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Samizdata quote of the day – Is China communist? Now the thing is:
You can gatekeep in Europe
You can gatekeep in the United States
You can gatekeep in every single economy of the West
But you absolutely cannot gatekeep in China, for there are no tools at all, that would allow you to do that
Like what would you even do to restrict the new entrees?
Intellectual property? lmao
Some other lawfare? Again, just like the enforcement of intellectual property rights, that would ultimately rely upon the cooperation of state, and the state in China – unlike in the West – just would not cooperate.
High profit margins in the West are ultimately based upon the artificial restraints upon the new entrees, and upon the state-sponsored gatekeeping. You keep your prices high, because any new entree on the market will be scared away by the force of the state machine. And in China, the state machine just wouldn’t do that. That is why Chinese competition is getting so close to perfect, and that is why prices (and profits margins) in China, can be getting so low.
– Kamil Galeev
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The Wild West is also a Platonic Ideal. Never thought it would take hold in China, though.
I find myself both agreeing and disagreeing with this article. I agree that in comparing the western “free market” economies we dramatically underestimate just how much that pile of regulatory burden, rent seeking, “government contracting”, politician buying and intellectual property reduces the amount of competition, and consequently the market is very far from free.
A while back some company had some government sponsored restriction on the manufacture of epi-pens (it wasn’t a patent, but something similar, regulatory probably, but I don’t remember). And started selling them for $700. An epi-pen is an extremely simple device, a spring loaded syringe with ten cents of epinephrine. It should be for sale in Wal-Mart for $5.99 or $8.99 for two. So, when that happened why didn’t I jump on board and start making one myself and selling it at huge profit for $50? I definitely have the skills and could have raised the capital. I didn’t because the government wouldn’t allow me. If had done, I would have gone to jail. So much for the free market.
But on the other side I think the OP is a bit too rosy eyed about the Chinese. They are very far from having perfect competition. The Chinese government most certainly does interfere in the market, whether by making the whole market place part of their spying network or forbidding the production of goods and services that they do not approve of. And in fact a lot of the success of China comes from the government manipulation of the market. To give a simple example, the creation of Shenzhen, right next to Hong Kong. Which has grown from a small town to an industrial behemoth in fifty years. And the consequence of that is that since all the industries are collocated, and collocated by a gigantic (government constructed) port, huge manufacturing efficiencies are produced. This didn’t happen by accident, but by government design.
So I think the OP is indulging rather in the same accusation he makes of his reader of the platonic form. Economies are complicated, and are a mix of a lot of different things. Plus in China? VAST corruption. That is a huge form of black market regulatory burden on any industry.
The People’s Republic of China is not a free market – but then, as the article points out, neither are Western countries – which have vast governments, government spending (mainly on Welfare States that have undermined society) taking almost half of the economy – and the rest of the economy saturated by regulations and by FIAT MONEY and Credit Bubble banking (just as in China – which has the same corrupt monetary and financial system), which has led in the United States to the domination of the economy by BlackRock, State Street and Vanguard (which have shares in-each-other) and the Credit Bubble banks (all supported by the SLUSH FUND that the “Federal Reserve” system really is – Cantillon Effect).
Chinese manufacturing is twice that of the United States – America won World War II not because its soldiers (brave though they were) were braver than the Germans or Japanese, but because its manufacturing was vastly greater. In Ukraine that argument goes into reverse – as behind Mr Putin is CHINA (Mr Putin is a wicked fool to trust the PRC – they are not friends of the Russian people, they are USING Russia).
And the relatively capitalist economy of China (again NOT free market – but neither are Western nations – see above) is married to a vicious Communist Party Dictatorship that seeks endless conquest – lands and seas it then pretends were “always part of China”.
Mao wanted to dominate the world – but he was also a sincere socialist, and socialism is nonsense. That means his plans for world domination were a farce – as his economy did-not-work.
The present rulers of China also desire world domination – but they do not really give a toss about socialism, they care only for POWER. If private ownership of the means of production serves the purpose of making China stronger – then FINE they will go along with that, as long as the private “capitalists” serve the regime – if not they are executed (killed).
Unlimited power – at home, and around the world – that is the aim of the Communist Party rulers of the People’s Republic of China.
Power is their faith (their belief system) – they have no other.
“But China is our friend” – you utter cretin Mr Putin, the PRC is USING Russia, using the Russian people.
Perhaps he knows that (perhaps Mr Putin is not a cretin at all) – perhaps he just does-not-care that the PRC is USING Russia. USING the Russian people.
Mr Navalny argued that Mr Putin was not a fool – but, rather, was a TRAITOR, selling out not just Russian natural resources, but also the Russian people – both to the People’s Republic of China Communist Party Dictatorship, and to the forces of Islam.