Is China’s Version of Capitalism Winning?
Steven Rattner
5-6 minutes
President Trump’s attacks on Chinese trade practices may be garnering the headlines, but underpinning that dispute lies a more consequential struggle, between liberal democracy and state-directed capitalism.
Of late, it’s a competition in which the Chinese approach has been delivering the more robust economic result. Indeed, implicit in the ferocity of the Trump administration’s attacks on China’s protectionism is the success of that nation’s economy.
Skeptics notwithstanding, China’s model, which has brought more people out of poverty faster than any other system in history, continues to flourish, as I’ve seen firsthand in a decade of regular visits. Meanwhile, liberal democracy — the foundation of the post-World War II order — is under pressure, most significantly for having failed in recent years to deliver broadly higher standards of living.
Here’s one stark example: Last week, Congress finally managed to pass appropriations legislation for the current fiscal year — six months after the budget year began. The 2,232-page bill was cobbled together in a frenzy, without any discussion of national priorities or careful examination of the expenditures.
In contrast, China is driving hard toward its “Made in China 2025” plan, an ambitious set of objectives to upgrade Chinese industry so that, among other things, it can manufacture its own high-value components, like semiconductors. And while we retreat internationally, China’s One Belt One Road Initiative will physically connect China to more than 65 percent of the world’s population.
If you think we have trade problems with China now, just wait.
To be sure, China is a long way from overtaking the United States. Its gross domestic product per person is just $9,380, compared with $61,690 in the United States. Less visible than the sleek modern skyscrapers that now dominate China’s cityscapes are the 700 million people — about half of China’s population — who still live on $5.50 per day or less.
And China’s mercantilist trade practices are indefensible, particularly its use of non-tariff barriers to discourage foreign companies from coming to China, its insistence that non-Chinese companies share their technology, its outright theft of intellectual property and on and on.
That said, I’m confident that China’s mixed system would have produced formidable growth even without these predatory practices. As China marches forward, Washington feels like it’s standing still.
Perhaps the only policy area on which President Trump and the Democrats agree is the need to fix the nation’s crumbling infrastructure. And yet, 14 months after the president was inaugurated, nothing has happened (except for the release of a plan that was quickly derided).
For its part, China continues to build airports, subway systems, renewable-energy facilities and the like at a torrid pace. Even its longstanding pollution problem is being addressed. In the past four years, China has succeeded in cutting concentrations of one pollutant — fine particulates — by 32 percent, roughly what it took the United States 12 years to achieve after passage of the Clean Air Act in 1970.
Next up, artificial intelligence. In mid-2017, China announced a plan to become a global leader in artificial intelligence by 2030, sending shudders through American policy circles. One research report estimated that A.I. could add 1.6 percentage points to China’s growth by 2035.
At the moment, the United States remains the world leader in A.I., and our scientists are working hard to achieve further advances. But from the Trump administration: silence, notwithstanding a parting warning and a call to arms from President Barack Obama’s team.
As a capitalist, I’ve never believed in excessive government intervention in the economy. One of America’s greatest strengths has always been its flourishing private sector. But in a complex, global economy, the public sector should play an important role, and ours just isn’t.
China, despite its Communist heritage, understands the benefits of incorporating a robust free-enterprise element. Beijing bustles with internet entrepreneurs. Venture capitalists are pouring vast sums into a dizzying array of start-ups, including in prosaic industries like retailing. And an increasing number of “national champions” are expanding beyond China’s borders.
Don’t get me wrong. I’m not suggesting that we rewrite our Constitution to emulate China. And I certainly understand the loss of freedom and civil liberties under the Chinese system. But that doesn’t mitigate the need for us to get our government to perform the way it did in passing the New Deal and Lyndon Johnson’s Great Society.
When Russia launched its first Sputnik satellite in 1957, our response was to redouble our efforts and win the race to the moon. While the merits of punishing China for its unfair trade practices are strong, that’s hardly the most important reaction to its extraordinary economic success.
Pentru biografia autorului, dati click aici: https://en.wikipedia.org/wiki/Steven_Rattner
Steven Rattner
5-6 minutes
President Trump’s attacks on Chinese trade practices may be garnering the headlines, but underpinning that dispute lies a more consequential struggle, between liberal democracy and state-directed capitalism.
Of late, it’s a competition in which the Chinese approach has been delivering the more robust economic result. Indeed, implicit in the ferocity of the Trump administration’s attacks on China’s protectionism is the success of that nation’s economy.
Skeptics notwithstanding, China’s model, which has brought more people out of poverty faster than any other system in history, continues to flourish, as I’ve seen firsthand in a decade of regular visits. Meanwhile, liberal democracy — the foundation of the post-World War II order — is under pressure, most significantly for having failed in recent years to deliver broadly higher standards of living.
Here’s one stark example: Last week, Congress finally managed to pass appropriations legislation for the current fiscal year — six months after the budget year began. The 2,232-page bill was cobbled together in a frenzy, without any discussion of national priorities or careful examination of the expenditures.
In contrast, China is driving hard toward its “Made in China 2025” plan, an ambitious set of objectives to upgrade Chinese industry so that, among other things, it can manufacture its own high-value components, like semiconductors. And while we retreat internationally, China’s One Belt One Road Initiative will physically connect China to more than 65 percent of the world’s population.
If you think we have trade problems with China now, just wait.
To be sure, China is a long way from overtaking the United States. Its gross domestic product per person is just $9,380, compared with $61,690 in the United States. Less visible than the sleek modern skyscrapers that now dominate China’s cityscapes are the 700 million people — about half of China’s population — who still live on $5.50 per day or less.
And China’s mercantilist trade practices are indefensible, particularly its use of non-tariff barriers to discourage foreign companies from coming to China, its insistence that non-Chinese companies share their technology, its outright theft of intellectual property and on and on.
That said, I’m confident that China’s mixed system would have produced formidable growth even without these predatory practices. As China marches forward, Washington feels like it’s standing still.
Perhaps the only policy area on which President Trump and the Democrats agree is the need to fix the nation’s crumbling infrastructure. And yet, 14 months after the president was inaugurated, nothing has happened (except for the release of a plan that was quickly derided).
For its part, China continues to build airports, subway systems, renewable-energy facilities and the like at a torrid pace. Even its longstanding pollution problem is being addressed. In the past four years, China has succeeded in cutting concentrations of one pollutant — fine particulates — by 32 percent, roughly what it took the United States 12 years to achieve after passage of the Clean Air Act in 1970.
Next up, artificial intelligence. In mid-2017, China announced a plan to become a global leader in artificial intelligence by 2030, sending shudders through American policy circles. One research report estimated that A.I. could add 1.6 percentage points to China’s growth by 2035.
At the moment, the United States remains the world leader in A.I., and our scientists are working hard to achieve further advances. But from the Trump administration: silence, notwithstanding a parting warning and a call to arms from President Barack Obama’s team.
As a capitalist, I’ve never believed in excessive government intervention in the economy. One of America’s greatest strengths has always been its flourishing private sector. But in a complex, global economy, the public sector should play an important role, and ours just isn’t.
China, despite its Communist heritage, understands the benefits of incorporating a robust free-enterprise element. Beijing bustles with internet entrepreneurs. Venture capitalists are pouring vast sums into a dizzying array of start-ups, including in prosaic industries like retailing. And an increasing number of “national champions” are expanding beyond China’s borders.
Don’t get me wrong. I’m not suggesting that we rewrite our Constitution to emulate China. And I certainly understand the loss of freedom and civil liberties under the Chinese system. But that doesn’t mitigate the need for us to get our government to perform the way it did in passing the New Deal and Lyndon Johnson’s Great Society.
When Russia launched its first Sputnik satellite in 1957, our response was to redouble our efforts and win the race to the moon. While the merits of punishing China for its unfair trade practices are strong, that’s hardly the most important reaction to its extraordinary economic success.
Pentru biografia autorului, dati click aici: https://en.wikipedia.org/wiki/Steven_Rattner
Steven
Lawrence Rattner (born July 5, 1952) is an American financier who
served as lead adviser to the Presidential Task Force on the Auto
Industry in 2009 for the Obama administration.[1] He is currently
Chairman and Chief Executive Officer of…
en.wikipedia.org
Comments
Precar Roman Cu
cate mii de ani este mai veche civilizatia chineza, fata de cea
americana ? Vizitati Walmat ! Mirositi (la propri!) apa raului
Missisippi !Va trebui sa ne obisnuim ca "sa lasam" in urma ceea ce este
irelevant! Satisfacerea noii clase sociale in formare - PRECARIATUL
GLOBAL este problema! Si evitarea unui nou razboi mondial !
Prospectiv A-z .
Laura Philips Los Angles
The bottom line: the rich and powerful can't deny economic dignity to the majority of their fellow humans without things eventually taking a very dark turn.
Philip Cafaro Fort Collins Colorado
This isn't a backlash against "liberal democracy." It's a backlash against trade and immigration policies that don't benefit the average citizen.
Glassyeyed Indiana
This is not the Post-World War II order that was put in place 70 years ago, this one started with Reagan and Thatcher and their support for "trickle down" economics - basically coddling the rich and beggaring the poor. That unleashed a virulent form of unregulated capitalism that seems hell-bent on proving Marx right.
The "surplus value" that capitalists extract from labor is not really surplus at all, it's simply exploitation by the rich and powerful. We know that mixed economies work best for the majority of people, but some capitalists can never get enough. If we refuse to recognize that fact and continue to let them ride roughshod over working people, capitalism will fall and deserves to do so.
Should we return to true Post-World War II policies - as Bernie Sanders and other progressives have advocated - we might be able to pull ourselves back from the brink.
Belasco Reichenbach Falls
What all this handwringing about the ebb of the post WWII liberal consensus constantly omits is the hard fact that the US has evolved in the last 25 year or so years into a de facto plutocracy. It is no longer in the real sense a democracy or even a republic. (See Princeton Gilans Page study and others.) The American people know this. They feel it in their bones and at the ballot box. Dem or GOP they know they will get more of the same when it comes to the important economic/financial policy questions and the hugely unpopular all war all the time foreign policy. They will not get universal medical care, cheaper pharmaceuticals or an end to profitable wars etc.. These are off the table. Admitting the US is a de facto plutocracy with a dangerous OCD level compulsion for military intervention both overt and convert and pure national interest motivated meddling abroad would be a great start to addressing these problems. Denying this reality only makes things worse. Income inequality will increase and the bloody US military footprint so profitable for the sacrosanct military industrial complex (Any real coverage on that coming any time soon? I didn't think so.) will continue to spread around the world. (Hello Africa and Asia!) An amoral plutocratic military super power focused on making the world safe the plutocracy and its business interests around the world was not what the framers of the constituion were aiming for. Yes indeed. History was not supposed to turn out this way.
JD Ripper In the Square States
(Austerity for the masses while the perpetrators of the 2008 economic meltdown were allowed to escape prosecution and allowed to get even richer while the world was spinning out of control.)
+
(Waves of migrants escaping a destabilized Middle East and Islamic Africa in part brought about by an ill advised invasion into Iraq.)
=
Chaos in the Western Alliance.
In short, Economic Deregulation favoring Wall Street and Military Adventurism for Oil is a recipe for destabilizing the foundations of democracy. The only people who benefit are the wealthy.
https://www.nytimes.com/.../busi.../nato-european-union.htmlManage
Laura Philips Los Angles
The bottom line: the rich and powerful can't deny economic dignity to the majority of their fellow humans without things eventually taking a very dark turn.
Philip Cafaro Fort Collins Colorado
This isn't a backlash against "liberal democracy." It's a backlash against trade and immigration policies that don't benefit the average citizen.
Glassyeyed Indiana
This is not the Post-World War II order that was put in place 70 years ago, this one started with Reagan and Thatcher and their support for "trickle down" economics - basically coddling the rich and beggaring the poor. That unleashed a virulent form of unregulated capitalism that seems hell-bent on proving Marx right.
The "surplus value" that capitalists extract from labor is not really surplus at all, it's simply exploitation by the rich and powerful. We know that mixed economies work best for the majority of people, but some capitalists can never get enough. If we refuse to recognize that fact and continue to let them ride roughshod over working people, capitalism will fall and deserves to do so.
Should we return to true Post-World War II policies - as Bernie Sanders and other progressives have advocated - we might be able to pull ourselves back from the brink.
Belasco Reichenbach Falls
What all this handwringing about the ebb of the post WWII liberal consensus constantly omits is the hard fact that the US has evolved in the last 25 year or so years into a de facto plutocracy. It is no longer in the real sense a democracy or even a republic. (See Princeton Gilans Page study and others.) The American people know this. They feel it in their bones and at the ballot box. Dem or GOP they know they will get more of the same when it comes to the important economic/financial policy questions and the hugely unpopular all war all the time foreign policy. They will not get universal medical care, cheaper pharmaceuticals or an end to profitable wars etc.. These are off the table. Admitting the US is a de facto plutocracy with a dangerous OCD level compulsion for military intervention both overt and convert and pure national interest motivated meddling abroad would be a great start to addressing these problems. Denying this reality only makes things worse. Income inequality will increase and the bloody US military footprint so profitable for the sacrosanct military industrial complex (Any real coverage on that coming any time soon? I didn't think so.) will continue to spread around the world. (Hello Africa and Asia!) An amoral plutocratic military super power focused on making the world safe the plutocracy and its business interests around the world was not what the framers of the constituion were aiming for. Yes indeed. History was not supposed to turn out this way.
JD Ripper In the Square States
(Austerity for the masses while the perpetrators of the 2008 economic meltdown were allowed to escape prosecution and allowed to get even richer while the world was spinning out of control.)
+
(Waves of migrants escaping a destabilized Middle East and Islamic Africa in part brought about by an ill advised invasion into Iraq.)
=
Chaos in the Western Alliance.
In short, Economic Deregulation favoring Wall Street and Military Adventurism for Oil is a recipe for destabilizing the foundations of democracy. The only people who benefit are the wealthy.
https://www.nytimes.com/.../busi.../nato-european-union.htmlManage
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