China's boom to come to an end
bodawei
January 27, 2010, 06:10 PM posted in General Discussion'My own great fear is that history will repeat itself in China when the current boom comes to an end. In my view economic growth based on a western capitalist model is unsustainable (不能维持的). When it ends, what then?' [Tal_China's Lost Girls]. This is a quote from another thread but I love doomsday predictions so much I think this deserves separate discussion.
What do poddies think that [China's] 'economic growth is based on a western capitalist model' means?
I am a firm believer that the cultures are miles apart - this means that I also bbelieve that the mechanics of the economy are miles apart.
Does anyone believe that China is mindlessly aping the econommic policies of the West?
bababardwan
jckeith,
As always a very interesting and intelligent argument.I liked your summary at the end:
"Such predictions always just project present conditions into the future, without accounting for technological, societal, or cultural changes."
...but would add that surely such predictions are still important projections of current trajectory in order to give impetus to bring about such changes.
jckeith
That is certainly true. It's really fascinating when you think about it, but such predictions and any actions which may or may not arise from them are themselves a part of the marketplace. It gives some perspective on the complexity of markets and why central planning is doomed to fail. This reminds me of an old anecdote. At one point, the Soviet Union's planners resorted to using the Sears catalog to determine prices for goods. Thanks for your kind words :)
bababardwan
January 27, 2010, 07:58 PMjckeith,
As always a very interesting and intelligent argument.I liked your summary at the end:
"Such predictions always just project present conditions into the future, without accounting for technological, societal, or cultural changes."
...but would add that surely such predictions are still important projections of current trajectory in order to give impetus to bring about such changes.
jckeith
January 27, 2010, 08:11 PMThat is certainly true. It's really fascinating when you think about it, but such predictions and any actions which may or may not arise from them are themselves a part of the marketplace. It gives some perspective on the complexity of markets and why central planning is doomed to fail. This reminds me of an old anecdote. At one point, the Soviet Union's planners resorted to using the Sears catalog to determine prices for goods. Thanks for your kind words :)
simonpettersson
January 27, 2010, 08:53 PMThe Western capitalist model has certainly proven both sustainable and fruitful. The European Union was founded in order to prevent further wars inbetween its member states by getting them to trade with each other. It has certainly proven a lot more effective than the UN in this regard.
Regarding the environment, I'm quite confident in humanity's capability of solving a problem once it appears. Slightly worrying is the widespread belief that the way to stop global warming is to change people's behavior, rather than to find technological solutions to the problems. Changing people's behavior is very, very hard.
As to government meddling in the free market, it can certainly be done badly, but it can also be done well. Sweden is a prosperous country with a very socialist bent and a lot of government meddling. That's why Swedish universities don't have tuition, but are completely free for anyone who wants to study there, and why healthcare is extremely cheap.
jckeith
One minor correction: Swedish universities aren't free. The costs are simply dispersed and disconnected from the service itself.
xiaophil
I don't understand economics nearly as well as I should, but isn't dispersing and disconnecting the cost from the service a kind of meddling?
Personally, I don't buy the idea that economies are entities that cannot benefit from outside adjustment. I can buy the idea that economies are complex, and so doing something with good intentions will often bring about the reverse effect. I can also buy the idea that governments just plain and simply do dumb-ass things.
But as I said, I am not as informed as I would like to be.
jckeith
I don't understand economics nearly as well as I should, but isn't dispersing and disconnecting the cost from the service a kind of meddling?
Absolutely.
Personally, I don't buy the idea that economies are entities that cannot benefit from outside adjustment.
Well, an economy is just the sum total of millions of voluntary individual transactions. Correcting these results requires coercion of some form. Who's to say the person doing the coercing knows better than those individuals what their own self-interest is? And even if they did possess such knowledge, do you believe that the coercion would be justified in the first place?
jckeith
Of course, the keyword there is "voluntary." Transactions involving force or fraud should of course be corrected by the justice system.
xiaophil
Well, here comes my 业余 response again. I think that a government's job is to provide the optimal environment for people to be able to improve their lives. As an example, I believe that universal health care would encourage more people to start up businesses as they wouldn't have to worry about A) their business and B) not dying or racking up a huge debt if an emergency occurs. In addition, it will make people more likely to spend their money, always helpful for economies, instead of hoarding it for potential emergencies. Basically, I think there are a psychological elements, as other elements, to economies that perhaps can't be naturally resolved. People tend to think me, me, me. Which is good because it is usually through a healthy dose of selfishness that we improve our lives. That said, sometimes if everyone is thinking me, me, me that ,may help 'me' temporarily, but it the long-term it hurts 'we'.
Now how do we know the person doing the coercing knows better than the individuals? I suppose we can never know until later. The key is that in theory the people making decisions are experts who have debated this sufficiently to at least have made a very, very well-informed decision, something that the normal person cannot do. If in the end the people are unsatisfied with the result, the decision makers get voted out (at least in most countries with advanced economies).
Hope this makes sense as I had to wing it rather quickly, And yes, I can already anticipate some objections (i.e. universal health care), I really wish I had the time to really delve into this as much as I want to.
jckeith
It makes perfect sense. Fair enough. We disagree on things, but there's nothing unreasonable about what you said. I'm not looking to drag this discussion out here, just wanted to answer your question. Cheers for reasoned debate :)
xiaophil
Okay, right on.
jckeith
January 27, 2010, 09:05 PMOne minor correction: Swedish universities aren't free. The costs are simply dispersed and disconnected from the service itself.
Tal
January 27, 2010, 09:30 PMbodawei, I'm flattered! How sweet to see my words used to kick start such a potentially fascinating discussion.
It's 5am here in the Middle Kingdom and I'm far from at my most lucid, but I have a few points I'd like to make.
I was referring specifically to the form of global super-capitalism exported by western powers over the last century or so, not to some simple form of "exchange of goods and services". This kind of global economy most of humanity (in the 'developed world' at any rate) has come to regard as normal life and our indisputable birthright, our "manifest destiny", 呵呵. An economy run on fossil fuels, principally oil, which has allowed the human population of this planet to 'explode' over the last 150 years. An economy based on absurd and excessive exploitation of the natural world, the rape of the Earth. And this situation, like it or not, is unsustainable, and if you think otherwise, you are of course a sane normal human being doing what sane normal human beings always do: denial of commonsense truth so that we can be comfortable in our certainties and continue to enjoy our sweeties.
The fact is that humans look at the world around them, and find it rather difficult to think long term. They cannot imagine their conditions of life really changing drastically from what they are now. What we do is project our present into an indefinite future. Consider the story of Easter Island.
I smile grimly when I hear folk say: 'oh, you know we heard all this doomsday stuff back in the 70s you know, and look, we're still here'. Consider how brief our lives are. Individually. Consider that human beings have been on this planet for roughly 100,000 years, and that for 90% of that time we lived as tiny bands of hunter-gatherers. Agriculture and 'civilization' was 'invented' only 10,000 years ago.
Now think about how long we've had industry, cars, jet planes, computers. How long have we been using fossil fuel to create the current global model of super capitalism? Still feel so sure that "...the Western capitalist model has certainly proven both sustainable and fruitful"? It's a model that on a meaningful time scale we have been using for a very short time.
The 1970s were barely a moment ago, and Malthus my friends, was right! Even Charles Darwin knew that.
I'm a great believer in linking up different fields of knowledge and reflection, (sometimes erroneously no doubt.) 这样吧？Ever heard of the Fermi Paradox? It can be boiled down to: why are we apparently alone in the universe? Why don't we see evidence of other alien civilizations out there in space? I mean, given the age of the universe, and given the existence of bright, brilliant, ingenious creatures like us, they should be showing up every day to admire and encourage us, sharing their warp drive or replicators or whatever, right? You know what I think the answer is? Easter Island.
bababardwan
tal,
"absurd and excessive exploitation of the natural world, the rape of the Earth"
...actually I doubt whether you'd get anyone arguing with you on that point.But what I really wanna say is that you are really going to love Avatar [just wish I could be there to watch it with you mate :) ]
Tal
Hey baba! I finally saw that movie 2 days ago! I did enjoy it, (I mean come on, I've been a sci-fi fan since I was a kid,) and I do wish I could have watched it with you, but you know what? I found the story rather predictable and the characterization somewhat contrived! Sorry!
And the ending? Come on, you know what happens next? Humans go back to Pandora and nuke the surface from orbit, send down the robots and take all the unobtainium they want. I mean seriously, when have we humans ever done different?
bababardwan
Well in retrospect I s'pose I should have predicted that...after all it's harder to please a die hard sci fi aficionado and things would be even more predictable for such a one as you.No need to be sorry at all.I'm sure you're right in that respect.Actually ..gotta go...be back soon
Tal
As I said, I did enjoy it! Just being honest about my response.
bababardwan
yeah sorry tal,I got interrupted partway through what I was posting and was feeling too lazy to start it again when I got back so just posted what I'd typed so far.I definitely appreciate your honest opinion no matter what it may be[it's not important to me what others opinion on this is and I don't expect anyone to like it]......actually ,it's particularly interesting to hear the honest opinion of one like yourself who does have such a developed appreciation of scifi...so thanks heaps for that.I think posting what I had so far may have come off the wrong way.I wasn't suggesting for a sec that you're hard to please;I merely meant that it's only natural if you've watched a lot of scifi that it would be hard to come up with something that wasn't predictable[thouigh i've heard this predictability comment at least once before so I take it that this may be more predictable than your average scifi....I suppose this film has had more mass appeal and also the technical achievement of the film is outstanding] or at least that you'd have more refined taste and be more discerning.I did note though that you managed to enjoy it anyway despite those shortcomings and I'm glad to hear that for your sake.Yeah,I find that as I get older movies in general are often quite predictable but I've also realised that I ,like you already do I suspect,should try to not let this predictability detract from my enjoyment and just sit back and have fun.Actually I think my kids have taught me this,hehe.
xiaophil
Tal, Baba
I wish we three could have gone seen it! After I saw it I got that same feeling I had as a kid after seeing the original Star Wars. I was just thrilled. I too was a bit disappointed in the simple story. It's a shame that Hollywood thinks that most of us aren't capable of absorbing a complex story. But the rich world that was created compensated for it.
bababardwan
干杯好朋友。什么时候我们三位人再见？。。在打雷，闪电，或者阿凡达？
xiaophil
看不懂,哈哈,我来试一下翻译.
Cheers mate. When will we three say goodbye? (Or did you mean see again?) When there is thunder, lightning or at Avatar?
bababardwan
January 27, 2010, 09:44 PMtal,
"absurd and excessive exploitation of the natural world, the rape of the Earth"
...actually I doubt whether you'd get anyone arguing with you on that point.But what I really wanna say is that you are really going to love Avatar [just wish I could be there to watch it with you mate :) ]
jckeith
January 28, 2010, 01:24 AMI don't understand economics nearly as well as I should, but isn't dispersing and disconnecting the cost from the service a kind of meddling?
Absolutely.
Personally, I don't buy the idea that economies are entities that cannot benefit from outside adjustment.
Well, an economy is just the sum total of millions of voluntary individual transactions. Correcting these results requires coercion of some form. Who's to say the person doing the coercing knows better than those individuals what their own self-interest is? And even if they did possess such knowledge, do you believe that the coercion would be justified in the first place?
jckeith
January 28, 2010, 01:49 AMOf course, the keyword there is "voluntary." Transactions involving force or fraud should of course be corrected by the justice system.
jckeith
January 28, 2010, 02:22 AMIt makes perfect sense. Fair enough. We disagree on things, but there's nothing unreasonable about what you said. I'm not looking to drag this discussion out here, just wanted to answer your question. Cheers for reasoned debate :)
jckeith
January 27, 2010, 07:00 PMIt means that China's economy is based on private ownership of the means of production and voluntary economic exchange. Of course, China's economy is still very heavily manipulated by the central government and this is where the problems come in. The recession the U.S. is currently experiencing was directly caused by government meddling in the housing market and the Federal Reserve's obsession with cheap credit. Government policy did everything it could to create and sustain both the credit and housing bubbles, but you cannot wish away economic reality and those bubbles eventually burst. Now, government policy is aimed at reinflating those bubbles and doing everything possible from preventing the economy from correcting itself, which is why we have double-digit unemployment still a year later.
Meanwhile, China is in the midst of its own housing bubble. There is evidence that demand for raw materials is being artificially inflated as well. Is this government meddling sustainable? No. Just as in the U.S., the market will correct itself.
The question of whether capitalism is sustainable is nonsense. Voluntary exchange of goods and services is always sustainable. Perhaps he meant to say that the modern lifestyle brought about by Capitalism is unsustainable due to environmental concerns and limited natural resources. Whenever I hear a prediction like this, I always think of Paul Erlich's The Population Bomb which predicted the mass starvation of humans that would occur in the 1970s and 1980s and similarly the predictions of Malthusian Catastrophe and predictions of Peak Oil which have been continually revised for being wrong. Such predictions always just project present conditions into the future, without accounting for technological, societal, or cultural changes. Take them with a huge grain of salt.