Capitalists in China
Interesting link and comment from Denis C:
I thought this article might be of interest to you.
In the article Zhou Qi Ren, leading professor of economics in the university of Peking, is urging the Central Government to stop interfering with prices and let the markets work, he is proposing that China cut taxes significantly for individuals and businesses, and he is urging the government to cut their spending, and suggesting that the government should change laws on private enterprices and monopoly rules that restrict investments. He blames price fixing from the central government for creating some of the problems the economy is facing. Also arround a month ago when everybody arround the world was busy banning shorts from their markets, China anounced that it will introduce short selling to equity investors.
Although misguided on many things like "Boosting Consumption" and "Stimulus Packages" it is interesting and very surprising to hear a central banker and above all a communist speak like this.
I can't help but think the world has turned upside down allready, where capitalists are behaving like socialists and the communists are proving to be the best capitalist one can find today.
Comments (29)
Sadly, China could emerge from the Bush/Obama Depression as the world economic leader.
Published: November 22, 2008 12:27 PM
Maybe they already are, and the dollar standard is preventing the world from realizing it. Not for much longer, though.
Published: November 22, 2008 12:44 PM
Asia is the near-term hope for humanity. They are becoming more free and experiencing the prosperity that ensues. If their economists read and understand the Austrians (or rediscover the same truths) the sky is the limit. If not, expect another world empire accompanied by politics and war for another 200 years.
Published: November 22, 2008 1:50 PM
Will will have to start referring to our system as capitalism with American characteristics.
Published: November 22, 2008 3:18 PM
I think the US has been quasi-socialist for some time.
China's mix is quite curious, and it is sad that in some aspects, it is more free than our own system. Eastern Europe is also taking a far more Austrian approach to their economies - I suppose living for years under socialism shows people it can never work.
Published: November 22, 2008 3:33 PM
Well, we have to wait and see how it turns out. I am afraid however that the Chinese government is not very open to classical liberalism. But then again, which nation ever was open to it, besides the USA? From what I heard, the Chinese government is tried to come up with their own brand of democracy (i.e.: an alternative to liberal democracy). So it wouldn't be strange if they come up with their own brand of capitalism. The fact that the state would still be a prominent actor in the capitalist system in particular is surely not the one I have in mind. But that remains to be seen.
Published: November 22, 2008 3:37 PM
Sadly, China could emerge from the Bush/Obama Depression as the world economic leader.
Sadly? I am looking forward to it. Unfortunately, Americans seem to be quite fond of Nanny-State fascism. Many need a nice kick on the butt, and the realization that "We're NOT number one!" may do the trick, finally . . .
Or America may end like post-WII England. Who can say . . .
Published: November 22, 2008 3:40 PM
Gee, what a paradox.
Published: November 22, 2008 4:30 PM
Even "communist" Russia has lower taxes than the United States now! But by no means are they capitalists at heart...
Published: November 22, 2008 6:06 PM
I think Francisco got it right. But I would lean toward America becoming post-WII Britain. Whether this is something we will accept remains to be seen. I could imagine a more nationalist government than we have now or in the future. Far more nationalist than the flag-waving crowd getting hold of the federal government. Nothing to do with solely loving your country.
Published: November 22, 2008 6:12 PM
China has been more capitalist than the US for many years now. The problem is only that most people still buy into the narrative that tells them China has a huge central government and is still socialist in many ways.
That's what the Western media would have you believe, and it's also what China's media would have you believe (which is one industry where the Chinese gov't still has a lot of control). But saying it doesn't make it so.
Over the last five years living in China, it quickly became obvious that most Chinese people I know neither trust their gov't nor the media. They've fixed a skeptical eye on everything, and while they don't actively oppose their government there is no strong support for the gov't either.
I think this lack of a mandate from the people helps keep China's government somewhat in check. Percentage wise, China's gov't makes up a much smaller percentage of its GDP than the US gov't in America.
It's pretty easy to see that China's gov't is communist in name only.
And I'm with the people above who are speculating that China's economy will be bigger than America's after this unwinding, but that depends on how much China's gov't tries to expand during this crises.
Published: November 22, 2008 7:47 PM
I lost my previous doctor a bit under two years ago. He decided to close down his practice in San Diego, and move to southwestern China, to practice medicine in a more favorable climate.
Published: November 22, 2008 8:00 PM
well if china emerges as it should as the economic leader we in nz would benefit greatly- you americans made capitalism THE system the world should follow it is sad to see you guys flushing it down the toilet
Published: November 22, 2008 8:25 PM
While some may question whether current Chinese capitalism is true capitalism, the real point is that they are moving towards a freer market and freer government & society while the U.S. is moving in the opposite direction.
I concur with Francisco's sentiments. Teach your children learn Mandarin.
Published: November 23, 2008 2:07 AM
http://www.barackobama.com/issues/service/
I read the plan on the aboved link. Will Obama's plan result in bigger government and bigger number of military?
Weather it is called a capitalism or not, Chinese government's attitude is that it is not the label that matters but people's life quality. Result speaks for itself. My government is not interested in the name or the name of the theory. We are lagging so so behind. No time for argument but need to catch up otherwise we are done.
Published: November 23, 2008 8:49 AM
Brian Gladish wrote:
If their economists read and understand the Austrians (or rediscover the same truths) the sky is the limit. If not, expect another world empire accompanied by politics and war for another 200 years.
Brian's comment is critical to this discussion. We must never forget that China is a totalitarian country and probably always will be. With the US declining the very size of China will overwhelm the world. China will be the world leader without firing a shot, but China will also be totalitarian.
Justin's comment about teaching our children Mandarin may not be a joke and that could be serious. Yes, we are about free markets and economics but we are also about personal liberty. Are we in the process of exchanging freedom for economics?
Published: November 23, 2008 10:14 AM
Dick Fox:
"exchanging freedom for economics?" I would suggest you change that to: exchanging some slavery for more slavery for political promises. And the answer is: Yes. We are/have been since the depression in that process.
Published: November 23, 2008 5:09 PM
I doubt any country could ever be truly totalitarian unless it wants to destroy itself by mass starvation. Admittedly, China is authoritarian, but perhaps they've hit upon the answer to achieving free markets. Concentrate political power in the hands of a few individuals/groups who pay lip service to things like democracy and the "public good" but who, by and large, let the population do its own thing. Democracy in America, where people actually believe that democracy can achieve ends better than market outcomes, seems a slow but sure path to socialism.
Published: November 23, 2008 11:50 PM
I guess the developement in Hong Kong have opened some eyes in China.
Published: November 24, 2008 6:44 AM
Chinese society could evolve to some form of limited government without any hint of democracy. I mean Communist Party might still hold central power and make some decisions but unwillingness of people to give it credit, lack of true support might limit its powers in several important ways. Key factor is that lack of democracy because such veil can easily give government powerful justification of its oppression as it is customary in Western countries.
Of course we would still call it totalitarian country, we are accustomed to think this way. Yet our governments can be greater threat to freedom because we believe in their right to govern. I do not say China is more free right now. I just say it could turn more laissez faire than our countries because their government is not able to hide its authoritative nature from its subjects so effectively.
Published: November 24, 2008 6:54 AM
In response to a post about the mantle of "world economic leadership" going to China: Personally, I could care less. I hope others do the same. National pride is a laughable concept to me, but having a stable economy, steady employment/income and decent standard of living means a great deal.
A stable economy looks like a total pipe dream right now. It appears, through their arrogance and stupidity, the current US governmental class is going to plan the country into the ground.
Having a society crushed under weight of massive regulations and centralized power should be frightening to everyone. I hope I'm wrong, but I can't help but see that happening in the United State. Just the other day I saw some idiot on CNBC talking about GM should be bailed out and given orders to build green/environmentally conscious cars. I was amazed the other people on the show didn't even react in horror as to how politburo that sounds.
I've been thinking of moving to China for the past year, but every time I do, I remember something Rothbard said about "retreatism." I then curse his name after I decide he's right.
Published: November 24, 2008 8:37 AM
J Cortez said: "I saw some idiot on CNBC talking about GM should be bailed out and given orders to build green/environmentally conscious cars. I was amazed the other people on the show didn't even react in horror as to how politburo that sounds."
I think that is the end game for the Little Three. Who is going to choose to buy a car designed Nancy Pelosi and Harry Reid over a Lexus?
If I wasn't so worried about the UAW being forced on Honda and Toyota, I'd be buying up as much TM and HMC as I could.
Published: November 24, 2008 9:31 AM
To Dick Fox,
( Quoted from Jie: My government is not interested in the name or the name of the theory. We are lagging so so behind. No time for argument but need to catch up otherwise we are done.)
I want to make it clear that when I was using the term my government, I am saying Chinese government because I am a Chinese. When I say that we are lagging so behind. No time for argument but need to catch up otherwise we are done, I am trying to state Chinese government attitude about the urgency to make a change in thoughts. 20 years ago, the Chinese leader realized that the government put some much control over people's thinking, which limited the development of the countries and began to conduct open door policies after Deng Xiaoping paid the visits to the countries outside of China. Chinese government call people to librate their minds to think for themselves instead of letting or waiting for the government to find ways out for them. I feel that once a new technology is disclosed to the public, the recession will be closing to the end. I am wondering what it will be.
By the way, history can tell that democracy is not a golden finger to the prosperity. Copying the exact format of democracy of USA can be a big problem. Emulation is not good. Creation works.
Published: November 24, 2008 10:08 AM
Jie Feng,
Well put. I have faith in the Chinese people. In truth, I have faith in all people. The realization of the power of individual decision, and action, can be realized from either an authoritarian perspective or a democratic perspective. It makes no difference so long as you see the truth of how people really are, what really benefits them.
Grouping individuals and implementing policy by group is counter-productive in the long run. People are not defined by their group(s). They are Individuals. Individuals are the fundamental element of ANY group. Policy that benefits individuals as individuals and not by some arbitrary group, have the most benefit to the most people because individuality is fundamental to all groups, (whether the groups themselves believe it or not).
Published: November 24, 2008 12:29 PM
Jie Feng,
I used to say that I would eat my hat if China was not the world's largest democracy in 50 years. But I'm wondering if it wouldn't be better to be the world's largest republic. But how tenable is any form of government in the long run over that many people? But I do have faith in the ingenuity of all people to find solutions to their problems, and China is making great strides. China will have the world's largest economy before much longer, as it did for most centuries before the 20th.
Published: November 24, 2008 9:15 PM
@Jie Feng,
"By the way, history can tell that democracy is not a golden finger to the prosperity."
You got that right. Voters quickly learn that they can vote themselves huge handouts and at this point the country becomes empoverished.
Published: November 25, 2008 8:06 AM
China more capitalist than US? You got to be kidding me. Not only they have an exact carbon copy financial crisis hidden in the asset management companies (with NPLs potentially running at about trillion dollars) and employ exactly the same solutions that preserve status quo (monetary and fiscal stimuli). They micro-manage economy with provincial bureaucrats all engaged in economic-warlordism and meaningless malinvestment. They destroy their own nature. Half a million people die of respiratory decease every year. More than half of population does not have access to clean water. Smaller government??? In percentage terms there are now more bureaucrats in China than in the days of the Qing dynasty.
Better still, try to count truly successful big Chinese companies. Huawei? Lenovo (aka IBM)? Haier? Any more?
Pick that Will Hutton book (the writing on the wall). China is just a part of the problem.
Published: November 30, 2008 11:23 AM
To Daniel,
I dare not say that China is more capitalist than US. From my observation in USA, in general, I do feel that American people have more benefits and welfare than the Chinese. It means that people are given more opportunities to not work for their living but relying on the taxpayers. Everybody should know the consequence of it. Those who work are feeding those who don't. As a result, being lazy is encouraged. Being deligent is punished. China is no exempt of its own problems, either. Plus the whole world is like a person's body. When one part of the body is sick, the function of the whole being is affected. Dramatic changes have happened in China in the past 30 years. I believe that if people are willing to accept the change for the good even though it is painful at the time and dare to face the changllege directly without covering the problems, progress can be continuously made. What has already happened in the developed countries, such as America and Japan can be a great assest for the Chinese to study and learn to make the same problem least likely to happen or affect the whole being. I do feel that Chinese are given more choices than ever before by its government. Thank you for bringing up Qing Dynasty. It is probably the most prosperous time in Chinese history and worthwhile being studied. It has something to do with a less controlled or less manipulated society but free efforts of the people.
I like the article by Friedrich A. Hayek | Posted on 12/5/2008 below. It illustrated the point very well.
The recognition of the insuperable limits to his knowledge ought indeed to teach the student of society a lesson of humility which should guard him against becoming an accomplice in men's fatal striving to control society — a striving which makes him not only a tyrant over his fellows, but which may well make him the destroyer of a civilization which no brain has designed but which has grown from the free efforts of millions of individuals.
Published: December 7, 2008 11:12 AM
To Milena Thomas,
(China's mix is quite curious, and it is sad that in some aspects, it is more free than our own system. Eastern Europe is also taking a far more Austrian approach to their economies - I suppose living for years under socialism shows people it can never work.)
It is true. The result of socialism is poverty. Under socialism, government has the most resources to manage and takes the most responsibilities.That fails the whole contry since not each individual is held responsible for its own decision by his own resources. It is such a contrast with the prosperity, the result of free marketing economy.
Published: December 8, 2008 9:52 AM