WSJ Cheerleads for China

http://www.futureofcapitalism.com/2010/11/wsj-cheerleads-for-china

A front-page Wall Street Journal news article endorses Chinese Communism:

China's national economic strategy is detailed and multifaceted, and it is challenging the U.S. and other powers on a number of fronts.

Central to China's approach are policies that champion state-owned firms and other so-called national champions, seek aggressively to obtain advanced technology, and manage its exchange rate to benefit exporters. It leverages state control of the financial system to channel low-cost capital to domestic industries—and to resource-rich foreign nations whose oil and minerals China needs to maintain rapid growth.

China's policies are partly a product of its unique status: a developing country that is also a rising superpower. Its leaders don't assume the market is preeminent. Rather, they see state power as essential to maintaining stability and growth, and thereby ensuring continued Communist Party rule.

It's a model with a track record of getting things done, especially at a time when public faith in the efficacy of markets and the competence of politicians is shaken in much of the West. Already the world's biggest exporter, China is on track to pass Japan this year as the second-biggest economy.

The comparison with Japan is a real laugher. Back in the 1980s, the newspapers were writing articles like this lauding Japan's national industrial policy. Central planning works — until it doesn't. In the meantime, per capita GDP in Japan is about five times that of China, and China isn't going to be passing Japan on that front anytime soon. And the Journal article seems to attribute China's growth to the central planning rather than to the reduction of government control and introduction of openness to foreign investment.

The whole article illustrates the weakness of a strictly utilitarian approach to public policy. I don't actually agree that central planning works better than free markets by the definition of "getting things done" or achieving economic growth. But even if you assume, for the sake of argument, that it does, is it worth the sacrifices of individual liberty, both economic and political? The Journal doesn't even touch on the question. The most glaring example is the article's treatment of the one-child policy: "Longer term, China faces a host of challenges that threaten growth. They include a population that is aging quickly because the one-child policy limited births in recent decades."

The "growth" threatened by the one-child policy isn't just the economic growth the Journal is writing about but the growth of the individual children who are ordered killed by the policy.

The great James Taranto of the Wall Street Journal, commenting last month on an Associated Press report that "A pregnant woman in south China was detained, beaten and forced to have an abortion just a month before her due date because the baby would have violated the country's one-child limit," recalled New York Times columnist Thomas Friedman's remark, "I have fantasized–don't get me wrong–but that what if we could just be China for a day? I mean, just, just, just one day. You know, I mean, where we could actually, you know, authorize the right solutions." Mr. Taranto wrote, "It's a monstrous thought, although one supposes the quality of American journalism would be higher had we been China for a day on July 20, 1953."

It's one thing for Mr. Taranto to muse about what would have happened if Mr. Friedman had been aborted. It'll be interesting to see if Mr. Taranto is as tough on his three Wall Street colleagues as he was on Mr. Friedman.

by Ira Stoll  |  Nov 16, 2010 at 10:38 am Related Topics:  China, Press receive the latest by email: subscribe to the free futureofcapitalism.com mailing list