Planet Money: The Original Chinese Capitalists

Ok last post on China for awhile… 

Stiglitz and Wolf both hold up China as an example of a developing nation that has flourished with globalization. Stiglitz writes on how China has averaged near 9% growth for the past 3 decades (11) and has lifted hundreds of millions of people out of poverty (23). While Wolf attributes this success to deregulation and the opening up of special economic zones, and Stiglitz attributes the success to careful management of a potential hazardous boom bust cycle, it is important to remember that following the Cultural Revolution, China was an extremely poor, vulnerable and economically depressed country. This podcast details the spark that arguably started China's meteoric rise. In 1978, farmers in a small town took a revolutionary step and started farming for themselves. This was extremely illegal in Communist China, where all goods were supposed to be collected by the government and redistributed. The end of result of these Chinese farmers' experiment has to be considered one of the most compelling arguments for the benefits of a capitalist system in the past 100 years (at least on a micro level). Check out this Podcast from NPR's Planet Money!

BBC Talks With Chinese Economist

http://www.bbc.co.uk/programmes/p00msxgh

In the same vein as last weeks post, BBC's Zeinab Badawi discusses China's recent economic growth pains with prominent Chinese Economist Cheng Siwei. During the course of the discussion, Badawi tries very hard to get concrete answers concerning the growing number of riots and public dissent that have come to light in Chinese society, and tries to make the case that these are signs that China's system is starting to show cracks. Cheng meanwhile contends that China's economy has only slowed because of the financial crisis in the West, which has slowed down demand for Chinese exports. This is interesting--showing tension between a newly developing country and countries that have been developed for sometime.

Mass Suicides at Chinese Microsoft Plant vs. Free Trade

http://www.cnn.com/2012/01/11/world/asia/china-microsoft-factory/index.html?hpt=hp_t3

Today in class we were asked whether or not we supported free trade. At the time my answer felt obvious, of course I support free trade. This was probably influenced by our first reading, from Martin Wolf, who makes the hypothetical argument that it makes little sense for America to set prohibitive barriers that create 50 separate economies. In same way, it doesn't make sense for the world to be divided into 200 separate economies. This logic seemed compelling at the time, but the more I think about it, the more unsure I become in the free market logic. Take for example the afore mentioned article. The details are a little sparse, but its slightly perturbing to think that in order for us to consume products for a "reasonable" price here in America, our goods need to be created by Chinese workers toiling in a sweat shop. Not just toiling, but treated poorly enough to consider mass suicides in order to improve working conditions. This article makes me reflect on my earlier assuredness in the free market, perhaps I do support some sort of regulation after all?