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#169067 - 05/09/19 04:21 PM Re: THESE are the most telling failures of socialism [Re: ScottSA]
Enright Offline
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Registered: 05/17/06
Posts: 3523
Loc: CA
 Originally Posted By: ScottSA
 Originally Posted By: Enright
Recently, just in one decade, 2007 to 2017, over 200 million Chinese have moved to the cities, a sure recipe for explosive economic growth.
Wait. Huh? People move to cities BECAUSE of explosive economic growth. When that growth slows down or dies, the cities explode. 10% growth has fallen steadily to a twenty year low now, and still collapsing. That's not sure anything, because history never really repeats, but it rarely bodes well and often ends in chaos. Especially when it's being economically pressured externally.


I was reading in the Oxford Encyclopedias of Economics and Finance that rural-urban migration has long been recognized as one of the key factors in China's "growth miracle." That's because agricultural sectors are far less productive than industrial sectors. So when people migrate to the cities from the countryside, if they can get jobs at all they just naturally become more productive on average, with aggregate output increasing and economic growth accelerating.

People migrate to the cities for all kinds of reasons. Medical facilities are much better in the cities, for one thing. Most of the universities are located in the cities, so that's where the young people come for an education. Marriage prospects are much better because society is richer there and more educated. The arts and cultural activities are much more available, and so on. But I imagine that many people in China move to the cities for the same reason that my father left his dad's small rural farm in Nebraska and headed for California in the 1920s. There was no future for him there.

China's GDP is so large that it's rate of growth has been slowing since 1999, reaching a low of 6.6% last year, a rate still over twice as fast as our GDP of 2.9% for 2018. I imagine that China's rate of growth will continue to slow, and someday, perhaps soon, they may start experiencing recessions and other pauses the way we do. But still, other things being equal, they are likely to be adding untold billions to their GDP over the years to come because there are still hundreds of millions of people living in the rural areas.
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#169068 - 05/09/19 05:05 PM Re: THESE are the most telling failures of socialism [Re: Enright]
jmill Online   content
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Registered: 04/01/06
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China's 2018 GDP: $13,407,400,000,000
......US 2018 GDP: $20,494,100,000,000

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#169069 - 05/09/19 05:15 PM Re: THESE are the most telling failures of socialism [Re: jmill]
Enright Offline
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Registered: 05/17/06
Posts: 3523
Loc: CA
 Originally Posted By: jmill

China's 2018 GDP: $13,407,400,000,000
......US 2018 GDP: $20,494,100,000,000


Yes, and should China's GDP ever reach $20 trillion it is highly likely not to be growing at 6.6% then.
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#169071 - 05/09/19 07:38 PM Re: THESE are the most telling failures of socialism [Re: Enright]
Silence Offline
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Registered: 04/28/19
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Indeed China will face the same problems with automation than countries like USA have started facing. It looks like the world could become multipolar by then. When the world abandons trading in dollars, it is likely the USA's leadership will fade.
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#169074 - 05/09/19 09:30 PM Re: THESE are the most telling failures of socialism [Re: Silence]
Enright Offline
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Registered: 05/17/06
Posts: 3523
Loc: CA
 Originally Posted By: Silence
Indeed China will face the same problems with automation than countries like USA have started facing. It looks like the world could become multipolar by then. When the world abandons trading in dollars, it is likely the USA's leadership will fade.

From my perspective, which sees China and the USA occupying major nodes in an international-capitalist network or system, I would agree with what you have said above. However I'm not as sure that the world will abandon the dollar as its international standard currency in the foreseeable future, say the next 40 years.

The situation with the dollar standard may be something akin to the situation with English as the international standard language in science and mathematics. Various alternative languages to English, such as Esperanto (a much simpler language) have been proposed, but the world continues to embrace English, which is much more difficult to learn. Approximately 90% of all science and engineering papers published in the world are written in English, so they say. So if you want to be a published scientist or mathematician, you would do well to learn English, not only to publish in your field, but even to understand it.

The situation with the dollar as a financial standard may be similarly entrenched. At least I am wondering if there are not many creditors in the world holding billions in debt denominated in dollars who would not like to see the currency weakened in favor of an alternative.
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#169075 - 05/09/19 09:50 PM Re: THESE are the most telling failures of socialism [Re: Enright]
jmill Online   content
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America is not preeminent because the dollar is the international standard currency. If that were the case, all you would have to do to make a country economically preeminent would be to make that nation's currency the international standard.

It's exactly the other way around. The dollar is the international standard currency because America is economically preeminent.

This is a relatively new way of backing currency, starting in 1944 when the Bretton Woods agreement moved the Allies away from the gold standard and to using the US dollar at fixed exchange rates with other currencies as the banking standard. It was no accident that the dollar was chosen.

Should America ever fade, then another currency might well replace the dollar. I don't see that happening anytime soon, and certainly not at the hands of the Chinese economy, not as long as they are socialist.

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#169076 - 05/10/19 12:12 AM Re: THESE are the most telling failures of socialism [Re: jmill]
Enright Offline
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jmill, I wasn't making the argument that America became preeminent because the dollar-standard made it so, or that America's economic preeminence in 1944 didn't lead to the dollar's elevation to the standard. That's nowhere in my text. I was saying that it might be more difficult to remove the dollar as the standard than some might imagine just because it has become so entrenched. Say at some point, the GDP of China reaches 33 trillion, and the U.S. 28 trillion. I don't necessarily see everyone rushing to switch from the dollar to the Chinese currency, even so. The country is enormously corrupt; it has a record of cheating; many of its more powerful state corporations are subsidized by the government (so it is more difficult to know how really productive and sound they are); it doesn't have the American record of political stability based on representative democracy; and so on.
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#169084 - 05/10/19 02:45 PM Re: THESE are the most telling failures of socialism [Re: Enright]
jmill Online   content
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I didn't think you were making that argument, Enright. I was just remarking on the conditions for any currency to become an international standard and connecting it to China, the current socialist subject du jour. My argument, of course, assumes a capitalist, free-market economy where the strongest currency (in terms of the best/most useful international standard) "wins".

I'm more reacting to a general notion that has pervaded certain segments of the American public (and other countries as well) that China is poised to eat our lunch somehow. That simply cannot happen with a socialist economy. They are ultimately parasitic, and as such depend on a stronger host. For a while now China has been trying to do a mixture of capitalism under the thumb of socialism. The Soviets made that work for a few years (remember glasnost and perestroika?), but it ultimately collapsed. China's economy will either transition almost completely to Western-style capitalism like that of the West, or it too will ultimately collapse.

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#169087 - 05/10/19 04:40 PM Re: THESE are the most telling failures of socialism [Re: jmill]
Enright Offline
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Registered: 05/17/06
Posts: 3523
Loc: CA
 Originally Posted By: jmill

I didn't think you were making that argument, Enright. I was just remarking on the conditions for any currency to become an international standard and connecting it to China, the current socialist subject du jour. My argument, of course, assumes a capitalist, free-market economy where the strongest currency (in terms of the best/most useful international standard) "wins".

I'm more reacting to a general notion that has pervaded certain segments of the American public (and other countries as well) that China is poised to eat our lunch somehow. That simply cannot happen with a socialist economy. They are ultimately parasitic, and as such depend on a stronger host. For a while now China has been trying to do a mixture of capitalism under the thumb of socialism. The Soviets made that work for a few years (remember glasnost and perestroika?), but it ultimately collapsed. China's economy will either transition almost completely to Western-style capitalism like that of the West, or it too will ultimately collapse.


My point would be that they do have such a stronger host, which is not going away anytime soon, namely the international capitalist system, China being just one node of it, although a powerful one indeed. Just very recently, for example, Donald Trump blamed China's 21st Century spurt on the WTO, with some justification. Also, we cannot assume that the weaknesses of "socialism" (1920-1980) in the Soviet Union and China, with their top/down planning and setting of prices, etc., teetering like the Tower of Pisa is identical with the "socialism" of China now, where such things are determined by the international capitalist market. China can still to an extent set prices in effect by being a price leader in certain commodities and a powerful economic force within the system. So I believe that the latter "socialism" is inherently a much more stable economic system than the old Soviet top/down style. The old style collapsed, but as I see it, we can't assume that the latter will too just because we can call both "socialist."

None of that is to say, of course, that China's current socialist system, with its state-run factories, etc., and its autocratic political and ideological rule, does not have inherent weaknesses that will cause it too to fail at some point.
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#169122 - 05/19/19 04:59 PM Re: THESE are the most telling failures of socialism [Re: jmill]
AuntJobiska Offline
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Registered: 05/02/17
Posts: 157
Loc: USA
 Originally Posted By: jmill

Auntie, in 1968 Anthony Quinn starred in a movie called THE SHOES OF THE FISHERMAN. A Russian bishop is released from the Soviet Gulag, and allowed to go to Rome. He get's elected pope. His big problem in the movie is the imminent invasion of Russia by tens of millions of starving Chinese, who have no other option but to go north to find food, which will precipitate a nuclear war between China and Russia.

This premise seems ludicrous today. It wasn't in 1968. That's a smidge more than 50 years ago, and it tells you how China was perceived by the world then. There was more than a grain of truth in that scenario at the time. Twenty-three years after the end of WWII, the Chinese were having trouble feeding themselves. So much for socialism.


I didn't see the movie, but read the book long, long ago in my teens. I didn't remember that part! Ah, maybe the movie will show up on Prime or NetFlix and I can see it. Now I am recalling a scene at the end of THE CAMP OF THE SAINTS where the Red Army is facing hordes of starving Chinese about to pour over the border into the USSR.

At the same time, we should remember Sino-Russian relations were at a centuries-long nadir at the time both books were written. The Russians and Chinese, while always wary of each other, have historically got along quite well with their "good fences make good neighbors" policy (both strictly regulate their borders with each other).

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