Lots of, er, us types:
The End of the Win-Win World
Why China’s rise really is bad for America — and other dark forces at work…
A few months ago, I found myself sitting next to a senior EU official who turned out to have read my book. “My job is to prove your zero-sum thesis wrong,” he told me. I replied that, as an author I hoped to be proved right — but as a European and a human being I was hoping to be proved wrong. My lunch companion laughed and said, “That is too dialectical for me.”
It is one of the nice things about the best EU officials that they are happy to talk to their critics, and comfortable using words like “dialectical.” However, I fear that cultured technocrats will not do terribly well in the new era. A zero-sum world may summon up rather darker forces.
LAS, it’s more like the 1950s BC than 1950s AD.
Fiddle >
It’s weird that people can clearly see the poverty, human rights abuses etal in China and still think that somehow sucking up to them is an advantage to us.
I’ve travelled northern China fairly extensively and the poverty is simply third world, no other way to put it. People still live in caves in allot of areas. Somehow all this idealistic greatness that China is supposed to have is a model for us to shoot for is beyond me. Need a kidney? No problem the waitlists are short for the right price.
In reality China was a feudal junkpile begrudgingly comparable to 13th century Europe without the grand cathedrals by the time the Japanese invaded in WW2. Their modern innovation was indeed due to western corporate/ government greed and our failure to protect our own economy in a long term sustainable way. If we didn’t give it to them, they simply stole it. It continues today with corporate and military espionage from high-tech equipment, to knock-offs like Gucci handbags, watches, camera’s, and lead based toothpaste.
Me No Dhimmi >
“Imagine how desperate you would be if you had to be self sufficient in shelter, food and clothing. It’s no different when it comes to the global division of labour.”
Desperate enough that +300 million American’s can’t fend for themselves, I guess. That must be why it’s such a good thing bringing in the Islamic Middle East, to fill those voids and help us out.
cgh >
“…it’s blindingly apparent that none of them understand what socialism is, anything about Chinese history, or how economic systems work.”
That’s a fairly broad and presumptuous statement.
Please elaborate as where socialism has worked so well in the past?
What exactly is it about Chinese history that makes it such a great and wonderful friend for us to embrace? Have you been to China? I have, unlike the beautiful National Geographic photos of the simple life; it is a craphole once outside of the major smog choked cities. Many people still live in caves in the parts China I’ve travelled, yet somehow it is this wondrous utopia built by Mao, and the necessary +60 million murders to achieve.
cgh said: “Phantom, remember that along with all these exports China’s internal economy is growing hugely.”
It is, but there are some very serious internal problems that the Chicom government is trying very hard to not talk about.
We know about the appalling water and air pollution in China. That’s a serious problem, because it has huge effects on their ability to feed their own population. How long can they keep doing that before something breaks?
Most of the raw materials they use come from elsewhere. That’s a fine balancing act on a scale as large as they are doing it, their only real value added is cheap labor, since materials and shipping costs don’t change except upward. How long will it be cheaper for Ikea to make stuff out of imported particle board in China and then ship it back to Europe?
Large numbers of common people in China are investing their savings in real estate. There are cities being built where nobody lives. How long is that going to last?
A large part of the Chinese advantage is lack of regulations. Western companies can quickly build a factory in China that regulators in Western countries will take forever to approve. Example, Intel built their new chip fab in China because there was literally no amount of money in the whole world that could get it built in Silicon Valley. How long will that last, when Western countries are going broke the way they are?
I think the answers to many of these questions is “not long”. So I think maybe all these people proclaiming China will take over the world economy are probably massively wrong. China is run by even bigger a-holes than Europe is, and the potential for disaster is IMHO substantial.
But then I’m just a PT, so I could be wrong.
Dealing with the lawless just means you will be fleeced. Or poisoned…whichever comes first.
You have the option of not buying products from the lawless.
You have the option of not eating food from the lawless or any food which might contain products from the lawless.
The Communist Chinese didn’t get wealthy because they were “smarter” or better economists than everyone else. They got filthy rich because they are greedy lying cheats and thieves.
The Western Capitalists didn’t get wealthy because they were “smarter” or better economists than everyone else. They got filthy rich because they are greedy lying cheats and thieves.
It’s not economically feasible to produce some products in North America. The labor and benefits costs in North America are prohibitively expensive and North American environmental regulations which keep our air, water and land from being heavily polluted don’t exist in Asia, so nearly all of the electronics, solar panel and wind turbine production is over there where they can pollute and keep their production costs low. The electricity to run their factories comes from dirty coal and the factories dump pollution into the environment. They don’t care if some people die from pollution, they’ve got more people than they need.
cgh –
You make a comment about ” military territorial expansion ”
That statement, whatever its meaning to you, sidesteps the issue that China under socialism has indeed waged aggressive war: China was in a border war with India a few decades back, and China launched an offensive war against the US in Korea. To this day, it is official policy to seek re-unification with Taiwan using any means necessary, and treats it as its chattel.
China is rapidly building a military that probably has achieved more than parity with the US, the sole counterweight in East Asia to China.
You claim an understanding of economic systems. The question is larger than that: Trade with China is not win-win because one of the side effects of the trade is the arming of China. A simple calculation based on cost of goods is ridiculously narrow-sighted and deeply undercounts the cost of such trade becaust it strengthens a hostile state.
A Ricardian analysis of pecuniary gains from trade is the starting point, not the endpoint of judging the net effect of mass trade with China.
North of 60 >
“The labor and benefits costs in North America are prohibitively expensive..”
There go any union friends you may have had.
I think what cgh and others are trying to convey and convince is that if we wish and support them hard enough, the Chinese will form a utopian socialist government, force a clean up their cultural corruption, the environment, pay high NA union wages and benefits, turn their military into a peace keeping force, trade fairly without a devalued currency or product, and dance merrily hand in hand with us as we explore the stars together.
Heh heh heh.
The Western Capitalists didn’t get wealthy because they were “smarter” or better economists than everyone else. They got filthy rich because they are greedy lying cheats and thieves.
Oh, pish-tosh. Your error is a simple one of logic. You have asserted all western capitalists (S) are rich because they cheat, lie, and steal (P). If you had said SOME S is P, I would agree with you. But it was Western countries who, slowly and fumblingly to be sure, developed democracy. It was Western society that, slowly and fumblingly, developed the scientific method. The Chinese knew about gunpowder, steam, and smelting long before the West, but it was the West that developed engines, steel, and yes, bullets, before and better than anyone else. The Chinese were still treating disease with pins when the West was developing anatomy, surgery, sterilization, etc.
The West got to where it is because we created both a learning system that encouraged innovation, and a government/economic system that rewarded it. Does it have weaknesses? Of course. Has it been misused and abused by criminals, dressed variously in black masks and pinstripes? Of course. IS IT STILL BETTER THAN ANY OTHER SYSTEM CURRENTLY PROPOSED? Hell, yes.
Of course, we don’t have capitalism in North America and Western Europe right now. We have cronyism, which is loathsome in every way.
Ron Paul 2012.
I got turned off by the author as soon as he started describing economics as a zero-sum game. Also, his description of the European mega-nanny state as a “win-win” situation is laughable.
cgh – lots of really good points.
The only way we’re going to get out of the economic mess that we’re in is through economic growth or hyperinflation which will wipe out all savings and just leave people with the material things that they own. Protectionism is a sure way to get into the hyperinflation mode of solving our problems.
Human creativity is one of the solutions, but probably more important is the removal of bureaucratic regulation which has the same effect on the US economy as atherosclerotic plaque in human arteries. Obozo is in the position of someone with a 95% blocked coronary artery who refuses bypass surgery because they want to try “natural” therapies (an analogy to the US governments decision on the Keystone pipeline).
All that China has now is a lot of cheap labor and we have the creative edge. The solution to our economic problems is found not in boycotting Chinese products but starting a ship building program, loading the ships up with our bureaucrats and watermelons and sending them on a one-way trip to China or whatever other country whose economy we want to destabilize. There’s a reason that manufacturing is moving overseas and it’s insane over-regulation in N. America. That is the primary reason for the decline of the US economy. The other is the insane idea, held by a worrisome fraction of the population, that a degree in feminist poetry (or its equivalent) is of any use whatever.
The way things are going now, China is going to be the predominant country in space soon and the US is going to be a third-world basketcase with occasional power from windmills and a good job, for those lucky enough to get one, will be scraping bird shit off solar panels.
Small C:
“China was in a border war with India a few decades back”
Yes indeed. India started it. But then Nehru was an idiot as we all know.
“China launched an offensive war against the US in Korea.”
Yes indeed. And so would the US if the Soviet Union invaded Canada. And it would call it correctly purely defensive in nature.
“…a military that probably has achieved more than parity with the US”
It cannot project power beyond its own immediate region. And its construction plans, particularly naval, show no signs of such. In particular, it hasn’t committed to any SSBMs, and those are the things which really count. It has essentially no capability to project power beyond eastern Asia. And its defence expenditures are a fraction of those of the US on a per capita basis.
So why the concern over China’s military? It’s structured and equipped only for regional defence, not global power projection.
Economic matters are indeed not the only basis for evaluating relations between nations. But there is relatively little evidence to justify paranoia about China’s intentions. Post-Mao, it’s tolerated an openly hostile government in Vietnam for the past 30 years. For all the sabre-rattling with Taiwan, there’s no two countries in the world that have more bilateral agreements betwen them than China and Taiwan.
Fact is, China, like the western world has grown up. It’s now recognized that territorial conquest simply doesn’t work and doesn’t generate any benefits, and that’s been the case for at least a century now. The last government leader to make military expansion a winning proposition was Bismarck.
Whatever the Chinese are, they are not stupid.
Loki, your analogy of blocked arteries is true for just about everything with respect to the strangling of creativity and development. The problem that you’ve correctly identified is that there have been very, very few cases in history were a nation has successfully and signficantly reformed bureaucratic inefficiency. Mostly the only cases where it has occurred has been from the literal extermination of the ruling class.
The only recent example I can think of is revolutionary France. With Napoleon, the country got very efficient but very ruthless government, but I don’t think any of us agrees that bonapartism is a solution.
I agree with you that China’s principal edge is cheap labour. It’s not going to stay that way, given the huge number of highly talented scientists and engineers that are emerging from China’s universities and technical colleges. And while China surges ahead, we remain mired in the same ridiculous behaviours that have led us to this pass: useless academic “disciplines”, and debt spending on consumables.
I just wish the Cninese were silly enough to accept your suggestion of boatloads of watermelons. But I think they know about Greeks bearing gifts.
KevinB: right in every word. Cronyism is NOT capitalism. It seems more like the favouritism and court politics of 18th C Europe.
Loki, “The solution to our economic problems is found not in boycotting Chinese products but starting a ship building program, loading the ships up with our bureaucrats and watermelons and sending them on a one-way trip to China or whatever other country whose economy we want to destabilize.”
That is one of the best ideas I have read in a long time.
My comment:
The Western Capitalists didn’t get wealthy because they were “smarter” or better economists than everyone else. They got filthy rich because they are greedy lying cheats and thieves.
is of course pointedly invalid, just like the comment I quoted:
The Communist Chinese didn’t get wealthy because they were “smarter” or better economists than everyone else. They got filthy rich because they are greedy lying cheats and thieves.
Both are logically invalid for the same reason:
You have asserted all Communist Chinese (S) are rich because they cheat, lie, and steal (P).
Unfortunately for some it takes intelligence to understand that there is no difference. Idiots who fail to grasp it take quotes out of context to further their agenda.
One big mistake in thinking about an economy is to regard it as some kind of organic entity that needs to be catered to or cared for. It isn’t. An economy is the sum total of all acts of production, trade and consumption performed by individuals. Voluntary trade for mutual benefit is the foundation of capitalism. It’s supposed to be a win-win situation, because individuials are free to use their judgment with regard to the relative value to themselves of the items up for trade. The only thing that can foul up the economic works is government intervention that overrides the value judgments of individuals. Taxes, regulations, subsidies and various distortions can prompt individuals to act in a way that wastes and depletes savings rather than building them up. This is the problem. But that ain’t “capitalism”.
The author makes the same mistake, although he’s far from the only one. One sentence of the article reads, “What was good for China would be seen as bad for America. What was good for Germany would be bad for Italy, Spain, and Greece.”
Economies are about INDIVIDUALS using their minds. Forget whether something is “good” or “bad” for America, China, Greece, etc. What is good for the INDIVIDUAL is freedom to judge economic values, and to trade based on those judgments.
From the linked article: “At Davos, this year, the mood is more questioning — with numerous sessions on rethinking capitalism and on the crisis in the eurozone.”
The only rethinking of capitalism that needs to be done is in removing the long list of impediments to it.
cgh >
“And while China surges ahead, we remain mired in the same ridiculous behaviours that have led us to this pass:”
Oh no, now you make it seem like a bad thing that China is surging ahead of us. I think you can take solace in the fact that once the brilliant and compassionate Chinese become the global masters they will most definitely have the compassion to pull us up out of the mire we put ourselves in.
After all we would do it for them.
“I agree with you that China’s principal edge is cheap labour” – cgh
Stupid us, again we could learn something from that.
cgh @ 9:53 p.m.: “I too agree with Newt’s vision of space. We are always at our best when we’re looking at a big new project that opens new frontiers and captures the imagination. If we want it badly enough, we find a way.”
Nonsense! Who’s “we”?
“big new project” = socialism
eh? >
Goodbye, don’t let the door hit you on the way out. Write sometime, we’d be interested on how your doing, really.
I’ll bet your Chinese lady will be glad to be home.
I’m still waiting for the “Ron Paul 2012” KevinB to explain why Ron Paul suddenly supports cgh in globalization and socialism.
The last time I checked, Ron Paul seemed to support ending big government, securing borders and using tariffs among other things to fund the limited government after eliminating personal income taxes.
http://www.ronpaul.com/on-the-issues/taxes/
Then cgh, jumps on the cheerleader bandwagon “KevinB: right in every word” 12:07am
Talk about a confusing argument.
It’s possible to support globalization without supporting socialism. In fact, last time I looked, it’s the leftists who are decrying globalization.
From your own link: “To provide funding for the federal government, Ron Paul supports excise taxes, non-protectionist tariffs”. Here’s a clue: “non-protectionist tariffs” means taxes on imports that are similar to the excise taxes on locally produced goods, not artificial trade barriers, as many people assume they mean.
It’s only confusing when you lack basic understanding, conflate things that are not related, attribute to others stances they adamantly haven’t taken, and show that you’re incapable of interpreting a simple statement correctly. Why don’t you run along and discuss things with fiddle? He seems to be on your level.
The US, and especially Canada, need to stop the flow of millions in foreign aid each year to China.
The US gave $12 million in foreign aid to China in 2011. Canada gave $36 million, three times the amount.
This money could be better spent at home. China certainly does not need it.
China is rapidly building a military that probably has achieved more than parity with the US,
WRONG. China has one (1)aircraft carrier. America has multiple aircraft carriers that are all larger and more capable.
“creativity will always turn things around, but who says it will be us that are the creative ones? Odds are on the side of India and China,”
Posted by: cgh at January 27, 2012 6:37 PM
I’d have to bet on India. China’s time is winding down. It was creating when it should have been doing some procreating.
Knight, the fact that we are mired has nothing to do with China. It’s our own bad choices which put us here. Why do you reject the notion that we ourselves are responsible for what we do?
Read your own words and heed them:
“Idiots who fail to grasp it take quotes out of context to further their agenda.”
KevinB>
“Why don’t you run along and discuss things with fiddle? He seems to be on your level. “
As opposed to your level on the pom pom squad.
“It’s only confusing when you lack basic understanding, conflate things that are not related, attribute to others stances they adamantly haven’t taken, and show that you’re incapable of interpreting a simple statement correctly.” – KevenB
The best and brightest self analysis I’ve seen you write yet. You’re finally making some progress.
cgh >
cgh #1 – “Read your own words and heed them:
Idiots who fail to grasp it take quotes out of context to further their agenda.””
Please reference where I made this quote.
cgh #2 – “Why do you reject the notion that we ourselves are responsible for what we do?”
“now that we have sold off all of our technologies and patents” – K99 @ 2:06pm
“We gave it away” – K99 @ 2:06pm
“and our failure to protect our own economy in a long term sustainable way” K99 10:18pm
Now go back to cgh #1 and repeat to yourself.
cgh –
“In particular, it hasn’t committed to any SSBMs”?
The Chinese SSBMs you claim don’t exist are apparently in their 2nd generation of development ( from Jane’s Defense):
JL-2 (CSS-NX-5) (China), Offensive weapons
Type
Inter-continental-range, submarine-based, solid-propellant, single warhead ballistic missile….developed as a second-generation Submarine-Launched Ballistic Missile (SLBM) with a longer range than JL-1.
And China’s truculent support of Iran does not indicate maturity but rather the attitude: the West and their interests be damned.
By the way, you forgot to excuse the Chinese invasion and ( continued ) subjugation of Tibet.
I don’t know why we are so concerned about the Chinese. Everything I bought that was made in China was cheap garbage. They cant even make a hair trimmer that works. Are they not the same people who sold us bad cat food, bad gyprock, etc…everything they make is full of chemicals, etc. I for one will not buy anything, especially food, that was Made in China.
China is a bubble that is going to break in the near future. Wait until their economy goes in the tank and all these people who are working in their big cities demand more from the government….lots of unrest.
Oh by the way did I mention……swine flu, bird flu…….just thinking.