China And The US. Which Of Us Is The Most Capitalistic?
Posted by Dan on December 11, 2008 at 06:01 PM
"'You sit by yourself grasshopper. What do you think of?' -Master Po 'My mother, my father. Both gone. I am alone.' 'You hear the flock of birds flying overhead? You hear the fish? The beetle?' To all of this the young Caine nods. 'In this crowded place you feel alone. Which of us is the most blind?"Kung Fu, Episode #1
In his post, "Is China now more capitalist than the US?" Ed Morrissey over at HotAir has written what so many have been thinking [h/t to China Challenges]. As the US economy tanks, the US moves away from capitalism. As China's economy tanks, it moves towards capitalism. There is obvious irony here, but also a pretty good petri dish(es) to test which works better when things start going really wrong.
We will see.
Comments
What are the giant SOEs supposed to be? Isn't China's stimulus plan centered around huge infrastructure projects that will almost all go to state-run firms (or firms connected to the hips of local officials)?
Posted by: Bill | December 11, 2008 7:08 PM
I thought of voting for your blog. But as much as I've learned from and enjoyed some of your posts, the 3 words of this one have clipped my clicking digits. Please take moment to ponder the wisdom of writing (or saying) "we will see". Ok, is the moment up? Now, what have you learned? Perhaps, if you're intelligent, or rather, not too proud: when such a phrase is the only thing that will fall from the lips or drip from the pen, it is time to fall on your intellectual sword. Will we see this comment on your blog?
Posted by: Razinsky | December 11, 2008 8:39 PM
Funny, I have been saying this for ages, and still stand by it. China's economic growth has not been government planned or driven but more accidental and the result of the government getting out of the way. It is the fallacy of discredited paternalistic Keynesian policy wonks who believe that governments can actually shape and benefit free market economies by their compulsion towards social engineering and "doing something" that is so dangerous as most policies end up having totally unintended consequences; to whit, Fair Housing Act and CAFE laws from Congress leading the US to the mess it is currently in these days.
Posted by: terry | December 12, 2008 5:25 AM
There is only one "ism" in China that really matters and that is pragmatism. Chinese officials really don't care very much whether something is "capitalist" or "socialist." If it works they just do it, and then they define it as "socialism with Chinese characteristics."
The result of this is a mix of policies, some of which are "capitalist" and some of which are "socialist." So you end up with things like very low taxes on state owned enterprises.
Posted by: Twofish | December 12, 2008 11:25 AM
Terry,
Wow, I thought Milton Friedman had a gift for simplicity. You make him look convoluted!
Posted by: Razinsky | December 12, 2008 2:23 PM
Actually, China and the US started out at opposite ends, but we will soon meet in the middle.
Posted by: PaulR | December 13, 2008 3:39 PM
I think it's hard to say that China is more capitalistic when the government owns majority stakes in most of the top 100 corporations. Even with respect to regulations, China is more regulated in some ways (foreign acquisitions, tariffs, labor regulations), and less regulated in others (emissions, pollution). One way to work this out is to ask yourself - at what wage level would you move Chinese operations to the US? 1/4 of US wages? 1/2 of US wages? If it's at anything other than parity minus some adjustment for transportation costs and time lag, China is less capitalistic than the US.
Posted by: Zhang Fei | December 15, 2008 7:11 AM