After winning the Chinese Revolution, Chairman Mao approached the microphone in Tian An Men Square to make a victory speech to the assembled victorious masses. He said "The Chinese people have stood up." Indeed they did. Communism is an esoteric system to the Chinese, and the Maoists rather stumbled forward for a few decades after 1949 until the indomitable Deng Xiaoping took the reins.
The Hamiltonians in the USA bet their capitalist system would best Chinese communism, and the USA powers that be had a plan: trade worthless pieces of paper for Chinese manufactures, and trap the Chinese into wage slavery to the USA. Deng Xiaoping looked at Hong Kong and Singapore as models and for advice, and came up with a better idea. Free market communism. OK, that sounds weird, but so is "free market capitalism."
With no real effective legal structure, out of the chaos came spontaneous order in China, and wealth and freedom. The USA bet that China would be trapped was ill-advised. Now China has moved (for one month) into the world's largest exporter and even the Chinese military is savvy enough to spot a way to judo-flip the American arm-bar on the Chinese economy.
With no real effective legal structure, out of the chaos came spontaneous order in China, and wealth and freedom. The USA bet that China would be trapped was ill-advised. Now China has moved (for one month) into the world's largest exporter and even the Chinese military is savvy enough to spot a way to judo-flip the American arm-bar on the Chinese economy.
China has grown in new ways now, much more sure footed, and presenting a better offer around the world than USA will offer. We do not compete on cheap labor, we compete on cheap management. When the powers that be want their resources exploited, USA takes far more than the Chinese demand, because USA management charges far more (think Blackwater, Bechtel, etc).
USA may have had an edge technologically, but our confident arrogance that China would be our factory floor caused us to pass that technology on.
The path we are on practically guarantees a conflict with China. If we were to get rid of the Fed, get rid of the hundreds of thousands of rules that hamstring small business, get rid of IP rights and restore the power to contract and property rights in USA, we could have both prosperity and peace.
China and USA have different roles in the world, and the hamiltonian assertion we are the world's policeman puts us in direct and unnecessary conflict with China (since our "police work" usually involves invasion for oil.)
That oil is for sale, which is a dirt cheap way to acquire it. China has plenty of problems, but their people save and are willing to work. Two huge advantages.
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