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China's coming collapse?

Michael May comments on the Washington Post article on the high unemployment in China, which argues that only the free market system can solve the problem:

"Without taking sides on what China's economic growth has been recently, a controversial subject, it should be noted that an economy "in which the state's role is limited to the provision of justice and arbitration," such as Waldron advocates as the only remedy in the referenced article, does not exist anywhere and has never existed in any modern country. The US may come closer than others, but the US government has intervened in major ways, overt and hidden, in most markets (labor, health care, agriculture, steel and autos, housing and lumber, electricity, transportation, oil, coal, to name just a few that have recently been in the news) and continues to do so. That intervention has been so pervasive and long-lasting that it is impossible to decide now what the net result of it all has been, although there is pretty clear evidence that the protectionists aspects have been harmful.

China, in my humble worm's eye view, continues to evolve in ways that defy easy categorization, but a recent article by Charles Wolf, former Dean of the Rand Graduate School and a noted long-time conservative economist, points out ("Capitalism Chinese Style" in International Economy (Winter 2002) that China is probably moving closer to the European economic model than to the American one. European governments are much more interventionists into the economy than the American government, some of that by the repeated desire of their electorates. The social contract underlying economic arrangements is different there from here. It would not be surprising if that were the direction China moved, given the political factors at work. China has a long ways to go of course before matching any of these economies or their social safety nets".

Ronald Hilton - 3/26/02