May 09, 2006

China syndrome

For the past 50 years the various parts of China have formed what is probably the best controlled experiment into comparing Socialism with Capitalism that there is likely to ever be. All have similar ethnic groups (due to it's size there the People's Republic contains many ethnic groups, including those present in Taiwan and Hong Kong). All have the same cultural and religious base, even if the traditional religions have been suppressed in the People's Republic. All have spent most, or all, of that time as dictatorships. The principal differences are economic:
  • The People's Republic is still principally a Socialist republic, despite it moving towards Capitalism (because it works) since the rule of Deng Xiaoping.
  • Taiwan is Capitalist, having been ruled between 1949 and 2000 by the Chinese Nationalists driven out of the mainland by the Socialists under Moa Zedong.
  • Hong Kong is Capitalist of the laissez-faire variety being ruled by the British with an attitude that can be described as benign neglect between 1841 and 1997.

The following data is from the CIA World Factbook:
 Hong KongTiawanPeople's Republic
median age40.734.632.7
life expectancy81.5977.4372.58
GDP - per capita (PPP)37,40026,7006,300
net migration4.89/10000/1000-0.39/1000

So from the data it is easy to see that the more laissez-faire a country the higher it's GDP per capita, no suprise there. But also there isn't a strong corelation between general education levels (which literacy provides a good way of measuring) and GDP per capita, you can have a fairly high level of literacy and yet still have a poor GDP per Capita if the rest of the system is wrong. Median age and Life Expectancy correlate with the level of laissez-faire, the freer the system the longer people seem to live. But perhaps they are happier despite being poorer and living shorter under a Socialist system? Well there is a way to look at that, do people want to live there or would they rather move somewhere else? Again the numbers are fairly clear, people want to move to the laissez-faire Capitalist society and away from the Socialist one.

Or to put it simply; Socialism sucks.


Blogger tomdg said...

I think there are a few holes in your argument.

1. You can't draw any conclusion from a single example. Nazi Germany was capitalist therefore capitalism is evil. Stupid example, same logic.

2. How socialist is China? It embodies lots of values which aren't socialism as I know it. The UK would be as good an example of a country run along socialist lines, what with our living benefits, free health care and education. And we're doing ok.

3. GDP is a very one-dimensional measure of good and bad. (I think you partly acknowledge that). Median income would be a better (but still bad) metric, but even so, money is only one dimension. If GDP is your metric, that strongly shapes what you see as "good".

4. In order for your figures to be meaningful, you'd have to provide comparisons with how each area looked in 1949. There were some incredibly poor parts of mainland china back then. Yunnan province, for example: when Mao's army were chased there by the nationalists, it was assumed they'd all starve. Instead they revitalized the province and thrived.

5. You should do a similar comparison between countries in the Americas. I suspect Cuba would stand head and shoulders above it's neighbours in terms of literacy and life expentancy (Cuba's is simiar to the USA's).

6. Who migrates and why? Wealthy people can move more easily than poorer. People also migrate to escape totalitarian regimes, left or right.

7. China is bigger than Hong Kong and Taiwan. If you look at countries in Europe, you'd find a strong correlation between being small and having higher GDP. Part of what you observe could be to do with national size independent of government type.

8. Another problem with GDP is that it takes no account of local prices (which vary hugely). Buying power is more meaningful than income. If I lived in Cuba, China, South Africa, Argentina etc. on my current salary I'd be a lot better off than I am here.

The Chinese government sucks. Totalitarianism sucks. Rampant capitalism sucks. Democracy, in its own way, also sucks. But a good mix of law and liberty, democracy, technocracy and autocracy, capitalism and socialism, is the best kind of government we can hope for.

9:52 am  
Blogger chris said...

The Nazis where socialist, and the People's Republic of China is the archetype of an actually existing Socialist state. They are moving away from the Socialist ideal since Deng Xoaping allowed the market back into farming, following the attempt to put 'from each according to his ability, to each according to his need' into practice had created a famine that killed millions.

Tiawan and the mainland where both at roughly the same state following the Japanese occupation and Chinese Civil War, providing a reasonable baseline.

People migrate from places where they don't want to live to places where they do. And they don't like living under Socialism compared to a capitalist territory like Hong Kong.

8:53 pm  

Post a Comment

<< Home