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ETpro's avatar

If free-market capitalism always beats top-down managed states and socialism, why are Republicans so terrified of big, mean China?

Asked by ETpro (34247 points ) February 6th, 2012

Given their theory of superiority, why worry about a nation that has, according to GOP orthodoxy, chosen the path to destruction rather than the GOP’s corporatist road to Valhalla? Mind you, this question is not meant as a defense of China, Inc.

Republicans are quite right when they claim the Chinese government engages in unfair trade instead of free trade. They are right that China uses currency manipulation to give their exports an unfair advantage and to render imports from their trading partners artificially costly within China. The are right the Chinese prop up unprofitable industries with government subsidies to let them price exports below cost and capture a world market before jacking up prices to recover investment. But if free-market capitalism, where Gilded Age trusts and cartels did all those things; is so far superior to a government doing them, then so what?

If China does all those things, which I would argue they do, then by GOP Free-Market theory, it should doom China to economic collapse, shouldn’t it? Do they not believe their own rhetoric, or is this just a flaw in the GOP’s ability to think rationally?

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9 Answers

6rant6's avatar

Nice essay. Really.

Ron_C's avatar

It seems pretty simple to me that neo-cons aren’t really interested in capitalism as they are in protecting their markets and asset. Rather than produce they feed on successful business and work angles to keep themselves and their friends in the money and gain as many assets as possible. Someday they are going to run out of things to steal then they will turn on eachother.

ragingloli's avatar

The vast majority of China’s GDP actually comes from privately owned corporations, so China is not a centrally planned economy.
Then there is the fact that western corporations, too, really like producing there because of dirt cheap labour. They don’t have to worry about worker’s rights, unions, safe workplaces and other totally useless and costly luxuries. They even have literal labour camps where workers work and live. When workers started jumping of factory roofs (or is it rooves? I dunno) to kill themselves, they did not improve labour conditions or pay, they simply installed nets to catch jumpers.
China is so successful because its conditions are so much like true unfettered capitalism.
Not even international copyright laws impede chinese companies. When BMW sued the company that made a blatant BMW X5 copy, they lost, because China’s said that the knock off did not look anything like the X5.

ETpro's avatar

@6rant6 You are welcome.

@Ron_C The ultimate downfall of any vulture enterprise. What next when you’ve eaten all the prey? Eat other vultures. It’s where the zero-sum game always leads those who subscribe to it. If only they could realize that economics, played properly, is an infinite sum game. Understanding that, vulture capitalism makes no earthly sense.

@ragingloli Sorry, but you can’t have it both ways. Republicans insist that government owned corp[orations are gaming the system through government support. A communist government that permits party insiders to own private corporations and profit handsomely from them is also free to prop them up, thus letting them price at below costs. The evidence is clear that Chinese companies do price below cossts, and are willing to do so for years on end. So they either are cheating commies as Republicans say, or they are the world’s cleverest capitalists who have figured out how to make money by prepetually operating at a loss. They can’t be both at one time.

Totally agree that our corporate leaders have had a great hand in building CHina Inc., and for all the reasons you mention. Also, it is worth noting that when the Obama administration tried to strip US corporations of tax credits for off-shoring US jobs, it was the Republicans in the senate that stopped that move dead with a filibuster. So China is great for demonizing and fear mongering, but it’s also critical to the profits of their overlords, the corporatists and oligarch financiers.

YARNLADY's avatar

I suspect they are afraid their covert infiltrations of Chinese enterprise will be exposed.

mattbrowne's avatar

I think they are terrified about the foreign exchange rate not following the supply and demand logic.

ETpro's avatar

@mattbrowne As far as I can tell, Republicans don’t take demand into consideration. They are supply-siders, convinced that giving billionaires lots more money will cause them to invest in goods and services even though the money was taken from the middle class and the poor, who no have nothing left to go shopping with.

mattbrowne's avatar

@ETpro – Exactly. Rich people suck the money out of the system and story it some place “safe”. They already got 5 cars. So there’s supply but no demand.

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