WSJ article on China and Hayek

[jpatter666]

Interesting article in the Journal today. Some choice quotes:

"China's economy is not what [Party leaders] claim as the 'socialist-market economy,' " he says. "It's a 'power-market' economy."
What does that mean?
"It means the market is controlled by the power. . . . For example, the land: Any permit to enter any sector, to do any business has to be approved by the government. Even local government, down to the county level. So every county operates like an enterprise, a company. The party secretary of the county is the CEO, the president."
Put another way, the conventional notion that the modern Chinese system combines political authoritarianism with economic liberalism is mistaken: A more accurate description of the recipe is dictatorship and cronyism, with the results showing up in rampant corruption, environmental degradation and wide inequalities between the politically well-connected and everyone else. "There are two major forms of hatred" in China today, Mr. Yang explains. "Hatred toward the rich; hatred toward the powerful, the officials." As often as not they are one and the same.


......


"For the last 20 years, the Chinese government has been saying they have to change the growth mode of the economy," Mr. Yang notes. "So they've been saying, rather than just merely expanding the economy they should do internal changes, meaning more value-added services and high tech. They've been shouting such slogans for 20 years, and not many results. Why haven't we seen many changes? Because it's the problem that lies in the very system, because it's a power-market economy. . . . If the politics isn't changed, the growth mode cannot be changed."
That suggests China will never become a mature power until it becomes a democratic one. As to whether that will happen anytime soon, Mr. Yang seems doubtful: The one opinion widely shared by rulers and ruled alike in China is that without the Communist Party's leadership, "China will be thrown into chaos."

http://online.wsj.com/article/SB1000...mod=hp_opinion

[c1ue]

Re: WSJ article on China and Hayek

Heh I do find it amusing that Mr. Yang decries the abuse of power over the market in China, but is perfectly fine with accepting the Hayek prize from the Manhattan Institute - a beneficiary of an American version of power over market:

http://www.greenpeace.org/usa/en/cam...tan-institute/

1986	-	-	$25,000
1987	-	-	$25,000
1988	-	-	-
1989	-	-	-
1990	-	-	-
1991	-	-	-
1992	-	-	-
1993	-	-	-
1995	-	-	-
1996	-	-	-
1997	-	-	-
1998	-	-	-
1999	-	$25,000	-
2000	-	-	-
2001	-	$100,000	-
2002	-	-	-
2003	-	$200,000	-
2004	-	$200,000	-
2005	-	$200,000	-
2006	-	$200,000	-
2007	-	$200,000	-
2008	-	$200,000	-
2009	-	$200,000	-
2010	-	$200,000	-
2011	-	$200,000	-
Total:	$0	$1,925,000	$50,000

[Milton Kuo]

Re: WSJ article on China and Hayek

Heh I do find it amusing that Mr. Yang decries the abuse of power over the market in China, but is perfectly fine with accepting the Hayek prize from the Manhattan Institute - a beneficiary of an American version of power over market:

http://www.greenpeace.org/usa/en/cam...tan-institute/

A hypocrite can be correct, though. Yang's behavior perhaps is best seen through St. Augustine: "Lord, make me chaste. But not yet."

[c1ue]

Re: WSJ article on China and Hayek

A hypocrite can be correct, though. Yang's behavior perhaps is best seen through St. Augustine: "Lord, make me chaste. But not yet."

Perhaps. The anecdote of seeing his own father starving is considerably out of place, however, given what has happened in China in the last 20 years.

I'd also note that there were a number of serious outbreaks of famine during China's democratic heyday - it was this which gave a strong impetus to the Communists to start with.

I do agree there's all sorts of corruption going on in China; the question basically is whether this is going to get worse - because it is a systemic/endemic issue or if this was permitted so long as other goals were achieved.

Time will tell.

[Milton Kuo]

Re: WSJ article on China and Hayek

I'd also note that there were a number of serious outbreaks of famine during China's democratic heyday - it was this which gave a strong impetus to the Communists to start with.

Yang's issue with the famine that killed his father was that it was caused by Mao's stupidity and not natural disasters that destroyed crops.

I do agree there's all sorts of corruption going on in China; the question basically is whether this is going to get worse - because it is a systemic/endemic issue or if this was permitted so long as other goals were achieved.

Time will tell.

I don't know what's going to happen with the corruption in China--maybe it'll get better--but from accounts from relatives, friends, and relatives of friends who have been affected by the Communists, I believe the problem to be endemic. The "other goals achieved" are only done to enable an environment relatively free of revolution and ripe for continued theft.

[c1ue]

Re: WSJ article on China and Hayek

Yang's issue with the famine that killed his father was that it was caused by Mao's stupidity and not natural disasters that destroyed crops.

I agree Mao's policies had a role - it is far from clear that it was the only reason or that it was entirely avoidable. Among the other policies - a redirection of people into iron and steel production.

I don't know what's going to happen with the corruption in China--maybe it'll get better--but from accounts from relatives, friends, and relatives of friends who have been affected by the Communists, I believe the problem to be endemic. The "other goals achieved" are only done to enable an environment relatively free of revolution and ripe for continued theft.

I guess it all depends on the generation you talk to. Those who remember the endemic corruption before the advent of the communists - the warlord era - think differently than the post Cultural Revolution generation, which has largely been a blank slate.

As for other goals - I personally find it difficult to believe that the Deng Xiao Ping 'market economy with Chinese characteristics' was created solely to enrich the Communist party members. Even as many of them become obscenely rich, nonetheless China still continues to improve its infrastructure - power generation, roads, communications, etc etc.

Contrast that with say, Mexico, where the same corruption exists but the society seems to be going the other way. Many other nations are seeing this result as well.

[GRG55]

Re: WSJ article on China and Hayek

...Put another way, the conventional notion that the modern Chinese system combines political authoritarianism with economic liberalism is mistaken: A more accurate description of the recipe is dictatorship and cronyism, with the results showing up in rampant corruption, environmental degradation and wide inequalities between the politically well-connected and everyone else...

...They've been shouting such slogans for 20 years, and not many results. Why haven't we seen many changes? Because it's the problem that lies in the very system, because it's a power-market economy. . . . If the politics isn't changed, the growth mode cannot be changed."...

What! China isn't going to save the world economy after all?? Cronyism? Misallocated capital? Corruption? Unimaginable...

http://www.itulip.com/forums/showthr...910#post258910