Theories of 18th-century Irishman key in today’s China
ECONOMICS: Richard Cantillon can provide assistance in unlocking the paradox of communist China and its entrepreneurial class, writes ANTOIN E MURPHY
ON A recent visit to Shanghai I was struck by the extent to which China has not only a vast population (1.3 billion people) but also a burgeoning population of entrepreneurs. There is a multiplicity of backstreet shops with entrepreneurs producing a wide range of goods. They are not alone. The suburbs are full of Chinese companies producing commodities for the global market, while the mushrooming of high-rise buildings suggests there are many rich entrepreneurs in the construction sector.
China has quickly blown away the negative implications of the great financial crash of 2007 to 2009 and is in a new strong phase of economic growth. Gross national product is rising by as much as 9 per cent. This raises the paradox as to how a supposed communist country can produce such an impressive macroeconomic performance.
The reality is that from an economic perspective communism has been thrown out the window of these mutistorey buildings. The workers-versus-capitalists classification has no relevance to the restructuring of the Chinese economy. The 18th-century Irish economist Richard Cantillon can provide assistance in unlocking the paradox of China and its entrepreneurial class. more
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I don’t agree. Now it’s certainly true that the CCP has allowed for a significant degree of economic liberalization, which has indeed stimulated economic activity. But China still has a good amount of central planning, there is perpetual currency manipulation, and there’s simply no way to have a functional price mechanism under such a system. They’re most likely plagued by systemic malinvestments, and will probably see a major crises.
Great article until the end: “However, once the system moves to a more parliamentary system and the ruler no longer has control over these monopoly rights/economic rents, the scope for this type of corruption is greatly reduced, though it is not removed.”
England had a parliament when Smith wrote and all he could see was corruption. Corruption may be less in the West than in China, but it’s not because of democracy, as Congress repeatedly demonstrates.
Totalitarian regime will always produce whatever data it needs. So them reporting 9% growth is meaningless.
Their advantage is that the Chinese economy is more free than the US.
Of course, the gov’t morons with their “stimulus”, etc. are busy at work in China just as here, and so the question is: Will they kill the golden goose or will it survive?
Be careful. There may be a big credit bubble in China going on. When will it burst? Don’t know:
http://www.libertaddigital.com/economia/saltan-las-alertas-sobre-el-riesgo-de-colapso-crediticio-y-bancario-en-china-1276373303/
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