Resonse on China's Economic Future-BECKER

Thanks once more for interesting comments. I have a few reactions. I argued in my entry that it was in the interest of a country like China to pay little attention to intellectual property rights since it is a net importer of knowledge. I suggested this will change not only because of WTO pressures, but also because as China continues to grow, it will be producing more knowledge itself, and would then have more incentives to protect knowledge. I was well aware of American violation of European intellectual property rights during 19th century. The rural countryside is poor protection for unemployed urban workers since farmers are still dirt poor compared to urban workers. That is why there is such strong pressure for rural persons to move to cities, a pressure that the present regime is trying to slow down. I agree the absorption of East Germany in a very inefficient way, such as the one for one exchange rate between eastern and western marks, hurt the German economy. But many of its problems in labor markets and elsewhere really are independent of this, and Germany was already slowing down before the absorption. To be sure, the size of China is important for many questions of trade and global military influence. And the aggregate GDP of China is likely to become the world�s largest before long since its population is so large. But surely per capita GDP is the relevant measure for understanding what is happening to the economic well being of the typical individual? The evidence supporting the causation from economic growth to greater democracy is not based on a single study, but a history of studies for the past 40 years. I know of no respectable recent evidence that overthrows this conclusion. It is not true that I neglected civil rights. I did discuss the authoritarian regime of China, the greater freedom to farmers, the freedom to change jobs, etc. I could have added greater access to computers, internet, etc, although a lot remains to be done before China is a free society by any standard. I am not familiar with Slate�s criticism of de Soto. I believe he has done very important work on the underground economy, and his emphasis on the latent property of the poor is a keen insight. However, he carries that insight much too far. Bad property rights are a real problem in many countries, but China is a good example of a country that is growing from poor income levels at a rapid rate with weak property rights. I do not believe the poor of Latin America-de Soto�s example-have a lot of property, even if they had rights over all of it. I do not know Barnett�s work, but I will try to look into it, and see if it justifies a topic.

Comments

[killy]

Thanks

[Ryan Peterson]

Dr. Becker,

A recent article by Daron Acemoglu, Simon Johnson, Pierre Robinson, and Pierre Yared (http://econ-www.mit.edu/faculty/download_pdf.php?id=1090 ) suggests that the link between wealth and democratization is not causal and can be explained by omitted variable bias.

You say above that "The evidence supporting the causation from economic growth to greater democracy is not based on a single study, but a history of studies for the past 40 years. I know of no respectable recent evidence that overthrows this conclusion." Do you have any opinion of the above study? Is it simply not compelling (either due to flaw or simply because of the weight of previous evidence)?

Respectfully,
Ryan Peterson

[M. Simon]

I think property rights are important in a poor country because they allow begining of an individual business that is not farming.

Such small stake holders advance the desire for republican democracy.

[killy]

Thanks once more for interesting comments. I have a few reactions.

[John Smith]

I am amazed at how many people think that until you have a "study" on some idea, you can't know whether it's true or not. Many social phenomena are unmeasureable by studies.

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