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Unlike liberal democracies, Beijing has more room to act in crisis. China has extractive institutions that will ultimately be a growth limiting factor, but I d

Unlike liberal democracies, Beijing has more room to act in crisis. China has extractive institutions that will ultimately be a growth limiting factor, but I don't see it limiting their crisis responses. * There will be no political gridlock between left and right that can be solved only with half measures. Decisions are done in small groups of 30 people at most, with several hundred people having some influence. * They don't have ideological fear of meddling with the markets or private property. It's all about being practical. Beijing can make mistakes when handling the crisis. After they realize their error, they can take as big hammer as needed to fix it.

yxhuvud 8y ago
The problem for China won't be dealing with private property, it will be dealing with government owned property. Just because the average Joe doesn't get to vote doesn't mean the system isn't geared to preserve the status quo. I think you are quite naive if you think vested interests and political corruption is a smaller problem than having to respect private property.
- Nokinside 8y ago
  The political elite is relatively small number of people. When the political power is not widely distributed, you can take care of the elites without hurting the economy. If the top 100,000 power players and their families are shielded from the fallout, how much will that cost? Few $100 billions or so?
  - pas 8y ago
    Decision-making processes, especially in times of crises are rarely presenting themselves so supra-rationally. Meaning, that usually internal struggles will prevent the participants to be so generous, cool headed and foreward thinking. Sure, the Politburo / Central Committee is small, but they still represent hundreds of millions of people, many different regions, cities, to a degree even many ethnic groups. Usually shielding the elites does not show up as a goal, and differing circumstances of those can easily lead to serious opposition against the generally useful solutions. We shall see how the current regime handles whatever history throws at them.
  - tsuabing2 8y ago
    That’s naive and uninformed. Many Chinese political elites not on the side of Xin jing ping have been jailed and killed in recent years under the guise of corruption. Many corporate elites have been quarantined, jailed or killed, such as head of HNA and Wanda. The only elite safe is xinjingping. Because he is the dictator
    - seanmcdirmid 8y ago
      This is also naive and uniformed. Xi Jinping hardly has absolute power, there are a few very powerful red families pulling strings in the background, a lot of power brokers that are way in the background. Xi has power, is probably the most powerful man in China, but even he isn’t safe.
  - mcguire 8y ago
    If political power is not widely distributed, it seems unlikely that you will have a healthy economy in the first place.
crwalker 8y ago
"...they can take as big hammer as needed to fix it." If you believe complex economic systems follow simple, well-known control laws, then yes. But I haven't seen much evidence for this.
- Nokinside 8y ago
  Just study the War Economy in different countries during the WWII. Government can simplify and direct the economy if it has total control over it. For lighter control look at the post war economies in Europe, Japan and Korea. Tight control of the economy worked just fine to stabilize the system.
  - neilwilson 8y ago
    You can see that blind spot in the piece where the author states there are only four ways out. There is actually a fifth, which is currently the one being used. At the moment Bejing discounts 'foreign currency' into Yuan and distributes it to factories that export. If foreign entities fail to buy that output Bejing can simply discount 'other assets' instead at the central bank, distribute it to the same firms and stick the output in a shed somewhere. The result is the same monetary circulation within China in Yuan.
  - crwalker 8y ago
    If WWII policies seem to be evidence that "tight control of the economy worked just fine to stabilize the system," consider that centralized economic decisions (German war finance, treaty of Versailles, war reparations, Weimar Republic hyperinflation) paved the way for WWII. Early 20th century Europe is an odd example to choose to demonstrate a stable, well-controlled system.
    - mistermann 8y ago
      Unless I'm mistaken, I think the point of contention here is whether centralized economic decisions can work sometimes (his point?) versus can never ever work (your point?). And by "work", I do not mean "work absolutely perfectly".
ekianjo 8y ago
> It's all about being practical. The soviets and Mao's regimes had ample powers to do what they wanted, yet it resulted in mass murder and complete catastrophe at unprecedented scale because they made very, very poor decisions. Having leverage does not mean it fits prosperity nor crisis. Look at how soviets encouraged the killing of Kulaks which led to the great starvation (dozens of millions of deaths) in Ukraine in the following years.
- Nokinside 8y ago
  Those are examples of ideological action. Chinese have not been strongly ideological after Deng Xiaoping. Communist party is more like ruling aristocracy with privileges. Communist party is using communism the same way as aristocracy used religion to justify their divine mandate.
  - evilturnip 8y ago
    Central decision makers generally cannot predict the outcomes of the decisions they make because the system is so complex. It's been proven time and time again that the distributed decisions of millions of individual actors ala a non-centralized economy results in a more efficient and non-catastrophic outcome. Wherever recent history has gone awry is when a few powerful people think they know what's best for everyone else.
    - Nokinside 8y ago
      You have completely wrong image in your mind. We are not talking about fully centralized command economy. Just like I said in other comment, Look at the post war economies in Europe, Japan, Korea etc. Wage controls, price controls, rationing etc. still a market economy and not a command economy.
    - pishpash 8y ago
      An interesting line of thought. Some writers have suggested that the failure of centralization in prior eras was due to a poor state of information availability. If you consider why things like the Great Leap Forward continued till it became a catastrophe, one big reason was because politicians in locales made up good numbers for political reasons. As long as humans have been involved, this and other more technological barriers (as in the case of the USSR) have presented insurmountable challenge, but things are certainly moving in a direction that makes centralized decision making less impractical. Note, this is still not a suggestion to do it, for humanist reasons, which I think is mostly what the Western (cultural) objection has always been. But from a practical perspective, centralization (even totalitarianism) has been accepted as the norm in various smaller and non-governmental contexts that have also involved highly complex decision-making, e.g. the corporate employer. People seem to accept this level of de-individualization, and a strong evidentiary case has yet to be put forth that full decentralization of that relationship works out better over all.
ajross 8y ago
> There will be no political gridlock That's true at the micro scale, not the macro. Tienanmen may be fading from memory, but it happened before and it'll happen again. Those 30-person decisions have winners and losers, and the losers not being in the room doesn't mean they'll just shut up and go quietly. Nor does it mean that those 30 people are going to be insensitive to or unwilling to accommodate their needs in all cases. They know what the stakes are if they mess up, and it goes farther than poverty. Basically: "political gridlock" looks bad, but it's a safety valve that democracies use to avoid unrest, which is a far worse problem in the long run than a debt crisis.
doombolt 8y ago
Maybe they have more room but then they have catastrophic failure scenario like USSR and unlike liberal economies. Think Greece vs. Venezuela.
galuggus 8y ago
That all depends on how powerful the leader is. If you look into the quite recent past this comment would be absolutely untrue. There was massive gridlock between factions it was just so opaque that we could only guess what was going on. Also, How do you get the bureaucracy to actually do what you want?(A major recurring problem in Chinese History).
bitxbit 8y ago
This is wrong. China can’t defy gravity and the laws of economics especially in a global economy. It boils down to the fact that Chinese govt continues to abuse the labor without meaningfully increasing their standard of living. This can’t continue. What they’re doing is akin to engineering growth for the sake of showing growth.
paulsutter 8y ago
Where can I find more detail on this? > Decisions are done in small groups of 30 people at most, with several hundred people having some influence. To all the ideological responses to nokinside: don’t underestimate China. China isn’t perfect but is an incredible story.
- mooreds 8y ago
  Totally an incredible story. Like Japan, South Korea or Taiwan, but 10-100x the size. It's amazing. That said, the challenges they face are enormous. I hope they can navigate through them.
sseth 8y ago
There's a lot of truth in this. However, there is also the fact that their ability to keep the lid on things means they may also suppress feedback mechanisms which in a democracy may prevent wrong things from going on too long. Something like this has been seen in the one child policy which went too far and the government is now scrambling. Also, the clumsy attempts to prop up the stock exchanges a couple of years ago have ultimately come undone. So we will see whether we have true resilience in the system, or is it actually brittle.
- ksec 8y ago
  >However, there is also the fact that their ability to keep the lid on things means they may also suppress feedback mechanisms which in a democracy may prevent wrong things from going on too long That is where surveillance and big data comes in. And I am not too sure if they are scrambling at their one child policy, there are simply far too many people in china.
  - joeyo 8y ago
    > And I am not too sure if they are scrambling at their one child policy, there are simply far too many people in china. It's not the absolute number that's the issue it's the age distribution: https://en.wikipedia.org/wiki/Demographics_of_China#/media/File:Population_pyramid_of_China_2015.png https://en.wikipedia.org/wiki/Demographics_of_China#/media/F...
    - ksec 8y ago
      Yes and there are nothing wrong with that distribution. Death rate are lowered life expectancy are higher. Their working population, even though a decrease of 20% is still huge.
  - sseth 8y ago
    In 2016, they put an end to the one child policy. In 2017, they are offering women free removal of IUDs. Under the one child policy, women were forcibly fitted with IUDs after the first child, and were forced to undergo sterilization after two. This has led to a ridiculous situation highlighted in the New York Times, where a woman forcibly fitted with IUDs in 2012, is now being offered free removal of the same IUD. This is what happens when policy is made centrally, detached from ground realities. I don't know whether there are enough people or not in China - the point was more about the issues with central planning. Similar U-turns can be seen in the stock market. The government was exhorting people to invest in the stock market as a patriotic duty, creating a huge bubble. When it burst, they tried to manage the stock market by punishing investors who were selling shares! No wonder the stock market has tanked - would you put your money in a stock market where you could be punished for selling? I agree the Chinese government with its Orwellian-like control of the population can get away with a lot. But they get a lot wrong as well.
seanmcdirmid 8y ago
Unlike liberal democracies, Beijing has also mostly absolved its people of moral hazard, creating a situation where they have to act and fix things up because they have basically taken complete responsibility for the health of the economy. In a liberal democracy, one can just vote the turkeys out when something economically bad happens (whether or not it’s their fault), but that is obviously not an option in China.
dougmwne 8y ago
Everything you said might be right, I don't know. I think though that your facts are just as political as the facts the western countries use to justify market-based deregulation. I've spent some time near Washington politics. It gave me the opionion that our system is purposefully designed to create gridlock in order to tie up political energies. Political energies that would have otherwise been used to create rapid change. I think the entire point is to create a relatively stable climate for business investment. So that's the exact opposite philosophy as how you described the Chinese system. Central planning and proactive decisions made by a few vs. market driven and reactive desisions made by many. I'm not even sure if it's possible to determine which system is better or what the exact best middle ground would be. It may have complexity beyond our scientific tools' ability to study.
- solotronics 8y ago
  I think there is a natural system of balance found in a true free market. When thinking about longer term ideas such as climate change it is ultimately up to the average desire of the population of comsumers as a whole. Even though this has shortcomings I think it is a more "fair" system because it is just a reflection of the psyche and desire of the people and not a controlling party or politburo. When thinking about things like unsustainable growth rate and ghost cities in China I think that is the negative side of the top down model of central control. The ability to change policy quickly might be a benefit but I don't think we will know the true result in terms of benefit to civilization or country until we can look back and compare systems in the future.
  - omegaworks 8y ago
    >I think there is a natural system of balance found in a true free market. This is not borne out by the examples we've seen thus far of deregulated markets. It's important to distinguish between a free market and a deregulated market, as pundits often conflate the two so regularly. The benefits you state, a system aligned with "the psyche and desire of the people" does not, in fact, naturally emerge from deregulated markets. Every entity participating in a market would benefit by being the only participant in that market, so they do things like externalize costs, acquire competitors and leverage network effects to grow their share of that market. Once that state is achieved, the people hoping to have their various desires met by various participants in the market will have but a single option. A deregulated market devolves into central control.
yuhong 8y ago
I wonder if part of the problem is that democracies don't really work well when for example Americans care about only themselves. One classic example is NIMBYs in cities. Of course, the debt-based economy only compounds the problem.
schuke 8y ago
But the Soviet Union and other dictatorships had similar institutions yet they all mess up somehow...
- fellellor 8y ago
  By OP's argument, the Soviets had ideology which supposedly limited their actions. The Chinese on the other hand are truly faithless.
  - conanbatt 8y ago
    The soviets were restrained? oh my..
monort 8y ago
The second point about dismissing markets was actually the downfall of many authoritarian governments. You can't defy the law of economics with executive orders. At the moment, China is only strengthening private property rights, looks like they learned that lesson.
forapurpose 8y ago
> Unlike liberal democracies, Beijing has more room to act in crisis. I strongly disagree; the above is an old shibboleth of dictators and other anti-democrats. Mussolini promised to make the train runs on time. Authoritarian governments are actually starkly limited by the individuals with power - by their ability, their vision, their own greed and interests, and their political limitations (authoritarian power structures are not democracies; the limits are not voters and law but other power bases). When those leaders are incapable, the country fails - rule of man, not rule of law and by the people. In a democracy, the pluralism in people and inputs creates great flexibility: This especially applies to vision, a reason market economies, which factor in the vision of all, work so much better than command economies, limited to the cognitive processing of a few; it's the reason why micromanaging CEOs fail while delegating and empowering ones are so much more successful. Democracies are much more innovative politically and economically. More generally, when one person can't do it, in a democracy others can; either others in the broad power structure do it, or the people in power are replaced. IMHO, that exact problem explains the lack of dynamism in authoritarian government, and the reason by imperial China fell so far behind the 'West' - when the emperor failed to adapt, the country was stuck with him (and his progeny) for another century. In a democracy, he'd be gone within months or at worst a few years. Finally, corruption is an enormous problem and impediment in non-democracies, a fact long-established in Chinese histories. (IIRC, in Chinese histories the standard model of the long-term political cycle is the ascendancy of a new power, then its decline due to corruption, then chaos, then it repeats.) Policy is not driven by serving the voters, a necessity in democracies, but by those in power serving themselves. Finally, reality does not bear out the strong-man theory: Without question the best performing economies historically are liberal democracies. China remains - and many believe will remain without liberal democracy - a poor country compared with the liberal democracies. Everything the Chinese dictatorship does well economically, from monetary policy to market capitalism to universal education, are innovations of liberal democracies. The most economically successful parts of China, Taiwan and Hong Kong, are liberal democracies (speaking very broadly about Hong Kong - the complexities there are out of scope in this comment). (This is not a knock on the people of China. I dream of the day they will be set free to run their own lives - it's hard to imagine the innovation of a billion people set free with those incredible cultural resources at their disposal.)

yxhuvud 8y ago

The problem for China won't be dealing with private property, it will be dealing with government owned property. Just because the average Joe doesn't get to vote doesn't mean the system isn't geared to preserve the status quo. I think you are quite naive if you think vested interests and political corruption is a smaller problem than having to respect private property.

Nokinside 8y ago
The political elite is relatively small number of people. When the political power is not widely distributed, you can take care of the elites without hurting the economy. If the top 100,000 power players and their families are shielded from the fallout, how much will that cost? Few $100 billions or so?
- pas 8y ago
  Decision-making processes, especially in times of crises are rarely presenting themselves so supra-rationally. Meaning, that usually internal struggles will prevent the participants to be so generous, cool headed and foreward thinking. Sure, the Politburo / Central Committee is small, but they still represent hundreds of millions of people, many different regions, cities, to a degree even many ethnic groups. Usually shielding the elites does not show up as a goal, and differing circumstances of those can easily lead to serious opposition against the generally useful solutions. We shall see how the current regime handles whatever history throws at them.
- tsuabing2 8y ago
  That’s naive and uninformed. Many Chinese political elites not on the side of Xin jing ping have been jailed and killed in recent years under the guise of corruption. Many corporate elites have been quarantined, jailed or killed, such as head of HNA and Wanda. The only elite safe is xinjingping. Because he is the dictator
  - seanmcdirmid 8y ago
    This is also naive and uniformed. Xi Jinping hardly has absolute power, there are a few very powerful red families pulling strings in the background, a lot of power brokers that are way in the background. Xi has power, is probably the most powerful man in China, but even he isn’t safe.
- mcguire 8y ago
  If political power is not widely distributed, it seems unlikely that you will have a healthy economy in the first place.

crwalker 8y ago

"...they can take as big hammer as needed to fix it." If you believe complex economic systems follow simple, well-known control laws, then yes. But I haven't seen much evidence for this.

Nokinside 8y ago
Just study the War Economy in different countries during the WWII. Government can simplify and direct the economy if it has total control over it. For lighter control look at the post war economies in Europe, Japan and Korea. Tight control of the economy worked just fine to stabilize the system.
- neilwilson 8y ago
  You can see that blind spot in the piece where the author states there are only four ways out. There is actually a fifth, which is currently the one being used. At the moment Bejing discounts 'foreign currency' into Yuan and distributes it to factories that export. If foreign entities fail to buy that output Bejing can simply discount 'other assets' instead at the central bank, distribute it to the same firms and stick the output in a shed somewhere. The result is the same monetary circulation within China in Yuan.
- crwalker 8y ago
  If WWII policies seem to be evidence that "tight control of the economy worked just fine to stabilize the system," consider that centralized economic decisions (German war finance, treaty of Versailles, war reparations, Weimar Republic hyperinflation) paved the way for WWII. Early 20th century Europe is an odd example to choose to demonstrate a stable, well-controlled system.
  - mistermann 8y ago
    Unless I'm mistaken, I think the point of contention here is whether centralized economic decisions can work sometimes (his point?) versus can never ever work (your point?). And by "work", I do not mean "work absolutely perfectly".

ekianjo 8y ago

> It's all about being practical. The soviets and Mao's regimes had ample powers to do what they wanted, yet it resulted in mass murder and complete catastrophe at unprecedented scale because they made very, very poor decisions. Having leverage does not mean it fits prosperity nor crisis. Look at how soviets encouraged the killing of Kulaks which led to the great starvation (dozens of millions of deaths) in Ukraine in the following years.

Nokinside 8y ago
Those are examples of ideological action. Chinese have not been strongly ideological after Deng Xiaoping. Communist party is more like ruling aristocracy with privileges. Communist party is using communism the same way as aristocracy used religion to justify their divine mandate.
- evilturnip 8y ago
  Central decision makers generally cannot predict the outcomes of the decisions they make because the system is so complex. It's been proven time and time again that the distributed decisions of millions of individual actors ala a non-centralized economy results in a more efficient and non-catastrophic outcome. Wherever recent history has gone awry is when a few powerful people think they know what's best for everyone else.
  - Nokinside 8y ago
    You have completely wrong image in your mind. We are not talking about fully centralized command economy. Just like I said in other comment, Look at the post war economies in Europe, Japan, Korea etc. Wage controls, price controls, rationing etc. still a market economy and not a command economy.
  - pishpash 8y ago
    An interesting line of thought. Some writers have suggested that the failure of centralization in prior eras was due to a poor state of information availability. If you consider why things like the Great Leap Forward continued till it became a catastrophe, one big reason was because politicians in locales made up good numbers for political reasons. As long as humans have been involved, this and other more technological barriers (as in the case of the USSR) have presented insurmountable challenge, but things are certainly moving in a direction that makes centralized decision making less impractical. Note, this is still not a suggestion to do it, for humanist reasons, which I think is mostly what the Western (cultural) objection has always been. But from a practical perspective, centralization (even totalitarianism) has been accepted as the norm in various smaller and non-governmental contexts that have also involved highly complex decision-making, e.g. the corporate employer. People seem to accept this level of de-individualization, and a strong evidentiary case has yet to be put forth that full decentralization of that relationship works out better over all.

ajross 8y ago

> There will be no political gridlock That's true at the micro scale, not the macro. Tienanmen may be fading from memory, but it happened before and it'll happen again. Those 30-person decisions have winners and losers, and the losers not being in the room doesn't mean they'll just shut up and go quietly. Nor does it mean that those 30 people are going to be insensitive to or unwilling to accommodate their needs in all cases. They know what the stakes are if they mess up, and it goes farther than poverty. Basically: "political gridlock" looks bad, but it's a safety valve that democracies use to avoid unrest, which is a far worse problem in the long run than a debt crisis.

doombolt 8y ago

Maybe they have more room but then they have catastrophic failure scenario like USSR and unlike liberal economies. Think Greece vs. Venezuela.

galuggus 8y ago

That all depends on how powerful the leader is. If you look into the quite recent past this comment would be absolutely untrue. There was massive gridlock between factions it was just so opaque that we could only guess what was going on. Also, How do you get the bureaucracy to actually do what you want?(A major recurring problem in Chinese History).

bitxbit 8y ago

This is wrong. China can’t defy gravity and the laws of economics especially in a global economy. It boils down to the fact that Chinese govt continues to abuse the labor without meaningfully increasing their standard of living. This can’t continue. What they’re doing is akin to engineering growth for the sake of showing growth.

paulsutter 8y ago

Where can I find more detail on this? > Decisions are done in small groups of 30 people at most, with several hundred people having some influence. To all the ideological responses to nokinside: don’t underestimate China. China isn’t perfect but is an incredible story.

mooreds 8y ago
Totally an incredible story. Like Japan, South Korea or Taiwan, but 10-100x the size. It's amazing. That said, the challenges they face are enormous. I hope they can navigate through them.

sseth 8y ago

There's a lot of truth in this. However, there is also the fact that their ability to keep the lid on things means they may also suppress feedback mechanisms which in a democracy may prevent wrong things from going on too long. Something like this has been seen in the one child policy which went too far and the government is now scrambling. Also, the clumsy attempts to prop up the stock exchanges a couple of years ago have ultimately come undone. So we will see whether we have true resilience in the system, or is it actually brittle.

ksec 8y ago
>However, there is also the fact that their ability to keep the lid on things means they may also suppress feedback mechanisms which in a democracy may prevent wrong things from going on too long That is where surveillance and big data comes in. And I am not too sure if they are scrambling at their one child policy, there are simply far too many people in china.
- joeyo 8y ago
  > And I am not too sure if they are scrambling at their one child policy, there are simply far too many people in china. It's not the absolute number that's the issue it's the age distribution: https://en.wikipedia.org/wiki/Demographics_of_China#/media/File:Population_pyramid_of_China_2015.png https://en.wikipedia.org/wiki/Demographics_of_China#/media/F...
  - ksec 8y ago
    Yes and there are nothing wrong with that distribution. Death rate are lowered life expectancy are higher. Their working population, even though a decrease of 20% is still huge.
- sseth 8y ago
  In 2016, they put an end to the one child policy. In 2017, they are offering women free removal of IUDs. Under the one child policy, women were forcibly fitted with IUDs after the first child, and were forced to undergo sterilization after two. This has led to a ridiculous situation highlighted in the New York Times, where a woman forcibly fitted with IUDs in 2012, is now being offered free removal of the same IUD. This is what happens when policy is made centrally, detached from ground realities. I don't know whether there are enough people or not in China - the point was more about the issues with central planning. Similar U-turns can be seen in the stock market. The government was exhorting people to invest in the stock market as a patriotic duty, creating a huge bubble. When it burst, they tried to manage the stock market by punishing investors who were selling shares! No wonder the stock market has tanked - would you put your money in a stock market where you could be punished for selling? I agree the Chinese government with its Orwellian-like control of the population can get away with a lot. But they get a lot wrong as well.

seanmcdirmid 8y ago

Unlike liberal democracies, Beijing has also mostly absolved its people of moral hazard, creating a situation where they have to act and fix things up because they have basically taken complete responsibility for the health of the economy. In a liberal democracy, one can just vote the turkeys out when something economically bad happens (whether or not it’s their fault), but that is obviously not an option in China.

dougmwne 8y ago

Everything you said might be right, I don't know. I think though that your facts are just as political as the facts the western countries use to justify market-based deregulation. I've spent some time near Washington politics. It gave me the opionion that our system is purposefully designed to create gridlock in order to tie up political energies. Political energies that would have otherwise been used to create rapid change. I think the entire point is to create a relatively stable climate for business investment. So that's the exact opposite philosophy as how you described the Chinese system. Central planning and proactive decisions made by a few vs. market driven and reactive desisions made by many. I'm not even sure if it's possible to determine which system is better or what the exact best middle ground would be. It may have complexity beyond our scientific tools' ability to study.

solotronics 8y ago
I think there is a natural system of balance found in a true free market. When thinking about longer term ideas such as climate change it is ultimately up to the average desire of the population of comsumers as a whole. Even though this has shortcomings I think it is a more "fair" system because it is just a reflection of the psyche and desire of the people and not a controlling party or politburo. When thinking about things like unsustainable growth rate and ghost cities in China I think that is the negative side of the top down model of central control. The ability to change policy quickly might be a benefit but I don't think we will know the true result in terms of benefit to civilization or country until we can look back and compare systems in the future.
- omegaworks 8y ago
  >I think there is a natural system of balance found in a true free market. This is not borne out by the examples we've seen thus far of deregulated markets. It's important to distinguish between a free market and a deregulated market, as pundits often conflate the two so regularly. The benefits you state, a system aligned with "the psyche and desire of the people" does not, in fact, naturally emerge from deregulated markets. Every entity participating in a market would benefit by being the only participant in that market, so they do things like externalize costs, acquire competitors and leverage network effects to grow their share of that market. Once that state is achieved, the people hoping to have their various desires met by various participants in the market will have but a single option. A deregulated market devolves into central control.

yuhong 8y ago

I wonder if part of the problem is that democracies don't really work well when for example Americans care about only themselves. One classic example is NIMBYs in cities. Of course, the debt-based economy only compounds the problem.

schuke 8y ago

But the Soviet Union and other dictatorships had similar institutions yet they all mess up somehow...

fellellor 8y ago
By OP's argument, the Soviets had ideology which supposedly limited their actions. The Chinese on the other hand are truly faithless.
- conanbatt 8y ago
  The soviets were restrained? oh my..

monort 8y ago

The second point about dismissing markets was actually the downfall of many authoritarian governments. You can't defy the law of economics with executive orders. At the moment, China is only strengthening private property rights, looks like they learned that lesson.

forapurpose 8y ago

> Unlike liberal democracies, Beijing has more room to act in crisis. I strongly disagree; the above is an old shibboleth of dictators and other anti-democrats. Mussolini promised to make the train runs on time. Authoritarian governments are actually starkly limited by the individuals with power - by their ability, their vision, their own greed and interests, and their political limitations (authoritarian power structures are not democracies; the limits are not voters and law but other power bases). When those leaders are incapable, the country fails - rule of man, not rule of law and by the people. In a democracy, the pluralism in people and inputs creates great flexibility: This especially applies to vision, a reason market economies, which factor in the vision of all, work so much better than command economies, limited to the cognitive processing of a few; it's the reason why micromanaging CEOs fail while delegating and empowering ones are so much more successful. Democracies are much more innovative politically and economically. More generally, when one person can't do it, in a democracy others can; either others in the broad power structure do it, or the people in power are replaced. IMHO, that exact problem explains the lack of dynamism in authoritarian government, and the reason by imperial China fell so far behind the 'West' - when the emperor failed to adapt, the country was stuck with him (and his progeny) for another century. In a democracy, he'd be gone within months or at worst a few years. Finally, corruption is an enormous problem and impediment in non-democracies, a fact long-established in Chinese histories. (IIRC, in Chinese histories the standard model of the long-term political cycle is the ascendancy of a new power, then its decline due to corruption, then chaos, then it repeats.) Policy is not driven by serving the voters, a necessity in democracies, but by those in power serving themselves. Finally, reality does not bear out the strong-man theory: Without question the best performing economies historically are liberal democracies. China remains - and many believe will remain without liberal democracy - a poor country compared with the liberal democracies. Everything the Chinese dictatorship does well economically, from monetary policy to market capitalism to universal education, are innovations of liberal democracies. The most economically successful parts of China, Taiwan and Hong Kong, are liberal democracies (speaking very broadly about Hong Kong - the complexities there are out of scope in this comment). (This is not a knock on the people of China. I dream of the day they will be set free to run their own lives - it's hard to imagine the innovation of a billion people set free with those incredible cultural resources at their disposal.)