Mish is noting debate is China is heating up as the economy there softens. Here are some excerpts from a typical article with the typical argument:
What I would note is that the problems do not come from a market economy, but from the elements of the economy which are not market-based. State owned enterprises, in my experience, are the most trustworthy entities to trade with. It may be best to corporatize them (as opposed to privatize, a mistake Russia made), but also keep in mind within them they have the discipline to produce clean products in fair dealing.
China may have SOE (state-owned enterprises) but USA has SDEs (state directing enterprises). Several Nobel Laureates have noted that in capitalism the regulated own the regulators. Big Pharmacy tells Big Government what to do in USA. Whereas with the communists you might get fair dealing, you won't with Big Business in USA.
I'd say there is no ready-made civil society to support a free market in USA either. If Ron Paul won the election, there would be too few people to fill in the gap between what a free market could produce in time before the SDE's (state-directing enterprises) were dismantled.
His final call is for the emergence of common law, which history shows is the fairest and soundest kind of law. The best governments adopt that kind of law. China's legal system is still evolving, so it has a chance.
Also, at over 2000 years old, China has the Tang Dynasty as a cultural precedent to study and learn from. And China has Hong Kong today as an example. USA has neither resource to guide it out of the troubles it experiences. It looks to war to solve problems.
The deterioration of the social ecosystem comes from the growing corruption of uncontrolled power. In the study of the process of China's transformation to a market economy, we have faced the fundamental issue of how to regard the costs and benefits of reform. Questions arise, such as: Where does the motivation for reform come from? Who benefits the most from reform? Who bears the heaviest cost? Talk of the "labor pains" of reform and the unavoidable "costs" of reform has already lost its persuasiveness because the same people are always bearing the costs and the same people are always receiving the benefits.
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Power is becoming too formidable and cruel. It is out of control, and without limits. It has kidnapped society and strangled reform. Facing this, finding a solution is a matter of vital importance. In a situation where special interest groups have choked off the possibility of various types of progress, building a just society and enacting reform is difficult. Moreover, there is not a ready-made civil society waiting to settle into the void.
We need to realize several things. The impetus for reform comes from society, not from authority, and reform within the system is produced under the force of social strength. Fair and just rules are formed by interaction between various forces. Civil society is produced by the participation of citizens. Extrication from stagnation and the restoration of social vitality can only come from the start of civil consciousness and civil action. Only by empowering society and enlightening citizens can the strength to reform be developed.
What I would note is that the problems do not come from a market economy, but from the elements of the economy which are not market-based. State owned enterprises, in my experience, are the most trustworthy entities to trade with. It may be best to corporatize them (as opposed to privatize, a mistake Russia made), but also keep in mind within them they have the discipline to produce clean products in fair dealing.
China may have SOE (state-owned enterprises) but USA has SDEs (state directing enterprises). Several Nobel Laureates have noted that in capitalism the regulated own the regulators. Big Pharmacy tells Big Government what to do in USA. Whereas with the communists you might get fair dealing, you won't with Big Business in USA.
I'd say there is no ready-made civil society to support a free market in USA either. If Ron Paul won the election, there would be too few people to fill in the gap between what a free market could produce in time before the SDE's (state-directing enterprises) were dismantled.
His final call is for the emergence of common law, which history shows is the fairest and soundest kind of law. The best governments adopt that kind of law. China's legal system is still evolving, so it has a chance.
Also, at over 2000 years old, China has the Tang Dynasty as a cultural precedent to study and learn from. And China has Hong Kong today as an example. USA has neither resource to guide it out of the troubles it experiences. It looks to war to solve problems.
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