes and madness, lies and greed — and it never stops, it just goes on and on and no-one ever seems to learn. In the end they stop asking why and just become amused by it all.

And here we are at yet another denouement. Our gunslingers jumped out of the stagecoach long before the other passengers saw the Grand Canyon up ahead. They have repositioned themselves. Someone has to pay for the nonsense of the last few years but it won’t be them. The paying will be done by "investors" putting money into things they just didn’t understand and by ordinary hard-working people, who wouldn’t know a CDO from an IPO, seeing their living standards plummet.

And where will the gunslingers be as this latest tragedy unfolds? Camping out alone on the prairie? Taking it easy by the campfire for a while? Looking up at the stars and playing a lonely dirge on a mouthorgan?

Not a bit of it.

The boys have already mounted up and are headed for Dodge. They travel alone. They ride steadily and with purpose. When two of our bounty hunters find that they are after the same prey then meetings become inevitable and can be somewhat, how shall I say, "fragile." One will exit the hunt minus his scalp — if he’s lucky. For they of all people know that now, especially now, when the blood is about to start running in the streets — that now is the time when there’s a real killing to be made.

Chris Clancy [send him mail] is Associate Professor of Financial Accounting at Zhongnan University of Economics and Law in Wuhan, Hubei Province, People’s Republic of China.

Chris Clancy Archives

September 2003, London, England — I was handed my redundancy notice — I was 49 years old.

One year later I arrived in China. I had signed a twelve-month contract to teach Oral English in a small city called Dan Jiang Kou (DJK) in Hubei Province. My students were all English majors training to become teachers.

The first semester really was one of the most special periods in my life — I was alive again — rather than living the wage-slave, zombie-like existence, I had become used to in the UK.

After the first semester finished I went travelling with another foreign teacher for the Spring Festival. This is the biggest holiday period in China which ushers in the Lunar New Year. It’s like our Christmas except that literally millions of people travel to be with their families at the same time.

Overall the holiday was not enjoyable. I didn’t enjoy the long journeys, the crowds, the conditions, the hassle with the language and, in particular, being overcharged and ripped off everywhere we went.

The experience was not such a bad thing really. It brought me back to earth with a bump. Before setting off all I really knew of China was DJK and the marvellous students I was teaching. If I was in danger of getting any airy fairy ideas about my new life in China then this experience brought me back to reality.

The college where we worked insisted that we return from holiday at least one week before teaching began. It gave me a couple of days to recover from my so-called vacation. Then I had some time to prepare for the second semester. In the first one I had ten repeat Oral English classes each week. For new teachers repeat lessons are usually welcome. They’re a chance to learn from mistakes and get things right — they also cut down on the hours spent on preparation — a lot of it wasted time due to inexperience

However, for experienced teachers too many repeats is simply tedious. Once the same lesson has been taught three times in the same week that’s as good as it’s going to get. Anymore and it tends to become a bit flat.

The Foreign Affairs Officer (FAO) managed to re-jig my timetable so that I had a bit more variety this time. I now had five Tourism English classes, four Oral English classes and one Business English class.

I was given one new book for each course. The one on tourism was the best — not so much for the text but for the exercises at the end of each chapter — lots of practice material. The one for Oral English was just a variation on the one I’d used in the first semester with about the same number of careless mistakes. The one for Business English was simply un-usable — not only technical mistakes but grammatical and spelling mistakes — I decided to do some book-keeping related work with them — there were lots of business English words I could introduce.

Once I’d sorted out what I was going to teach and had a few lessons prepared I had a couple of days to relax. I was happy to be back in DJK. I felt comfortable. I was even looking forward to teaching. So long since I’d felt this sort of contentment — I couldn’t actually re-member the last time. There’s a very old Celtic saying which loosely translates as, "if you’re happy don’t talk about it, or it might just go away." I never told anyone how I felt. I certainly never told anyone that I was happy — just in case it went away.

The semester got underway

The tourism course went well. The students were genuinely interested. In China tourism is described as a "sunrise" industry. For most of my students it represented a possible alternative to teaching — which very few wanted to do anyway. I had lots to tell them about and they had lots to talk about too. We actually started to communicate without me constantly prodding and practically pleading for contributions.

I continued to struggle with getting the Oral English classes to speak. I borrowed "activity" lessons from one of the EFL trained foreigners. I also learned a few useful things, e.g. "if you have to explain demonstrate" etc., but I felt that these activities were just "games" or time-fillers. In terms of getting the students to speak to any meaningful extent little was achieved. Anyway, I persevered until I knew that if this approach worked for others then good luck to them — it didn’t work for me. I returned to a more traditional approach. The students weren’t that happy — they had more fun playing.

Business English. I had only one lesson a week. I started with vocabulary and built it around an imaginary business just beginning. Once we’d been through all the key words a few times I started to introduce some numbers. At this point I had their interest. We started building the business together. Before I knew it we were into book-keeping proper. They ate up the material. In no time at all we were constructing and analysing financial statements

By April the weather began to turn. It quickly became very warm again The FAO was beginning to think about recruiting foreign teachers for the next academic year. He invited me to re-new my contract. My salary would be increased from 4,000 to 5,000 RMB per month and I would have a freer hand in what I taught.

I was unable to give him an answer straight away as I had been invited to attend a second interview with a university in Wuhan in May. This interview would involve teaching a lesson to the staff of the Accounting School. The letter of invitation informed me that I could pick any "relevant theme." I chose to talk about China’s rapid development since 1978 with particular reference to Shenzen and its designation as a Special Economic Zone.

I researched the thing thoroughly, prepared a PowerPoint presentation to go with the lesson and even practised it in front of two of the foreign teachers.

Four weeks later I was back in Wuhan.

The lesson went well for about five minutes but after that the leaders seemed to become a bit restless. Something was wrong. I started to sweat. Then I was stopped and asked if I would do something specifically on an accountancy topic. There was a short break. Luckily I had brought the letter of invitation. It asked for a lesson on any "relevant theme" not one on an "accounting topic." This is a good example of the kind of confusion which can arise due to misunderstandings about words. It almost cost me the job!

I then did a lesson on accounting ratios. It was something I was very familiar with and had done many times before. It went smoothly and everyone clapped when I finished. I was greatly relieved. I was then taken for lunch with a lot of people from the department. I knew I’d got the job if I wanted it.

Back in DJK I received the official offer a few days later. The hours were not clearly specified but would be in the region of twelve per week. Salary would be 3,500 RMB per month. Once again, in the space of twelve months, I had a big decision to make. And once again the options were between an easy way out and a leap into the unknown. Staying in DJK was the easy way out. I had got to know the place, the people. I knew the job and had ideas about how to do it better. My conditions of employment would be better. Best of all I liked it there. This was indeed the easy option. But I knew it would be the wrong option.

Wuhan was the more difficult choice — I didn’t know what to expect — new city, new people, new situation, less money etc. I wasn’t even sure what the job entailed or how to go about it? Did I really want to face all this newness again? The answer was yes. I chose Wuhan. I had nothing to lose anyway.

The semester drew to a close. I had some time for reflection again. I had arranged with Wuhan to stay in their accommodation for the summer. The thought of returning to the UK for the holiday never seriously entered my head. The day before I left DJK I walked to the top of a mountain. The path to the top was steep and narrow and in places a bit treacherous. By now the weather was very hot. It was hard work. The mountaintop itself was flat — a bit like an anvil — about an acre in size. The only thing there was a giant electricity pylon. I had been here once before, about two months after coming to DJK. Someone took a picture of me lying on the grass. I didn’t know the picture was taken. It was emailed to me later. I was laughing for some reason. Not a loud laugh it seemed but a relaxed and genuinely happy laugh. The picture had been given the title "Happy moments" — it was an apt and fitting title.

I lay in the same spot, stretched out in the warmth of the sunshine and the blueness of the sky. I tried to absorb the enormity of the changes which the last year had wrought. Coming to DJK was one of the most special years in my life. It was a turning point — I had left behind an unhappy life and an unhappy place — I had regained my self-respect, my dignity and my confidence.

To have stayed any longer would have ruined it. It had its own time and its own place

On my last night there I thought of my first night in China. With hindsight I can see now that I’d touched rock-bottom.

Maybe we all have one place that’s special in our lives. I had to wait fifty years and travel to the other side of the world to find mine. If I die in this part of the world I hope that someone climbs to the top of that mountain and, once there, scatters my ashes far and wide. I can think of no better place.

But in the meantime Wuhan beckoned. I could not possibly have dreamt of the events which would unfold over the next four years.

But I felt good in myself and for the first time in years I was looking forward and wondering, not knowing, rather than looking forward and thinking, oh no, not more of the same — I’m just not sure how much more of more I can take.

Chris Clancy [send him mail] is Associate Professor of Financial Accounting at Zhongnan University of Economics and Law in Wuhan, Hubei Province, People’s Republic of China.

Chris Clancy Archives

They say that history tells us everything, even the future. It has given us repeated lessons about fiat money and inflation. Hannan said it about as clearly as it can be said — you cannot spend your way out of recession any more than you can borrow your way out of debt.

But we know this already. The dot.com bubble bust was followed by a deliberate policy of inflation which was the principle cause of the present crisis. Let’s go back. Japan. They’re twenty years into it now. What started their problems? Inflation following the Plaza Accord. Let’s keep going back. The 1970′s and the emergence of stagflation. The Keynesians said it couldn’t happen. The cause? Inflation, trying to spend your way out of recession. 1977 — The UK took their begging bowl to the IMF. Two years later Paul Volcker was appointed Fed. Chairman in the USA. Inflation was not creating jobs just higher prices. He called a halt to it and let interest rates rise. Jimmy Carter didn’t get a second term. Career politicians made a note of this.

Let’s go right back to the big one. The Great Depression. The cause? Inflation. The cure? The same nonsense that’s going on now. Massive government intervention. It didn’t work then, it didn’t work in the 1970s, it didn’t work in Japan and it’s not going to work now.

We’re just putting off the pain. But it’s in the post. Late delivery simply means it’s going to be worse when it arrives.

Again and again history tells us that the cause of such problems is inflation made possible by fiat money. It’s all lies, deceit, smoke and mirrors. They can’t even say the words "printing money" — instead it’s "quantitative easing"! More double-speak — the "Mushroom Principle" — keep them in the dark and feed them BS!

Far be it from me to start throwing out well-worn Austrian adages but this one bears repeating again and again — the cure for a recession is a recession.

Let’s take one more step back. The USA 1921. Recession. The cause? Inflation. The cure? Do nothing. The government of President Harding didn’t know what to do — they ended up doing next to nothing. This was the correct response. A severe but short recession followed. Then recovery.

Gordon Brown is currently engaged in a series of meetings here, there and everywhere, trying to set things up for the G20 summit coming up in London next week. The in-fighting, insults, arguments and horse-trading are already in full swing. He has been humiliated everywhere he’s gone. France and Germany do not agree with his strategy. The Brazilian leader was less than courteous, the Argentinians are still going on about the Falklands and the Chilean leader gave him some motherly advice about household management. Then there’s the Czech leader who has called President Obama’s plan the "road to hell."

Add to all this calls by Russia (along with strong interest from China, not surprisingly) for a new world fiat currency — I hope they call it the "Gono" in celebration of Gideon Gono — and we have a boondoggle of epic proportions in the making.

What is the purpose of this thing? Why is President Obama attending? Does he even want to? Will it change what he and his administration are doing by one iota?

Of course not! But hey, they will be seen to be doing something when the best thing they could be doing is nothing!

This was a highly damaging speech by any stretch, not least for the fact that he said quite clearly that the Prime Minister is fully aware of the disaster into which his policies will lead us:

"Now, it’s not that you’re not apologising … [I]t’s that you’re carrying on, wilfully worsening our situation, wantonly spending what little we have left.." (Emphasis added) — Daniel Hannan.

No government could create such havoc were it not for fiat money — it is the root cause of our problems. Without it not only would they have to live within their means, thereby restricting their growth, but also they would not be able to manipulate its supply and price via central banks, thereby eliminating the booms and slumps which follow.

Fiat money has been a boon for a few but a disaster for the rest of us.

Chris Clancy [send him mail] is Associate Professor of Financial Accounting at Zhongnan University of Economics and Law in Wuhan, Hubei Province, People’s Republic of China.

Chris Clancy Archives

I had agreed
to go traveling with another foreign teacher for the Spring
Festival. This is the biggest holiday period in China which
ushers in the Lunar New Year. It's like our Christmas except that
literally millions of people travel to be with their families at
the same time. Just before we set off I went to see the Foreign
Affairs Officer (FAO) to give him our itinerary. This was not just
a matter of courtesy but also a security and safety issue. Intrepid
lone travelers are not welcome here. We were all aware of a story
about one such traveler who took himself off to Tibet for the Spring
Festival. He was never seen again.

I provided
the FAO with details of times, dates and places of everywhere we
planned to travel to. Details of any changes had to be emailed to
him.

He then told
me that since we had last met he had been on a business trip to
Wuhan. There he had met the FAO for Zhongnan University of Economics
and Law (ZUEL). The Accounting School was looking for a native English
speaker to teach Accounting in English. This was one of the main
subjects I taught when I lived in England. Was I interested?

You bet I was.
I really didn't want to continue teaching Oral English — one year
would be enough. I got in touch with the FAO at ZUEL and an interview
time and place in Wuhan was eventually agreed.

The problem
I had with teaching Oral English was that there was so much rope
to play with — enough to hang yourself. Basically you can do whatever
you like as long as it gets the students to speak. I just wasn't
used to this kind of freedom. My teaching/training career had been
primarily examination and assignment based. There was usually a
syllabus to keep to or clear objectives to aim for — a line to follow.
There was always some latitude for weaving in and out of the line
to add a bit of color but there was always a clear target. With
Oral English I found it difficult to know where to start because
there was so much freedom — and even then, once started, where to
draw the line? I felt a bit like Charles
Babbage — he never finished what he set out to do because he
kept on getting a better idea!

The Wuhan interview
meant a slight change to the itinerary. The revised plan went like
this. Travel by sleeper bus to Wuhan and then fly to Hong Kong.
Stay a few days and then fly to Hainan Island. Stay for a week or
so and then fly to Guangzhou. From there travel to Maoming by coach
and attend my son's wedding. After this get a coach back to Guangzhou.
Then a train to Wuhan for my interview. Finally, a sleeper bus back
to DJK.

I had never
done so much traveling in such a short space of time but it all
seemed very straightforward.

Three things
about traveling in China. First, don't even think about "going
it alone." Second, the language. There are many many different
dialects in China and most are mutually unintelligible. However
there is one which most people will understand called Pu Tong Hua
(which translates as "common language"). Get a good phrasebook
and learn some "survival" Chinese. You're still going
to have problems but not nearly as many. Third, get yourself a money
belt!

We set out
late one night on a sleeper bus to Wuhan. The journey took about
seven or eight hours. This kind of bus is simply a coach with three
rows of double bunk beds. Provided you're not taller than about
five feet six or seven you'll have a comfortable ride. The bus only
stopped once on the way for five minutes. There was no toilet on
the one we traveled on. A foreign teacher had warned us about this.
Don't drink anything for a few hours before or during the journey.
She said that she had once been so desperate for a wee on one of
these buses that she used a plastic carrier bag and then stuffed
it out the small window of her top bunk.

We arrived
in Wuhan very early. It was just as cold as DJK. After much confusion
trying to make ourselves understood we picked up a shuttle to the
airport. At this time the latter was small. Four years later it
had grown so large I didn't recognize it — an example of the incredible
speed of development here.

The flight
to Hong Kong took about two hours. We landed at the international
airport on Lantau Island. From the cold of Hubei I stepped into
the clammy heat of Hong Kong. The airport itself was immaculate,
spotless, as was the train which took us to Kowloon.

The three dreaded
u2018S' words for visitors to many parts of mainland China — smoking,
spitting and staring — are not a problem in Hong Kong. Anyone caught
dropping a cigarette end or spitting in public is heavily fined.
The police enforce these rules with great "enthusiasm."
As for staring, the place is so cosmopolitan no-one is bothered.

We found some
cheap accommodation and then went for something to eat. Whatever
kind of food you wanted was there. Afterwards we went for a walk
up and down Nathan
Road. I couldn't help thinking how British the place was. They
drove on the left and all the street signs were familiar. In fact,
parts of it reminded me of a place called Soho in London.

There was lots
to see over the next two or three days. The most memorable part
for me was going to a place called the Peak on Hong Kong Island.
Once there you can take a walk which circles the top. It takes about
an hour. Along one stretch of it you can look down on Kowloon, Victoria
harbour and Hong Kong Island. I won't even try to describe it —
just go if you get the chance. The same goes for the harbour skyline
at night.

Hong Kong is
a busy place — at once prosperous and seedy. It's a love it or hate
it place. I loved it and would have liked to stay longer but it
was time for Hainan Island and a place called Sanya.

One of the
last things I did before leaving Hong Kong was to take a boat ride
around Victoria Harbour. I felt like pinching myself — was I really
here — was this really happening. If someone had told me six months
before that this is where I would be I most certainly would have
thought they were mad.

We flew from
Hong Kong to Sanya.

Hainan has
been described as China's Hawaii. If you like beautiful weather,
clean beaches, lying in the sun and just doing not much else all
day, then this is a place you'd love. I can only take lounging about
on a beach for a few hours. I took a few trips here and there and
went into town a few times but after a few days I'd had enough.
I'd also had enough of being ripped off left, right and centre —
for taxis, the hotel, restaurants, excursions and so on.

This was not
like being overcharged in DJK. This was a holiday resort. Like any
other in the world the game was simple — if they're foreigners and
can't speak the lingo take them for every penny you can get!

We went on
one outing to some kind of "nature reserve" — we were
supposed to be seeing people living a traditional native lifestyle.
The houses reminded me of pictures I'd seen of Maori buildings.
They were beautifully carved and were very authentic looking — one
had a satellite dish which ruined the overall impression somewhat.

On our arrival
we were immediately beset by people offering to be our "guides."
They were very persistent. Just to escape I said yes to one of them.
He then led us from one place to another stopping each time to be
pestered and pestered to spend — souvenir stalls and shops, dance
exhibitions, acrobatic displays, people wanting to sing to us, tea-making
ceremonies, photo opportunities with an enormous evil-looking snake
and a half-dead giant turtle — it just went on and on. It became
obvious that the guide got a cut from whatever we spent; the more
places he dragged us the better.

One of the
stops was a shallow pond. For 5 RMB you were given 10 bamboo spears
to hurl into the water to try and get some fish. This was the only
stop that sparked my interest. I wanted to spear one of them and
then email a photo to the Animal Rights people back in the UK. Unfortunately
every time I let fly they scattered. Even the God-damned fish are
clever here! I spent another 5 RMB — but no luck.

The last place
was to a hut inhabited by someone who purported to be a "monk"
— he gave me his "blessing" and then rubbed his thumb
and middle finger together — there wasn't even a smile. He wanted
some money. I lied I was broke. He pointed to my cigarettes and
held up five fingers. I held up one. We settled at three.

Learning point.
When anyone offers to be your guide, do yourself a favour and just
say "no."

The final rip-off
was booking our "package" to fly to Guangzhou. It's still
painful to think about how trusting we were and how much our "travel
agent" took us for. A parting broadside you might say. I swore
if I ever came here again it would either be with a Chinese speaker
I knew and trusted or it would be never again.

Once in Guangzhou
the now usual palarva with trying to get from the airport to a bus
station. The whole thing was beginning to wear a bit thin.

Getting the
tickets was a nightmare followed by sitting around for hours, amidst
the masses, waiting for our bus.

In contrast
to Hubei at this time of year, Guangdong is pleasantly warm. Travelling
in a bus which is packed for five hours was unpleasantly hot. Every
seat was taken and extra seating, in the form of small plastic stools,
was provided so that people could fill the central aisle.

My son, who
had been working in Guangdong for a year, came to get us at the
bus station in Maoming City. Even at that stage I was beginning
to dread the journey home.

The next few
days and the wedding passed off smoothly. This was probably the
most relaxing part of the "holiday."

Time to start
heading back. Bus to Guangzhou then find the railway station. When
we finally got there I have to say that never in my life have I
seen so many people in one place at one time.

As for the
journey itself, words fail me here except to say just imagine a
thirteen-hour journey, standing in a corridor, with wall to wall
people and one toilet on each carriage. We fought our way to the
front carriage where we found two spare bunks in a four-berth cabin.
Paid more than we should have but it was worth it even with the
snoring, farting and worse that we had to put up with from the old
couple we were sharing with.

Got to the
hotel in Wuhan after the usual hassle. Paid over the top for one
night — didn't care anymore. Went for a walk in the evening. Saw
a place which resembled a bar. There were three or four members
of staff — no customers. I saw they had small bottles of Heineken
in a fridge. I ordered one. They charged me 50RMB. I didn't argue
because I couldn't. Even if I could have I wouldn't have. No matter
how good your Chinese is, never have a vocal with a local — you'll
lose. This is especially true if there are lots of people around,
as a crowd will quickly gather out of curiosity. If the argument
continues things can escalate very quickly. Just don't do it. I
drank up and went back to the hotel.

The next day
I had my interview with four people from Zhongnan University of
Economics and Law (ZUEL). We met in the hotel lobby. One was the
FAO, the other three were "leaders" (what we would call
Managers or Senior Managers in the West). They all had copies of
my rsum. I wasn't asked many questions. The FAO handled the translations.
In between each question and answer the leaders had five-minute
discussions in Chinese. They were particularly interested in my
experience with computerized accounting systems. As part of my answer
I said that obtaining licenses to run the software from the various
providers was a straightforward matter. The FAO translated. This
seemed to cause some confusion. He spoke some more in Chinese and
this seemed to clear the problem.

I can't remember
exactly how the thing ended except that there were plenty of handshakes
and smiles. I had prepared for an in-depth interview but actually
said very little.

The experience
made me think about how much time and money we waste in the West
on recruitment — expensive advertising, psychometric tests, harrowing
interviews and so on — enlightened personnel departments recruit
experienced staff through recommendations. That I had the knowledge
and experience was not in question — a more important question was
did they like me and would the students do so too?

I knew that
the FAO at DJK had written me a very good reference. He had given
me a copy in Chinese. I asked a student to translate it for me later.
I felt humbled. I knew from the start that the job of being FAO
is not easy — in fact it's pretty thankless yet carries a great
deal of responsibility — it involves trying to perform a juggling
act where a number of groups are all kept happy at the same time.
I knew the pressure he was under and so never bothered him unless
I had to. On the few occasions when I did I always asked rather
than demanded. This approach is appreciated and, like bad behavior,
is not forgotten.

The ZUEL FAO
told me that he would be in touch. And that was it.

Later that
evening we traveled back to DJK in a sleeper bus.

Before we left
I bought a small bottle of Chinese wine (46% proof). I mixed it
with lemonade and drank the lot. If I had to spend the next eight
hours in a semi-foetal position I'd prefer to be knocked out.

Arrived very
early in DJK and hung around for two hours waiting for a taxi to
get us back to the campus. It was still as cold as when we left.
I was exhausted. Back at the campus I carted my bags to my flat.
Someone asked me how it had gone. "Great" I replied. All
I thought was "never again!"

March
28, 2009

Chris
Clancy [send him mail]
is Associate Professor of Financial Accounting at Zhongnan University
of Economics and Law in Wuhan, Hubei Province, People’s Republic
of China.

When I first
came here the conversion rate was about fourteen RMB to one UK pound.
With this kind of rate there was little point in saving unless you
intended to stay here. Anyway, on a foreign teacher's pay you can
live comfortably — things are so cheap — if you want to save it's
not difficult. Most foreigners just spend it on buying things or
travelling. One caveat; take out reliable medical insurance before
you come here. Don't cut corners on this one.

I started work
in China in September 2004. I was in a city called Dan Jiang Kou
(DJK), in Hubei Province. I had a one-year contract teaching Oral
English to students who were training to become English teachers.
After a brief settling in period the weeks began to slip past as
I got into the swing of things.

Shopping became
easier provided I stuck to supermarkets where everything was bar-coded.
If you shop elsewhere take a student with you — bargaining is how
it's done here. If you don't bargain you'll be overcharged. I never
found anything particularly malicious about this — it was more like
a game which everyone appears to enjoy. One starts high the other
starts low and they both meet at a price in the middle which they
both knew to begin with.

Before coming
to China my cooking expertise extended to using a tin-opener and
a spoon — I usually didn't bother with a plate — it saved on the
washing up. Unfortunately in DJK I couldn't even buy a tin of baked
beans. Even the bread was different — it was sweet.

I just couldn't
eat Chinese food so I had to learn to cook. A group of students
took me shopping to some fresh meat and vegetable markets. I learned
from them how much I should pay — much to the chagrin
of the stall-holders. I downloaded recipes from the internet and
actually didn't mind cooking that much. It was never exactly cordon
bleu but at least I could eat it.

I was getting
used to the large class sizes and the sweltering heat. There were
ceiling fans in each room but, like the lights and electricity sockets,
some worked, some didn't.

I learned the
value of having a good monitor in each class. Their job is to represent
their class and they take this job very seriously. For foreign teachers
having good monitors is a big help – both in and out of class. As
regards co-teachers (one Chinese teacher was assigned to each foreign
teacher for support) I learned to use mine only when I really had
to. They get paid very little for this extra work, and besides,
the students are always more than willing to help with most things.

All foreign
teachers were required to attend a thing called "English Corner"
every Tuesday evening. There we could meet students and chat informally
— not a bad idea on the face of it but actually a waste of time.
It's usually the teachers who do all the talking rather than the
students. I only ever came across one that worked — but that came
much later.

I had to get
used to the roads and the traffic and not having my own transport.
In China the rule is that people drive on the right. In DJK you
could be forgiven for thinking, at first, that there was no rule.
I tended to avoid public transport and always walk if possible —
it was safer. I probably walked more that year than I had in the
previous twenty. If I had to use transport I used a contraption
called a "Mamu." Imagine a motorbike with the back wheel
replaced by an axle and two wheels making it a three-wheeler. A
thin metal box is then bolted on above the two rear wheels. Inside
the box is a wooden shelf which seats two. I've seen as many as
six people squeeze into one of those things. I preferred to use
these because the price was fixed. If I used a taxi I would be routinely
overcharged. If I used a bus I was putting my life on the line!

One of the
surprising things about China is that for most people it is very
much a "cash" economy. Businesses use the banking system
to settle debts, to what extent I don't know, but ordinary people
going about their transactions use cash and, to a much lesser extent,
debit cards. In a sense they have leap-frogged the cheque system.

When I received
my first months pay I was paid in actual cash. I could hardly believe
it. 4,000 RMB handed to me in cash. The last time I was paid in
cash was when I was a student doing vacation jobs.

How much cash
is flying around the economy and not through the banking system
is impossible to say. Hoarding it to avoid tax seems to be a national
pass-time. The economic consequences of this are serious but in
a non-welfare state it's not that surprising. When hard times hit
you look to yourself and your family to get through it — not the
state.

As time passed
the antipathy which I detected from a lot of Chinese teachers towards
their foreign colleagues became understandable. Foreign teachers
get paid two or three times as much as Chinese teachers. Also foreign
teachers get free accommodation. The only thing we pay for is a
landline, if we want one, and gas for cooking. Chinese teachers
have to pay for everything. Also there's the fact that many foreigners
seem to be unaware of the fact that they are actually being paid
to do a job of work — in particular, improve the quality of the
student's spoken English – playing games, singing songs, watching
DVDs and various other activities are good fun and pass the time
but don't actually achieve that much. By contrast, Chinese teachers
have to operate under a rigid examination system where lessons are
spent hammering away at grammar, vocabularly, reading, writing,
comprehension and so on.

If we add to
all this the fact that foreigners are the first to complain vociferously
when anything goes wrong, or is not to their liking, then a certain
amount of resentment is not that surprising.

The source
of many problems is a thing called "culture shock." Read
anything about working in China and you'll find that this is mentioned
somewhere. In my experience it is really just a ready-made excuse
for when things are not going well. Blame it on culture shock rather
than yourself. Anyone who thinks they can come to work in a country
like China and not have problems settling in is not being realistic.
You're the one who has to be adaptable, flexible and ready to accept
cultural differences, not them.

There are some
things you've simply got to get used to. I refer to the three u2018S'
words — smoking, spitting and staring. I could add a fourth but
I'll leave it at three.

Many people
smoke in China and there are few restrictions. Spitting is common
and is usually preceded by an enormous noisy hawk. I'm a smoker
so smoking didn't bother me. The spitting I got used to — except
when I hear a woman having a good hawk — I still have a slight problem
with this one. I found the staring more difficult. In the West a
prolonged stare usually means trouble. It usually means it's time
to get out of there quick — if this is not possible then it's probably
a good idea to cast your eyes around for a blunt instrument. In
China staring is simply curiosity — that's all — no threat is implied.
It took me some time to get used to it and learn to ignore it. It's
simply a cultural difference. But it's one that's changing.

There are two
Chinas. Young China and old China. The three u2018S' words apply less
and less to young China. However there is one thing which applies
equally to both. I found it particularly striking. What I refer
to is the pride and love which Chinese people have for their country.
It's something which, in a large part, we've lost in the West. In
the UK we don't even know what the word "British" means
anymore. No-one cares anyway. If anyone does they're not saying
for fear of upsetting one group or another.

Those who come
to China and then start complaining, carping and criticising make
themselves un-welcome. Behaviour like this is not only taken personally,
as an insult to their country, but it is also never forgotten. When
your contract comes to an end you can expect to move on.

The weather
changed in December.

It changed
from very hot to very cold very quickly. The students continued
to show a level of application which I could scarce believe. From
teaching in stiflingly hot conditions the classrooms were now freezing
— I mean see-your-breath freezing. The students wore hats, jumpers,
coats, scarves, boots and gloves (with the fingers cut off so that
they could write). I was dressed in similar fashion.

If my admiration
for them had grown steadily it was now multiplied manyfold. There
was not so much as a murmur — they just got on with it. Some pushed
their stools together so that they could sit shoulder to shoulder
to keep warm. During the break they stamped their feet to get the
blood going. I never heard a single complaint.

Yet again it's
not that surprising when you think about it. They grow up seeing
their parents working like hell and living on next to nothing in
order to provide for them. They grow up knowing that they have to
be independent and self-reliant. They grow up knowing that if you
give up you're on your own. If you choose to do nothing you get
nothing.

There were
many images that first year which will always remain with me. One
of these was in that December when it turned very cold. It was a
Saturday or Sunday afternoon and I was walking through the campus.
There was hardly anyone around. I saw one of my students sitting
at a table in one of the drab looking gardens. The table was a concrete
slab set on some concrete plinths. She was reading a text-book.
I went to speak to her and sit for a while. She must have been so
cold. Her hands had turned blue and the skin between her fingers
was cracked. I asked her where her gloves were and she told me that
it hurt her to wear them. I asked why she was sitting out in the
cold and she said that it was just as cold in her dormitory — there
was no heating — it was so cold that some of the girls slept together.
She smiled and then laughed a little when she said this. I almost
cried. The selflessness. The bravery. The quiet dignity. I felt
myself start to choke. I made my excuses quickly and left.

Throughout
my teaching career in the UK I can honestly and unashamedly say
that I'd rarely felt "inspired" as a teacher. The only
people who ever said thank you were those who were paying for it
from their own pockets — they worked hard and wanted their money's
worth — if you as a teacher did your job well, then all was well – quite so. For most who were getting it heavily subsidized or "free"
it was not appreciated. It was taken for granted. There was little
or no thanks no matter how hard you worked.

But this was
different. Here I was inspired. Almost right from the start and
even more so when the weather turned cold. If they could work this
hard in these conditions then I could do no less.

Christmas came
and went. I didn't miss it.

There was only
one thing I did miss in China. That was not having a car. As I've
said above, I tended to walk everywhere if I could. Given the heat
and the exercise and learning to eat properly I lost a lot of weight.
I came across a passport-size picture of myself taken when I first
arrived in DJK. It was more like a mug shot — of a zombie — one
of the living dead. I was shocked at how terrible I looked. The
words pale, drawn and pissed-off came to mind. At the beginning
of the semester I weighed well over 80kg. By the end of it my weight
had fallen to 70kg. I was tanned and fitter than I'd been in years.
I thought of all the money people spend in the West on dieting —
it's a multi-million dollar industry. But they're doing it all wrong.
If you want to lose weight the answer is simple. Don't go on a diet
– just go to China!

My first semester
was drawing to a close. I asked the Foreign Affairs Officer if he
could give me a bit more variety in the next semester — I didn't
fancy the idea of another one doing nothing but repeat lessons.
He said he'd see what he could do and then asked me if I was interested
in re-newing my contract when my current one expired. I said that
I'd prefer to teach my specialist subjects – finance and accounting – rather than Oral English. We left it at that for then.

I had agreed
to go travelling during the Spring Festival with one of the foreign
teachers. The semester finished about mid-January. The second would
start at the beginning of March. There was plenty of time.

The biggest
holiday period in China is the Spring Festival which ushers in the
Lunar New Year. It's like our Christmas except that literally millions
of people travel to be with their families. At this time there were
two other holiday periods called "golden weeks" — one
in October the other in May. They were introduced in the wake of
the Asian Financial Crisis of the late 1990s to get people spending
again.

I only travelled
out of DJK three times in the first semester. The first time was
to a city called Shiyan for our medicals. The second time was in
the October golden week. My eldest son, who had been teaching in
China for nearly a year, travelled up from Guangdong with his fiance
for a visit. We went to a place called Wudang
Mountain — about an hour from DJK. The scenery was breathtaking.
Visitors usually get up very early and walk to the top of the mountain
to watch the sun rising. It's a long walk and steep. If you want
to you can pay people a few RMB to carry you to the top in a sedan-like
thing. I drew the line here — even I wasn't decadent enough for
that. It didn't matter anyway — that night the rain came down and
walks to the top were cancelled because conditions had become treacherous.

The third place
I travelled to was a city called Xianfan. It was just a weekend
trip. It wasn't much different from DJK, Shiyan or even Wuhan. This
was something I would get used to as I travelled more in China.

The semester
finished and I prepared to do some real travelling in China. Some
of the other foreign teachers who had been here for a few years
said they were staying put. When I asked one of them why he would
not travel in the Spring Festival he simply said "never again."
I didn't inquire further.

I was about
to find out for myself just exactly what he meant.

March
17, 2009

Chris
Clancy [send him mail]
is Associate Professor of Financial Accounting at Zhongnan University
of Economics and Law in Wuhan, Hubei Province, People’s Republic
of China.

I was sitting
in the back of a van with the other foreign teachers – in total
there were six of us in Dan Jiang Kou (DJK) that year. We were on
our way to a city called Shiyan for our medicals. If everything
was OK we would each be given our Foreign Expert Certificate. As
my time in China passed and I met more and more foreign teachers
the word "expert" for many of them became questionable
if not downright laughable. Basically, the only criteria needed
to come here and teach is that first you are a native English speaker
and second that you can breathe.

A drunk foreigner
once told me that he never even finished High School. He held a
BA certificate in English Literature and two Masters degrees — one
of which was in Education — all three were fake. He had taught all
over East Asia. He said that the references he got when he moved
from one place to another actually legitimised these fakes. As far
as he was concerned they had become "real." Beware of
bogus qualifications — they are not unusual, they are easily obtained
and they are very authentic.

Anyway, the
journey to Shiyan took about two hours, I had time to think about
the newness of everything I had encountered so far. There had been
no induction. We went straight in. This made the transition more
difficult than it need have been.

There was lots
to absorb.

The state provides
education for all children up to age 14. After this comes high school.
Which one they go to is a mixture of how good they are academically
and how much money their parents have. My students in DJK were in
the age range nineteen to twenty-three. Their high school grades
were not good enough for them to go to university. They were all
English majors training to become English teachers. Very few wanted
this as a career but they didn't have much choice — this is what
their parents wanted — but you can't blame the parents for this.
There's no welfare system here, as such. The more highly educated
the children are, the more likely they will be to look after their
parents when they can no longer work. For the vast majority of people
that's how it is.

The most striking
thing I found was how hard the students worked. This was due not
only to a sense of duty and responsibility for the sacrifices which
their parents had made but also because the competition for jobs
was fierce. As time passed my admiration for them, for their courage
and determination, could only grow.

Their English
language skills were generally of a very high standard.

Vocabulary,
reading and writing were very good. Their grammar was better than
mine. Listening or comprehension skills were especially good – once
they got used to your voice and accent. Even for an experienced
teacher this takes a few lessons. Speak slowly (but not as if you're
talking to a bunch of half-wits or to the hard-of-hearing), pick
the words you're going to use, articulate them clearly, assume nothing
and don't be afraid of boring them — after what they go through
in the school system here they have learned the meaning of the word
"patience."

Curiously,
at first, I found that the most important skill, speaking English,
was their weakest. There are many reasons for this. Maybe the most
important is the Chinese language itself; it is a "tone"
language and therefore incredibly precise. Many students get the
idea that English is also a precise language — that the words have
to be pronounced perfectly — nothing could be further from the truth!
However, they do worry about pronunciation and this makes them reluctant
to speak. Another reason for their weakness in speech was just common
sense –such large class sizes — who wouldn't feel intimidated?

Probably one
of the most refreshing things I found was that I had escaped from
the world of political correctness. In many ways I actually had
more freedom to speak here than I had in the UK. I remember once
being with a group of teachers when one suggested that we should
no longer mark in red ink because it was "such an angry colour."
Nobody dared to laugh or say something like "Are you serious!"
We had all learned to behave in a particular way. PC had grown to
such a point that not only did it control our speech patterns but,
more importantly, it now controlled our thought patterns and behaviour
— as
it was intended to do. Time was actually spent seriously discussing
this "pressing issue."

No, no more
of this lunacy. It has actually got worse
since I left. I hope I never have to endure it again.

We arrived
at the hospital in Shiyan. It was packed like everywhere else. The
idea of forming a queue is still a relatively new concept in China
— everyone just sort of piles in — it looks like a noisy and chaotic
free-for-all but actually things get done very quickly.

The Chinese
teacher who was in charge could queue jump with the best of them.
Amidst the mle he dragged us from one test to the next. Most men
were smoking, including some of the doctors. While I was waiting
for my eyesight test I decided to light up — what the hell.

More tests.

Blood pressure.
The doctor indicated with a thumbs-up that it was fine — I knew
for a fact it wasn't — I wondered how accurate the other tests were?
I went to the toilet — I expected it to be clean — this was a hospital
after all. Some hope. The urinals were in a terrible state and there
were no doors on the cubicles. One old boy wearing a straw hat was
squatting down for a crap — he was smoking a cigarette and reading
a newspaper. I lit up again and took a leak.

When all the
tests were done we were given a couple of hours to look around and
get something to eat. I was starving. I don't think I'd ever felt
so hungry.

When I arrived
in China I thought that my biggest problem would be the language.
This was not the case. It's amazing just how far you can get using
body language, facial expressions, your fingers and pointing. Learn
the number system so that you can cope with prices, time and dates.
Combine this with a few words and phrases and you're on your way.
For more difficult jobs, like posting parcels or booking airplane
tickets, the students will help. For the vast majority, being helpful
and courteous is simply in their nature, and anyway, they have an
opportunity to practice their English.

No, my biggest
problem was not the language but food! Back in the UK I enjoyed
eating Chinese food. But here I was getting the real thing and it
was different – very different — it looked different, it smelled
different and it tasted different. I just couldn't eat it.

The first time
I went to a supermarket in DJK I recognized very little of what
was on offer. Much of what I did recognize I would never eat anyway
(e.g., fish heads, duck heads and chicken feet in hermetically sealed
bags). The only thing I bought was coffee and biscuits. I later
discovered crackers made from seaweed and processed cheese which
was like soft plastic — tasteless — it didn't even smell like cheese.
This is what I survived on for the first three weeks.

As we wandered
down one of the main roads in Shiyan I looked up and saw a McDonald's.
Back in the UK I rarely ate fast food. I started to salivate. I
was so happy I nearly cried. Trance-like, I floated down the road
and into the unit. I ordered two Big Macs, French fries and a milkshake.
After three weeks of virtually nothing, I can say without doubt,
that this was the best meal I'd had in years.

Two hours later
we were back in the van. I dreaded returning to my staple diet of
biscuits and crackers etc. Things on the food front just had to
change. I was going to have to learn to cook.

Once I started
cooking my biggest headache disappeared. Things started going more
smoothly. I stuck to my policy of looking, listening and learning.
This is probably the best advice I could offer anyone thinking about
coming here to work. Right from the start just go with the flow,
get your bearings and try not to over-react to anything — if you
do you are probably making a mistake.

One of the
most common mistakes made by foreign teachers is having a good rant
at students who fall asleep in their class. It is not unusual for
students to do this. It happened to me in my very first class. I
didn't say anything. A few days later I learned that students have
more than thirty hours of classroom teaching each week. Out of class
nearly all their time is spent studying. There's little point in
shouting at them and attracting all the classroom negatives which
follow if they are simply exhausted. Let them sleep. They've usually
only nodded off for a few minutes anyway.

There were
a number of things which I could have over-reacted to in those first
three weeks. It could have happened right at the start. When I first
arrived in China I was met by two people who were not friendly and
welcoming — far from it in fact. Thank God I didn't lose it with
them or start drawing conclusions straight away. I would have been
totally wrong. It didn't take me long discover that behaviour like
theirs was the exception, not the rule.

"Chinese
hospitality"?

Yes, it is
real. It does exist. During my time in China I have experienced
kindnesses the likes of which I thought no longer existed. Had I
made my start here in any other way I doubt I would have experienced
this or that I would still be here five years later.

I had settled
in. There was still much more to learn. So much more to come. But
life had offered me a second chance. I grabbed it with both hands.

March
3, 2009

Chris
Clancy [send him mail]
is Associate Professor of Financial Accounting at Zhongnan University
of Economics and Law in Wuhan, Hubei Province, People’s Republic
of China.

Coming here
to live and work had never entered my head six months before. Not
in my wildest dreams. But here I was — August 31st 2004,
Wuhan, China. My first full day was about to begin.

I had my first
acquaintance with an Asian toilet. Imagine an oval shaped ceramic
dish sunk into the floor. Having a pee does not present problems.
The other however requires practice. Women usually carry tissues
with them. If you are male I would advise you to adopt this habit.
Please be guided by me on this one.

Breakfast.
It was a good thing that I didn't have any appetite as I recognized
nothing which was put before me — apart from one peeled boiled egg
— even then it was different — it was black.

I sat at a
table with three other people. Two men and the young woman who had
met me the night before — my so-called "helper." One of
the men tried to speak to me. As I didn't speak a word of Chinese
it was pointless. My helper spoke fluent English but offered no
help.

After "breakfast"
she told me that I could spend another day in Wuhan or go directly
to Dan Jiang Kou (DJK), my new home for the next academic year.
I said I'd like to go straight there, but first I needed to change
my dollars into Renminbi (RMB) — otherwise known as yuan or kuai.
On the way to the bank I clearly remember saying to her "I
can't believe I'm in China." There was no reply. I didn't mind
that much — I let it just sort of wash over me. Before coming to
China I had made a decision to just get on with it for the first
few weeks, whatever happened — work hard, do a good job but, beyond
this, just to keep my mouth shut; look, listen and learn about living
and working in China.

About mid-morning
the journey by car to DJK began. My helper never said goodbye. I
met her once more a few months later. I was with a group of foreign
teachers. It was re-assuring to see that she treated them with the
same indifference, bordering on contempt, with which she had treated
me.

The two guys
from breakfast shared the driving. Once we made it out of Wuhan
we got onto an expressway (what we call a motorway or freeway in
the West). These are all toll roads. I've travelled on them many
times since I've been in China. What they all have in common is
that they are immaculately clean, incredibly well-maintained and
I've never travelled on one which was congested. Motorway travelling
in rush hours in the UK takes time and patience — sometimes even
courage! Don't shout me down here but perhaps we just don't pay
enough to use these roads?

After a few
hours we left the expressway and continued on public roads. These
were nothing like the expressways, to put it mildly. However, as
we passed through countryside, towns and villages I now had something
to look at. The further we travelled west, into the heart of China,
the poorer things became.

We only made
one stop. It was in a small town — very run down. For the first
time in my life I tried to use chopsticks. Whatever it was that
was served up, even though I was hungry, I couldn't eat it. I was
directed to a "toilet" behind the building. I've never
seen anything like it. I won't try to describe it but the smell
was enough to knock me back. A little puppy dog was lying by the
side of this open sewer. I not sure whether he'd been overcome by
the heat or the stench or whether he was alive or dead. I didn't
care — I just had to get out of there. I had a leak behind a crumbling
wall in the back yard — it was cleaner and healthier.

Late in the
afternoon we arrived in DJK. When I realized where we were I must
have done a double-take. It was a sort of scaled up version of the
place we'd stopped at on the way. When we got to the campus of my
new employer, YunYang Teachers College (YYTC), I expected to see
what I had seen on their website back in the UK. The reality was
drastically different. I didn't say anything.

I met my co-teacher.
Their job is to help foreigners settle in. He offered a handshake
but no smile — at least it was more than I'd got so far. He showed
me to my accommodation which comes free with the job. The only thing
we pay for is gas for cooking and telephone calls. The best thing
about it was that it had a western toilet. But it was OK — it would
do me. He gave me my time-table and a text book — "Western
Culture" — I felt like asking what happened to Oral English?
But I didn't — I stuck to my decision — just go with the flow.

Next he took
me to where I would teach. We walked out of the main campus gate
and down a long sloping road for about half a mile.

When we got
to the teaching buildings it was double-take time again and then
again when he showed me the classrooms. The floors were just uncovered
concrete — walls and ceilings were whitewashed — most of which was
peeling. In the classrooms doors and windows were in a bad state
of repair. Each teacher's desk was set on a dais made of rough planks
of wood. Students sat on small wooden stools, two to a desk.

Wherever those
pictures on their website were taken it was not in DJK! I asked
when I would start teaching. He told me it would be at eight o'clock
the next morning. Some induction!

We walked back
to the campus. He led me to a food hall — I won't use the word "restaurant."
There I was faced with a plate of sliced green peppers mixed with
soggy meat slices (not sure from what animal), garlic chunks, chilli
bits and lots of oil. I gave up after a few chopstick-fulls.

It must have
been about seven or eight o'clock by now. He brought me back to
my flat and then showed me how everything worked. There was a problem
with the internet connection. He tried a few things and then made
a call on his mobile. Not long after half a dozen students arrived
and set about fixing the problem. This was my first experience of
seeing Chinese industry and determination. They wouldn't leave until
the problem was solved.

I was exhausted.
I sat down on a wooden sofa-type thing. The next thing I knew was
my co-teacher waking me. He told me that the problem had been solved
and they all left.

I opened the
text-book, scanned the text of the first chapter and then zeroed
in on some very general questions at the end of it. Tomorrows' lessons
would be long introductions followed by the questions if I needed
them. I climbed into bed and had a half-awake sleep for a few hours.

Early next
morning I headed out the main gate and down the hill. It was hot
and going to get a lot hotter. The YYTC Foreign Affairs Officer
(FAO), Robert, was waiting for me outside my classroom. This time
I had a handshake and a smile — things were improving.

Time for my
first class. It was packed — over seventy students. They all clapped
and smiled. Whether they were put up to it or not, I don't know,
but I felt welcomed anyway. He introduced me and left me to it.
I wasn't well prepared — I'd had no time — I knew I'd have to "wing
it" for the first lesson.

I began speaking.
Just background stuff. I used the blackboard and chalk to write
up a few words and phrases. They appeared to be listening attentively
and some took notes. I asked a few questions as I went — no-body
ventured answers — wrongly, I put this down to just shyness.

The bell went.
My first lesson in China was over. We had a five-minute break. I
continued my introduction after the break. I asked some more questions,
still no answers. I dried up after about twenty minutes — twenty-five
minutes to fill. I asked if anyone had any questions for me about
anything. Silence. OK, time for plan B. They all had the text-book
with them. I asked them to turn to the questions at the end of chapter
one

A few did.
The rest stared at me blankly. There was an awkward pause. I repeated
myself and wrote the page number on the board. Another awkward pause.
One of the students stood and introduced herself in very good English
as the class monitor. I knew nothing about monitors. She spoke to
them in Chinese. They all turned to the page and then waited for
me to speak again. I asked them to spend the next ten minutes working
through these questions in pairs; then we would go through them
together. The monitor had to translate. They then set about their
task with great diligence. Everyone worked by themselves, not in
pairs. Complete silence.

I had a chance
to think. Could it be that hardly anyone in the class knew what
the hell I'd been talking about for the last hour?

Ten minutes
was not nearly enough. I let them use the rest of the lesson. Two
or three of the students put their heads down on their desks and
went to sleep. The others just got on with their work. I stuck to
my plan. Don't over re-act to anything. You're the stranger, you're
the outsider — just look and learn.

Tiredness had
caught up with me. Standing at my desk I actually nodded off a few
times. The bell brought me back to life. On her way out the monitor
said that I must speak much more slowly and not to write in freehand
on the blackboard — use separate lower case letters or capitals.
Under normal circumstances I probably would have been offended by
this — here I was just grateful for the advice.

For the second
class I was on my own. I introduced myself and then found out who
the monitor was. I asked the class to tell me if I spoke too quickly
or if I used any words with which they were unfamiliar. I then repeated
what I did with the first class but far more slowly. I made more
use of the blackboard writing in capitals and lower case letters.
There was still no interaction. I tried asking a few questions directly
— the response was mixed. A few spoke well, most struggled and some
had real problems.

I spent that
evening leafing through my textbook and thinking about the day's
lessons. I had eight more classes that week. They would all be repeats.
Under normal circumstances this would have driven me mad but I was
thankful for it. I had never taught English or anything like it
before. My subjects were always numerical — finance and accounting
in the main. I had never really had to think about how I spoke —
clearness, speed, volume and so on. My handwriting was another thing
— appalling — as my students in the UK frequently told me. No wonder
the monitor for the first class said something to me — they must
have found most of it, if not all of it, incomprehensible!

I had no EFL
training or qualifications. To this day I'm not sure if that was
a good thing or not. I was going to have to learn how to do this
job. I would also have to learn to teach in a different way. It
was not going to be easy.

However, if
there was one big consolation it was that something had become very
clear — I wasn't looking at alternatives — there was no going back.
It was make or break, do or die. Get on with it — and you better
make a fist of it — because for you there's nothing else. That's
how stark the whole thing was. It concentrated the mind wonderfully!

February
24, 2009

Chris
Clancy [send him mail]
is Associate Professor of Financial Accounting at Zhongnan University
of Economics and Law in Wuhan, Hubei Province, People’s Republic
of China.

It was May
1st 1976 — I was at university. To kick the May Day festivities
off the student union organized a three-legged pub crawl. A map
was provided detailing ten pubs — the last being a student bar in
one of the Halls of Residence. The rules were that every male must
drink one pint of beer at each pit-stop. Females must consume a
half-pint of beer. Everything had to be verified by student union
officials. For those who made it to the Hall of Residence their
reward would be a free beer. After the third or fourth pub the maps
were no longer necessary — you just had to follow the trail of vomit.
My three-legged partner and I decided to call a halt to proceedings
at the fourth or fifth pub. We then headed off to find a party somewhere.
This was an easy job as there were so many going on that night.

So it was I
stumbled, much the worse for wear, into some party, at some time,
some where, that evening. There I met the girl who I would marry
two years later. From this meeting would follow four children and
a marriage which would end twenty-seven years later. I've often
wondered if the sequence of events on that evening, thirty-three
years ago, was just coincidence? If so then how meaningless and
random life really is. I have no religion but I find it difficult
to accept this one. There must be some reason or purpose to it all
even if the reason or purpose is beyond our comprehension. I suppose
that makes me agnostic; if so, then so be it.

Looking back
I can see that there were many more such seemingly innocuous events
which led down unplanned and unimagined paths – most recently, there's
the string of circumstances which led me to China. But this one
was different — it proved to be seismic – life-changing.

It started
in September 2003 — the beginning of yet another semester. We were
all busy enrolling new students. I received a message, out of the
blue, telling me to see one of the senior managers immediately.
I did so and was told that my services were no longer required —
I was to be made redundant. I was forty-nine years old.

I could have
"played the system" and strung the thing out for a year,
but I just couldn't be bothered. The redundancy package was good
and I accepted it; even if it was bad I would still have accepted
it. The truth is I'd had enough and was happy to go.

I decided to
take some time out. My wife and I had separated some seven years
before. I was working a long way from home so I could only travel
home at the end of each month to see the kids. I returned and rented
a place not too far away. I thought that maybe we could try and
make a go of things — get back to where we once had been. For the
first time in many years we would have time to talk. Unfortunately,
when it came down to it, we had nothing to say to each other. To
say we had become u2018strangers' sounds a bit too well-worn — but it's
the only word that really fits. The cracks in our relationship had
become canyons. Our lack of communication could no longer be blamed
on the pressure of work, children, money etc. We'd reached the end – we'd never ever get back to where we once had been. What a pity
so many years were wasted pretending that we could.

A few months
later — in January 2004 — my eldest son told me that he was going
to China to teach for a year. I don't know where he got the idea
from but off he went — to a city called Maoming in the southern
province of Guangdong. Time passed. By March I started to think
about returning to the world of work. I dreaded the thought of returning
to the sterile, politically correct world, which Education, and
everything else it seemed, had become.

In one of my
son's emails he suggested that I go over there to teach English
— after all I was just kicking my heels in England? I dismissed
it at the time – but a seed had been sown. By June I was beginning
to panic. My redundancy was running out. The seed started to grow.
I now had a choice. The easy one was to return to teaching in September
and put my time in until retirement. The unknowable one, the difficult
one, was to go to China. I think it's safe to say that for the first
time in my life I didn't take the easy way out — I chose China.
Even at that point, when the decision was made, I knew that if things
turned out just half right, I'd never return.

I registered
with a Chinese government agency called China TESOL Teachers Register
(CTTR). Their job is to find placements for foreign teachers. My
only stipulation was that I wanted to teach in a college or university.
Within a few days they put me in touch with a college called YunYang
Teachers College (YYTC). It was in a city called Dan Jiang Kou (DJK)
situated in the north-west of Hubei Province. I went to their website
and was very impressed with what I saw — beautiful gardens, lovely
teacher accommodation, nice teaching rooms and so on.

The job would
be to teach Oral English to English majors. I had never taught English,
never mind Oral English, so I spent some time reading up on it and
felt I could cope with it. I filled in all the necessary documentation,
of which there was surprisingly little, sent it off and that was
that – YYTC offered me a one-year contract and I accepted. I used
what was left of my redundancy to buy an airplane ticket. There
was no going back now — the die was cast.

The next two
months were a mixture of sorting things out, tying up loose ends
and all the time wondering just what in the hell I had done. The
truth is I had no idea. Had someone told me at the outset, just
how much I would have to learn, just how much I would have to change,
I doubt if I would have had the courage to come here in the first
place.

The actual
journey to China began at the end of August 2004. My wife drove
me to a coach station. We didn't speak on the way. Our parting words
were as loveless as our marriage had become.

"Are you
coming back?" she asked.

"I don't
know" I replied

And that was
it. What a sad end. We exchanged divorce papers, by post, about
a year and a half later.

I flew from
London to Dubai. There I had a few hours to kill waiting for a connecting
flight to Shanghai. I wandered around the concourse and to my surprise
found an Irish pub. I treated my self to a pint of Guinness.

The second
part of the journey began. Slightly mesmerised, I arrived in Shanghai
not knowing whether I was coming or going. I was met by someone
from YYTC — I would like to say it was a warm and friendly meeting
but it wasn't. Little was said. I was hustled off to buy a ticket
to take me to a city called Wuhan. As I waited I looked around the
concourse — not much different from any airport in the West. Most
of the shops were Western. Not that different from home really?

How much I
had to learn.

My surly companion
marched me to a check-in point and then on to security and departure.
As far as I remember she didn't even say goodbye. I'd read about
"Chinese hospitality" before beginning my journey — I
felt I must have got my wires a bit messed up here.

Another woman
met me in Wuhan. She was younger. If the greeting in Shanghai was
a bit on the cool side then this one was ice cold. She just asked
my name and then I was driven to a run-down building. I was put
in a room and left there for the night. YYTC had said I would be
treated to a u2018banquet' in a luxury hotel on my first night — yeah
right!

Time to reflect
— no longer about what in the hell I was doing – but about what
in the hell had I done?

I was starting
again at fifty, on the other side of the world, with one suitcase
and $400 in my pocket.

I didn't sleep
that first night. Just lay on my bed wondering if I hadn't just
made the worst mistake of my life.

February
17, 2009

Chris
Clancy [send him mail]
is Associate Professor of Financial Accounting at Zhongnan University
of Economics and Law in Wuhan, Hubei Province, People’s Republic
of China.

Had they taken
an introductory course based on Austrian economics I daresay the
outcome for most would have been different. What the Austrians say,
in a nutshell is, cut intervention to a minimum and then just leave
the thing alone.

Unfortunately,
government intervention in free markets leads to unseen problems
down the line which leads to more intervention, more unseen problems,
more intervention and so on. Most of the difficulties and complications
in economics arise from trying to explain just why intervention
in free markets makes things worse.

What has become
clear to me is that at the heart of Austrian economics lies the
Austrian Business Cycle Theory (ABCT).

When I first
came across it I encountered the same problem which many find with
mainstream economics — reconciling the theory and the practice.
In particular, Bryan Caplan
gave me something to think about when he said that ABCT …

” … requires
bizarre assumptions about entrepreneurial stupidity in order to
work: in particular, it must assume that businesspeople blindly
use current interest rates to make investment decisions."

I struggled
here. A great deal of reading followed until I came across this
article by Bob Murphy. Then I understood the problem. The reason
I was having trouble was because I didn't really understand ABCT.
I didn't understand ABCT because I didn't understand Austrian Capital
Theory (ACT). This article saved me so much time — not just because
of the article itself but in particular because of the references
he provided. I read all of them and more. By the end of it the conundrum
posed by Bryan Caplan and much else besides was resolved.

Investment
decisions are made by people running real businesses in the real
world, not academics. Because of government intervention no one
knows what the "true" rate of interest should be. Even
if a business knows that rates have been artificially lowered by
government are they likely to do nothing as competitors grab this
cheap money and put it to work on interest-sensitive investments?
Hardly, they fear that they'll be running the risk of being put
out of business — so they pile in too.

The point is
made here in a quote I lifted from this
gem of an article by Gottfried Haberler:

"May
I be allowed to quote an example given by Mr. Keynes in a lecture
before the Harris Foundation Institute last year. u2018No one believes
that it will pay to electrify the railway system of Great Britain
on the basis of borrowing at 5 percent. . . . At 3 1/2 percent
it is impossible to dispute that it will be worthwhile.
So it must be with endless other technical projects.'"
(Emphasis added).

The real benefit
of all this reading was to bring home the utter
complexity of the production process and the time elements involved.
Also, understanding the sheer
folly of government intervention and the short-term benefits
it yields.

In retrospect,
the most useful reading for me was firstly, "Money
and the Business Cycle" by Gottfried Haberler — this is
where all the pieces came together. Secondly, this PowerPoint
presentation by Roger Garrison — in a word — excellent! And thirdly,
Murray Rothbard's "Economic
Depressions: Their Cause and Cure" — this pulled everything
together by putting the whole thing in a historical perspective.

The reading
was hard work and took time but was necessary in order to understand
what is going on right now. Governments are busy trying to re-inflate
their economies. They appear to want to avoid deflation at all costs.

But we've been
here before. The problems we are facing are not new. The solutions
which are being tried are not new. That these solutions will not
work is not new. So why on earth are governments doing something
which they know will only make things worse later on?

The only sense
to be made of it is that it has little to do with economics and
everything to do with governments staying in power.

Deflation is
visible and it's horrible — businesses fail, people lose their jobs,
relationships come under pressure, marriages break, crime rates
rise and so on — it also leads to governments being kicked out of
office!

Inflation is
different — it's not as easy to see or understand and the blame
can be shifted away from governments:

"Define
inflation as rising prices and … you'll think that oil sheiks,
credit cards and private businesses are the culprits … Define
inflation in the classic fashion as an increase in the supply
of money and credit, with rising prices as a consequence, and
you then have to ask the revealing question u2018Who increases the
money supply?' " — Lawrence
W. Reed

Here's a quote
from Gordon
Brown last week:

“If the monetary
system is not working as well as it should; if there’s no likelihood
of huge inflation in the next period of time; if you are not crowding-out
private investment then government must play its role.”

The wrongness
of what is being said here is now clear — in fact, it can be seen
visually thanks to Roger Garrison's PowerPoint presentation. I'll
leave it to others better qualified than I to explain what is wrong
about this and other such statements. Just in the last few weeks
alone this has been done by Frank
Shostak, Thorsten Polleit,
George Reisman, Ed
Bugos and, almost inevitably, Bob Murphy, here
and here. Of course, I
must not forget Gary North — his writing is so even and so clear
— his latest article here
is a very good example of what I mean.

As long as
writing of the above calibre continues the message will get across
— carried by all the people who increasingly read it on the internet.
Maybe the process has already started. In this
reference, following the recent G-20 summit, there is one recommendation
which could easily be missed. Under the section "Tasking of
Ministers and Experts" there appears the following — it refers
to governments …

"[m]itigating
against pro-cyclicality in regulatory policy."

Pity they couldn't
say it in plain English. But, if I understand it correctly, is this
an admission by government officials that booms and slumps are in
fact caused, or made worse, by government intervention?

January
24, 2009

Chris
Clancy [send him mail]
is Associate Professor of Financial Accounting at Zhongnan University
of Economics and Law in Wuhan, Hubei Province, People’s Republic
of China.

DIGG THIS

The following
article arose from an exchange of emails starting here.
I urge you to read them. If you have had it up to the gills with
"political correctness" then this is something to relish.
Make no mistake, what happened here is no spat — it's a turning
point. Professor
Block said, in effect, "enough is enough!"

This is my
fifth consecutive Christmas in China. I have made no visits back
to the UK because, in truth, there's very little I miss about it.
Maybe I'll live out my days here or in this part of the world.

One of the
things I left behind in the UK was political correctness (PC). In
fact, if I had to give only one reason for not going back then this
would probably be it.

What started
under the banner of "equal opportunities" has now ballooned
into an ideology. People don't laugh anymore, there's no leg-pulling,
no banter. Everyone is afraid. Phrases like "getting the gender
balance right" and "diversity training and awareness"
abound. If anyone has the gall to offer positive criticism of such
things they are in for a rough ride.

In reality,
a great many people are heartily sick of it all. But beware whom
you say it to. The charge of "racism" or "sexism"
today carries the same weight as that of "heretic" in
the Middle Ages. The accusation is enough. You won't risk losing
your life but you'll be very lucky to save your career unless you
prostrate yourself, admit your guilt and beg for mercy.

How refreshing
it was to see someone not only take on the PC brigade, but see them
off as well. They've become so used to behaving with impunity that
when someone actually stood up to them they were found to be wanting.
His response to their charges was to repay them in full measure
and more.

This was not
some ivory tower academic debate but rather one man’s refusal to
see his reputation, character and integrity trashed by a group of
highly-paid "scholars" who had made it to positions of
power and prestige on the back of PC. I wonder what their collective
scholarly publications list looks like?

It has been
clearly demonstrated that these people can be taken on and shown
up for the cowards (not one would engage in public debate) and bullies
(say what we say … or else) that they are.

I doubt if
he'll get an apology, never mind justice. However, on the positive
side, he has exposed his detractors to academic and intellectual
ridicule. More importantly, as each of them slunk from the fray
and headed for cover, everything has been clearly observed by all
who have followed the saga, especially students. For them there
is much to be learned here; if you are going to attack someone in
this fashion — at least do your homework – get your facts straight
first and then your arguments. If not, you are likely to
suffer the destruction which Professor Block has wreaked upon the
credibility and reputations of those who comprise the Affirmative
Action Diversity Task Force at Loyola University New Orleans
and others.

Professor
Medina chose at the outset, for reasons not made clear, to attack
Professor Block in a public arena. He has, to all intents and purposes,
finished it where it all began, in the public arena.

"Here
is a bit of friendly advice, in closing. Next time, pick your target
for unwarranted ill-treatment more carefully."

Metaphorically
speaking, a "bloody nose" is usually a good indication
that you did something which it may not be wise to repeat. I wonder
if any lessons have been learned?

December
31, 2008

Chris
Clancy [send him mail]
is Associate Professor of Financial Accounting at Zhongnan University
of Economics and Law in Wuhan, Hubei Province, People’s Republic
of China.

DIGG THIS

To say that
I was surprised by the response I got to my article "It's
Never Too Late," would be putting it mildly.

I write to
thank those who emailed me and mention the three main themes ran
through the emails.

The first was
that everyone was keen to describe their personal journeys. What
is remarkable is how similar all our stories were. They nearly all
began with a single event. With me it was a word, with others it
was a question, a line in a book, something on a billboard, an innocent
comment and so on. What is even more remarkable is that once started
everyone saw it through — regardless of the time and effort it would
take to unlearn and then relearn so much. I'm reminded of something
written by Butler
Schaffer in a recent article; he recalled a George Carlin punch-line
about someone digging through a huge pile of manure who keeps thinking
to himself “there's got to be a pony in here someplace." I
think we all had similar thoughts when we started our journeys.

When people
enter the world of work they become embroiled in the rough and tumble
of it all. The demands of career, marriage, children, mortgage and
so on leave them little time to think about the status quo. Indeed,
nearly all the people who emailed me are around my age or older;
this is not surprising since they could clearly identify with my
story.

If sound economics
is not taught before people start work an invaluable opportunity
is lost. Those few who do return to it, will only have the time
to do so much later in life. But this is back to front — like Keynesian
economics. It is the young who should be learning sound economics,
not people of my age — I'm not going to change anything! A young
Australian student, Lionel Chan, finished his email by adding the
following quote:

"Whether
we like it or not, it is a fact that economics cannot remain an
esoteric branch of knowledge accessible only to small groups of
scholars and specialists. Economics deals with society’s fundamental
problems; it concerns everyone and belongs to all. It is the main
and proper study of every citizen."

~
Ludwig
von Mises

The message
is clear but not the method.

A second theme,
which snaked its way in and out of the emails, was suspicion over
the non-mention of Austrian economics. Witness the disgraceful treatment
of Ron Paul by the MSM, and one would have to agree that something
definitely stinks in the state of Denmark. Even at this early stage
of my re-learning it is obvious that if the Austrians ever got even
half their way, the big government gravy-train would grind to an
abrupt halt for a great many people. Enormous and disturbing questions
are raised here. I feel as if, almost inexorably, I am being led
into deeper waters. I balk at what I am going to discover.

The third and
final theme was China. What was it like to live and work in China?

When I wrote
the article I neglected to say that before going to Zhongnan University
I had spent my first year teaching English in a city called Danjiang
Kou. I left it out because it wasn't relevant to the story — I never
dreamt I'd get the response I did.

That year turned
out to be the pivotal year in my life. We all have one, and
that was mine. It was meant to be a career break — just one year
— then home.

I have been
here for four years now.

If someone
had told me at the outset, just how much I would have to learn,
just how much I would have to change, I doubt if I would have had
the courage to come here in the first place.

What is it
like to live and work here? The best way to answer this question
is to relate the story of my first year in China. There is much
to write about — not least the fact that there is no welfare system
here as such — from what I have seen, at first hand, the positives
of this situation by far outweigh the negatives.

July
26, 2008

Chris
Clancy [send him mail]
is Associate Professor of Financial Accounting at Zhongnan University
of Economics and Law in Wuhan, Hubei Province, People’s Republic
of China.

DIGG THIS

Three years
ago, when I hit fifty, I decided that it was time to ease off and
look for a comfortable bolt-hole — something less demanding which
would lead me nicely into retirement. As luck would have it, or
coincidence (if you believe in such a thing), a university in China
advertised a post for someone to develop a new course. The course
was called "Modern Accounting." The incumbent would teach
Financial Accounting in English to undergraduate students.

To cut a long
story short I applied for and obtained the post and travelled from
Britain to the other side of the world. When I started work I quickly
realized that this was not going to be the "cushy number"
I was looking for — far from it — the first year nearly killed me!
Two years on I'm still "developing" the course and working
even harder than I did pre-50! But that's another story.

The reason
I have put pen to paper here is to describe a journey.

Not long after
beginning my second year, whilst still recovering from the shock
of the first, a professor from the law department asked me to edit
his research proposal — he was applying for a scholarship with the
Fulbright Institute in the
USA. His research would be to examine the resolution of legal disputes
over securitization,
in particular, with reference to remoteness
of damage.

His research
proposal ran to five pages. It was extremely well planned and laid
out. His written English was good but did need some editing. Before
I could do anything I had to first make sure I really understood
"securitization." I went to the internet.

Of course I
didn't realize it at the time but a journey of discovery had begun.
That one word, securitization, led me to the Austrian School of
Economics and the libertarian movement. A whole new world began
to open up. The more I read the more I realized that I had been
looking at many things the wrong way around. But it wasn't easy
and, much to my wife's dismay, consumed nearly all of my leisure
time.

What made it
so difficult was that I had to unlearn so much — and not just about
economics. And then there was a wealth of new knowledge to be acquired.

Getting to
grips with securitization led me a merry dance. It took me to many
places, not least the Great Depression, FDR and the FHA. Whatever
site I went to I was led to more and more. A paper chase had begun.
I quickly edited the research proposal and then dived headlong into
the chase.

As time passed
I found myself focusing on three main sources of information; The
Daily Reckoning, LewRockwell.com,
and the Mises
Daily Article. It was tough going to start with, especially
the Mises articles. At the beginning it was almost impossible to
read any article without looking things up, which led to other things
to look up and so on.

It took a long
time to get to the point where I could just read most articles without
having to research as well. The whole jigsaw started to come together.

One of the
questions I kept asking myself over the last two years was this:
how come I'd
never heard of people like Ludwig von Mises, Murray Rothbard and
Henry Hazlitt to name just three?

The answer
is simple. When I studied Economics in the 1970's they were never
mentioned. Even though everything in our economy was going wrong
at the same time we were still being taught Keynesian economics.
The only maverick on the scene was Milton Friedman. So I left university
with ideas about economics which were deeply flawed — as did everyone
else of my generation.

After university
I spent a number of years in Accountancy before going into Education
to teach Economics. To my shame, I realize now, I was passing on
the same rubbish to my students as I had learned at university —
it was still all Keynesianism with a bit of Monetarism thrown in.
It was as if the Austrian School did not exist. After two years
I changed jobs and began teaching Accounting and Finance. In the
years that followed I had neither the time nor the inclination to
pay attention to Economics.

How much Austrian
Economics is being taught in universities today? I don't know —
but I suspect not much.

I am not an
economist and would never claim to know and understand the minutiae
of the teachings of the Austrian School. However I have come to
the view that they have the right of things. It makes sense. The
difficulty lies in how to spread the message? When Ron Paul outflanked
the MSM by using the internet he showed the way ahead. Indeed, if
my journey had introduced me to this man and only this man, then
it would have been worth it for this alone. The challenge now is
how to follow his lead and keep the momentum going.

I'll finish
here but want to briefly mention some people I've discovered along
the way.

Ayn Rand —
a free spirit if ever there was one. The following quote from her
book The
Fountainhead, still haunts me:

“The soul
is that which can’t be ruled, it must be broken. Drive a wedge
in, get your fingers on it — and the man is yours. You won’t need
a whip — he’ll bring it to you and ask to be whipped. Set him
in reverse — and his own mechanism will do your work for you.”

Hans-Hermann
Hoppe — his article on LewRockwell.com Democracy:
The God That Failed left me stunned by its clarity and reason.

Bill Bonner
— a real tonic to read every morning on the Daily
Reckoning. I would hate to get on the wrong side of his acerbic
wit!

Thomas Friedman
— I bought his book The
World is Flat. As kids, our father always brought us up
to love and respect books. I use this one as a doorstop. Sorry Dad.

Robert P. Murphy
— When he writes he sets out to teach, not show off (see here).
We could all do a lot worse than follow his example. Writing in
economic-speak gobbledygook impresses no-one and spreads nothing.

Pat Buchanan
and Ralph Raico — Their respective demolitions of the Churchill
myth gave me plenty to think about. See here
and here.

Robert Higgs
— I was moved by the obituary he wrote for Murray Rothbard — such
honesty and sincerity — especially his closing line. See Murray
N Rothbard — In Memoriam.

Lew Rockwell
— I'll finish with this. When I read it I felt as if two hands had
reached out of my screen, grabbed me by my shirt and given me a
good shake. The only thing missing was an exclamation mark at the
end — so I've added one.

"The power
of government to do what we desire is strictly limited. Those who
do not understand this point do not understand economics!"
See The
War the Government Cannot Win.

It’s been a
steep learning curve and there's still a long way to go — it's a
journey I will never finish, but I'm so glad to have started.

July
17, 2008

Chris
Clancy [send him mail]
is Associate Professor of Financial Accounting at Zhongnan University
of Economics and Law in Wuhan, Hubei Province, People’s Republic
of China.