Needless to say, this is not the conventional reading of China’s recent attacks on fin-tech, internet monopolies and private education companies. Take Stephen Roach, former chief economist at Morgan Stanley, who recently decried Beijing’s actions “as a tipping point for the economy”. He goes on to lament the heavy-handed use of regulation “to strangle the business models and financing capacity of the economy’s most dynamic sector”.

As the proverbial expression goes, you can take the boy out of Morgan Stanley, but you can’t take Morgan Stanley out of the boy. Roach still retains a Wall Street-centric bias in a country — the United States — where the stock market remains the ultimate arbiter of the American experience. Indeed, if one were to assess America’s “entrepreneurial spirit” via stock market metrics, then that would suggest that US has been stunningly successful. As economist David Goldman has noted, “in 2010, the five biggest tech companies accounted for just 11% of the market capitalisation of the S&P 500”. Today, however, “ten companies in the S&P 500 hold two-fifths of all the cash balances of index members, and all but one is a tech giant… The top three cash holders in the S&P — Microsoft, Apple, and Google — hold a fifth of all the cash held by index companies”.

But as Goldman observes, these companies’ profits have increasingly been the product of oligopolistic rents, rather than product innovation: “Apple is so cash-rich that it has bought back $327 billion of its stock since 2012. That explains why its stock price has risen by 82% in the past six years even though its operating income has barely changed.”

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Chinese censorship is coming

By Jamie Bartlett

Far from deploying cash toward productive R&D investment, Apple’s behaviour provides a case study of precisely the kind of situation that Beijing is seeking to avoid: companies deploying cashflow toward stock buybacks, rather than investing in stateside facilities to enhance the nation’s productive investment and employment capabilities.

How many times do we find ourselves in an elevator, in an airplane terminal or at home, looking at a screen with stock numbers whizzing by, and people fretting over whether America is about to disintegrate because of a 5% swing in Apple’s share price? How did we get to point where our national economic conversation is dominated by chatter on the stock gyrations of GameStop, when this just an economic irrelevance for most of the 330 million people who live in America, and are struggling to sustain a modicum of economic security?

We ban the use of Chinese 5G equipment in US networks, but few ponder the question as to why there are no longer any American telecom equipment companies. After all, in the 1970s the two largest telecom equipment manufacturers were US companies: Western Electric and ITT. With this story of increasing manufacturing irrelevance as our backdrop, is it really fair to suggest that China is on the road to economic perdition because its government decries the “spiritual opium” of computer games?

A harsh charge, especially when one considers China’s own tragic history pertaining to opium addiction. Yet it seems there is some moral force to the Government’s argument which pressured China’s largest gaming company, Tencent, to announce new restrictions to limit gaming time for children under 12 to just one hour a day and two hours a day during holidays.

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Bankers are running the country

By Peter Franklin

Here in the United States, we lost our way decades ago, when we decided that the only social responsibility of a corporation was to increase its profits, community considerations and employees be damned. This laid the groundwork for economist Milton Friedman’s “stockholder theory”: the idea that shareholders, being the owners and the main risk-bearing participants, ought therefore to receive the biggest rewards.

But while tying corporate decision-making and stock price to innovation and production may have sounded superficially attractive, the champions of this theory, including Friedman himself, never bothered to show how these outcomes could be achieved in the real world. In fact, the historical experience has been abysmal.

Boeing and GE, to cite two prominent examples, were once poster boys for the success of American capitalism. Today they are but a shell of their former glory. With its Max 8 737 plane, and the 787 Dreamliner, Boeing has become synonymous with airplane crashes and shoddy engineering, whilst GE, once a byword for thriving manufacturing and innovation, suffered the indignity of being yet another target of Harry Markopolos, the accounting expert who first raised red flags about Bernie Madoff’s Ponzi scheme.

Both managements are now focused on financial engineering rather than manufacturing, much of which has been sold off, or outsourced to China. In doing so, they reflect an ethos that prioritises finance above all else in an economy increasingly characterised the layering of debt on top of debt. It means a greater share of GDP going to the financial system, going to interest rather than profit, and away from a goods-producing economy.

Beijing has been paying attention as it increasingly bets on real innovation, and targets various companies as strate­gic components within a broader industrial ecosystem to promote national development. True, the Government has fought to protect and promote its own companies within this sector. But what has been caricatured in the West as governments incompetently picking winners and losers has in fact created world-class companies such as Huawei.

At the same time, American “free market” solutions have resulted in a hollowing out of companies that were once world-class innovators, and a corresponding degradation of economic know-how and social capital as highly skilled jobs have been outsourced.

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Will China invade Taiwan?

By Tom Chivers

This is the context in which we should understand Beijing’s recent crackdowns. What Stephen Roach and others characterise as Beijing’s politically motivated attacks on big tech behemoths such as Jack Ma’s Alibaba, could more accurately been seen reining in Ma’s attempt to convert his company into bank, all the while seeking to circumvent increased banking regulation. In other words, regulatory arbitrage.

Likewise, China’s State Administration for Market Regulation has been criticised for its fines on Alibaba Group, Tencent, and SF Holdings. But a closer look at the situations shows that these firms were singled out for what China’s chief regulator called “monopolistic corporate behaviour”, and the fines were levied “to protect consumer interests”. That sounds like the sort of thing that we are used to in the US, before our tech behemoths — Apple, Google, Facebook, Microsoft — gobbled up smaller competitors and began stifling competition and actively suppressing competitive innovation. These days, Beijing appears to believe in market competition more than we do.

Similarly, the crackdown on private education companies should be seen as an attempt to curb a credential arms race as we have in the US. Attacks on cramming factories such as TAL Education Group and Gaotu Group are not an attack on education, but a deterrent to the need to furnish students with worthless diplomas while businesses lament a skills deficit.

It’s not as though Beijing’s authorities are saying mathematics is Western and needs to be replaced with Han math or Confucian physics — which would be the real equivalent of what we are currently doing in many of our universities, where the extremes of progressive ideology mean that medical school professors are forced apologise for referring to a patient’s biological sex on the grounds that “acknowledging biological sex can be considered transphobic”.

In America, among the biggest beneficiaries of the current economic system are not entrepreneurs or innovators, but parasites who owe their wealth to rigged markets or government subsidies. But they are merely a symptom of the bigger problem: a newfound scepticism in the ability of American capitalism to deliver on its economic promise of prosperity.

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China's Communist Party owes it all to colonialism

By Bill Hayton

That is precisely the kind of thing that China is seeking to avoid. Stock market investors may be unhappy, but far from destroying consumer confidence, the measures now being undertaken by Beijing might have precisely the opposite effect.

As Chinese fund manager Yuan Yuwei has argued, “housing, medical and education costs were the ‘three big mountains’ suffocating Chinese families and crowding out their consumption”. Yuan went on to describe these measures as “the most forceful reform I’ve seen over many years, and the most populist one. It benefits the masses at the cost of the richest and the elite groups.”

Unlike America’s Federal Reserve, whose increasing tolerance and support of financial bubbles continues to engender profound systemic fragility in the American economy, Beijing is prioritising social cohesion above the narrow interests of financial rentiers. If only American policymakers had demonstrated such foresight in decades past.

Who knows if this superb story — which appeared in a Taiwanese newspaper — is true? Certainly, the British executive was performing well in his job before being suddenly forced from it after just two years. And his resignation, which followed Beijing pressure that airline staff be stopped from joining protests after the high-profile arrest of a pilot, was first announced by China’s state-run television station before the company itself made a statement.

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Is Xi losing his grip on Taiwan?

By Bill Hayton

The claim has led to Hogg being hailed as a hero by pro-democracy activists in the region. It would be nice to think this is a true tale, a businessman’s defiant stance reflecting the bravery of the protesters I have seen out on the streets demanding freedom and democracy in the face of Chinese autocracy. For we need corporate icons at this time of immense change. And it would also make a welcome contrast with all the grubby kowtowing seen by other Western business leaders before the Chinese authorities, toeing the Beijing line to preserve their flow of profits.

Their tawdry behaviour has been highly depressing, a reminder that capitalism and morality are not always natural bedfellows. Now we hear of a climate of fear among staff at Cathay Pacific, warned they could be fired if they “support or participate in illegal protests” in a disgusting betrayal by their bosses, who are, admittedly, under fierce assault from Beijing. Unions are urging the company to end “white terror” (acts that create a climate of fear) after the dismissal of the head of a flight attendants’ association. Staff must also endure Chinese searches of electronic devices for evidence of joining demonstrations.

This is an alarming capitulation to political pressure from an autocratic regime. Yet the Cathay Pacific firm is far from alone. Jardine Matheson is a British-listed company run by a billionaire British dynasty that enjoys the fruits of our freedoms, yet it rushed out a statement echoing the Beijing line of condemning violence while praising the police whose brutal response inflamed unruly events on the streets. PwC issued a contrite statement after employees of large accounting firms publicly backed protests, while luxury fashion houses Coach and Versace prostrated themselves in apology before China’s communist rulers after implying Hong Kong is a country.

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How long can Hong Kong hold out?

By Fred Attewill

These firms might say their duty to shareholders and staff is to make money — and that China is a vital and fast-growing market. As Milton Friedman argued, the social responsibility of corporations is to increase profits since, as the Nobel-winning economist argued, free-market capitalism ultimately made the world a better place.

As he wrote in his 1970 New York Times essay: “There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”

Even half a century ago, this was a controversial theory; it has since sparked ceaseless debate and rebuttal. I have sympathy for his view of capitalism as an inherently progressive force. Yet now Friedman’s stance — echoed by all those panicked firms doing Beijing’s bidding — is being challenged from within the world of commerce. For the chief executives of 181 major companies, including many of the world’s best-known brands, are seeking to redefine the role of a corporation.

Their pitch, made in a statement through a group called Business Roundtable, is that business must seek to serve not just shareholders but the wider community, arguing that it should improve society as well as maximise profits. So they talk of fair pay for staff, fostering diversity, dealing ethically with suppliers, protecting the planet and supporting local communities.

Great stuff. Few would quibble with these firms doing more to hire black and disabled workers, improve staff pay among lower ranks or soften the environmental impacts of their massive global operations.

Yet we should judge them by their deeds, not their smooth words. The average chief executive in America takes home 280 times more than their workers, a grotesque imbalance that seems unlikely to change fast. In reality, the statement looks like a fearful response to rising concerns over capitalism — with one billionaire financier saying inequality poses an “existential threat” to the United States — as well as the issue playing a key role in the fight for the Democratic presidential nomination.

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Are the Democrats ready for revolution?

By Justin Webb

In Britain too, we have seen loss of trust in capitalism. But when you look at many signatories on this document, it is hard to see it as more than a glib public relations effort designed to diffuse public anger.

After all, is the head of aircraft maker Boeing really the man to lecture the rest of us on protecting the environment? Are the bosses of banks the best people to talk about ethics after their greed caused global fiscal meltdown, and they have shown so little contrition? How can the chief of Walmart boast of supporting communities when his firm — recently described as “the largest retailer of firearms in the world” — refuses to stop selling guns despite the plague of mass shootings tormenting the United States? Should the chief executive of Lockheed Martin pose as a moral paragon when her firm is selling missiles to barbaric nations such as Saudi Arabia?

Then there is tax. For if the likes of Jeff Bezos want to show they care about communities, there is a simple way to do this by starting to pay fair taxes. This is, after all, how our society collectively funds public services such as schools and hospitals, care homes and police forces. Instead, Bezos has become the world’s richest man, able to build his vast business and indulge his ideas for space travel, by using sophisticated financial trickery to flip Amazon’s digital profits and evade traditional tax collection methods. The same goes for the companies such as Apple and Oracle.

The more you delve into the list, the more it reeks of hypocrisy. It includes pimps in pin-stripes fostering tax-avoiding practices at accountancy firms and financial houses. There are two airline and one oil company chiefs claiming to protect the environment, the boss of a fizzy drink and crisp firm ignoring the obesity crisis to pontificate about respecting communities, another major weapons-maker talking about letting people lead lives of “dignity and meaning”.

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How the Right lost faith in capitalism

By Giles Fraser

This is a shame. Capitalism does need to clean up its act and there is much to admire in the sentiments set out by these corporate titans and multi-billionaire tycoons. But this smacks of all those bogus mission statements, the thin veneers of greenwashing, the tiny nods towards corporate social responsibility proclaimed as transformational. The truth is that until such people start showing genuine desire to practise what they preach, even if it impacts on their bottom lines, then the clamour to control capitalism, check its dynamism and stifle competition will only grow.

Capitalism has transformed our world and the experience of humanity for the better, and business can be a highly progressive force, whether by accident or design. Just looks at the numbers being lifted from poverty around the planet, the pace of innovation in medicine, the advances in communication and connectivity. But we live in a time of incredible technological change that is disrupting work and societies with unprecedented speed, while leaving politicians paralysed in the face of its strength — and this is shaking faith in the invisible hand identified by Adam Smith.

Businesses transform society by being dynamic and open. Yet they need to start displaying social responsibility and stop undermining wider well-being before they are shackled by their foes and we all suffer the consequences. Unfortunately we have seen a glimpse of the prevailing corporate ethics exposed by the submissive behaviour of Western firms towards China’s communist rulers, not in this week’s shallow stunt from a bunch of over-paid corporate panjandrums in the US. Whether the Hogg story is true or a flight of fancy, we most definitely need corporate heroes prepared to place morality before money.

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Why business must break the curse of short-termism

By James Kirkup