China: Testing My Faith in Freedom

My faith in the efficacy of freedom is shaken. I believed that unfree countries could not effectively use the tools of the free market and so were bound to change their evil ways or end up in the ash heap of history. Observation confirmed this, as communist and socialist governments turned prosperous countries into basket cases and disintegrated. But the rulers of China seem to have figured out how to remain oppressive and yet harness the power of the free market. It is troubling.

The blessing of old-time authoritarians is that they were screw ups. Fundamental tenets of communist or socialist philosophies were just so wrong headed that they did not work. That does not mean that the Soviets, Nazis or the variety of lesser totalitarians were not deadly menaces, but they were economically clumsy; we could stay ahead of them if we tried. We are still several steps ahead of the Chinese, but they are coming on strong. Everybody knows about the growing power of the Chinese economy, but they are also developing military technologies faster than we anticipated, for example, even in those areas of battlefield control we thought were beyond them for at least a decade.

My concern re China WAS assuaged with the sure and certain knowledge that its totalitarian ways would whither away under the rising sun of the free market. A free China is a natural friend. But maybe the authoritarian Chinese have figured out a way to avoid giving their people freedom while still using the market to get rich.

An article I read this week crunched some numbers that support my anxiety. I also listened to a lecture about the flavors of capitalism. China is classified as the "state capitalist" variety. This flavor of capitalism is effective at adapting technologies, but not very innovative. That was a relief, but they went on to explain that China has managed to develop pockets of innovation.

China is also very good at information technology and the Google captitulation facilitated the Chinese ability to block information. The scary thing is that they can do it surreptitiously. When the Soviets blocked Radio Free Europe broadcasts, people could notice its absence or hear static. They kept on looking for the truth. When the Chinese block, they provide alternative information that leads many recipients to believe that they have found what they were looking for, so they stop looking.

Freedom is still something very new. Throughout most of human history, almost everybody lived under oppressive despots who tried to plan their economies, their religions and their lives. A generation ago, most countries in the world were unfree. Even today, despite significant progress, most of the world's population lives in unfree or semi free countries (a quarter of them in China). In spite of all this experience, I nurtured the hope that freedom was the normal state of human affairs and that communists, fascists and plain authoritarians were anomalies.

My entire adult life, I have believed that the future belonged to the free because the free were also the most efficient & innovative. I still believe that the Chinese rulers and others authoritarians will eventually have to make the choice of either expanding political freedom for their people or sacrificing economic power, but I am no longer so certain.

Posted by Jack at May 11, 2007 8:10 PM
Comment #220117

Have faith Jack, Chinese citizens are experiencing Western society, capitalism, and some forms of freedom.

When I was in China for school in 2002, Bejing, we met with the the Asian President of McDonalds. I am sure most have heard that when a McDonalds opens that you will have lines going around the block, four wide. Of course this is to get a taste of the West as it is for the “taste”.

One of McDonald’s marketing strategies was more longer strategically than I could have possibly imagined. McDonalds was providing rural communities and schools with sporting supplies. Soccer balls, bats, baseballs, nets, mitts, golf clubs, basketballs, basketball nets, etc.

What was the catch, each and every item had the McDonald golden arches branded on the piece of sports equipment.

McDonald’s strategy was to use this implied generosity to get families to make pilgramages to their closest McDonalds to meet the nice people that donated the equipment, take a bite of Western Society, and have braging rights.

Will this work? I have not idea. However, certainly many children will indeed want to know who it was that helped them. I tend to look at China’s people and see that exposure will create a generation hungry for more. And that will lead to change in future leadership.

Posted by: Honest at May 11, 2007 8:44 PM
Comment #220125

I’ve not read the book, but I think James Mann, author of Rise of the Vulcans is saying something fairly similar to that in his recent book The China Fantasy. It might interest you.

Posted by: Stephen Daugherty at May 11, 2007 10:29 PM
Comment #220129

Wow, thank you Stephen. Looks like a good read and I will. I was reading the reviews of the book and came accross this paragraph which is pretty telling.

Nonetheless, Mann’s prediction will prove correct if no one takes any concrete action to alter the status quo. I still believe that China will eventually democratize, but Mann reminds us of the Marxist fallacy that ‘history’ equals inevitability, a fallacy that many who adhere to the so-called ‘Soothing Scenario’ implicitly seem to have fallen into. Democracy in China will *not* happen if people, including Americans, simply play a waiting game until it magically does. Yes, the Soviet Union collapsed in 1989 when no one would have predicted it two years earlier. But it may not have happened without movements like Solidarity, or Radio Free Europe, or Reagan’s high-minded diplomacy at the Berlin Wall and with General Secretary Gorbachev; none of which have current parallels with China. Right or wrong in its prediction, Mann’s book deserves a read.

Posted by: Honest at May 11, 2007 11:13 PM
Comment #220130

Just some thoughts…

The most effective economic nations and systems owe their success, not to freedom, not to democracy, not free markets or capitalism, but to a potent combination; the combination of the power of the state with the power of big business. Give any nation and its oligopolies a technological superiority, and a method of exploiting the resources of weaker neighbors, and it explains most successes, including China, the US, the USSR, the British Empire, Nazi Germany, and many other economic success stories throughout history.

The fact is, fascism works. Corporatism works. Colonialism in the name of business- exploitative trade- works. It works like a champ. Various nations present the same face to history with various flavors, but it always amounts to the same thing, and it has nothing to do with freedom, or liberty, or the freedom of the marketplace, or other whitewashing claptrap.

In the US, we value freedom because of its intrinsic worth. We champion the rights of the individual, we champion Human Rights, because it is the right thing to do.

We do it in spite of the natural tendency within capitalism for businesses to grow into oligopolies and monopolies. We use government to regulate the domination of big business, but there is always a struggle between those who seek regulation, and the moneyed interests seeking deregulation.

We are free. But we are not as free as you think.

Posted by: phx8 at May 11, 2007 11:57 PM
Comment #220135

I think it’s not unusual to think the ideologies of our time represent the end of history. As far as capitalism goes, we don’t have much experience with it. As Jack points out, freedom (in the sense that the power of government lies with the people) is also new. For some it’s an article of faith that democracy/freedom and capitalism are vitually synonymous or at least indispensable to each other. China may shake up that thinking.

As phx8 says, we value freedom intrinsically. If that is so, then we shouldn’t judge freedom by economic terms — freedom is the end, economic arrangements are the means. Too often we reverse that.

Freedom itself is a construction. What does it mean? How will it be constructed in the future? In the mass mind in America, it oftens means freedom to acquire, to be consumers. It is true we can if we like understand freedom in other ways, but to some degree we are ourselves constructed by our culture. Thus, religion in America serves the mass mind, too; and is often barely distinquishable from our own brand of nationalism.

About China — we don’t know how it will change, but we do know that it will. Everything does. It may move to be less authoritarian — one imagines that in such an interconnected world that it would be impossible in the long run to tightly control influence and expression. Who knows? I do think, though, that our ideas of freedom/democracy/capitalism will evolve in ways difficult to predict.

Posted by: Gerrold at May 12, 2007 2:41 AM
Comment #220143


I was in Beijing in 1995 for work, on the only day off I had while there I was given a car, a driver, and an interpreter. My interpreter practically begged to go to McDonald’s for lunch.

BTW, the McDonald’s off of Tiananmen Square was the largest McDonald’s in the world at the time.


The Chinese had lived with a feudal system for so long I am surprised that they have come this far, this fast.
As for their choices, money talks, lots of money screams. They want their piece of the pie, and in the typical bass-ackwards Chinese manner they will do whatever it takes to get it.

Posted by: Rocky at May 12, 2007 9:37 AM
Comment #220144

China’s government, nor the people of China value individual liberty as we do here. They value the integrity of their culture and nation and absence of revolution very highly. They value progress in the name of their children’s future, very highly. They have a People’s Congress where the people’s representatives speak for them in the decisions of government. The inner circle of the Politburo does in fact work with and listen to the People’s Congress.

But, this is crucial! Nothing in China’s history or culture places the value of the individual above that of the state, the nation, or the people at large. Hence, China has no history-culture upon which to aspire to the kind of individual liberty we supposedly prize so highly here.

As long as the people of China see their children’s future in China as good or better than their own, the Chinese people submit to the wisdom and direction of the inner Politburo. And the inner-Politburo is acutely aware that the absence of revolution depends directly on their efficiency in creating a better economic future for the people. That is their mandate from the people.

Now, this too is crucial to understanding China. Because the individual is never more important than the state or the nation, the Chinese inner government will replace it’s own inner circle members if they fail to uphold the objectives of efficiency, growth, and security. In China, no politician is above the state nor is permitted to jeopardize the nation’s future for any reason. This fact distinguishes modern China from Stalin’s dictatorship, Mussolini’s fascism, or Kruschev’s Communist government.

For this crucially important reason, the absence of valuing the individual over the state or nation, China will continue to become more efficient in achieving its objectives, regardless of what is required to achieve them. And the Chinese government will have the support of the majority of its people.

The day will come when the Chinese people will be exposed to the value system of the West. But, it is not wise to bet on that exposure changing the Chinese character of doctrine, state, and nation. For in China, state and nation are synonymous with The People. And the people will remain loyal to the state and nation as long as their children’s future’s are promising. And that is clearly the case for the rest of this century on purely economic and resource terms.

Religion plays a part in all this as well, reinforcing the relationship between the Politburo and the people. In Christian nations, the religion places a value on the individual that transcends the state, or even this corporeal existence. In Buddhism, which most of the Chinese are, the individual is what one wants to diminish in order to become enlightened, for enlightenment is in part the revelation that we are all of one spirit and individuation or separateness from others is an illusion to be overcome.

This reinforces the political value system the Chinese hold that the individual may not put the population, the state, or the nation’s future at risk. To act as an individual in disregard of the rest of the people is to be spiritually and politically lost. Efficiency and the common greater good of the nation’s people and future are the Achille’s Heel of western democracies. Their governments are designed to be inefficient and to place the value of the individual above that of the state or nation’s future.

This is why western societies permit individuals to amass wealth which otherwise could be put to use in securing the nation’s health and future. In China, the nation’s health and future of the people trump any value or concerns of an individual who would get in the way of the nation’s health or future prosperity.

This is precisely why China is poised to become the economic giant of the 21st century as western societies struggle for the next hundred years over the issue of state debt and productivity vs. individual and corporate wealth leaving the state for greater wealth protection, as Haliburton’s decision to become a Dubai Corporate citizen, and offshore bank accounts in the Carribean attest.

Western societies have great difficulty in understanding the value systems of the Chinese and Fundamentalist Islamic suicidal terrorists, for example. The difficulty in understanding comes from our inability to grasp a value system that is not predicated on the individual as above other values.

Western societies rely upon self-interest as the cornerstone of their societies. It is built into their economic philosophies and their Constitutions which enshrine the individual value and rights as above those of the state or the people. This has its strengths. But, also its weaknesses as this century is demonstrating.

It makes it very difficult to understand other cultures whose value systems diminish the importance of the individual to other concepts of greater value, such as society at large or, reward in the afterlife for causes of greater value than the individual. In a very real way, we honor our soldiers and emergency first responders because they reflect this middle and eastern value system of sacrificing of self for the greater good of society where it is voluntary.

Yet, we tend to condemn this valuation of the state or nation over the sacrifice of the individual when we see it institutionalized in places like China or Islamic fundamentalism. China’s one child policy was painful to millions in China, but, there was no revolution over it as there would have been here.

It is the greatest of philosophical conundrums of the 21st century that western societies shall struggle to compete and maintain against the efficiency and unity of eastern societies, whose politics and economics are built around the health and future of the state and society and not the individual, as in western societies.

Posted by: David R. Remer at May 12, 2007 10:08 AM
Comment #220148


“In China, the nation’s health and future of the people trump any value or concerns of an individual who would get in the way of the nation’s health or future prosperity.”

You cannot say, however, that there aren’t some very rich folks in China that won’t take advantage of the “peasant” mentality of the people.
In 1995 I was also in Dailin, and the largest manufacturer in the area was Mercedes Benz, at a time when the average citizen couldn’t even afford a car.
The laborers I worked with made only about $2.00 (American) a day and rode the bus or a bicycle.
When the disco I was working on opened, it cost $50.00 (American) just to get in the door, far out of reach for the average Chinese.
Virtually every businessman I met in China was educated in America, more than likely subsidized by the Chinese government.
The aforementioned laborers spoke of America as if it was merely a dream.

The China I saw while I was there was a strange dichotomy of the very rich, and the laborer.

Posted by: Rocky at May 12, 2007 10:44 AM
Comment #220153


And yet we know there are fault lines in China. Political dissident is silenced, censorship is common, freedom of religion, of assembly, etc., is curtailed. The state secures its power through force, its constitution mandates one party rule. We don’t know how widespread dissatisfaction is; we tend to hear only from dissidents who have managed to get the attention of the West. And as Rocky says, individualism in the sense of acquiring power or wealth occurs in China, and in China’s history, just as it always has everywhere in the world. What would happen if the State did not suppress dissent? China has had many revolutions and civil wars in its history, of course; the party in power now achieved its place through revolution. For a people who love peace, China’s history is one of warlords, power grabs, and the like. And as in any state, those in power seek to maintain it; I think it is possible to overstate how far individuals willingly subvert their own interests.

Posted by: Gerrold at May 12, 2007 12:46 PM
Comment #220154

Rocky said: “You cannot say, however, that there aren’t some very rich folks in China that won’t take advantage of the ‘peasant’ mentality of the people.”

Quite right, Rocky. China is plagued with corruption, bribery, and inequality in wealth. Not unlike here, but, more so there due to sheer size.

That however, does not negate the fact that when and if the Chinese government decides that such wealthy individuals are blocking the progress and goals of the nation, that those wealthy will be forced to dissociate themselves from some or all of that wealth.

What that implies, is that the wealthy in China serve the government’s policies or objectives in exchange for the right to retain their wealth. The individual’s wealth is not guaranteed as a right in the Chinese system.

I am not describing a picture of model efficiency throughout the whole of China, for with the size of their population, government, and land mass, inefficiency and ineffective oversight by the government is one of their ongoing problems.

China has a potential problem with Hong Kong, Singapore, and other previous British provinces. The Chinese gov’t. decided to leave their capitalism largely intact, and to appease the people in other more impoverished areas, began granting work visas to those capitalist bastions.

The demand in China’s farming communities to acquire work visas to the wealthy modern cities, is overwhelming. China is now trying to forge a policy that would reverse this demand, incentivizing the people to remain in their farming and more rural areas, but, it is proving to be an enormously expensive venture for the Chinese government.

Food to feed their people is China’s greatest social issue, and finding ways to make farming in rural areas a productive and enriching lifestyle is equivalent in magnitude to our finding solutions to entitlement reform here in the U.S. and Western Europe.

They don’t yet appear to be close to a sustainable solution as the migration by the young toward modern work and rewards and away from the impoverished lifestyle of their farm community parents has become a very serious problem. Enjoining the rest of the world in capitalism is only part of the solution. Finding market mechanisms that put food production on par with manufacturing jobs is their number one social problem and priority. It remains to be seen if they can pull it off.

One thing is for sure. Their plan to use trade surpluses to buy food to feed the poor in the rural areas is failing in very significant ways. One of the main reasons it is failing is because the export industries are so very successful that it is impossible to avoid reinvesting increasing amounts of those surpluses into expanding growth in the manufacturing and export industries, instead of food production incentives in the rural areas.

But, at some point, the government will be forced by social unrest to shift that surplus from international trade pursuits in the free markets back into food production, and that of course, will mean a shift back toward command economy at the local rural government level, unless another way can be found.

It appears to me, one alternative is for China to start decentralizing their manufacturing and technological industries, moving pieces of it to the rural communities, in much the same way as Silicon Valley in California began to decentralize to places like Austin and Dallas, Tx. and Phoenix, Az. back in the mid-1990’s. This would create local economies in which demand and supply could dramatically increase the profitability of farming surrounding manufacturing and technology enterprises relocated to the center of those farming communities.

But, then, I am looking at the problem from American upbringing. That said, I have to wonder if the growing number of Chinese coming to our centers of higher education and returning to China will not afford the Chinese government the benefit of that education and perspective. I unfortunately have no Chinese student visa friends to discuss this with, so, I have no idea if there is, in fact, a relationship between Chinese students here and their government’s desire to tap their education upon their return.

It was however announced recently that Mainland China was opening visas between it and Taiwan to allow more interaction between the two populations. That could potentially mean China’s intent to harvest American education and perspective through exchange with Taiwanese American educated students. A politically very smart move if that is their intent in opening visas with Taiwan.

Posted by: David R. Remer at May 12, 2007 12:46 PM
Comment #220155

Gerrold said: “And yet we know there are fault lines in China. Political dissident is silenced, censorship is common, freedom of religion, of assembly, etc., is curtailed.”

All true, Gerrold. Yet, this truth is inescapable. With 1.3 Billion people, the government in China and its military CANNOT stop the people, if the people decide to turn on their government. Therefore, the Chinese government still rules by consent of the people.

One of every five people in the world today live in China. No government can control that number of people without their consent. And no one knows this better than those in control of the Chinese government. The Chinese politburo is acutely aware that repression and police power alone cannot sustain their government. The people’s expectations must be met as well, and that is why rural China remains the biggest challenge to China’s government and China’s future.

Many Americans would assume those in Hong Kong and Singapore exposed to western modalities of thought and enterprise would constitute the greatest threat to the Chinese government. But, they would be wrong. The real threat to the Chinese government lies in its rural areas, where poverty, disappointment, and futility are growing. Should the people of the rural areas devise a means of communication between their vast number of villages and hamlets, China’s power structure will truly be threatened.

The Chinese government is acutely aware of this also, which is why communications are strictly regulated and controlled by the state. That control buys time for the Chinese government to try to address the wealth and quality of life disparity between urban and rural communities. But, the clock is ticking.

China either finds a way in the next couple decades to meet the needs of the rural populations, or, the rural populations will find a way to communicate with each other and organize. The clock is ticking.

Revolution is the Chinese people’s greatest fear. But, revolution also remains an option of last resort for the Chinese people. They did it once, they know they can again if they must. If desperation grows, revolution becomes a more viable option despite its fearful and loathsome history in China.

China is dependent upon other nations for food to forestall revolution. Their trade surpluses provide that food. And China’s dependency upon foreign food imports precludes China desiring to become a global aggressor. They cannot fight an internal civil war and an external international war and hope to be successful in either.

Thus, it is safe to predict that China will be an increasingly reasonable partner in global affairs and interaction provided the international community stays out of its internal affairs and domestic governance. It has one war against poverty to fight internally. It won’t tolerate attempts by outsiders to complicate that effort. Which is also why they are building their military capacity at an unprecedented rate. As those in the West are fond of saying, the best deterrent to war is a strong and powerful military capability.

Posted by: David R. Remer at May 12, 2007 1:00 PM
Comment #220158


“That however, does not negate the fact that when and if the Chinese government decides that such wealthy individuals are blocking the progress and goals of the nation, that those wealthy will be forced to dissociate themselves from some or all of that wealth.”

You can be assured that the wealthy class in China know which end of the gift horse is which.

As for Hong Kong. I was there in ‘97 working for the Chinese Government when China took it over. There were those that bemoaned the fact that the Chinese were taking over, and those that celebrated. I felt at the time that reality would fall somewhere in between.
Hong Kong was then, and still remains a cash cow that even China couldn’t screw up.

As for the “just plain folks” on the farms, they are living much as they have for millenia, and they would like a share of the wealth being generated by the capitalist turn that China has taken.
As I said before there is virtually no middle class as we know it in China, and because, as you brought up, their upbringing places the collective first (as it does in pretty much all Asian cultures), I think it will stay that way for some time.
China, at the time I was there, wasn’t really a “consumer” society as we know it.
I know that things are changing, but, with the exception of places like Shanghai, prosperity is a “trickle down” thing in China.
Whether the people will stand up to their government or not remains to be seen.

Posted by: Rocky at May 12, 2007 1:42 PM
Comment #220160

Of course, I’m no economist or a very good student of history but but from what I’ve read here are a few thoughts to chew on.

The Chinese are extremely patient and able to take a long view, something we in the west could learn from. Nonetheless, they have raised hundreds of millions out of poverty in the last 30 years. We must understand how poor the Chinese really were. Their economic juggernaut is in part due to the potential climb in front of them.

Also, although political freedom does combine with capitalism for some nice synnergies I think the idealogy that they are nearly one and the same, especially on the far right, has gone a bit far. Corporations are not democratic but run much like the Chinese system. China might be thought of as the biggest conglomerate on earth. Corporations did not rise out of democracy either but in the monarchies of Europe. Although liberalization and the rise of the middle class lent power to democracy and vice-versa this does not mean that the corporate behemoths are still governed by the same forces of a couple of centuries ago.

Even countries who do not have a huge hill to climb, a lot of resources, or a liberal democracy can be economically prosperous, witness Singapore.

The question these days seems to be, have we in the west reached our pinnacle or will our wealth generate truly new opportunities? Will we make room for the poor, the environment, proper health care, ailing infrastructure? Will we answer the challenges of global warming and raising Africa out of extreme poverty and disease?

Or will we squander our material abundance on new Viagras and hair loss replacement, cell phone services and boob jobs.

Posted by: chris2x at May 12, 2007 2:14 PM
Comment #220161

Rocky, the real problem is the vast volume of young people leaving the rural areas for urban jobs. This is strangling China’s ability to grow enough food to match its food export limitations.

The young are leaving rural China also for better education. This is why it is imperative, in my view, that China reverse this trend by decentralizing its capitalist centers into the rural areas and investing in rural education and manufacturing and technology centers in rural areas. Without those mfg. and tech. centers moving into the farming communities, there is no infrastructure to keep the young from leaving the farms. And food continues to be China’s least abundant resource.

They must find a way underwrite food production in China. They can have no autonomy in the international community if they are utterly dependent upon it for food. Same problem the U.S. faces with oil.

Come to think of it, the U.S. is starting to have a domestic food production problem too! Food production doesn’t attract the young to the industry. Our farming communities are beginning to suffer, though not as drastically, the same flight China is experiencing. Property values in the Mid-West have plummeted due to the flight of the young to more lucrative and glamorous urban area jobs.

Posted by: David R. Remer at May 12, 2007 2:19 PM
Comment #220162

Also, it is was surprising that communism sprang up in rather agricultural societies like Russia and China first. It was supposed to happen in industrial countries like Germany, which almost did become communist. The rise of a middle class did save capitalism.

Is China striving for a middle class? I wonder what the communists in China really think these days. Do they believe they are taking a necessary steps towards communism (a rather long view) or do they even believe in Marxism anymore?

Posted by: chris2x at May 12, 2007 2:20 PM
Comment #220163


Not that the price of food is fixed in America, but there isn’t much profit in it for those that have bigger dreams, and admittedly it is a hell of a lot of work.
Beyond the fact that the Chinese farmers are dirt poor, perhaps the Chinese are beginning to have bigger dreams.
If China wants to feed it’s people it needs to modernize the process.

There was an article on NPR yesterday about catfish farming in China and how they don’t take the care of their ponds that our farmers are required to.
China is exporting catfish meat that is full of antibiotics (because of filthy ponds) that are banned in this country.
China is either doing this because they don’t have a clue, or because they are simply after the money.

Posted by: Rocky at May 12, 2007 2:51 PM
Comment #220165

Chris2x, I can’t speak for communists in China. Surely there are some, still. But, the government in China left communism ideology with the death of Mao Tse Tung. They have become progressively less ideological ever since.

My take from the news I read, is that the current Chinese Government is pragmatic to the extent that their enormous bureaucracy will permit, adhering neither to capitalism nor socialism as an ideology, but, to the merits of their prescriptions as can be adapted to their view of their future without revolution or disintegration.

Posted by: David R. Remer at May 12, 2007 3:38 PM
Comment #220167


I think Cheney/Bush should accuse China of storing WMDs, and being super-oppressed, and undemoctratic, and invade at the earliest op. What do YOU think? China is ripe for our type of forced democracy…right!?!

Posted by: Marysdude at May 12, 2007 3:49 PM
Comment #220168

Rocky, it is likely a combination of both, ignorance and lack of experience as well as charting the shortest distance between cost and profit.

Believe it or not, the root cause is very likely not a large enough bureaucracy to oversee the quality controls and education necessary to compete with other nations. Despite their having already the largest bureaucracy of any government on the face of the earth. Still, 1 in 5 of the earth’s population requires an awful lot of bureaucracy if Chinese quality control is to mean anything on the international marketplace.

They have been making tremendous progress, though. But, not fast enough to keep up with growing exports. Their steel industry is a good example. Once, their steel was the poorest on the market. Today they are beginning to rival Japanese steel production quality.

Free Enterprise in a non-competitive marketplace won’t spend on quality control. Thus, it is incumbent upon the rest of the nations of the world to exercise the power of purchase and buy non-Chinese products until their quality comes up to international standards. Unfortunately, free market enterprise in the rest of the world also dictates not refusing the lowest cost.

So, Houston, we have a problem. Either governments regulate industries forcing them to set aside China’s lowest cost and insist they purchase higher quality, or we continue to watch an increasing decline in the quality of our products as the prices for them also decline. Food imports is something our Congress is currently addressing. It remains to be seen if Republicans will permit international trade quality standards with teeth, or not. And it remains to be seen if Democrats will insist on higher consumer prices as part and parcel of insuring higher quality imports.

It is an interesting debate taking place on the Hill. The Congress just passed trade authority with a couple countries south of us without the quality controls so many have been demanding of our trade agreements. A case of Bush and Democrats agreeing on something. Not good for American consumers or workers.

Posted by: David R. Remer at May 12, 2007 3:55 PM
Comment #220180


Listen to that link re flavors of capitalism. The authors talk about the oligarchy types (examples in Africa or Russia), state directed (like China), big business (Japan Continental Europe) and Entrepreneurial (U.S, Taiwan, Ireland, recently some parts of Scandinavia). There are no pure types and these are just convenient labels, but it is interesting.

I think the key understanding of the market is that wealth is created, not found or taken. Post war Japan is an excellent example. It had the capacity to compel nobody. Rather, it created wealth and increased it by trading with others.


Freedom to me means not being bothered any more than necessary. In fact my friends sometimes describe my ideology as dontbotherism. I like not to think about the government very much and I prefer they do not think much about me. I understand that government and markets are so pervasive that I do not notice them. That is the way I like it.

I once heard a guy talk about good and bad laws. In a good country if you have done nothing wrong and you see a cop, you are not worried. In a bad country you are. In a good country, if you have done something wrong, and you see a cop you should be scared.


Gerrold and Rocky have said many things I think too.

I do not know what the average Chinese guy wants. The fact that the Chinese rulers do not ask them indicates that they might suspect the people are less happy with their situation than the rulers might lead you to believe. Using tanks and force to crush demonstrators also indicates that.

Chinese history is not one of a pleasant cooperation of ruled and rulers. Oppression and poverty were the rule. The poverty of Chinese peasants was appalling even to Europeans who knew something about oppressed peasants themselves. The Cultural Revolution and the great leap forward caused the deaths of many millions of people.

I can respect the great strides China has made recently w/o idealizing what they have done. Remember also that until around 1800, China was still the most advanced and powerful nation on earth. What did they do to fall behind?

Re Agriculture in the U.S. - we have no trouble producing what we need and want. People are leaving farming because labor saving machines have taken the place of workers. A couple of old people can run a herd of dairy cows that used to take dozens of workers.

BTW - please let me know where the value of productive farm land has plummeted. I would be in the market for it. I can tell you that the value of southern pine land has rise a lot in the last ten years. If anything it is getting too valuable.

BTW – you know that I wrote this post with you in mind. I respect the Chinese achievement, but I think you may overestimate them and cut them a little too much slack. There activities in Africa these days are very much like neo colonialism and their record in Tibet or W. China is horrible and remember that Mao is probably responsible for more deaths than any other dictator.


I do not think anybody believes in communism anymore, except on some western university campuses. It is pretty much ignored by anybody who wants to be practical.

Posted by: Jack at May 12, 2007 8:12 PM
Comment #220191

David said,

My take from the news I read, is that the current Chinese Government is pragmatic to the extent that their enormous bureaucracy will permit, adhering neither to capitalism nor socialism as an ideology, but, to the merits of their prescriptions as can be adapted to their view of their future without revolution or disintegration.

That’s what I’m asking, what is their view of the future? Surely they still have an ideology. How do you go from communist and the cultural revolution to economic pragmatists. They must still be socialists. Are you saying they are more akin to Singapore? Would you put Vietnam in the same category?

Posted by: chris2x at May 12, 2007 10:20 PM
Comment #220218

chris2x, my take is their politburo will act socialist when it fills a need, and act capitalist when it fills a need, act democratic when it fills a need and act communist when it fills a need.

Their primary agenda items are defending their national integrity including Taiwan, and food for their people. Their vision of the future includes these 2 agenda items, and feeding their people through economic power and trade surplus in the international markets allowing them to buy food. This is much is safe to say.

A bit more speculative on my part is a vision to become the world’s supplier of non-agricultural goods in exchange for services and food. And to dominate the global investment dollar by producing the best available returns on capital investments of any nation on earth. By assuming that role from the Americans, they can assure security against attack from any other nations, in the same way the U.S. now is secure against attack by other nations being the largest nation of investment services and investment transactions transacting trillions in other nation’s investments.

I think too, China has it’s sights set on space preeminence as well, not only for security reasons but for 7th generation population management through colonization on other world’s. China in this regard is much like the American Indians, who made decisions based on their impact on the 7th generation to come after the decision is made.

China already has plans for the Moon, and Mars. One of their demonstrated strategies is to build upon the investment and innovation spent by other nations to take over providing those services and technologies at a lower cost. But, as I discussed previously, the big obstacle to these plans is quality control which they must master if those strategies are to pay off down the line.

China is creating a rapidly growing middle class in its urban areas. But, there are serious limitations on how large it can grow if confined to urban areas. If China makes moves to decentralize their mfg. and technology centers into the rural areas of China, that will be the significant milestone marker foretelling of China’s becoming the economic dominant nation of the latter half of this century.

It is impossible for me to speculate what they have in mind for the 22nd century, but, it would be a mistake to think they aren’t already making tentative plans for it. It is one of the psychological differences between China and Japan and western nations. They think and plan for the future, whereas the West thinks future but, fails to plan for it because of being pulled constantly back to short term gains.

I believe this precisely why the Chinese will never embrace capitalism as the dominant and exclusive economic paradigm. It would work at odds with their predisposition for long term planning and strategy paradigm.

That said, Japan has managed a compromise, instead of very long term planning and strategy, they moved to mid-term planning and strategy feedback loops with capitalist short term investment strategies forging a kind of compromise, in which their longer term planning is longer than most competitors while insuring short term strategies maintain current market shares and brand respect and profitability while longer term plans are implemented incrementally.

In other words, China may adopt Japan’s model in time of sacrificing some short term profitability for longer term planning implementation but, never to the point of allowing current competitive advantage to falter. For China to adopt this model however, quality control has to become one of their immediate and most ardently sought after objectives. To date, there is some signs of this taking place as with their steel industry and exports. But, they have a very long way to go to make quality control synonymous with Chinese exports.

They have afterall, a largely uneducated and untrained population to work with. Therefore, education and training shall have to become their next major social program on a vast scale. I don’t yet see signs of this massive scale education and training system being put in place though it is obviously growing on a smaller urban scale.

Posted by: David R. Remer at May 13, 2007 2:23 PM
Comment #220237


You say that the Chinese people consent to the rule of its government because if they didn’t, the 1.3 billion population would revolt. I’m not an expert on China, so I’ve leave its specific case aside, but I do believe history gives us many examples of large populations of terribly abused peoples kept in line through the ruthlessness of their masters. When expression is tightly controlled, when dissent leads to lengthly jail terms and possibly execution, then I don’t think we can speak of consent. North Korea is an extreme modern example — thought itself insofar as possible is rigidly controlled; what does consent mean when it’s the product of invasive conditioning? Of course, this leads to a discussion of ideology in its deepest sense.

Posted by: Gerrold at May 13, 2007 7:32 PM
Comment #220264

We tend to forget that not all cultures treasure democracy as much as we do. 1930’s-40’s Germany and Japan were not exactly glowing examples of democracy and yet their populations were for the most part strong supporters of their rulers. As China expands in population, economy and military power look for them to to start flexing their mucles in the years to come. When they do start to expand their borders how much stomach do you think we will have to get into a brawl with them over it?

Posted by: carnak at May 14, 2007 1:43 AM
Comment #220298


I still have a hard time believing the Chinese leadership has no idealogy whatsoever. Although feeding the populace and raising them out of extreme poverty is behind the shift (wasn’t this originally called the Two Chinas policy?) it would be a momnentous shift to claim they are now realy only a patient and practical-minded oligarchy.

An interesting indicator to what they believe would be what do they teach (or indoctrinate) the childern in school?

Posted by: chris2x at May 14, 2007 3:53 PM
Comment #220315


You might find this long article interesting:,1518,465007,00.html

Posted by: Gerrold at May 14, 2007 5:57 PM
Comment #220334


Thanks, I look forward to reading it.

Posted by: chris2x at May 14, 2007 8:34 PM
Comment #220364

Jack said: “Re Agriculture in the U.S. - we have no trouble producing what we need and want.”

Really? Why then are we so dependent upon foreign imports of food?

Posted by: David R. Remer at May 14, 2007 10:48 PM
Comment #220368

Jack asked: “BTW - please let me know where the value of productive farm land has plummeted.”

I never said productive farm land. I referred to property values in the MidWest. Housing in the MidWest states like Kansas, Iowa, and Nebraska have plummeted. The children are leaving rural towns and communities for the big city. Hence, demand has been dropping for properties in these states for decades as have property values compared to most of the rest of the country.

Posted by: David R. Remer at May 14, 2007 10:51 PM
Comment #220369


We trade because of comparative advantage. We are not seeking autarky. We both export food and import food. We give a lot of food away. The U.S. is responsible for more than half of all the food aid in all the world. We are not dependent on foreign sources in the respect that we could feed ourselves if we had to, just like I could make my own shoes… if I had to. But we prefer to eat fruit in the winter etc.

Posted by: Jack at May 14, 2007 10:51 PM
Comment #220372

Chrisx asked: “How do you go from communist and the cultural revolution to economic pragmatists. They must still be socialists. Are you saying they are more akin to Singapore? Would you put Vietnam in the same category?”

I believe I answered this already. Did you miss it? They are capitalist where they need to engage the international marketplace. They are socialist where they need to control destitution and revolt in poverty stricken areas. I am saying what I am saying. They are pragmatists, and will be capitalists where they need to be capitalists, socialists where they need to be socialists, communists where they need to be communists. It is the very definition of pragmatist. Not ideological at all, which precludes action or thought outside that ideology.

When you have 1.3 billion people able to draw and quarter every member of government, you tend to become a pragmatist instead of an ideologue in a pretty damn quick hurry.

Posted by: David R. Remer at May 14, 2007 10:57 PM
Comment #220375

Chrisx said: “it would be a momnentous shift to claim they are now realy only a patient and practical-minded oligarchy.”

It is a mistake to try to encapsulate the Chinese government or society in pigeon hole. It is far too large, complex, and diverse a nation, and in the midst of tremendous transition, to try to summarize it as this or that. Jack is right to point out that China is not without horrendous and steep obstacles in its path to becoming the leader of the latter half of this century. But, Jack is wrong I think, to think that China’s past stands as an obstacle to its future. China’s sheer size stands as its obstacle and China can ill afford to fail to adapt to rapidly changing conditions and circumstances. China’s sheer size also holds out the promise for its future.

Nothing is assured about China’s future other than its potential is monumental. We in the West should hope China succeeds in charting a successful future for her people and place in international affairs. There are very great reasons to fear China’s failure, like a nuclearly armed China without a centralized government at all. It would be akin to Pakistan without Musharaaf’s government in control (currently a CIA and Indian nightmare scenario).

Posted by: David R. Remer at May 14, 2007 11:09 PM
Comment #220929

China is a nation in transition. More than we can say about N. Korea that has killed millions of it’s own via starvation while spending it’s meager resources (that should have bought rice and other foodstuffs) on building nuclear bombs and missiles.

The “great leader” still dreams of a unified N. Korea in which the poor, ignorant, but heavily armed N. Korea will absorb and pillage the rich south Korea.

China has come light years in a very short time. And along the way it’s bound to be very painful from time to time.

Posted by: StephenL at May 20, 2007 8:00 PM
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