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09/02/2007

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ronghai,zhang

What I am saying is that the socialism in China is not about true faith but about the security concern. More than 20 millions Chinese people was killed in the war against Japan only from 1937 to 1945. Maybe you mean the civil war during 1946-1949. But first,during the period from 1949 to 1952, China was not a socialist country and there was little planning and collective life at that time. Second, there are always wars between conflicting parties. I am not sure about one party or the other should be blamed the most. Also, if there was no support for one party from America, that war may not last so long.

Corruption is not a severe problem during 1953-1976. And there are no benefit going to the royral party members, actually there are no royal members at all. Corruption does be a severe problem now. But I do not think the new socialism is real socialism. There is much more corruption in Russia which is now a capitalist country. So I would rather think corruption has not a causal relationship with socialism. And also, I do not think joke is an appropriate word for a country or system which experiences a more than 8% growth rate during the last twenty-nine years.

By "turns normal", I mean people do not need to reduce much consumption for the concern of security. Maybe you misunderstood that purposely.

There is no need for the ruling party to kill anyone. There do exist some problems now in China. But can you find anywhere in this planet without any problems? All my classmates and friends agree that the government is quite wise on most of its decisions. Or at least, it is on the right road.

I do not know Iran. What does the life look like there? How do the Iran people think about themselves? These things are critical to judge what they really want. You can not decide for them.

Jack

Zhang, Interesting post, and one that points up the attraction of the NK or Iran and Chinese approach: These nations with but a tenth or less of the US GDP can not hope to compete "on the open field" with conventional strength. Thus the best way is for them to join the "MAD" (Mutually Assured Destruction) Club by ginning up at least a few nukies and the means to lob one at "someone". (or deliver it by satchel? or cargo van?)

That's why I, and many RETIRED Generals have advocated getting rid of ALL nuclear weapons and declaring all equipment for refining weapons grade uranium as contraband.

Today, with the net, the military version of google-earth we should be able to find any enrichment plants and with the blessings of the international community simply lay waste to them and go on. Once ALL nukies were considered contraband we'd also get help from regular folk as it would be hard to recruit the numbers needed w/o hiring someone who'd, annonymously rat them out on the net.

For the US, since we are FAR stronger in conventional arms, getting rid of ALL nukies would enhance our military advantage rather than weaken it.

As for "what if" a "rogue" nation, or individual DID manage to get one off? To which, I would ask what would we do now with all our nuclear might? "Nuke" a bunch of starving peasants and poison the land and atmosphere for the sins of a dictator?

In addition to the obvious advantages, the savings in the world's military budgets would feed all those who are not being fed tonite. Jack

ronghai,zhang

Jack:

I admire your opinion. Nuclear weapons and those military spending are pure cost. These costs come from the self-interest human nature. I mean there are two ways to make a good living. One is to produce and exchange with others. The other is to rob other people. People will use the more cost-effective way. So there comes the military competition. But reducing the military spending through commitment or some kind of contracting is always a good way worth to try.

Actually, there is another way to lower these pure costs. If different nations are more cosely interrelated with each other economically, the cost of war between them will be greater. If America has so much direct investment in China, and if American high technology is so desirable for China, then neither of these two likes to be in conflict. So maybe globalization does have some positive effect in this respect.

Talking about "MAD", I have a little disagreement. I would rather think that extremely military-directed or security-concern-directed economy is based on the rationality. It does result in the despotism and some really bad concomitant effect with it. That is the exact "MAD" part.

Jack

Zhang Thanks, and little disagreement here either.

Interesting though that in terms of one "robbing the other" that China's use of artificially low exchange rates is, for now, something of a gift to the wealthy consumers of the US. Perhaps, unilaterally, (some) in China are happy to get the contract, and US consumers, (others than those whose jobs disappeared) are happy to get the cheap goods. But, I'd imagine there are others such as SK or Mexico who aren't so happy about being undercut through rigging the currency. Perhaps Clinton was a tad too hasty in signing permanent MFN as it would seem better to have some leverage regarding human rights and work rules. But! history tells us that large trade deficits and artificial exchange rates don't last forever. Sadly, I suspect the situation is like earthquakes; the longer we go without releasing the pressure through small tremors and adjustments, the worse it will be when it's no longer sustainable for either nation or the other trading nations.

Yes... MAD was perhaps all that could have been managed during the era when the USSR was strong (and thought FAR stronger than it was) and a closed society. I suppose it will take us a quarter century to reflect the changes in our own policy. But, considering that perhaps NK or Iraq were the most closed societies and that, still, we largely knew what was going on there, it seems time to begin anew on a nukie build down and eventual ban. In keeping with your "trade makes good neigbors" I think the time for any nation to be "closed" is past, and that membership in the global trading community would require at least the degree of openess to allow for WMD inspection. I'd go further than UN inspectors only and allow any nation to inspect any other nation, though perhaps with the host nation being allowed a veto or two as long as they promptly allowed some inspectors.

I'm thinking how easy the next "NK" or "Iran" situation would be were ALL nukes considered contraband. Instead of the five years of brinksmanship an inspection of the suspected installation would be scheduled. If refused, once some group decided the risk was real, NATO, SEATO, UN, etc. notice would be given to get their people out, and the installation would be destroyed. No war, few hard feelings, don't take if personal, it was contraband and now it's rubble, welcome to the civilized world.

While this may seem naive, consider how hard it will be to avoid allowing Iran or others to join the nukie club. In fact how can the US browbeat Iran when we make sure Israel is armed to the teeth with the latest weapons and sporadically demonstrate they are not shy about using them?

Jack

DanC

I would not turn a blind eye to the evils of Mao and the communist past. 2 to 5 million people killed as Mao consolidated power another 1.5 million sent to education camps. Millions more starve to death from failed agricultural collectivist "reforms". You want to see the Kibbutz idea gone really mad, look at Chinese agricultural reforms that the communist in China tried.

Want to see what China would look like without a turn to free markets? Look at North Korea, is that a model to follow. Pursue military might while people starve and make false claims that it is for their own good.

Russia is hardly capitalism. It is more like cronyism floating on oil revenues.

Corruption is a drain on all societies. For some, like the US, it becomes a nuisance tax. In Nigeria it becomes a way of life that blocks development. View corruption as a tax, then ask if the corruption occurs because of a market failure or because that is the way the government funds itself indirectly.

I suggest you read Robert Barro (and Gary Becker) on what may generate real economic growth

Iran shows a strong desire to become a regional military power that will move aggressively against it's neighbors. The Iranian people suffer deprivation and loss of liberty as Iran's leaders impose a fascist state cloaked in religion. The Iranian view of the correct world order should scare people around the world. The purges that the current Iranian rulers would like for the middle east would repeat the mass killings of Mao and Stalin.

Jack is a hollow drum - he makes a great noise with little substance. His quirky mix of leftist, populist, protectionist, and conspiratorial world order views can be mildly amusing. He is the guy in the bar who complains about everything but offers solutions that are worse then the disease. So have a little chuckle when you read Jack and know that in the US we tolerate a wide spectrum of views.

Flash Gordon

The failure of socialism in the Soviet Union, China, Cuba and North Korea might be excused on the grounds that the founders were not really idealists committed to the promise of socialism. Instead, they were thugs bent on domination of their fellow countrymen and unearned privileges for themselves.

The kibbutz movement in Israel actually was an experiment based upon good faith intentions. It's failure is therefore the most damning to the socialist ideal.

ronghai,zhang

About "2 to 5 million people killed as Mao consolidated power ", I think I need more proof here. I never heared that from my father or my grandfather or those old professors in our school. I will be very thankful if you can show me more evidence. "Millions more starve to death from failed agricultural collectivist "reforms"", I knew that. And also I have heared many miserable stories from my mother. Natural disater, collective reform and the deteriration of the relationship with USSR are all the reasons, not just the collective reform. Here the problem is you need to choose between two evils, the threat from outer world or the despotism resulting from the planned system. So you should calculate first how many people were killed in war or by opium from 1840-1945. Plus, Mao never chase his own good to starve those people.

About Russia, I only heard there are two system, capitalism and socialism. What category does the "cronyism floating on oil revenues" belong? Or maybe you have more narrow definition about capitalism. Please explain.

So you say corruption in America is different with that in other countries. How about India? Is it a capitalist country? Isn't it corruptive? Then how about America in early 1900s? Isn't corruption at that time more popular and severe than now? Is America at that time capitalism? There must be some other variables which can explain this phenomenon, but it is not capitalism or socialism. I suggest you read some historical books. Plus, I do read some papers of Gary Becker and Rober Barro, I do not see where their views are in conflict with mine. I just say maybe there is no causal relationship between corruption and socialism. Is that problematic? Please show me.

I do not think I am prepared enough to talk about Iran. But I am quite uneasy when you say Mao is a mass-killer.

You do not need to worry about my chuckle. I am glad someone agree with me, there is no shame.

DanC

I assume you have easy access to the internet. Research Mao on your own and decide. Then be thankful that people like someone like Deng Xiaoping was able to change the path. (And remember that Maoist turned his son into a paraplegic by throwing him out a window because of the father's views.)

The failed collectivist efforts were the direct unambiguous cause of the mass starvation. The rest is noise.

The outside threat is a common myth used by despots to gain control. And not to be cynical but Mao doesn't look like he lost much weight while millions starved to death. Perhaps he had a slow thyroid.

On Russia I can refer you to a recent Economist cover store.

Socialist countries are more prone to bribes, black markets, etc. then capitalist countries. When formal legal markets are unable to allocate resources, secondary informal markets form. Socialist economies create more market distortions which leads to more secondary, often illegal markets.

When US laws prevent the drug trade, secondary markets step in. When discrimination is allowed, secondary labor markets step in. When the government distributes profitable contacts, absent a profit motive, politicians will allocate based on political advantage or sometimes bribes. etc.

ronghai,zhang

“Peking has two fundamental objectives in its economic planning: first, to maintain an adequate level of food and clothing for the growing population; and second, to develop a modern industrial base that, while small, will be capable of supporting a strong military force.”

U.S. Congress, Joint Economic Committee, Allocations of Resources in the Soviet Union and China-1976(Washington, D.C.: Government Printing Office, 1976), p.25.


“And Samuel told all the words of the LORD unto the people that asked of him a king.
And he said, this will be the manner of the king that shall reign over you: He will take your sons, and appoint them for himself, for his chariots, and to be his horsemen; and some shall run before his chariots.
And he will appoint him captains over thousands, and captains over fifties; and will set them to ear his ground, and to reap his harvest, and to make his instruments of war, and instruments of his chariots.
And he will take your daughters to be confectionaries, and to be cooks, and to be bakers.
And he will take your fields, and your vineyards, and your oliveyards, even the best of them, and give them to his servants.
And he will take the tenth of your seed, and of your vineyards, and give to his officers, and to his servants.
And he will take your menservants, and your maidservants, and your goodliest young men, and your asses, and put them to his work.
He will take the tenth of your sheep: and ye shall be his servants.
And ye shall cry out in that day because of your king which ye shall have chosen you; and the LORD will not hear you in that day.
Nevertheless the people refused to obey the voice of Samuel; and they said, Nay; but we will have a king over us;
That we also may be like all the nations; and that our king may judge us, and go out before us, and fight our battles.”

Chapter 8, Samuel, Bible

ronghai,zhang

I agree with you that in Socialist China, nearly all the prices are distorted. This distortion is exactly for the development of a industrial base which can support a relatively strong military force(compared with the past, of course).

In rural China, the price of capital is high and the price of labor is low. But the heavy-industry-directed investment needs a lot of capital. If it is a market economy, the interest rate may go too high and this investment can not be sustained. So the heavy-industy development strategy is the real cause of the planned economy which purposely lower the price of capital. This view is actually held by Justin, yifu, Lin in our school. He has a lot of papers published in some top economic journals, maybe you can find some.

Jack

Dan.....

I would not turn a blind eye to the evils of Mao and the communist past. 2 to 5 million people killed as Mao consolidated power another 1.5 million sent to education camps. Millions more starve to death from failed agricultural collectivist "reforms". You want to see the Kibbutz idea gone really mad, look at Chinese agricultural reforms that the communist in China tried."

.......... Dan, I don't think anyone here is "for" military dictatorships and that we've agreed that the voluntary formation of kibbutz or communes as a choice in a free society is much different from one dictated under totalitarian governments.

Want to see what China would look like without a turn to free markets? Look at North Korea, is that a model to follow. Pursue military might while people starve and make false claims that it is for their own good.

......... Hmmm........ "military might" at the expense of the people is hardly unique to socialist nations, consider, the good ol' US spends more on military than all the other nations combined.

Russia is hardly capitalism. It is more like cronyism floating on oil revenues.

.......... cronyism seems an apt description of much of what is going on in the US these days too.

Corruption is a drain on all societies. For some, like the US, it becomes a nuisance tax. In Nigeria it becomes a way of life that blocks development. View corruption as a tax, then ask if the corruption occurs because of a market failure or because that is the way the government funds itself indirectly.

............ Well, in the US, I'd say the "government" does not profit from the corruption; it seems more of an industry of trading pork in return for preserving public power of our "elected" "representatives". My guess is the feedback loop is FAR more costly than most of us think.

I suggest you read Robert Barro (and Gary Becker) on what may generate real economic growth

...........Currently, since the US and much of the world is suffering from OVER-capacity of which the flip side is too little demand, the pump priming would be that of getting some discretionary income into the hands of those of median wage and lower, who have the highest propensity to spend to fulfill their unmet needs. Bush would have been FAR better off, in terms of spurring the economy and creating jobs to have implemented a strong program to address the problem of our crumbling infrastructure than to have cut taxes for the upper income group. Today, it's a huge problem, as "job creation" w/o government spending more than they take in, would be zipnada, and we're too broke to continue the "spurring". Trickle down just doesn't seem to work and just leaves us with a pile of unpaid bills and a weakening dollar.

Iran shows a strong desire to become a regional military power that will move aggressively against it's neighbors. The Iranian people suffer deprivation and loss of liberty as Iran's leaders impose a fascist state cloaked in religion. The Iranian view of the correct world order should scare people around the world. The purges that the current Iranian rulers would like for the middle east would repeat the mass killings of Mao and Stalin.

.... Indeed, they are much like us in that a high percentage of the people do not favor a government "cloaked in religion" but they have one anyway. I'd hoped that looking closely at the messes of the M/E would highlight the risks in the US of confusing government with religion. As fuzzy as it can be, at times, the separation of church from state is one of our strongest assets.

Jack is a hollow drum - he makes a great noise with little substance. His quirky mix of leftist, populist, protectionist, and conspiratorial world order views can be mildly amusing. He is the guy in the bar who complains about everything but offers solutions that are worse then the disease. So have a little chuckle when you read Jack and know that in the US we tolerate a wide spectrum of views.

........... Oh? One of the things I've noticed is that of the "right" (faux conservatives?) and their "talk show hosts" who never dare to host anyone, IS that of never proposing any solutions to our myriad problems. Come to think of it, neither have your posts.

....Want to try? Health care was 12% of GDP when Pres Clinton said "the worst thing we can do is continue doing what we're doing", and 30 million were w/o health insurance. Today? HC consumes 18% of GDP and over 45 million are w/o insurance. And this is before the boomers retire and pile onto Medicare. Do you see something of a trend? Other nations care for all of their people for 8% - 10% of their, typically, smaller per capita GDP. Do you think this is just fine? Do you think we can even hope to "be competitive" in a global economy while diverting 10% more to a health care system that is not even top ranked? Do you have any suggestions?

Cheers, and perhaps listen more closely to the sound of the drums? Jack

Jack

Zhang: You say "to build a relatively strong military". I wonder why they think it wise to spend heavily, (or virtually at all?) for military? China has never been successfully invaded. While, perhaps a superpower could "invade", but what would they do with it? It would take most of the US population to even try to occupy China and what would be the reason?

As for hegemony in Asia? Other than nukie brinksmanship, they'd have to engage in a Soviet style arms race and still come out second best. Doing so would seem to risk any number of their advantageous trading agreements with Western nations. They'd be wise to take heed from Ike, who advised that "every dollar taken for military uses" is a dollar not available for schools and domestic uses. I assume it's the same in yuan! Jack

DanC

Jack
Now you compare North Korea and the United States and shrug that all countries spend money on the military. Then you equate the participation of conservative christians in a democratic government to what the fascist leaders in Iran want to do. Obscene

So you can rant against the United States all you want. You can attack free markets all you want. It is clear that an honest debate with you is hopeless.

Zhang

The failed policies of Mao is the reason China is now on a different path. Communism failed. It always fails.

If you want to look at a different model look at the Mejii restoration in Japan. Imperial Japan was able to build a very powerful military without resorting to the starvation of the population.

DanC

Zhang

BTW Justin Yifu Lin seems to be a very good economist

zhang

Yeah, I think so.

Tracy W

This is QUITE a lump! Did people "move away from kibbutzes or matriculate into other endeavors? I point out that the US and what remains of our "capitalist" system has some very big problems to solve. Are the problems of the communist nations relevant???

Yes - they put the problem of the US into perspective.

Wages have been flat because health insurance has been rising and that is not counted in wages.

Americans produce great swathes of grain from their farmland due to capitalism, not due to access to low-cost resources.
Japan and America and every other rich country prospers because people work very wisely. What's your point?

Germany is one of the largest suppliers of high-quality engineering equipment in the world. Also vehicles, iron, steel, coal and cement. Sadly, America does not buy enough speciality cheeses from outside due to dairy quotas.

The labour supply of China and India does not border on the infinite. Infinity is not a number. It is a concept. A series may approach infinity, but the population of China and India will not. Look at it this way - the combined population of China and India is less than 3 billion people. There are a lot of numbers larger than 3 billion. For example, a google is 1 followed by 100 zeros. The combined population of China and India is less than 1% of a google. Therefore their population does not border on infinite. And please study the concept of comparative advantage. The Chinese and the Indians may be able to produce everything cheaper than the US, but it would still make sense for them to concentrate on the things that they produce most efficiently, and pay Americans to do the things they do least efficiently.

And, then, lets imagine that this doesn't happen, and that as the Chinese and Indians get richer, they have nothing they want to buy from Americans. Will Americans therefore turn up their toes and die? No, I have far more faith in Americans than that. Instead, Americans will make do with their own resources, and go back to apparently what you regard as the golden age of trading only within the USA.

My original lament here is that there ARE a LOT of fixes that NEED to be done NOW or our future will be QUITE bleak.

People have been saying this for as long as we have widespread written records. I don't see anything special about now.

France's productivity per hour worked is high because they work less hours. As a non-politically correct academic of my acquaintance put it - how do the Americans get such great productivity growth while hiring morons?

I don't know why the dollar is falling comparatively to the yen and euro (except in the extremely general sense that on average traders in the dollar believe that returns will be higher from yen and euro investments), but these things happen from time to time. And then they go the other way.

Does your complacency stem from a confidence that we'll soon find a way to sell $600 billion worth of stuff w/o increasing our imports?

Yes, since the dollar is falling. US exports are worth more, imports become more expensive, so people will import less and export more.

Please read the European newspapers - every country in the world has a long list of problems they worry about. French unemployment is near 9% compared to the US's 5%, the government debt is 65% of GDP - about the same as the US's Germany's public debt is slightly higher at 67%. Japan's public debt is at 176% of GDP, and they have a far more aging population than the US. Oh, and their Prime Minister has just had to step down due to scandals. (CIA Worldfactbook figures).

Once we've armed the Saudi's and those made nervous by the Saudi build up, what do you suppose we'll sell? The rest of our manufacturing plants and equipment?

Healthcare services, financial services, high-tech designs, Hollywood movies, top-quality university degrees, software, American wines, wheat and other crops, and probably a million other things I don't know about.

Oh, and the next generation of weapons to the Saudis most likely.

There's nothing special about the US's economic or political problems - everywhere in the world faces them. And people *always* worry about some oncoming economic and/or political crisis, there's nothing special about now. Please get a sense of proportion. If you only look at the US you get a weird distorted sense of the world and blow things up into far bigger problems than they actually are.

Jack

test is this thread still open?

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