Labor

How to Recreate the Chinese Economic "Miracle"

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Reihan Salam at National Review pokes at U.S. union overlord Andy Stern's belief that we have a lot to learn from China:

Andy Stern believes that the Chinese economic model is superior to what he calls the "conservative-preferred, free-market fundamentalist, shareholder-only model."….Andy Stern believes that the United States needs a Chinese-style central plan to flourish, one that will be executed by a streamlined government.  

To really learn from the Chinese, and to enjoy such staggering growth rates, we should go about things differently: let's have a Maoist insurrection followed by a civil war that lasts for several years. Then let's destroy most of the wealth in the country, and drive out millions of our most enterprising and educated citizens by launching systematic terror campaigns during which millions of others will die in violence or of starvation. Next, let's have a modest economic opening in coastal regions: impoverished citizens will be allowed to launch small-scale township and village enterprises and components will be assembled in a handful of cities by our stunted descendants. Then let's severely curb those township and village enterprises because they represent a potential political threat and invite large foreign multinationals and state-owned enterprises [let's not forget those!] to work our population to the bone at artificially suppressed wage rates, threatening those who complain with serious reprisals up to and including death. Let us also initiate a population control policy designed to improve our dependency ratio for a few decades. As large numbers of workers shift from low-value agricultural work to manufacturing, we will experience … rapid growth! Mind you, getting from here to there will involve destroying an enormous swathe of our present-day GDP. And that sectoral shift from rural to urban work will run out of gas pretty fast, as will the population control policy that will guarantee rapid aging.

Link via Scott Sumner at Money Illusion, who adds: "There's nothing I find more annoying than people who talk about how we need to learn from China's 'success.'  I'm all for learning from other countries, but can we please focus on actual success stories (Denmark, Switzerland, Singapore) and not a country that is much poorer than Mexico."

Reason on Andy Stern and China.

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  1. You forgot to put the last closing quote Scott Sumner’s excellent comment.

    Excellent quote from Reihan that I saw over the weekend (and at Scott’s place).

    Reading The Money Illusion, eh, Brian? Sounds like someone might be a little less of a hard money guy than Tim Cavanaugh.

    1. I’m as hard money as Murray Rothbard, my friend. I just read a lot about monetary policy.

      1. HARD Money (1974):

        Starring John Holmes as Muff-Ray Rothbard.

      2. Ah, an open-minded soul. Very nice.

        1. Sumner, as I’m sure you know JT, for whatever reason of sociology among economists gets talked about/linked to a lot by the GMU economists, which is I’m sure how I first came across him; I started reading him while researching my 2009 feature for Reason on the anti-Fed movement, and quoted him in it; kept up with him ever since.

          1. He has a very interesting viewpoint, and I think he’s mostly convinced me.

            I wasn’t being sarcastic in any way, I hope that was clear. I genuinely am interested in how you came to read him and what you think about his viewpoint.

            1. No, I totally get it JT; I just wanted to defend my goldbug bonafides…

          2. shorter version: he read Tyler Cowen

    2. STOP FOLLOWING ME ON THE INTERWEBZ. I was a market monetarist first, first I say!

  2. Andy Stern and the other union bigwigs are basically crony capitalists. They trade on political influence and the privileges granted by government to their organizations.

    Why shouldn’t they think China is something to be emulated?

    1. That’s charitable. Stern sounds like a fascist to me. Of course, I guess it’s a pretty good name for a fascist.

      1. Fascists and crony capitalist are just flip sides of the same (debased) coin.

    2. They could do something really simple, like compare the PRC to the ROC since the inception of both. Each of these countries started at the same time, with people from the same place. The big difference is freedom, including free markets.

  3. China = Tebow

    1. Tebow? You kidding me? He’s bashed all the time but all the guy ever does is win.

  4. When do the China-worshipers plan to emigrate to their paradise on earth?

    1. They want to drag us down to the level of their shitty Paradise on Earth — why should they move when they’re clearly fated to right the many wrongs of liberty and prosperity on their own soil?

    2. *fingers in ears* lalalalala . . . Not listening!

  5. I’ve noticed that the inner totalitarian in your average “progressive” has come much closer to the surface during the Obama era.

    That scares me a lot more than the fundamentalist nonsense on the right. It’s not so certain that the next Huey Long will be as unsuccessful as the original.

    1. Even though I don’t agree with them politically, at least social conservatives believe in morals.

      While economic liberals do not:

      http://bigjournalism.com/jjmno…..et-so-far/

    2. It’s very concerning. In the past, leftists in the U.S. generally had to either suppress or hide their socialist or even Marxist leanings. Now, they can act more openly. I’m completely amazed at that, given how the facts have so discredited centralized economies.

      1. You’re amazed leftists would ignore facts?

  6. Andy Stern believes that the Chinese economic model is superior to what he calls the “conservative-preferred, free-market fundamentalist, shareholder-only model.”….Andy Stern believes that the United States needs a Chinese-style central plan to flourish, one that will be executed by a streamlined government.

    “That is, something exactly like we have right now, except with rice and noodles!”

    Indeed, those abandoned new cities and malls did not build themselves – that required planning!

  7. streamlined government,

    HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA…

    *deep breath*

    HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA…

  8. “U.S. union overlord Andy Stern”? The guy’s “retired,” retired, I strongly suspect, one step ahead of an indictment. Andy’s about as relevant these days, and as about as powerful, as John L. Lewis. I guess Reihan was really desperate for a column.

    1. Could be, but it seems the WH is interested in his views:
      “Stern has been a frequent visitor to the White House since Obama’s election. […] Between Inauguration Day and February 23, 2011, Stern visited the White House 53 times.”
      http://en.wikipedia.org/wiki/Andy_Stern

    2. Stop mis-spelling my name!

  9. You have to remember that to a certain type of trade unionist leftist, nothing matters but manufacturing employment and transportation employment.

    I don’t even say “manufacturing” and “transportation”, since we have plenty of both of those and have never stopped growing our total domestic product in either area (with recessionary blips being the exception).

    They want to see large numbers of people employed in manufacturing and at fixed transportation assets.

    They’ve grown so desperate for it that they will even overlook that the gross abuses China inflicts on its working class.

    It’s nostalgia for a time when large employment totals in these fields gave labor mouthpieces political and cultural importance.

    Do you think they care about what China had to go through to become a world manufacturing center? Nope. They just see lots of guys wearing work clothes and punching time clocks, and they say, “Me Likey.”

  10. I agree with Andy Stern. The first thing we should do is abolish all unions, because those are not allowed in China.

    Wow, he is an idiot.

    1. “I agree with Andy Stern. The first thing we should do is abolish all unions, because those are not allowed in China.”

      Hey, he’d have a brand new job organizing them…

      1. Followed by a very long prison sentence…if he’s lucky.

  11. I don’t like your attitude.

    1. I know Tom . . . why can’t these peons see the beauty of the Chinese system? I guess we will be two busy guys when we have to write those Reeducation Manuals . . .

  12. Miracle!

    Amazing Pictures, Pollution in China

    October 14, 2009, the 30th annual awards ceremony of the W. Eugene Smith Memorial Fund took place at the Asia Society in New York City. Lu Guang (??) from People’s Republic of China won the $30,000 W. Eugene Smith Grant in Humanistic Photography for his documentary project “Pollution in China.”

    http://www.chinahush.com/2009/10/21/a…..-in-china/

  13. Frank Newman was on our morning radio show discussing his new book “Six Myths that Hold Back America”. He sounded like a ridiculas combination of Krugman and Friedman. Debt doesn’t matter. We need more stimulas and infrastructure spending to creat jobs. China has 40% growth so we need to do emulate them. He actually says that debt is not important because debt is just another form of money and you don’t have to pay back money. Our radio guy asked the simple question about who’s going to buy the debt. He replies that is it’s a closed loop where the financial side get’s money from the sale of debt in order to buy the debt which is a pretty stupid thing to say. He was obviously trying to obfuscate the fact that creating money from thin air devalues it. I wanted to punch my radio. I looked up his bio and it pretty much explains it all. Why did we need bank bailouts?

    http://www.diversionbooks.com/authors/frank-newman

    1. In a few years, all these idiots blowing kisses to the ChiComs will look as silly as the “Japanese hegemony” folks from the ’80s eventually did.

      China is headed for a banking & real estate implosion that will make ours look like a quiet day at the park.

      1. It is already starting to happen. And it floors me that the likes of stern have such short concept of history. Yes China has grown tremendously the last fewdecades, but much of it wasn’t sustainable. Then you look at the US economic system which transformed a backwater colony, and much of the world, from living conditions not much different than those who lived in antiquity to the astounding ones we have today. Our standard if living today would have been inconcievable even to the wealthiest of yesteryear.

      2. India, Japan, South Korea, Taiwan. Those are long-term Asian powers.

        1. India is fairly messed up too. Its growth is another case of picking the low-hanging fruit.

          1. It has serious problems, but it also has completely amazing assets. Beginning with a middle class that’s as big as the U.S. population, and having a comparatively liberal government. In other words, it’s not China, where it’s all about oppression, cheap-ass labor, and theft. And cheap-ass labor.

        2. As is China. They will recover from their impending troubles. But they will simply be one powerful nation among many.

          We seem to be heading towards a time when there isn’t really one preeminent power in the world, especially economically. The post-WWII situation was probably an anomaly, not a sustainable situation.

          1. Well, WW2 obliterated all the European economic powers except the USSR and UK, and both of them sustained heavy damage. Japan was a rising power at the time too and we know what WW2 did to them.

            1. That’s what I mean. The pre-WWII multi-polar world is the “normal” state of affairs. Unless you think WWIII is imminent, in which case we all have much bigger things to worry about.

    2. Podcast of his stupidity if anyone’s interested. Assume facepalm postition ahead of time:)

      http://www.610wtvn.com/player/…..d=21637876

      1. Frank Newman is CEO of Shenzhen Development Bank. Of course he thinks China is great!

        Basically, Newman is just arguing that your dad was completely wrong when he admonished that “money doesn’t grow on trees”. In fact, with a central bank, it is created with even greater ease.

        I wonder, however, whether his comments on US Treasury debt give any comfort to the folks over at the Peoples Bank of China.

        In fact, Newman will be 100% correct until he isn’t. It’s kind of like going all-in in no-limit hold ’em every hand. Eventually, the other players realize you’re bluffing. Then they take all your chips and you have to leave the game.

    3. You know, the European disaster and the lack of any real safe harbor in the East has done more to save the U.S. than anything else. Aside from gold, T-bills and dollars are still seen as a saf(er) investment. And that’s also based on past performance and not on anything we’re doing today, other than retaining our position as the world’s greatest economic power (by far, though you wouldn’t know it from all of the China proponents).

      1. ProLib,

        The fact that we’re still the world’s greatest economic power says two things:

        1) The competition isn’t exactly stiff

        2) Past performance counts for a lot

        1. The biggest and meanest military force of all times counts for a lot as well. You want to price oil in terms of gold: well, suck on this.

      2. The US Dollar is the tallest among the fiat midgets now that SNB has said that it will trim its legs as necessary to shrink with the Euro. That’s not saying much for the USD.

      3. The US Dollar is the tallest among the fiat midgets now that SNB has said that it will trim its legs as necessary to shrink with the Euro. That’s not saying much for the USD.

  14. Your points are meaningless. Unless we start spending 50% of our GDP at the federal level, we are doomed. Like I said in my article the other day, look at Europe – their problem is a lack of sufficient spending as well. But they’ve been at their cheapskate antics for far too long, and now look at them. When America implodes, it will be for the same reasons.

  15. China’s only growing fast because they only opened their economy in the early 80s. Same as in Vietnam, they’re exploding but that’s because they only opened in ’86. There’s some true capitalism going on, but there’s a lot of crony capitalism in Vietnam as well. Huge empty malls in some of the suburbs. This is bound to crash, and it will get worse after a couple of generations have passed and the ones coming up have gotten lazy. In twenty to thirty more years, their growth will flatten out, just like Japan’s did.

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