By Arnold Kling
The gap between China’s rich and poor is turning into a chasm. China’s innovators, investors, and captains of industry are richly rewarded. They live in luxury housing developments whose streets are lined with McMansions. The feed in fancy restaurants, and relax in five-star hotels and resorts. China’s poor live in a different world. Mao Tse Tung would turn in his grave.
So where are the Chinese communists? They’re in government. The communist party is the only party there is. China doesn’t have freedom of speech or freedom of the press. It doesn’t tolerate dissent. Authorities can arrest and imprison people who threaten stability, as the party defines it. Any group that dares to protest is treated brutally. There are no civil liberties, no labor unions, no centers of political power outside the communist party.
China shows that when it comes to economics, the dividing line among the world’s nations is no longer between communism and capitalism. Capitalism has won hands down. The real dividing line is no longer economic. It’s political. And that divide is between democracy and authoritarianism. China is a capitalist economy with an authoritarian government.
This would be an excellent discussion topic in a freshman class, I should think. My guess is that the capitalism in China ultimately will collapse. I think that the government actually allocates a lot of the capital, and at some point that will cause significant problems.
Thanks to Brad DeLong for the pointer.