Thursday, April 12, 2012


Time I got back to this blog. A colleague recently sent me a piece from the NEW YORK REVIEW OF BOOKS, a review of a new book by Michael Spence: THE FUTURE OF ECONOMIC GROWTH. I have only read the excerpts dealing with China in the NY REVIEW piece. But that set me off on a favorite subject that I offer here: I'm not running out to buy this. Spence is fairly typical of the perspective seen through what he knows: the Euro/US filter. He treats China and India as if there were analogies he assumes to western development and development patterns. He asks whether "this time will things be different"? Things have been different from the beginning of China's entry back into the world. One danger traveling academics and others face and almost invariably leads them astray is the view of "modern China" that looks so much like home. So they never stop to think that Beijing and Shanghai are not China. That because the US is a big powerful country they know something about big powerful countries. "Gee its so modern". Yes, but the rice farmer down the road is still plowing with a water buffalo while the high speed train passes nearby, while the farmer pauses to call his wife on his smartphone to tell her "honey, I'll be late for dinner." Right, its all very familiar. Just like home. T'ain't so McGhee. Spence is not so much wrong, he isn't. Much of what he says is correct in an isolated and theoretical way. I will spare you a somnambulant inducing diatribe with a short version. China is doing something no other country on earth has ever done. Every economist will tell you that there is no theory that includes the ability for a country of any size to grow at between 8-10% a year for 30+ years. Remember cycles from econ 101? Not here baby. Does that mean the Chinese are on to a secret new form of economics? Balderdash. They invent as they go. The principle of Party control remains in force. That is as close to a philosophy as they have. Marxism/Leninism be damned. The task is simple. Make sure there are 22 million new jobs every year; that is what China needs to satisfy the turnover, them what gets turned over into the earth and them what retires. That requires 8% growth. Simple formula. The best way to insure the growth is keep as much of the big economy in the hands of the Party; banking, steel, coal, power transportation. Its a command economy behind a scrim that looks a lot like capitalism. Thus far it has worked. Will it keep working? Beats me, and I am convinced it beats them to. They, the top leadership, wakes up every morning thanking someone that they made it through the previous day. Now make a world econ theory out of that with the Spencelike approach to mixing analysis of what has passed (and that can be debated long and hard) to the near-useless attempt to predict future paths. Might as well throw darts at a target you can't see. It depresses me the extent to which the speculators all include the military option fairly high in their agendas. Damned alpha males waving their dicks at each other. Where is it writ we gotta to war or they have to go to war with us? Oh yes, its always happened therefore its gotta happen again? Now there is a deep thinking. Has someone conveniently forgotten where we have come to. Nuke's baby, hydrogen nukes. Like the end of the world if you use that stuff. Get real. The challenge is not to end the world. Ending it is easy. just follow your dick. Further questions?