China: Free Market Success Story? Think Again
Our Word is Our Weapon links to a paper by Dani Rodrick which
China has, in fact, built its new economy on thoroughly state capitalist policies. The one thing Rodrik mentions that most nearly conforms to free market principle--its "relaxed attitude to intellectual property rights"--is also the one thing sure to provoke squeals of outrage from the neoliberals.
On the other hand, the things China does to attract Western investment and make it Sweatshop Valhalla--its authoritarian labor policies and its theft of village lands for industrial use--are decidedly not "free market," whatever the latest gushings from ASI, Mises or LewRockwell.
[h]opefully... will help knock on the head the implausible but still popular notion that China represents some sort of free market success story. Instead, it seems to be squarely in the tradition of heavily interventionist, politically dubious East Asian ‘developmental states’ that thrived on the basis of all the ‘wrong’ policies.
China has, in fact, built its new economy on thoroughly state capitalist policies. The one thing Rodrik mentions that most nearly conforms to free market principle--its "relaxed attitude to intellectual property rights"--is also the one thing sure to provoke squeals of outrage from the neoliberals.
On the other hand, the things China does to attract Western investment and make it Sweatshop Valhalla--its authoritarian labor policies and its theft of village lands for industrial use--are decidedly not "free market," whatever the latest gushings from ASI, Mises or LewRockwell.
posted by Kevin Carson | 10:19 AM
3 Comments:
China has relied in part on state capitalism to develop. The elite of the Communist Party will soon learn their error as a correction gets under way.
Presently there are billions in bad loans and many billions more coming down the pipes. China is in for a rough ride.
At the same time, not all the development is smoke and mirrors. The degree of tangible advancement for the Chinese is indicitive of the degree of freedom that has grown.
It's not complete, it's not all-encompassing, it's not the totality of the Chinese economy, but the fact remains that freedom has increased in China in some areas for some people.
It is due to this freedom that the Chinese economy is making some permanent gains. And through trial and error they will see what works best. They will only continue to embrace free markets more and more as the evidence piles up that freedom works.
Consider also that some Communist leaders have been pushing for freer markets for decades, this migration is not going to change!
When Mises.org and Lew Rockwell talk about growing free markets in China they are quite correct, despite some areas of state control.
Not only is China not an example of a free market its labor and environmental policies could overturn the capitalist applecart. According to an article in the latest Monthly Review, the Chinese left is reforming and could eventually seriously challenge the corporate state capitalist system there. There could be a Third Chinese Revolution and this would have very interesting global effects. Since China is now the main supplier of goods to the US and a major holder of its increasingly worthless dollar, imagine the possibilities if that country should face serious unrest or revolution. See http://www.monthlyreview.org/0606weil.htm
Anonymous,
I think state capitalism is more structurally central to the present corporate boom in China than you imagine. Special privileges to big business are at the core of why TNCs flock there. Take away draconian labor policies, government giveaways of village communal lands, and the like, and there's not much reason to locate there. And I recently saw in the news that China's leadership is ready to take a page from Ike's book and build an "Interstate Highway System," too.
I fully agree that genuine free market policies would be beneficial to the majority of people in China. But what's good for the animals in Animal Farm isn't necessarily good for the pigs or the neighboring farmers in cahoots with them.
Larry,
Thanks for reminding me of the MR article. I'm glad to see it's online. I've occasionally looked MR over at the library and seen something good on China, and thought it would be good blog material, but I keep forgetting it. It's a shame the Marxoids, as good as some of their analysis is, make the mistake of denouncing such policies as "free market."
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