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Dear Andy Stern

My readers have been e-mailing me asking for a response to your wonderful OpEd in a recent Wall Street Journal. Here is Mr. Stern’s major claim: “China has been growing like gangbusters, and they have central planning, so we ought to do more central planning here in the USA.”

  1. Mr. Stern needs a statistics refresher. What is the right probability here?  Is it really to look at a growing command economy and imply that command –> growth? Actually no. What matters is, what is the probability that an economy run like China’s will see growth. And China is one case out of … 50? 70? 90? What is the probability? On the contrary, what is the chance that a country moving in a free-market fundamentalist direction achieves good results? I’d venture a polite guess that it is a wee-bit higher.
  2. Signapore, second only to Qatar, had the world’s second fastest growth rate in real GDP last year, it grew 50% more rapidly than China. Does Andy recommend the US follow Singapore’s model? After all, it is ranked second in economic freedom. It must be the case, right, that it is growing only because of its free-market fundamentalism. In any case, here’s a list of the top 20 growing countries from last year. What about the other 19? What makes China so special? Is it really because it’s big?
    1 Qatar 16.272
    2 Singapore 15.270
    3 Paraguay 14.400
    4 India 11.1
    5 Republic of China (Taiwan) 10.823
    6 People’s Republic of China 10.300
    7 Turkmenistan 9.222
    8 Argentina 9.161
    9 Sri Lanka 9.134
    10 Congo, Republic of 9.090
    11 Zimbabwe 9.006
    12 Peru 8.795
    13 Botswana 8.562
    14 Uzbekistan 8.500
    15 Uruguay 8.468
    16 Nigeria 8.394
    17 Afghanistan 8.227
    18 Turkey 8.200
    19 Yemen 8.016
    20 Ethiopia 8.008
  3. There are lots of countries doing lots of great planning like China too, do we just get to forget Guinea, Bolivia, Cameroon, Venezuela, etc.?
  4. Mr. Stern is making a pretty bold assertion that China is growing because of its central plan. That may be true. But China had central planning for three decades before the 1980s, and it was one of the most horrific human rights and economic horror stories that the planet has ever seen. Do we conveniently get to ignore that “misstep?” Furthermore, China has been growing incredibly freer over the last 30 years – did you even see a single mention of this in his article? That the concept of private property now has meaning in China. That unlike the United States, not a single dollar of foreign capital has been expropriated by the Chinese government in 50 years. Would it be any less correct to argue, “China has been learning from the free-market fundamentalism of the western world and has made rapid movements in that direction, which is why it is growing. Therefore the U.S. should pay attention to what’s happening over there and step on the free-market fundamentalist gas pedal?” I’ll be long dead before he utters anything resembling that.
  5. So what?  I don’t care if China grows faster than us. I hope they do. It will make me richer. It will give me more friends. It will be a source of more medicines. It will be a source of more entertainment. It will be a source of more trading partners. What’s this insane obsession with being like anyone else anyway? If someone in China is better at building a bridge or better at making a faster microchip than someone in America, why the heck should I care? After all, I currently suck at building bridges and making microchips, and I don’t care since I can trade teaching services in order to access someone who has those skills. Tell me again why I would be worried that I’d have more and richer people to trade with? Or is Andy worried that if China goes and gets all rich on us that we’d lose a war with them? Fine. I’m not particularly interested in seeing America at war with anyone.
  6. So what? Suppose Andy is right. I still don’t care. Or does Andy not respect the core values of a certain class of people who prefer to have their rice-bowls to themselves? Being free is valuable on its own right. And being free has delivered unmeasurable wealth to mankind already. If being free in the 21st century means I’d have to forego some more of an increase in my living standards, it’s a price I’m more than willing to pay. But I suspect that those who value liberty do not matter in the world of Mr. Stern. If so, he would have mentioned that in his little polemic. And in a world of true freedom, what fear would I have of someone else’s success?
  7. Does Andy Stern really believe that political actors in China or the US can be trusted to wield the awesome powers he envies in an honest, fair and transparent way? Does he propose to have only the Progressives wield the power to “partner” with the private sector? What if a far-right Christian coalition ends up taking the reins in the US? Would he be comfortable having them usurp the “free-market” ideology of the US and legislate a massive moral change in the country? Would he agree with the mobilization of massive resources to build more churches and community centers that agree with established teachings? Would he agree with an expansion of government-corporate farming, you know, to benefit the people?
  8. Does Andy even know that more roads and more high rises are good things? You’ll find an eerie emptiness in his article about whether any of the things China is doing make long term sense. Furthermore, you’ll find an eerie emptiness regarding the rapid pace of American growth 200 years ago and how that growth happened haphazardly and without a plan.
  9. And while we are on the topic of navel-gazing, you’ll notice that Andy leaves out some pretty famous navels. How about Lincoln Steffens and the rest of the Gulag-a-goggers that visited the USSR in the late 2os and early 30s (as detailed in Amity Shlaes’ excellent The Forgotten Man) indicating, “I’ve seen the future and it works?”  Even as late as the late 1960s Paul Samuelson oohed and aahed at the rapid industrialization of the USSR and even had a chart in his best-selling textbook that showed Soviet living standards leaving America behind in the near future. Oops. Or, as one of the other commentators here pointed out, what about the oohs and aahs about Japan taking over the world in the 1980s? Oops.

Oh, so much more to say, but I must go alas.

UPDATE: Here is Scott Sumner.

5 Responses to “Dear Andy Stern”

  1. chuck martel says:

    Yeah, Steffens was wrong about the Soviets, like a lot of others. But he was right about law enforcement and government corruption. Sadly, he and many reformers saw more government as the solution to the problems created by government.

  2. Harry says:

    I like the way those growth numbers are shown in thousandths of a percent, putting Congo above Zimbabwe. The figures were probably gleaned in interviews between a World Bank analyst and Congolese and Zimbabwean desk jockeys. I assume they all have Microsoft Excel, which makes such precision possible.

  3. jb says:

    I’m surprised you wasted your fine brain cells on Stern’s asinine letter Wintercow. Your comments are on target, of course. I can only add that my first thought was to consider whether growth in per capita GDP, versus absolute GPD, would perhaps provide a more insightful measure when ranking national prosperity. But then I realized that would distort the outcome to favor China unfairly; it is my understanding that Mr. Stern’s beloved authoritarian state extends its benevolent powers to influence not only to the numerator, but to control most ruthlessly the denominator as well.

  4. RIT-Rich says:

    Is Andy Stern really worth replying to?

  5. Harry says:

    A wise comment,jb.

    Our friend wintercow did a good job in skewering Andy, but I do agree he wasted brain cell time, but then he attracts us to his blog for our entertainment and enligntement.

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