Did Capitalism Help the Poor in China from 1979 to the Present?

[BrentWil]

Question for DUers. I believe in redistribution of wealth to ensure the poor and middle class have education, health care, food and housing. However, some on DU want to throw the baby out with the bath water and take down the whole Capitalist system. The claim is that Capitalist doesn't help the poor. My question is, is that true? Did Capitalism help the poor in China? The UN would argue that it did.

http://www.undp.org.cn/modules.php?op=modload&name=News&file=article&catid=10&sid=10

China’s rapid economic development in the past two decades has generated the most rapid decline in absolute poverty ever witnessed.
Both national and international indicators show that China has already achieved the goal of halving the number of people in extreme poverty by 2015 set by the UN as one of eight Millennium Development Goals./div]

The question for DU is why have things gotten better in China since 1979? Is it because of Capitalism? Is there another factor? What has made the difference in the great reduction in extreme poverty in China?

[Oregone]

1. It turned them into higher level consumers of earth's resources

Thereby contributing greatly to global warming through pollution and agriculture. It also contributed heavily to the massive polluting of China's waterways, endangering a handful of animals.



Hurray for capitalism. Perpetual growth to extinction!

Hi. My name is Ghan Zho, the Chinese River Dolphin! My hobbies are meeting fishermen and eating fish. What I want to do right now is go smoke a fat joint with Oregone, but I can't! I'm extinct. Isn't that sad? Not really....river dolphin sadness is a river dolphin construct, and we simply don't exist anymore to feel it. But, I could really go for some good Oregone Ganja.

[BrentWil]

4. Global warming is a problem that needs to be dealt with

However, did Capitalism reduce poverty in China? That is the question of the OP. If it didn't, what did?

[Oregone]

5. Maybe the invisible hand will magically fend off the sun's rays

Ya know, after India and Indonesia start burning as much CO2 per capita as Americans

[BrentWil]

7. Well..

Market regulations and tax that increased the cost of carbon based products would insure the free market worked on other solutions for energy. Also, there could be some technological solutions for the problem

Also, still didn't answer the question

[Oregone]

10. Too late for Mr.Ghan Zho, the Chinese River Dolphin

"Dolphin Ghan isn't with God, he's fuckin dead. He wasn't religious. So thank you for your thoughts, but he's fucking dead"


With that, Im going to go smoke a fatty in his name and bow out of this for the night



LEAVE CAPITALISM ALONE!

[MellowDem]

20. Not at all...

Industrialization did that. Do you think Capitalism and industrialization are one and the same? Soviet Russia heavily polluted the environment as well, even as the economy grew as the country became industrialized.

Capitalism doesn't require that a country have a huge industrial base, or even an industrial base at all. But a non-industrialized country usually is quite poor.

[Oregone]

24. Got it! Industrialization did all the bad stuff and capitalism did all the good stuff!

Yip Yip

[MellowDem]

37. Yeah, that's what I said...?

It isn't so much the economic system you have an issue with rather than how it is regulated. Humanity has been exploiting the resources of the planet to disasterous effect for a long time now, even before the notion of capitalism existed. The problem is a lack of regulation or policies aimed at conserving the environment. Many communist countries haven't been friendly to the environment, but that has little do to with the fact that they are communist countries.

Greed and lack of foresight are the main problems, and those will always be around, no matter what economic system a country is operating on.

[LanternWaste]

32. Having recently re-read Paul Kennedy's Rise and Fall of the Great Powers

Having recently re-read Paul Kennedy's Rise and Fall of the Great Powers, I'm compelled to agree. Part of his latter-premise is that a thriving industrial base (relative to the other great powers), regardless of the fundamental political system in place, ensures domestic wealth and a growing GDP.

[Skittles]

2. and the cost?

increasing poverty in America

[nadinbrzezinski]

3. First mistake

China is not a market, aka capitalist economy...

And yes it did, but I am not sure most Americans or Europeans would like to live under that system.

Second mistake, what helped china the most is something that actually follows "classic" economics. This is the One Child Policy, which is making labor (aka young labor) increasingly more expensive.

As to throw capitalism... I'd like a little capitalism. For reasons that are beyond most folks on DU, we are NOT a "free market" economy... and for god sakes I want THE remedy recommended by Smith to be used like yesterday... striking the monopolies down.

Yes, it is LOTS of fun to read the actual holy books (The Wealth of Nations) and realize that what we live under can be described as capitalist only when you strain to do it. OH and yes I know the myth very well, but what we have is far more akin to a COMMAND ECONOMY than people realize... go on, google command economy and capitalism... you might learn something in the process.

[WhaTHellsgoingonhere]

140. I got stopped dead in my tracks on his first mistake

whaaaaaaa??????????
:crazy:

[RandomThoughts]

6. If demand is more then supply capitalism has some good effect.

Since it increases production, and allows for more distribution of needed goods by its efficiency.

If supply is more then demand, all the mechanism of capitalism go screwy as they have to create broken stuff for more consumption, and consumerism, then demand does not set what gets built, but what can be easiest to push on a population.

also monopoly capitalism loses competition a needed factor. And corporate capitalsim without breaking up price setting is really no different then state run central economy, except the people that are taken care of, and that elect leaders, are only shareholders not the population.

Also if demand is less then supply, people get unemployed, which can spiral causing less demand.

And it is a fact that as production by automation increases, there will have to be a system to create jobs in teaching, health care, art, research, and many other fields to create demand for jobs. Even large unemployment compensation has a good effect on capitalism, since the taxes it cost gets people making money off others work think it is not worth working that much, opening up more jobs. Basically if you tax the upper brackets to the max, then they leave jobs, since they keep a small percentage of the wages capitalism gives them, that is out of balance anyways, so after a few million, it gives a more diverse amount of money spread out among society, and fewer people owning huge amounts of some sectors.

[dionysus]

8. capitalism with fair regulations and rules is what created the middle class and made us prosperous.

and strong unions.

perhaps after 30 years of deregulation and fixed game republican capitalism, people lost sight of that.

"socialist europe" isnt pure socialism, and communism failed hard...

what republicans call "free market capitalism" is a rigged shell game with no rules. it's not a free market at all.

a REAL free market would be about fair competition and innovation, not sending jobs to sweatshops. not about monopolies.

i wonder what the "kill capitalism" folks would say if we were still in the era before reaganism fucked everything up. would they still be saying it?

[girl gone mad]

9. Did it help India?

You can't just look at one and not the other.

Two countries with large populations of impoverished people. Both adopted more capitalistic systems at about the same time. One managed to reduce poverty among its poorest, while the other still struggles with increasing poverty.

What's been the major difference in how the transformation was handled?

One country has a centrally planned government with a centrally managed economy and the other has democracy.

So yes, capitalism, in combination with a communist/dictatorial system of government, does seem to reduce poverty to some degree. At least under the global conditions we've had during the last couple of decades.

[BrentWil]

17. Actually, I would argue that it did. India is booming and its poor are doing much better.

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/SOUTHASIAEXT/EXTSAREGTOPPOVRED/0,,contentMDK:20574067~menuPK:493447~pagePK:34004173~piPK:34003707~theSitePK:493441,00.html

Over the last decade, India grew rapidly and the percentage of poor people declined.

The average annual growth rate between 1990 and 2003 was 5.9% , according to World Development Indicators 2005.

[girl gone mad]

72. This is what capitalism did for India:

"In India, the level of inequality has risen to extraordinary levels, when at the same time, hunger in India has reached its highest level in decades. Rural economies across India have collapsed, or on the verge of collapse due to the neo-liberal policies of the government of India since the 1990s<34>. The human cost of the "liberalisation" has been very high. The huge wave of farm suicides in Indian rural population from 1997 to 2007 totaled close to 200,000, according to official statistics<35>. That number remains disputed, with some saying the true number is much higher. Commentators have faulted the policies pursued by the government which, according to Sainath, resulted in a very high portion of rural households getting into the debt cycle, resulting in a very high number of farm suicides. As professor Utsa Patnaik, India’s top economist on agriculture, has pointed out, the average poor family in 2007 has about 100 kg less food per year than it did in 1997<36>.

Government policies encouraging farmers to switch to cash crops, in place of traditional food crops, has resulted in an extraordinary increase in farm input costs, while market forces determined the price of the cash crop<37>. Sainath points out that a disproportionately large number of affected farm suicides have occurred with cash crops, because with food crops such as rice, even if the price falls, there is food left to survive on. He also points out that inequality has reached one of the highest rates India has ever seen. In a report by Chetan Ahya, Executive Director at Morgan Stanley, it is pointed out that there has been a wealth increase of close to $1 Trillion in the time frame of 2003-2007 in the Indian stock market, while only 4-7% of the Indian population hold any equity<38>. During the time when Public investment in agriculture shrank to 2% of the GDP, the nation suffered the worst agrarian crisis in decades, the same time as India became the nation of second highest number of dollar billionaires<39>. Sainath argues that

Farm incomes have collapsed. Hunger has grown very fast. Public investment in agriculture shrank to nothing a long time ago. Employment has collapsed. Non-farm employment has stagnated. (Only the National Rural Employment Guarantee Act has brought some limited relief in recent times.) Millions move towards towns and cities where, too, there are few jobs to be found.

In one estimate, over 85 per cent of rural households are either landless, sub-marginal, marginal or small farmers. Nothing has happened in 15 years that has changed that situation for the better. Much has happened to make it a lot worse.

Those who have taken their lives were deep in debt – peasant households in debt doubled in the first decade of the neoliberal “economic reforms,” from 26 per cent of farm households to 48.6 per cent. Meanwhile, all along, India kept reducing investment in agriculture (standard neoliberal procedure). Life was being made more and more impossible for small farmers."

Also:

"The definition of poverty in India has been called into question by the UN World Food Programme. In its report on global hunger index, it questioned the government of India's definition of poverty saying:

The fact that calorie deprivation is increasing during a period when the proportion of rural population below the poverty line is said to be declining rapidly, highlights the increasing disconnect between official poverty estimates and calorie deprivation.<41>

While total overall poverty in India has declined, the extent of poverty reduction is often debated. While there is a consensus that there has not been increase in poverty between 1993-94 and 2004-05, the picture is not so clear if one considers other non-pecuniary dimensions (such as health, education, crime and access to infrastructure). With the rapid economic growth that India is experiencing, it is likely that a significant fraction of the rural population will continue to migrate toward cities, making the issue of urban poverty more significant in the long run <42>.

Some, like journalist P Sainath, hold the view that while absolute poverty may not have increased, India remains at a abysmal rank in the UN Human Development Index. India is positioned at 132nd place in the 2007-08 UN HDI index. It is the lowest rank for the country in over 10 years. In 1992, India was at 122ond place in the same index. It can even be argued that the situation has become worse on critical indicators of overall well-being such as the number of people who are undernourished (India has the highest number of malnourished people, at 230 million, and is 94th of 119 in the world hunger index), and the number of malnourished children (43% of India's children under 5 are underweight (BMI<18.5), the highest in the world) as of 2008<43>."

[Hannah Bell]

89. sounds similar to what it did for china: increased inequality,

[William Z. Foster]

11. more of this?

"I favor (insert left wing position) but because of reality we should support (insert right wing position.)"

This is something new - "compassionate libertarianism." LOL.

[Starry Messenger]

14. Friedman Democrats.

:crazy:

[dionysus]

15. if you ever cracked a book other than Das Kapital, it worked just fine when it was regulated.

see 1930-1980.

our middle class was the envy of the world until reagan came along and started the process of destroying it.

name a system that worked better in a large nation.

[Hippo_Tron]

19. It helped tremendously that for much of that time...

We were the only major western industrial power that hadn't been completely destroyed by World War II.

[BrentWil]

45. We were doing pretty good before that..

If you were White, of course. But economically, we were well off.

[William Z. Foster]

22. LOL

DU is becoming Comedy Central.

[dionysus]

27. i guess you can't dispute the facts...

:shrug:

[William Z. Foster]

30. what facts?

The fact that when when Wall Street has access to prison and slave labor in a highly regimented country a few make a lot of money? That fact? That is hardly an endorsement of Capitalism. There has been significant blow back in terms of adulterated goods and collapsed industries here. A few here got rich investing in China, and the rest of us have lost jobs, wages have declined, and public health safety are at increasing risk.

Besides, why cannot one criticize libertarianism without facing interrogation by the HUAC here? That is why I posted "LOL."

[dionysus]

34. prison and slave labor created our middle class due to the New Deal? i never knew!

and here i thought it was because we had a fair system in place which meant you could have no college degree, work in a factory, put in an honest days work, and be able to afford your own home and be able to support a family comfortably!

and the money men weren't allowed to steal like they do today, because regulators did their jobs...

[hfojvt]

60. the other funny part is how miserably poor most of America is

according to that view. Only a few made any money. The rest of us don't have cars, TVs, air conditioning, running hot water, etc. Heck most of us don't have more than one pair of shoes, that we have to patch with cardboard. Because anybody who is not on the fortune 400 is really miserably poor.

[Hannah Bell]

93. well, prison & slave labor created our original "middle class", that's for sure.

in the older sense of the term "middle class".

[BrentWil]

46. Have you been to China? Have you talked to the average person there?

You might get a different picture if you did. THEY have made tremendous progress and their lives are much better off. Ask them.

[William Z. Foster]

62. I understand they are organizing

There is a growing Labor movement in China.

Depends upon whom you talk to, and which lens you view things through, upon where you stand.

[Lydia Leftcoast]

68. Yes, I have been to China

Some people's lives are better, but others are worse.

We visited a prosperous city (Wenzhou) on the east coast, and it was very prosperous indeed, but the migrant workers lived dreadful lives, and their ragged children were not in school (the schools charge tuition now), but doing dangerous stunts (fire-eating, dangerous acrobatics) on the streets to earn a few coins.

[Hannah Bell]

88. That's something I noticed (in pictures) that surprised me. China is probably the world's biggest

clothing producer, yet it still has people in raggedy clothing.

And raggedy clothing is not so common as it used to be, even in the third world, because clothing on the world market is so much cheaper & common. Yet you see pictures of african villagers who look less raggedy than poor chinese.

I've not been to africa or china, but I thought it was odd.

[Hannah Bell]

87. the "average" person?

Household incomes in China, when converted to U.S. dollars at the official
exchange rate, seem low. The average household income of the top 10
percent of urban Chinese households (about 4.5 percent of all households) is
just $2,641 per person (about $7,000 per household), still quite low by U.S.
standards.

Most Chinese households had per capita incomes less
than $1,000 per year in 2003. The middle 20 percent of urban households
had incomes averaging $880 per person. The average for the middle 20
percent of rural households was just $275, an amount that included the
imputed value of self-produced crops consumed on farm.

China’s Gross Domestic Product (GDP) has grown very rapidly (9-10
percent per year) since China began market reforms in 1978, but income
growth has not been uniform across all Chinese households. Between 2000 and 2003, average per capita income for the top tier of urban households grew at double-digit rates far exceeding GDP
growth. However, income growth for low-income urban and rural
households—the majority of China’s households—was well below GDP
growth.

Slow income growth for rural households (55 percent of the population)
has become a major policy concern in China, but income growth has
been even weaker among low-income urban households. Average income
for the lowest decile of urban households actually declined slightly between
2000 and 2003.

http://www.ers.usda.gov/publications/err32/err32b.pdf

[blindpig]

107. money shot n/t

[apocalypsehow]

84. Precisely - so in lieu of facts countering your original reply all you're getting is a ton of "LOL"s

Very telling, that.

[dionysus]

117. these cardbord cutout "comrades" are a gas...

[Toucano]

12. Has it ever? Anywhere?

Seriously.

Capitalism is not about helping the poor.

[dionysus]

13. it did pretty good 1930-1980, until greedy bastards fucked it up.

:shrug:

[Toucano]

18. It helped the poor?

Really?

What was that "war on poverty" circa 1964, then? And was that actually capitalism that produced results?

Medicare, Medicaid and food stamps are not products of capitalism.

[MellowDem]

21. The economy funds all tax reciepts...

and a huge, prosperous economy can have a government with big tax revenues that allows us to have such things as medicare, medicaid, etc. A poor country can't afford those things as well, or at the very least would have to make priorities and couldn't have all of them.

[William Z. Foster]

26. other way around

First came the public investment in public infrastructure, then came the huge, prosperous economy.

That was the position of Lincoln-era Republicans and FDR-era Democrats. It is 180 degrees opposed to your point of view.

Poor countries are poor because the oligarchs in those countries prevented "such things as medicare, medicaid."

I cannot believe that we have people here - calling themselves Democrats - taking such an extreme conservative position - the banana republic oligarchy position.

[MellowDem]

31. What?

We won't have tax revenue without an economy. We do have a capitalist economy of sorts, and that economy allows us to have these public programs. The only way public investment even exists to invest in anything in the first place is from taxes. This is a fact, not a support of banana republic oligarchies.

Poor countries are poor for a lot of reasons. Corruption, lack of natural resources, war, you name it.

[William Z. Foster]

56. nation states

The rise of nation states was absolutely a necessary prerequisite for capitalism to exist.

It was the development of public education, public transportation, public communication systems that created the context within which modern capitalism could exist. See the Whigs and the early Republicans. Where there was not this public investment, as in the South, the economy was moribund and stagnant. There we had a relatively unfettered ownership class, little working class power (to say the least), and so therefore no public infrastructure to speak of, and it is easy to see that the public infrastructure does not come from the business owners, rather it works the other way around. This is the case in the banana republics, as well.

Holland lacks natural resources, as does England relatively speaking. The US is hugely corrupt. England, France and the US have been at war almost continuously. Obviously, those things do not make a country poor and do not explain the banana republic phenomenon.

People were creating wealth through their labor before there was any capitalism or capitalists. Taxes are not the only way to achieve this - barn raising, for example, or communally farmed land held in common, as was the rule in England a couple hundred years ago until the rise of capitalism, for another example. Public infrastructure does not require taxes, and does not require corporations or Wall Street. Corporation and Wall street do, however, absolutely require public infrastructure.

This is easy to visualize. Take the 1% - the bankers, investors and owners - and put them on one island and they can do what it is they do to their heart's content. Loan money to each other, I suppose. Take the working people and put them on another island and they can do what it is they do - building and producing real things. The first island will fail, the second will prosper. The people on the first island cannot exist without the people on the second, let alone become wealthy and powerful. The people on the second island can and will do just fine without the people mon the first island. They will do better.

[MellowDem]

66. Capitalism has existed long before the modern nation state...

People made/collected/fabricated things from the environment and traded them at the market. That's capitalism.

As for resources, I suppose I should have included human resources, like a highly educated workforce, that make places like England and Holland "resource rich" in a way. Many products nowadays require lots of specialization and knowledge.

Obviously, the creation of the modern nation state has created a context within any modern economic system could exist.

Your example makes no real sense given the modern nation state and economy. There is now such a thing as currency, which can be used to "barter" for anything. So the old island example doesn't really make any sense in the modern context. The islands don't exist in isolation. Obviously, if you took all the rich people in the world and did isolate them, they would have to work to survive, but that really doesn't prove anything.

If you look at your "second island", guess what would happen. Some of those workers would be more proficient than others in certain sectors of the economy, and may come to own their own businesses. Before you know it, you have rich people on the second island. Guess that kind of defeats the purpose of your example, whatever it was meant to illustrate.

Public infrastructure and the government do require taxes. People have been taxed since the dawn of civilization. It is a necessary part of any sort of advanced society.

[William Z. Foster]

71. we are not talking about the same thing

If capitalism is making, collecting, trading, and selling things, then it has always been everywhere at all times since forever.

Therefore, if it is everything, then it may as well be nothing. In that case, what are you defending?

Something changed a couple hundred years ago or so - something quite dramatic and radical. That something was described and analyzed and a new word was coined for it - capitalism - and these things happened sequentially and in association with one another. No one at the time tho9ught that they were describing something that had always existed.

If capitalism is merely trade and sales and making things, then it has been with us all along and nothing new happened a couple hundred years ago. In that case, you cannot credit capitalism with the wonders of modern technology, can you? Rather we would have to say that for tens of thousands of years capitalism failed, and then for some unknown reason suddenly succeeded.

You cannot have it both ways: that it us some friendly benign and innocuous thing that has always been with us, that is inevitable and that is human nature, AND give it credit for the wonders of modern technology.

[MellowDem]

76. What changed was the means of production...

Capitalism is the private ownership of the means of production. Owning tools that could make things is private ownership of a means of production. Most humans owned tools of some sort or other and made things with them. Some even made excess to trade with others. I think this is a fairly specefic idea, though admittedly it does seem rather universal in that we are all "capitalists". Of course, Marx would refer to these times as "pre-capitalist societies", but I don't see what was "pre-capitalist" about them. There were means of productions that people owned and used. The difference to Marx I suppose is that the laborer was the one who controlled the means of production, or in another sense, that person was a capitalist AND laborer, one and the same.

Then came the industrial revolution, mass production, etc. Now you have much larger, more complex means of production with lots and lots of laborers which greatly enhance efficiency but do require a lot more "capital" as well to even start up or keep running. Not to mention new worker roles such as management, etc. Now laborers are just laborers and part of the human capital that leads to the end product. Only a few individuals actually own the means of production.

Of course, part of the reason this happened was the free market. You had the owners of the means of production competing with other owners of the means of production. It used to be that if the other guy was outselling you, you could just go and steal from him, or kill him, etc. But with the rule of law of the modern nation state, you could now compete legitimatelly as a business and you now had an incentive to increase efficiency and spend time thinking of new ways of producing that would reduce costs etc. This incentive has led to many inventions. Not all inventions ever, of course, but many important inventions did have the incentive of competition created by the free market and rule of law behind them. It was why we saw the huge explosion of inventions in the last couple centuries. The rule of law can get a lot of credit as well for creating a stable environment in which free market competition could thrive. And it's only fairly recently that the rule of law became a reality for many nations, and not the law of religion, or aristocracy, etc. but a law that applied to everyone equally.

The problem with Marx is that he pushed for collectivist owership of the means of production. Since there is no real profit to be had in a communist structure, the incentives will be much different. Indeed, there may be no competition either. Whatever incentives there are may not be as much to drive effeciency or lower costs of production. Not to mention that decisions about how to proceed are much harder to resolve with so many voices in the mix rather than just a few or one. It reminds me of some of the disadvantages democracies have to authoritarian governments. Democracies can take a long time to do the right thing, whereas a smart authoritarian can do the right thing right away with no questions asked. And there are so many different interests pushing and pulling in a democracy that don't necessarily think about what's best for the country as a whole as much as the individual groups that make up the country. I can see how collective ownership could face the same problems. And it is why Soviet Russia eventually developed its own "classes" within the Communist Party and an authoritarian structure. The collectivist structure was pretty chaotic. It's why the US has a representative democracy rather than pure democracy, which is chaotic enough as it is.

[William Z. Foster]

79. labor itself

Labor itself being bought and sold was the radical change. If you don't see what was "pre-capitalist" about earlier societies, then you fail to understand what the word capitalism means. Before capitalism if it took you an hour to make a pair of shoes, and I could make 12 arrows in an hour, we would trade 12 arrows for one pair of shoes. There is no "profit" there. Both of us prosper equally, both of us get what we need. The change under capitalism is that the worker might be paid paid 6 arrows, for example - a half hour's worth - for the pair of shoes he makes with the capitalist keeping 6 arrows for himself. That is a radical difference. The profiting off of the labor of others is what capitalism is - what defines the new economic system, what is being described in all analysis of it, and what the word was coined to represent. Capitalism sees the worker as a commodity and his productivity is bought and sold and is the source of the profit.

People needs were provided for without competition.

You claim here that capitalism solved the problems that it actually caused - worrying about being outsold, for example. That is constant for businesspeople in capitalism, was rare before.

The age of inventions preceded, and went on and still does in parallel with private business activity. We did not so much see a huge explosion in inventions as we saw a huge explosion in applications.

It is not true that the rule of law is recent. Far from it.

[MellowDem]

81. Well then we disagree...

Someone in the "pre-capitalist" era with more training or better tools could make more arrows per hour than the next guy, and therefore he had more to trade with than the other guy. He could make 16 arrows, trade 12 for the shoes, and have 4 arrows as "profit". And labor was bought and sold even back then. Labor has always been bought and sold. To not think so is naive. Slavery has always been with us, and as societies became more complex, they had laborers that didn't own the means of production very far back in history. There are laborers in stories in the Bible. Just because nobody stopped to come up with a word for all of this stuff at the time doesn't mean it didn't exist.

There has always been competition. People's needs were often as not NOT met, and they died off. Wars are based off of competition for resources. There was no rule of law to stop people from declaring war over resources instead of competing in terms of business.

Viewing competition as a problem rather than a fact of life is probably the "problem" of your viewpoint. Even Communist societies had competition, and lots of it. Just not among businesses per se.

If the profiting off of the labor of others is what capitalism is, then it definitely has been around forever.

And describing all of the inventions of the past couple centuries in mainly Western, capitalist countries as "applications" has to be the worst excuse I've seen to explain away the evils of capitalism.

And yes, the rule of law to the extent we see it today is very recent. There has never been more law and less chaos in the world than today. Free markets don't exist in very complex ways in places of war and constant destruction and chaos, which is what most of the history of the world is.

Every liberal European state practices capitalism. But all countries are mixed economies. Capitalism is not practiced in purity anywhere. The mixed economy works very well. Yes, capitalists can profit off of labor, but if they are making decisions that help increase profit and help the company, then they increase wages for the laborers. It makes sense to me. And government regulates those companies so that laborers are treated well and so that CEOs don't get too much of a share of the profit, etc. It has worked very well so far. I do think we need more government regulation here in the States, but that's a question of balance rather than questioning capitalism itself, which is just about as sensible as questioning socialism itself.

[Hannah Bell]

92. "Competition" isn't a distinguishing feature of a capitalist economy either.

And your example of profit misunderstands what profit is.

"Someone in the "pre-capitalist" era with more training or better tools could make more arrows per hour than the next guy, and therefore he had more to trade with than the other guy. He could make 16 arrows, trade 12 for the shoes, and have 4 arrows as "profit"."


There's no "profit" in your example.

The fact that John can make 5 arrows in an hour & Sam can make 10 arrows in an hour doesn't mean that Sam made a profit & John didn't, it just means Sam is better at making arrows, so it takes him less time to make enough to trade for shoes.

Both men have the tools, knowledge and skill to make arrows. Both can trade with whoever has the shoes. Both can have arrows & shoes.

To make this into a story of profit, there needs to be more to your story.

Profit is about getting more than you put in.

[MellowDem]

110. I never said competition was a distinguishing factor of capitalism...

just pointing out that it exists in free markets.

In the simplest terms, let's say it takes one pair of shoes to work at making arrows for one hour. And one pair of shoes costs 12 arrows. If somebody makes 12 arrows in one hour, they have broke even. If somebody makes more than that, they have made a profit. If someone makes less than that, they are operating at a loss. If both workers continue to work, one making more arrows per hour than another, and they work equal hours, the one who is better at making arrows will accumulate more wealth.

[Hannah Bell]

123. so, according to you, any business that produces less than the leading business in the field isn't

making a profit, but operating at a loss.

gotcha. so pepsi isn't profitable, but coke is.


your little arrow story has nothing to do with profit.

for starters:

in the society in your example, everyone has access to the tools (handmade) & materials (rocks, wood) for making arrows.

once a producer makes enough for the season, they're going to go hunting, not sit around making more in vain hopes of cornering the arrow market.

if john makes 4 extra to trade for a pair of shoes, there's still no profit. he still has the same value that was in the arrowheads he originally made, & there's no profit, because:

4 arrowheads = 1 pair of shoes ($1 = $1)

sam can get the same pair of shoes, he just has to work a little longer.

and once you have a couple pairs of shoes, or a dozen arrows, why would you keep piling them up uselessly when you need to hunt, or sleep, or build a shelter, or dance, or get drunk?


"profit" isn't equivalent to "wealth".

i can increase my wealth by robbing my neighbor, but it's not profit.


like i said before, your little arrow story needs something more to be an example of "profit". & that something more doesn't exist in the scenario you laid out.

[William Z. Foster]

115. I think you misunderstood

I don't think you followed what I said.

[Hannah Bell]

91. "Capitalism is the private ownership of the means of production"

No, that in itself doesn't identify a capitalist economy.

[MellowDem]

112. The defintion of capitalism isn't set in stone or even agreed upon...

though some aspects of it are widely considered "capitalistic". What you consider a capitalist economy is one opinion. Considering you won't give your opinion of what capitalism is, it's hard to have any sort of discussion about it.

[William Z. Foster]

116. I think it is a woodchuck

That is my definition of capitalism.

[Hannah Bell]

125. no, it's a vole!

[Hannah Bell]

124. it is by scholars who understand economics. it's not about my opinion.

In general, capitalism as an economic system and mode of production can be summarized by the following:

Capital accumulation: Production for profit and the need for producers to accumulate capital in order to produce.

Commodity production: Production for exchange on a market; to maximize exchange-value instead of use-value.

Private ownership of the means of production: Ownership of the MoP by a class of capital owners, either individually, collectively (see: Corporation) or through a state that serves the interests of the capitalist class (see: State capitalism).

Primacy of Wage labor: The dependence on wages or salaries by a majority of the population who are coerced into work by the social conditions fostered by capitalism, and then exploited by the capitalist owners of the means of production.

http://en.wikipedia.org/wiki/Capitalist_mode_of_production

Marx argued that capital existed incipiently on a small scale for centuries, in the form of merchant, renting and lending activities, and occasionally also as small-scale industry with some wage labour (Marx was also well aware that wage labour existed for centuries on a modest scale before the advent of capitalist industry). Simple commodity exchange, and consequently simple commodity production, which form the initial basis for the growth of capital from trade, have a very long history. The "capitalistic era" according to Marx dates from the 16th century, i.e. it began with merchant capitalism and relatively small urban workshops.

For the capitalist mode of production to emerge as a distinctive mode of production dominating the whole production process of society, many different social, economic, cultural, technical and legal-political conditions had to come together. For most of human history, these did not come together....

http://en.wikipedia.org/wiki/Capitalist_mode_of_production

[Hannah Bell]

90. "People made/collected/fabricated things and traded them at the market. That's capitalism."

No. It's not.

But the fact that so many people think it is certainly shows something.

[MellowDem]

111. They owned the means of production for making those things...

I suppose I should have added that.

[Hannah Bell]

118. as previously noted, private ownership of tools ("the means of production") isn't

in itself indicative of a capitalist economy.

peasants on feudal estates also owned their own tools. they weren't capitalists.

[Toucano]

28. What does a "prosperous economy" have to do with capitalism?

Those are not synonyms.

Some poor countries have to make priorities and don't prioritize a military industrial complex or a war on drugs or a space exploration program while their citizens live in cars and die of easily treatable medical conditions. Those are "American Values", I think.

There are "prosperous economies" with 1/5 the GDP of the U.S. that have better schools, universal medical care, and a lower poverty rate.
They can't, however, blow up the world 20 times over or anything.

Failures, I guess.

[MellowDem]

35. Did I say they had a relation?

A prosperous economy is necessary to have things like medicare and medicaid, and the more prosperous the economy, the more comprehensive those programs can be.

[Toucano]

38. Sure.

Still has nothing to do with capitalism, which is the central question of the OP.

We're not disagreeing. Just answering different questions, I think.

[MellowDem]

39. Sorry, my post was in reply to another poster, not the OP...

As for capitalism and prosperity... they certainly aren't necessarily related. A capitalist country with a corrupt government, few resources, lots of wars, no real government power, etc. will likely be quite poor. Of course, the same could be said about any country that had those conditions, regardless of their economic system.

If it comes to a country that does have an industrialized base and resources, not to mention a strong government that controls the territory, I think it is pretty obvious that a mixed economy of capitalism and socialism tends to result in the most shared prosperity, judging by how many industrialized nations are mixed economies. I actually can't think of any industrialized nations that don't have capitalism in some way or other. Unless North Korea is considered industrialized. And even they only survive by having food sent to them by some of the most capitalist nations on Earth.

[girl gone mad]

73. I don't think you understand how fiat currencies work.

Your money would have no value without taxation.

[MellowDem]

78. What does that have to do with my post?

Regardless, the value of fiat currency mainly rests on the supply and demand for it, just like anything else, which is dependant on the state of the economy. The development of fiat currency came about in part due to taxation and fiat currency does require a government obviously. Fiat currency would have no value without government backing is what I think you mean.

[girl gone mad]

82. Fiat currency would have no value without taxation.

In a fiat regime, the ability of the government to tax is what confers value to the fiat money.

Taxation is central to money’s value, but taxes are not necessary in order for the government to spend. They are instead a means to control the money supply and maintain exchange value.

[MellowDem]

109. Why?

The ability of the government to delcare legal tender is what confers value to fiat money.

Taxation is one of many factors that can impact money's value. I don't know how it is "central" to it.

Taxation is a transfer of wealth. While one could argue in theoretical terms that taxes are not necessary for governments to spend, we all know that in practical terms they very much are necessary for governments to have enough revenue to run a modern nation state.

How would the government be able to spend if there was no taxation but taxation is what confers value to that spending in the first place?

[girl gone mad]

131. "The ability of the government to delcare legal tender is what confers value to fiat money."

Again, I think that your understanding of fiat monetary systems is lacking.

If your quoted assertion were true, Zimbabwe and the Weimar republic would not have run into trouble.

Taxes don't fund spending at the Federal level. They decrease funds available for spending, which is desirable when the economy approaches full employment.

Federal Reserve Chairman Beardsley Rumi recognized this feature of sovereign fiat currency regimes over 60 years ago. See http://home.hiwaay.net/~becraft/RUMLTAXES.html">"Taxes for Revenue are Obsolete" - Rumi, January, 1946 (emphasis appears in the original):

The superior position of public government over private business is nowhere more clearly evident than in government’s power to tax business. Business gets its many rule-making powers from public government. Public government sets the limits to the exercise of these rule-making powers of business, and protects the freedom of business operations within this area of authority. Taxation is one of the limitations placed by government on the power of business to do what it pleases.

There is nothing reprehensible about this procedure. The business that is taxed is not a creature of flesh and blood, it is not a citizen. It has no voice in how it shall be governed — nor should it. The issues in the taxation of business are not moral issues, but are questions of practical effect: What will get the best results? How should business be taxed so that business will make its greatest contribution to the common good?

It is sometimes instructive when faced with alternatives to ask the underlying question. If we are to understand the problems involved in the taxation of business, we must first ask: “Why does the government need to tax at all?” This seems to be a simple question, but, as is the case with simple questions, the obvious answer is likely to be a superficial one. The obvious answer is, of course, that taxes provide the revenue which the government needs in order to pay its bills.

… if a government persisted in borrowing heavily to cover its expenditures, interest rates would get higher and higher, and greater and greater inducements would have to be offered by the government to the lenders. These governments finally found that the only way they could maintain both their sovereign independence and their solvency was to tax heavily enough to meet a substantial part of their financial needs, and to be prepared —if placed under undue pressure — to tax to meet them all.

The necessity for a government to tax in order to maintain both its independence and its solvency is true for state and local governments, but it is not true for a national government. Two changes of the greatest consequence have occurred in the last twenty-five years which have substantially altered the position of the national state with respect to the financing of its current requirements.

The first of these changes is the gaining of vast new experience in the management of central banks.

The second change is the elimination, for domestic purposes, of the convertibility of the currency into gold.

Free of the Money Market

Final freedom from the domestic money market exists for every sovereign national state where there exists an institution which functions in the manner of a modern central bank, and whose currency is not convertible into gold or into some other commodity.

The United States is a national state which has a central banking system, the Federal Reserve System, and whose currency, for domestic purposes, is not convertible into any commodity. It follows that our Federal Government has final freedom from the money market in meeting its financial requirements. Accordingly, the inevitable social and economic consequences of any and all taxes have now become the prime consideration in the imposition of taxes. In general, it may be said that since all taxes have consequences of a social and economic character, the government should look to these consequences in formulating its tax policy. All federal taxes must meet the test of public policy and practical effect. The public purpose which is served should never be obscured in a tax program under the mask of raising revenue.

What Taxes Are Really For

Federal taxes can be made to serve four principal purposes of a social and economic character. These purposes are:

1. As an instrument of fiscal policy to help stabilize the purchasing power of the dollar;

2. To express public policy in the distribution of wealth and of income, as in the case of the progressive income and estate taxes;

3. To express public policy in subsidizing or in penalizing various industries and economic groups;

In the recent past, we have used our federal tax program consciously for each of these purposes. In serving these purposes, the tax program is a means to an end. The purposes themselves are matters of basic national policy which should be established, in the first instance, independently of any national tax program.

mong the policy questions with which we have to deal are these:

Do we want a dollar with reasonably stable purchasing power over the years?

Do we want greater equality of wealth and of income than would result from economic forces working alone?

Do we want to subsidize certain industries and certain economic groups?

Do we want the beneficiaries of certain federal activities to be aware of what they cost?

These questions are not tax questions; they are questions as to the kind of country we want and the kind of life we want to lead. The tax program should be a means to an agreed end. The tax program should be devised as an instrument, and it should be judged by how well it serves its purpose.

By all odds, the most important single purpose to be served by the imposition of federal taxes is the maintenance of a dollar which has stable purchasing power over the years. Sometimes this purpose is stated as "the avoidance of inflation"; and without the use of federal taxation all other means of stabilization, such as monetary policy and price controls and subsidies, are unavailing. All other means, in any case, must be integrated with federal tax policy if we are to have tomorrow a dollar which has a value near to what it has today.

Rumi wrote these words while we were transitioning between the gold standard and the Bretton Woods system. During that time period, we were operating under the precise monetary circumstance in which we now exist. A sovereign, inconvertible fiat currency controlled by a central banking system.

[dionysus]

25. uh, yeah, when it was properly regulated in the New Deal Era, it created the bloody middle class.

your own graph shows poverty rates declining then spiking in 1980, like i said.

:shrug:

[Toucano]

36. It shows a decline and a leveling out

The question is if the decline is due to "capitalism".

I cited Medicare, Medicaid and the food stamp program. None of those are brought to you by Capitalism. The New Deal was nothing more more than a "Bloody Revolution Prevention Act".

Almost 40 million Americans received food stamps in Feb of this year. The highest ever. Capitalism ain't feeding those people.

[dionysus]

41. i think we're talking past each other, frankly.

Medicare, Medicaid and the food stamp program, SS, happened under our system, which is broadly considered "capitalist".

it came about because business was regulated properly, and created a tax base that could fund these programs. the bankers and investors couldn't rob us blind as they are doing now.

if you take socialism, or more rather the bogeyman of communism to the extreme that you portray capitalism, there would be no such thing as private property. every single thing would be goverment owned.

I think when you read "capitalism", it makes you think of the robber barons and the monopoly money guy, when it wasn't like that in the New Deal era

and if our tax rates were the same now as they were 50 years ago, we'd have no shortage on money for our social safety net.

[nadinbrzezinski]

47. That's becuse what existed in the 1950s

was more properly called a MIXED ECONOMY, which takes the good things from both and uses them.

Now, I don't expect most folks to know this, not in the US... but in places like Europe they are not shy of calling their systems either mixed or hybrid... which are technically correct.

Since the 1980s we have severely dumped the safety net and privatized aspects that should properly be handled by the state.

Hell at the pace we are going I expect toll roads, and private police, fire and EMS.

[dionysus]

50. i will wholeheartedly agree with the term mixed economy.

people call many european countries "socialist", but they are still "capitalist" in many ways, they just have a much stronger regulations than we have now, and the dough for a strong social system. everything is still based off of money and you can still buy land, so it a mixed system as it should be.

but they're fighting against challenges to that too. they have wingnuts of their own.

[nadinbrzezinski]

51. What is scary is when I went to school a generation ago

we talked about this in history, poli sci (especially comparative government, and that included China) and sociology classes. I hear these days it is really not covered.

But you can google it up. It was partly the creation of John Maynard Keynes, at least in the theory of it. No, spending during a crisis is not his only contribution to this.

[dionysus]

53. keynes has a take on this? i have to look this up. thanks!

[nadinbrzezinski]

65. It is part of the General Theory

[William Z. Foster]

58. wrong

It was the struggles by the people in the militant organized Labor movement that created the middle class.

Regulation no more created the middle class than a tree branch swaying in the breeze is the source of the wind.

Are we looking at this from the viewpoint of the rulers, or the working class people? That is the question.

For example:

Did Lincoln free the slaves? No, of course not. The slaves freed themselves with assistance form the Abolitionists. Lincoln responded to the pressure and did not impede that as much as some other leader may have.

Did Wilson give women the vote? No, of course not. The Suffragettes won the vote for themselves. Wilson responded to the pressure and did not impede that as much as some other leader may have.

Did FDR give the workers rights? No, of course not. The Union won that. FDR responded to the pressure and did not impede that as much as some other leader may have.

Did Johnson give people civil rights? No, of course not. The Civil Rights movement won civil rights. Johnson responded to the pressure and did not impede that as much as some other leader may have.

[leftstreet]

80. I wish I could K&R this post

Very, very tiring to see so many wringing hands and asking "when will our politicians help the unemployed, the impoverished, etc??"

When we demand it. Politicians and their politics are irrelevant.

History is ignored in favor of the authoritarian talking points du jour

[cherokeeprogressive]

63. Other side of the coin: EVERY economic system is about helping THE DECISION MAKERS.

There is no system that has been devised that puts EVERYONE on an even playing field. Not even communism. Someone always makes the decisions, and in doing so, makes decisions that favor themselves. Greed is a fact of human nature. It will never, NEVER be overcome by evolution...

NO matter the system, there will ALWAYS be someone living in dachas, chalets, or mansions.

[BrentWil]

64. I thought Mao lived a workers life? NT

[Greyhound]

132. Whatever lets you sleep at night.

:rofl:

[Hippo_Tron]

16. Yes

But theirs isn't exactly a system we'd want to emulate, either.

[wuushew]

23. How many times you going beat a dead horse?

:shrug:

[Starry Messenger]

33. Until it ceases to produce profits by beating it.

http://chinadivide.com/2010/relative-inequality-societys-ills.html

[BrentWil]

44. So inequity of that this type is better then the mass starvations of the Great Leap forward?

Was Mao and his close circle living a better or "unequal" life then the average Chinese man or woman?

[Starry Messenger]

48. That makes very little sense even by your standards.

Is that subject line even a sentence? Please, I'm not wasting brain cells on your comedy act, just enjoying the floor show.

[BrentWil]

49. It was a simple question...

Capitalism does produce inequality. No question. It is a problem that can be addressed and regulated, but not changed. However, is the type of inequality that one gets under capitalism better then the system that came before it? In other words, are the Chinese better off with inequality under a more capitalist system or with the Maoist economy that came before it?

Moreover, was there inequality under the Maoist system? Did the top circles of the Communist party get treated much better then the common worker?

[Starry Messenger]

52. No, No, Probably, and who cares.

I'm not doing your homework. Any "gains" under capitalism in china will be gone as soon as there is overproduction. It's the nature of Capitalism. Then the Invisible Market will take all the sand toys and go play somewhere else. It's what it always does. The rest of your simple questions are the subject of several Phds, I'm sure. Since you claim to have access to thousands of papers I'm sure you can find some.

[BrentWil]

55. Really? THat has been the case in Europe? NT

[Starry Messenger]

77. Read the news from Europe lately?

Ya Rly!!11

[Hannah Bell]

96. The glf was 8 years after the revolution, after ww2, japanese occupation,

and 20+ years of civil war.

all of which devastated agriculture in china.

the glf famine was the last one of note in china, which had previously had a famine every 20 years or so, killing hundreds of thousands to millions.

the communist government subsequently:

- doubled life expectancy
- achieved basic self-sufficiency in food production
- doubled the population (which had been flat for the previous hundred years due to poverty, foreign occupation, & imperial corruption).

[conspirator]

29. You are not the first person or first time to come up with this SHIT PROPAGANDA

Peasants in china used to own land and live in happy small self-sufficient communities. Now they are forced to live in matchboxes in heavily polluted areas and to be wage slaves.
In my point of view land is the only asset that there is. Not the monopoly money that the gangsters print.

[BrentWil]

42. You may want to review Chinese history from 1850 to 1979. NT

[Hannah Bell]

97. was china communist in 1850? who knew? here's some history for you:

Before 1949, for instance, the illiteracy rate in Mainland China was 80 percent, and life expectancy was a meager 35 years. At his death, illiteracy had declined to less than seven per cent, and average life expectancy had increased by twenty years. In addition, China's population which had remained constant at 400 million from the Opium War to the end of the Civil War, mushroomed to 700 million as of Mao's death.

http://en.wikipedia.org/wiki/History_of_the_People's_Republic_of_China_(1949%E2%80%931976)

[BrentWil]

102. The pont was that the Chinese had long periods of suffering before 1979 and the changes Capitalism

brought. They weren't living together in the good life. As far as Mao, he created over 30 million deaths during a MANKIND starvation during the Great Leap Forward. He crushed anyone who questioned and started a reign of terror during the cultural revolution.

Of COURSE the population went up. China had just come though 150 years of war, starvation, and hell. Just providing stability will allow that to happen.

[Hannah Bell]

121. "crushing anyone who questioned" = "stability"? complete reorganization of the economy =

"stability"?

you tell me communist china starved its people, now you tell me "of course the population increased". and life expectancy nearly doubled.

funny how that happened while they were starving the people & crushing everyone who questioned.

oh, & btw, those 150 years (actually more like 100) of war (& rebellion) were mainly courtesy of the influence of british and american capitalists.

"did capitalism help china"?

in the 19th century it did not; it addicted 10% of the population to drugs and tore apart chinese society.

[dionysus]

43. oh my god. i think you missed several centuries of history right there...

:rofl:

[smalll]

75. Yeah, "happy, small self-sufficient communities" - starving to death at 30 years old.

[Hannah Bell]

99. Under the communist government, Chinese life expectancy went from 47 to 66, and population doubled.

http://www.google.com/publicdata?ds=wb-wdi&met=sp_dyn_le00_in&idim=country:CHN&dl=en&hl=en&q=life+expectancy+china


The famine of 1957-61 was the last one of note in china.

In comparison:

Four famines – in 1810, 1811, 1846, and 1849 – in China claimed nearly 45 million lives.<43>

1850–1873 as a result of Taiping Rebellion, drought, and famine, the population of China drop by over 60 million people

1876–1879 ENSO Famine in India, China, Brazil, Northern Africa (and other countries). Famine in northern China killed 13 million people.

1896–1897 ENSO famine in northern China leading in part to the Boxer Rebellion

1907,1911 famines in east-central China

1928–1929 famine in northern China. The drought resulted in 3 million deaths

1936 famine in China, with an estimated 5 million fatalities<61>

1942–1943 famine killed one million in China

http://en.wikipedia.org/wiki/List_of_famines


And that's not a complete list of the period.

People are very selective in their outrage.

[BrentWil]

101. The Great Leap Forward was created by Mao's policies

You had 36 million people die when the harvest season was fine. These other famines were caused by nature. This one was ENTIRELY manmade. Anyone that pointed out the millions of deaths, even in Chinese power circles, was very badly punished. (i.e. Peng Dehuai)

[Hannah Bell]

119. Uh, no, "those other famines" were created by a combination of nature & imperial/imperialist

policies, just like the GLF famine.

The imperial government requisitioned grain & agricultural products from the countryside for the cities & for trade (e.g. for opium supplied by western capitalists, initially by force) leaving the farmers to starve in bad times, just as during the GLF.


And government policies during the GLF also combined with natural forces to create disaster, just as in imperial times:

"In 1959 and 1960 the weather was less favorable, and the situation got considerably worse, with many of China's provinces experiencing severe famine. Droughts, floods, and general bad weather caught China completely by surprise. In July 1959, the Yellow River flooded in East China. According to the Disaster Center,<10> it directly killed, either through starvation from crop failure or drowning, an estimated 2 million people.

In 1960, at least some degree of drought and other bad weather affected 55 percent of cultivated land, while an estimated 60 percent of northern agricultural land received no rain at all."

http://webcache.googleusercontent.com/search?q=cache:Xu7bxHu_P_QJ:en.wikipedia.org/wiki/Great_Leap_Forward+great+leap+forward&cd=1&hl=en&ct=clnk&gl=us

[OHdem10]

40. Does anyone remember your mom cautioning you against complaining

about your dinner---Think of all the poor starving people in China.

At least, as the Finance Minister stated--there are no longer
hungry people in China. We still have work to do but we are
making progress. I would say Chinese Capitalism has worked
for the poor.

[On the Road]

54. I Think It's Highly Amusing

to watch all the statists run around avoiding the OP's question:

To put it bluntly:

Yes, capitalism economically benefited the average Chinese citizen. Massively. By any standard you could use. All you have is go there and open your eyes. Talk to anyone.

My girlfriend grew up in China and survived the Cultural Revolution and Tienanmen Square. Her father was a party member and government official. Her two brothers run a small HVAC business in Daqing. I know many Chinese people, and you would find it difficult to find anyone who would argue that the more capitalized economy starting with Deng Xiaoping did not benefit the average person.

To take food, the most basic of needs: Li-Ping remembers eating dinners where the family had a small bowl of rice porridge which was mostly water. One egg might sometimes have to be split among the family. The government shut down higher for several years and send prospective students to work on farms as forced labor. When she was able to go back to school, there was no rice for the cafeteria and they had to serve millet, which was generally used as animal feed. Her younger brother died due to an infection brought on by malnutrition, and her own immune system was so compromised that an ordinary infection almost resulted in amputation or death when she was twelve.

I actually don't question Mao's intentions. I think he cared for the working class and wanted to create a better country. The communist government was better and fairer in certain ways, especially in the earlier years. That's one reason it had so much popular support. But the system was so massively inefficient that the country couldn't even provide the basics for itself. The Chinese worked their asses off and got nothing for it in return.

It is true that you can probably find rural areas where farmers are not as well off due to removal of former government support. But the question is about the poor, which was about 90% of the country.


-

[BrentWil]

57. I would agree

People are too dogmatic. How about polices that work. But to not simply state, it worked, in this case is crazy.

[On the Road]

61. I Agree

I hope China does work towards leveling the playing field.

The more robust economy enables them to do things that weren't possible before. For example, the government is discussing offering universal health care, which wasn't available under the communists. (Even communist party members only got coverage for themselves but not their families.) However, they have a strangely Chinese rationale: families are so worried about medical costs that they save massive amounts of money and don't consume. Universal health care is expected to stimulate consumer spending.

I don't disagree with a lot of the criticisms of China, but if you only read anti-American propaganda you would think we're living in the worst country on earth instead of the greatest.

Chinese history consists of centuries of oppressive monarchy occasionally broken by invasions, coups, and revolts. The fact is that under the current government, Chinese have more freedom, prosperity, hope, and control over their lives than they have ever had in their long, long history.

[wickerwoman]

98. It wasn't capitalism that raised so many people out of poverty,

it was large-scale foreign investment combined with the one-child policy.

I lived in China for years and almost everyone I met either worked for a foreign-owned company or manufactured something for export.

And all of those investors are already starting to complain that the price of labor in China is going up. That plus the rising cost of fuel means that China's days as mass-producer for the world are numbered.

What do you think will happen to China when all of that investment is pulled out and sent to Mexico or Russia or North Africa?

Here's a preview on a much smaller scale:
http://www.youtube.com/watch?v=0gkyxGyffzs

[Statistical]

103. "large-scale foreign investment" wouldn't that require capitalism.

There is no mechanism for "large-scale foreign investment" under communism.

Hence China embracing "capitalism" (I use it in quotes because what China has is somewhat of a hybrid) led to foreign investment.

"What do you think will happen to China when all of that investment is pulled out and sent to Mexico or Russia or North Africa? "
China is already self sufficient when it comes to capital. Most strategic companies are joint ventures between China govt (as largest shareholder) and foreign entities.

In last decade China has been transitioning to a greater emphasis on internal growth. Take China mobile for example. Chinese consumers use cellphones made by Chinese workers, and connect to cellphone towers emplaced by other Chinese workers.

[wickerwoman]

104. Right, but my point was it wasn't Chinese capitalism,

it was Western multinational capitalism in collusion with "socialism with Chinese characteristics" creating a socialist market economy as you say.

And while China has been trying to become self-sufficient and create domestic markets, it still relies heavily on exports. Companies might be "joint-ventures" in as much as a few party cronies get some no-show jobs, but they're still largely owned, managed and operated by foreigners and heavily dependent on contracts with foreign companies. Pull out the managers, experts, patents, investment and foreign contracts and many of those companies will crumble.

China Mobile is still a state-owned enterprise, not a joint venture. A better example is a friend of mine who is a middle manager at a ball-bearing factory. All of the upper-level managers are German, something like 90% of their product is exported to car manufacturers in the US and Europe. If that company suddenly decided it was more cost effective to make ball-bearings in Mexico or the Ukraine, that would be the end of my friend's job (and the 300 other people who work there). Sure, there are some car manufacturers in China and some demand for cars but not enough to sustain all of the workers who are now putting out exports.

Another friend of mine is a middle-manager for a garment factory that makes raincoats for Walmart. Same deal. All the managers are foreigners. 100% of their contracts are with Wally-World. Chinese people need raincoats, but they aren't going to pay foreign prices for them. Raincoat factory moves to Indonesia, a few thousand people out of work (and unable to afford cars or raincoats).

Rinse, repeat.

Obviously these two people wouldn't have been better off as peasants, but I don't think in ten or twenty years we will be able to say that capitalism with or without Chinese characteristics has done them a lot of long-term good.

[Statistical]

106. "but they're still largely owned, managed and operated by foreigners"

Not universally true.

The Chinese govt owns a majority stake in 150 critical industry companies
http://www.sasac.gov.cn/n2963340/n2971121/n4956567/4956583.html

The Chinese govt also owns significant stakes in thousands of companies.

The idea that vital industry can simply leave when the SASAC owns about $27 trillion worth market capitalization is silly.

"If that company suddenly decided it was more cost effective to make ball-bearings in Mexico or the Ukraine, that would be the end of my friend's job (and the 300 other people who work there). "

That company in return would lose access to the fastest growing and largest market in the world. China passed the US as largest car market in 2010. China has made it very clear that companies doing exactly that will face explusion from Chinese markets. Legal? Likely not but it happens. If you want to play in China you have to build in China.

Given the US/Europe are in terminal decline. The smartest multi-nationals will be the ones who secure long term relationships with the new rising powers (Brazil, India, China). Those that don't will find themselves marginal players.

[Hannah Bell]

126. Foreign ownership is concentrated in the most advanced industries.

Foreign-funded enterprises in China exported 494.4 billion U.S. dollars worth of machinery, electrical and electronic products in 2009.

A document posted on the website of the General Administration of Customs (GAC) said the figure made up 69.3 percent of the country's total exports of such products in the past year.

Exports of machinery, electrical and electronic products by privately-owned enterprises totaled 106.6 billion U.S. dollars in 2009, down 8.7 percent from a year earlier, according to the document.

State-owned enterprises only exported 92.1 billion U.S. dollars worth of machinery, electrical and electronic products, accounting for 12.9 percent of the country's total machinery, electrical and electronic products last year.

http://www.e-to-china.com/2010/0221/74763.html


Those "150 companies" are the old state-owned ones:

One of the biggest unknowns of China’s future development path is how the relationship among the party-state, the top-tier state enterprises, and the rapidly growing private sector will play out. Although there is significant debate on this subject, it seems clear that at present the party-state has no intention of divesting itself of the 150 or so largest state enterprise groups.4 Thus the central government intends to continue exercising control over substantial elements of the national economy through direct ownership of operating companies. Meanwhile, private-sector companies will increasingly be encouraged, as they are the principal engine of job-creation, as well as the main mechanism for meeting demand in consumer markets.

http://www.polsci.indiana.edu/china/papers/kroeber.pdf


Unique to China among large trading nations is the enormous share of exports and the trade balance accounted for by foreign invested enterprises (FIEs), as shown in Figure 2. At 58 percent and 55 percent respectively in 2005, these figures are without doubt far and away the highest for any major economy, although definitional differences make direct comparisons hard. Moreover, the foreign share of both has risen steadily.

The major risk of the openness strategy, from the Chinese point of view, is that China’s economy could wind up being “Latin Americanized,” with many market sectors controlled by foreign firms. In his study of the Chinese auto sector, Eric Thun notes that efforts to create an internationally competitive Chinese automaker have
thus far fared poorly, and suggests that the Chinese auto industry does indeed face some risk of repeating the fate of Mexico’s, which – in part because of the market-
opening North American Free Trade Agreement – is entirely controlled at both the assembly and the component level by multinational firms.9

Figure 2
Foreign enterprise share of China’s export and trade balance
Year Exports Trade balance
2000 47.9 9.0
2001 50.1 32.7
2002 52.2 31.8
2003 54.8 33.1
2004 57.1 43.7
2005 58.3 55.6

http://www.polsci.indiana.edu/china/papers/kroeber.pdf


The ownership share of foreign firms is growing, not shrinking.

[On the Road]

114. It is True That the Boom Was Caused by Foreign Investment

rather than the country bootstrapping itself. It is not a closed system. But that is how capitalism works nowdays, and that is what it means for a country to abandon a statist economy and move to a capitalistic one.

It is a good sign that the price of labor is going up. Foreign investment may flatten somewhat as a result, but it's not likely that a sizeable chunk of investment is going to be pulled out of China in favor of those other countries.

[Hannah Bell]

127. Foreign ownership share in the chinese economy is huge, & rising, not shrinking.

Unique to China among large trading nations is the enormous share of exports and the trade balance accounted for by foreign invested enterprises (FIEs), as shown in Figure 2. At 58 percent and 55 percent respectively in 2005, these figures are without doubt far and away the highest for any major economy, although definitional differences make direct comparisons hard. Moreover, the foreign share of both has risen steadily.

The major risk of the openness strategy, from the Chinese point of view, is that China’s economy could wind up being “Latin Americanized,” with many market sectors controlled by foreign firms. In his study of the Chinese auto sector, Eric Thun notes that efforts to create an internationally competitive Chinese automaker have thus far fared poorly, and suggests that the Chinese auto industry does indeed face some risk of repeating the fate of Mexico’s, which – in part because of the market-opening North American Free Trade Agreement – is entirely controlled at both the assembly and the component level by multinational firms.9

Figure 2

Foreign enterprise share of China’s export and trade balance

Year Exports Trade balance

2000 47.9 9.0
2001 50.1 32.7
2002 52.2 31.8
2003 54.8 33.1
2004 57.1 43.7
2005 58.3 55.6
Source: Ministry of Commerce

http://www.polsci.indiana.edu/china/papers/kroeber.pdf


and foreign capital is not a requirement for development of a country's industry -- if the country has resources, labor & knowledge.

foreign capital *is* a requirement if foreign capitalists have a lock on global resources & guns, however.

[On the Road]

138. How Can China's Economy Be Controlled Externally?

30 of the largest 32 corporations are majority owned by the government. They acquired foreign capital without ceding control, and are not likely to do so.

Foreign capital may not strictly be necessary for industrial development. However, China's government economists, educated under a Marxist understanding of economics, apparently decided that is was.

[Greyhound]

133. Even more amusing (or sad, depending on your POV), is confusing the investment in

social and national infrastructure with capitalism.

[On the Road]

139. Nobody is Confusing Those Two Things

The question was about whether China's adoption of a more capitalistic economy has helped the poor.

Everyone, especially the Chinese, knows what that means. Before Deng Xiaoping, China's economy was government-run and centrally planned. Industry was integrated with the rest of government operations.

For example, the government would decide to develop a sparsely populated area. They would plan the factories, housing, retail, and infrastructure as a single government project. Workers from more crowded parts of the country would simply be relocated. Beginning in the 80s, most of China's industry was spun off into corporations that were profit-driven and run like Western corporations. Although majority owned by the government, they raised a lot of capital by selling minority stakes to foreigners.

This was the difference between the system that was a disaster, despite the best intentions, and one that resulted in one of the biggest economic booms ever seen.

[conspirator]

137. capitalism DIFFERENT from technological progress

Technological progress made life better for the urban middle class chinese. Which are a minority. The majority are sweat shop workers. And I don't see how their life is better than when they lived in communal villages.

[okie]

59. I think this question misses the point.

I won't argue that capitalism did not raise the standard of living in China. No serious anti-capitalist would. Capitalism is a dynamic system capable of enormous, rapid wealth creation. This obviously has, for lack of a better phrase, 'trickle down' effects. The poor have a bit more money in their pockets (though they have lost access to certain social services), and access to more jobs in the cities (though those jobs come with harsh living conditions, and often brutal working conditions). We should always keep in mind the fact that China's growth since adopting capitalist reforms also has a lot to do with its incredibly oppressive state structure. I think that says a lot about the kind of political system capitalism functions best in.

Regardless, the anti-capitalist position is not based on wealth creation or GDP. An economy based on plunder and slavery built Rome. Feudal economies often created great wealth. Folks in Washington were terrified by Russia's gains under the Stalinism. But I think it would be perverse to seriously defend any of that. People oppose capitalism because it is a fundamentally exploitative system, prone to periods of crisis that hit workers harder than others.

[Lydia Leftcoast]

67. What we have here isn't entrepreneurial capitalism

We have robber baron capitalism.

China, like Japan, Taiwan, South Korea, Singapore, and Malaysia before it, is using the fruits of its people's labors to benefit China and the Chinese people as a whole.

Our capitalists are using the fruits of people's labors to play financial casino games, conduct useless wars, and make the shareholders richer than God, while not caring who gets hurt in the process, not caring whether there's mass unemployment and under-employment, poor product quality, and poor customer service.

By the way, I've been to China. Yes, some people are now fabulously wealthy, but others are poorer than ever because there is no longer much of a social safety net, although they are beginning to realize that they need to reinstate one or else risk having masses of rootless people. For example, they are in the process of putting together a system of national health care, which they had disbanded after they adopted capitalism.

[nadinbrzezinski]

70. We have corporatism

and as you have astutely said, what they have isn't capitalism either. I am willing to bet that the recent strikes as well as social unrest in the East will bring massive change once again, as well as the fact that their one child policy has a lot more to do with this than everything else and it is now in the process of making labor more expensive.

But the OP is talking propaganda... and has not looked under the hood.

[wuushew]

69. The Earth weeps at the damage capitialism brings

Ironically "dirty" low tech communism may have resulted in fewer animal and human deaths in the long run.

[proteus_lives]

74. Mao and the Reds sure as hell didn't.

[Hannah Bell]

85. no?

http://www.google.com/publicdata?ds=wb-wdi&met=sp_dyn_le00_in&idim=country:CHN&dl=en&hl=en&q=life+expectancy+china

[proteus_lives]

105. Fifty million dead.

Famine, courtesy of Mao.

[Hannah Bell]

122. 50 million? 10% of the population died from famine? only in the fantasies of right-wing scholars.

that's the global death toll for all of WW2.

[proteus_lives]

128. Ahh, I forgot. You're not allowed to question a Dear Leader.

Try having your Great Leap Forward and think for yourself.

[Hannah Bell]

129. uh, link to your 50 million figure? because here's what i find:

The official toll of excess deaths recorded in China for the years of the Great Leap Forward is 14 million, but scholars have estimated the number of famine victims to be between 20 and 43 million.

http://en.wikipedia.org/wiki/Great_Leap_Forward#cite_note-xiz-12


so i guess what you mean by "think for yourself" is "make shit up".

[proteus_lives]

134. I wonder if those totals included work camps and other events.

Yeah, fifty million works.

Thinking for yourself is hard but you can do it. First, avoid denouncing yourself counter-revolutionary activities. Then go from there.

[Hannah Bell]

135. gee, here's what you said:

105. Fifty million dead.
Famine, courtesy of Mao.



Like I said: your variety of "thinking for yourself" = making shit up.


and, fyi, the numbers i posted are for the entire cultural revolution. that includes famine, workcamps, & anything else you can come up with.

your shit is 14 million higher than the highest estimate.

[Greyhound]

83. Capitalism didn't do that, building infrastructure and production capacity did that.

Capitalism, as we practice and export it, impedes the benefit that development brings to people. It is also the impetus behind the excessive and destructive imbalance that China is seeing today.

[blindpig]

108. Yes, it is essentially parasitic.

Who needs the suits? The value they produce is minuscule compared to the return they receive

Kill Capitalism

[Hannah Bell]

86. China's Rural Poverty Line Far Below International Standard

Mr. Fang Jue, a Chinese political commentator living in the U.S., pointed out that the Chinese regime deliberately sets a low poverty line standard.

"I am of the opinion that China's poverty line standard is consciously, instead of unconsciously, set low. Its purpose is to cover up the widening gap in China between poor and rich, and also to conceal the Chinese regime's serious mistakes in poverty eradication. China sets a poverty line "defined according to Chinese characteristics," which is only one fourth of the international poverty line standard. This is an act to fool Chinese people and the international community," said Fang Jue.

Fang continued, "China's poor population actually totals 150 million to 200 million, using the internationally accepted one US dollar per day guideline. This enormous number is much more than the Chinese official estimate. Therefore, poverty reduction still has a long way to go in China, and it will take the Chinese regime a very long time to correct its mistakes in poverty alleviation."

Dysfunctional public services in China's rural areas have overburdened the rural poor with excessive medical and educational expenses. Medical and educational expenses are a "new contributor to poverty," according to a member of the China Reform Foundation. The huge burden of medical expenses, in particular, changes rural poverty for the worse.

en.epochtimes.com/news/7-10-5/60453.html


According to a January 9 China Radio International Online report, nearly forty percent of Chinese people’s earnings are paid with goods instead of money, further complicating the issue. The items an employer doles out in lieu of wages many not even be of use to employees. Another twenty percent of their income is used for work-related expenditures, leaving only 40 percent of their total income for living expenses.

The Beijing News has also reported on a Health Ministry of China study that indicatged half of the country’s farmers cannot afford to go to a doctor when they are sick. In China’s mid-west regions, sixty to eighty percent of the population dies at home because they cannot afford any medical care.

www.theepochtimes.com/news/5-2-4/26290.html

Many Faces of Poverty in China
By Richard and Haruyo Platt
July 2008

In 2003, my wife, children, and I lived in a province of China located in the most southwestern part of the country. We were there to study Mandarin at the local university. During our time there, we noticed the many faces of poverty. One of my teachers, a local journalist, explained many local realities to me.

Children. One of these is the tragedy of some children who are reduced to work for their “owners.” They are intentionally amputated at a young age; someone brings them to their assigned street corner to collect money. My teacher told me that those responsible for these atrocities are often rich and living as far away as Guangzhou (a wealthy city near Hong Kong).

Migrant workers. Another face of poverty is the many migrant “workers” who come from the villages hoping to make a living. Some walk around the city looking for anything they can trade for money at a recycling warehouse located far away in the suburbs. On their backs (or by bicycle) they carry a very heavy load of cardboard, plastic, or paper. They are easy to recognize as their tan is dark from all the hours spent in the sun. Their young children are often with them. Many belong to one of the ethnic minorities present in this part of China.

Other migrant workers live in crowded dorms to cut down the cost of housing. After their employers deduct the room and board fees, there isn’t much to take back to their village after months of hard work. Additionally, the working conditions on the construction sites are not very safe and accidents are common. The children do not have access to local schools because the workers are in the city illegally.

Closure of factories. Many government factories have closed, thus leaving workers without a job. This has created a major problem in some parts of China.

Taxes and inflation. Farmers in the countryside are struggling to survive due to heavy taxes and a rise in prices.

www.lausanneworldpulse.com/urban.php/979







The other face of the westernized major cities is the rural & urban working classes, from whom many communist-era supports have been removed.

[Prometheus Bound]

94. I would say no.

It did help the rich and the new middle class.

[WinkyDink]

95. It is a dictatorship with the desire to make money. Therefore, there is a capitalist class with the

profits.
The other 4 1/2 billion? Not so much.

[BrentWil]

100. That isn't backed up by data and the experiences of those people

For them, they can eat and their standard of living has tremendously gone up.

[nyc 4 Biden]

113. This liberal doesn't believe in abandoning capitalism...

...simply regulating it properly. Just like a river needs to be corralled by dams, levees and canals, so too capitalism needs to be managed with proper oversight. Like a river will flow to low places, capitalism will flow to profits, regardless of the damage done to the public, environment or anyone else.

[Hannah Bell]

130. capitalism believes in abandoning you though.

[nyc 4 Biden]

136. i do agree with that.

[TheKentuckian]

120. Who is poor that has shelter, produces their own sustenance, and has clothes as they need?

Now they toil in the factories and meat processing plants to earn just enough to eat minimally and pay rent.

What is important is quality of life. Seems to still suck. There is a middle class that is cashing in for the moment but they'll have to be sacrificed on the same alter we are and before they can actually hit a peak.

It's just not sustainable and crushes the poor. Not just our poor but poor folks everywhere. It also encourages the waste of resources at the quickest pace possible which cannot be defined as good from any perspective other than hand to mouth and that's only if you're one of the lucky few with surplus.

There is no baby, that's the residue of a miscarriage. The baby didn't make it, you gotta let it go.

Capitalism has been a horribly toxic blight that due to an unsustainable confluence of events had a decent fifty year or so run for a fair chunk of white western folk but has reverted into it's previous gilded age splendor with better and more focus on marketing.
You are essentially calling for a magical controlled and sustainable cancer.