And note another problem. China doesn’t have a free press. And since the government policy is to promote exports, any non-governmental reporting of problems are treated as threats that must be suppressed. So a Chinese Upton Sinclair isn’t going to be able to publish a Chinese version of “The Jungle” because the government won’t let him.
So non-governmental methods of regulation of businesses that work over here aren’t allowed to work in China. You can’t threaten to call the newspapers over corporate crimes, because the government protects the businesses rather than the consumers or employees.
I’m bored sitting in an airport while my DS re-charges…so, I will ask the following: WTF does this link have to do with your supposed “argument?” Capitalism requires regulation. When people say “free market” they mean, as at least one poster has eluded to: enforced property laws, equal protection under the law (that is, a means by enforcing contractual relations, however, capitalism can probably exist without this requirement, it just wouldn’t be very efficient); privately owned means of production/resources; etc.
Holding up a Communist dictatorship as an example of unregulated capitalism gives “strawman” a new definition.
China practices a heavily regulated, corrupt form of crony capitalism that looks about as much like a free market as I look like Barry Bonds. The state still has a stake in thousands of enterprises, especially in utilities and heavy industry, where obsolete plant holds little attraction for private buyers and the state fears layoffs. The state-run banking system is forced to prop up these enterprises with billions of yuan in non-performing loans. Many such government-run industrial plants are among the worst polluters in the world.
China recognizes no rule of law other than the dictates of the Communist Party, so even so-called “private” businesses are dependent upon clout and connections for permission to operate, for access to raw materials and capital, and for contract enforcement. Persons without such connections can be exploited and ripped off with impunity. Labor organization is forbidden. The “hukou” system, although administered less oppressively than in past decades, still restricts access to education and government services for people moving without official approval, and the ability to grant and withdraw such permission grants employers a huge coercive advantage over employees.
Personally, I see China as an example of the dangers of oppressive government, not of unregulated capitalism.
Exactly. Its a strawman to even attempt to compare what China has to free market capitalism…and its laughable to claim that Chinese industry is unregulated! Even at our worst, in the dark old days of crony capitalism here in the US we never dreamed of the levels of corruption and government nose sticking that they have in China today.
If China has such an oppressive government and heavy regulation, from a business viewpoint, how did all these defective products get exported? As you may have read in The World Is Flat, today’s China is not the Red China of old. It is a shell of communism over a burgeoning capitalist China.
Now, about that Strawman charge. I’m not trained in debate, but from my looking around in the last half hour, I think you are stretching the term. At the start of this thread, I didn’t have an opponent. While it may be inaccurate to call China’s manufacturing base unregulated capitalism (badly regulated is more like it,) I did not attack that premise, nor did I declare myself the winner.
I have to go now, to a family event. I’ll be back later.
The irony being, one of the men they routinely call upon to vindicate their crackpot economic fantasies, Adam Smith, was not averse to having the government interfere in the market when he thought it necessary (and that was pretty often).
Don’t sweat it, the term’s already almost as misused as ad hominem
Um…were you under the impression that totalitarian governments lack corruption? What gave you that impression out of curiosity? Defective products got exported despite an oppressive government and heavy regulation because the government officials (some of which have recently been posing for gunfire if you hadn’t noticed) were corrupt…and since they in effect run and control everything, who was going to stop them (well, now that they’ve gotten such bad press over it I suppose those bullets are whats stopping them atm).
I haven’t read The World Is Flat, so I can’t comment on it. However, if they are claiming that the Communist government in China doesn’t continue to have a strangle hold on business in China, well they are full of shit is all I can say…or grossly mis-informed. Business in China is certainly allowed a lot more leash room than in the old days…but the leash is definitely still there and can be jerked up anytime the government wants too do so.
China has an oppressive government. I wouldn’t say it has “heavy” regulation, because the reality is that nobody in the government gives two shits whether your factory produces goods that are up to spec, or if it pollutes, or if the workers are safe, or if your goods are poisonous. They don’t regulate that stuff because their goals are different. They want China’s economy to grow, they want to get rich themselves, they their piece of the pie.
What China has isn’t heavy regulation but rather arbitrary regulation. Make the right person shareholder in your company, pay off the right official, and you can do whatever you like unless your corruption comes to public attention. But if you fail to pay off the correct people, then you’ll be shut down, your suppliers will dry up, you will be unable to get permits for anything, and so forth. And if your actions result in embarressing stories in western newspapers, you get a bullet in the brain.
The Chinese government has the power to shut down any business for any reason. They don’t exercise that power because they are content to take the golden eggs rather than kill the goose. You can shear a sheep every year, but only skin it once. Of course, such a course is unsustainable in the long run, but for now everyone is happy…people have jobs, the party officials get rich, China’s economy grows, and the prospects for future growth are good.
Beat me to it, I was going to say much the same thing. I would make the distinction slightly differently, though: China does not have regulation, in the sense of formal, well-disseminated rules and metrics with which industry must comply; rather, it has authoritarian control, in the sense that agents of the government can do pretty much whatever the hell they want in the name of whatever larger goal has been put forward by the state. In a regulated system, business can do what it wants as long as it follows the official ground rules; in the unregulated but highly authoritarian system, there is no comprehensive set of rules, except whatever the officials say they are whenever something unfortunate or unpleasant happens. Two very different things.
I got the phrases “oppressive government” and “heavily regulated” from Freddy the Pig in the post where he said I was purveying straw.
Then xtisme, after also calling me a strawmonger, comes to a mysterious conclusion.
I never said any such thing. xtisme conjured this “impression” of mine out of thin air, then argued against it. That style of argument sounds almost like…no, it couldn’t be that! :rolleyes: Could it? Naw.
There can be no corruption in capitalism? News to me.
In many rural areas, the factories own the government, not the other way around. It’s done with bribes, but also with jobs. Sure the central government can crush anyone if it cares to, but for the most part they either don’t know or don’t want to know.
A few weeks back a Times reporter asking about the poison pet food was held prisoner by a factory owner for six hours. That’s the sign of an autocratic government.
Having rules on the books and having them enforced are two different things.
If the Pure Food and Drug act is what saved people from the horrors of run-amok capitalism, would any of you like to explain why we don’t see endless shoddy products in industries that are largely unregulated? Say, computer hardware?
Perhaps you could explain why businesses seek out voluntary quality certifications like ISO9001 and PAY auditors to come in and evaluate their quality systems? Government doesn’t mandate it.
This notion that products in a Capitalist society will be defective unless the government tightly controls their quality is simply a load of crap. The vast majority of traits of modern products that we associate with high quality have absolutely zero to do with government regulation. From the quality of the stitching in your jeans to the easy-open food containers you buy, you are surrunded by products of high quality, where the quality of the product was the result of great effort and cost, done voluntarily to meet the demands of the marketplace.
And by the way, it’s a hell of a lot easier to bribe a government official than it is to pull the wool over the eyes of your customers for any length of time. And in many regulated industries, the phenomenon of ‘regulatory capture’ has allowed regulated industries to twist regulations to their benefit and shield them from the dictates of the market.
There will always be shoddy products. There will always be people who skirt the law, lie to their customers, or bribe regulators. But whenever this happens in an unregulated industry, people scream for more regulation. When it happens in a regulated industry… people scream for more regulation. It’s the true constant.
For a start, I’d argue that food and computer hardware are qualitively different, in that it’s obvious when hardware is faulty, whereas it’s not obvious when, for instance, your food is tinged with arsenic.
But largely unregulated? Every piece of hardware sold in the UK (for example) has to meet, at a minimum, the British Standards (“BS”) , as well as European Standards (“CE”), as well as meet the minimum requirements of consumer protection laws (the product is fit for purpose) etc. The days of unregulated industry are long gone in any industrialised nation.
Bad example. There is a large amount of “shoddy products” in the low-end of the computer hardware market, not to mention outright fraud and counterfeiting. There’s never a shortage of people who are willing to do anything to make a buck.
Sam, you constantly bring this point up, but nobody is arguing that every consumer product must be regulated ten ways to Sunday. You’ve often talked about how heights of desks and chairs aren’t regulated by the government, and yet the market takes care of that.
I have yet to see anyone argue that there ought to be government regulation of the heights of tables and chairs. Or what memory works with what computer, or the quality of golf clubs, the stitching on jeans, or whatever. When we talk about regulation, we’re generally talking about protecting the health and safety of consumers: Barbie dolls should not be made with lead paint, noxious chemicals shouldn’t be dumped into mountain streams, and so on.
It is pretty clear that China does not have a functioning system of regulatory controls to keep unscrupulous companies from making extremely dangerous products (eg, toothpaste and cat food) or dumping toxic waste willy-nilly into the environment. Perhaps if you could address how the market proactively protects people from real dangers – either in China or elsewhere – (as opposed to annoying, low quality products) better than government regulation, then you might have a point.
I’m asking you a question…one that seems pretty relevant to your post above. You asked how an oppressive government would allow defects to be exported. I’m asking you if you really don’t understand that oppressive governments have corruption. Seems pretty cut and dried to me. Maybe you should go back and re-read it again in light of what you wrote, ehe?
But my point is that even absent any regulation, these other industries still produce goods of high quality and low defect rates. Which would seem to be a good counter-argument to the idea that if the government doesn’t regulate business, business runs amok and floods the market with crappy goods.
In fact, the vast majority of products are largely unregulated. Sure, a computer might have to meet some regulations on electrical safety and RFI emissions. But those are only two characteristics of computers. Why doesn’t industry create computers that are electrically safe yet pieces of crap in every other way?
I’ve probably explained the mechanism a hundred times on this board. No one listens. I don’t have time to go through it again, but you might ponder this: After Enron went down, the government prosecuted a handful of people. The market punished the whole company and every other company that looked like it. Companies like GE that had capital divisions with fingers in many pies bent over backwards to open their books, submitting to voluntary audits, and restructuring their businesses to remove any questionable relationships, to avoid having their stocks hammered by the market. The market did a far more effective job of ‘cleaning house’ than did government regulators.
Again, nobody is arguing against the fact that market forces tend to make products better, cheaper, and more reliable. What I am saying is that the market sometimes does a poor job of balancing short-term profit with the interests of workers, customers, and the public, and that people cannot necessarily rely on long-term market forces to continually guarantee the safety or efficacy of any one particular product, in the same way that our continually growing economy doesn’t guarantee that nobody will lose their job.
Let’s get a little less abstract: China’s mine safety practices are just simply abysmal. Due to regulation, somewhere around two dozen US miners are killed in accidents each year. I believe China averages something like 4,000 mine deaths a year. There’s also all sorts of other dangerous business practices that have caused scandals, like unregulated fireworks industries employing underage children and having the factories blow up killing scores.
Then, of course, there’s the toothpaste and cat food. I’m just not clear what you’re arguing specifically in regards to those examples: are you saying that it simply doesn’t matter that Chinese businesses produced these terribly dangerous goods, because in the long run, the market will take care of those businesses? Why did the market fail to encourage these companies not to do seriously dangerous things? With respect to mine safety, isn’t it possible that the lack of regulations combine with market forces to make the situation even worse, since labor is so cheap that there is no incentive for businesses to adopt safer working conditions?
I think we’re speaking different languages here. When I talk about regulation of business, I’m not talking about ex post facto punishment of poor business practices or criminal activity. I’m talking about standards enforced by the government that stop dangerous products or practices before the public is harmed by them. In the example you bring up, the market response may have encouraged businesses to clean up their act, but the market didn’t lift a finger to stop the life savings of many thousands of people being wiped out by Enron.
Before you misinterpret what I’m saying, I am not saying that the responsibility of government is to prohibit investment schemes that are on the up-and-up but may carry great risk. But clearly Enron was not on the up-and-up, and we have regulators that are supposed to investigate those kinds of practices to that people don’t have their money wiped out by con men in expensive suits. That is the kind of system that China is completely lacking. The only question is, are the truly irresponsible features of China’s business community caused by its place in a corrupt climate of business and politics, or because that is the way businesses tend to act when nobody is watching and enforcing?
