Be Like China? Really?

December 1, 2011 - 5:45 PM

Obama confidante and former president of the Service Employees International Union (SEIU) Andy Stern touts "China's Superior Economic Model" in today's Wall Street Journal.

Stern argues it is time for America to junk its love of economic freedom and free markets and copy China's statist model instead.

Be Like China?

Let’s look at the hallmarks of the Chinese economy:

  • Slave labor.
  • Villages confiscated and bulldozed to provide new land for construction of high-rise towers for the newly rich.
  • Rampant theft of intellectual property.
  • Political and religious oppression.
  • Widespread corruption in banking, finance, government procurement, and construction.

Like the old Soviet Union, China's government imposes "5-year plans" on the economy. Unlike the Soviet Union, they appear to be working, at least the way Stern sees it, since China's economy is growing and it is building a lot of shiny new buildings.

He writes:

“Some Americans are drawing lessons from this. Last month, the China Daily quoted Orville Schell, who directs the Center on U.S.-China Relations at the Asia Society, as saying: "I think we have come to realize the ability to plan is exactly what is missing in America." The article also noted that Robert Engle, who won a Nobel Prize in 2003 for economics, has said that while China is making five-year plans for the next generation, Americans are planning only for the next election.”

Of course, it is actually Americans like Stern and Obama who are planning for the next election. They're planning how to use more money taken from taxpayers or borrowed from China to "stimulate" the economy that, darn it, just won't wake up despite the last injection of stimulus, and they're hoping to do it in time to win the next election.

Most American business owners, on the other hand, are just trying to survive until the next election, in hopes that change will come and the heavy hand of crony-socialism and oppressive over-regulation will be lifted from the American economy so that they can get back to growing their business and creating jobs.

Surely, Andy Stern hasn't forgotten how the Japanese economic miracle was supposed to swamp America unless we adopted their ways. A funny thing happened on the way to that destiny - American entrepreneurs and business owners adapted, while Japan's economy collapsed into a "lost decade."

And it's not likely that Americans are going to be very receptive to being told that they must give up their freedom so people like Obama and Stern can create "five year plans" for the economy.

According to the Heritage Foundation's 2011 Index of Economic Freedom, the United States' economy is the 9th-freest in the world. We ought to be aiming for #1, not looking to copy China, which is ranked 135th.

Haiti and Yemen are among the 133 countries with more economic freedom than China.

Just how un-free is China?

Heritage writes:

“The Communist Party, though allowing some economic movements in response to market forces, still maintains ultimate authority over virtually all economic decision-making. The state-controlled financial sector often allocates credit based on political criteria, undermining economic efficiency and productivity. Beyond sporadic attempts to facilitate nominal openness to foreign investment or to imply currency market liberalization, recent years have seen the virtual cessation of economic reform and an absence of political will to undertake more fundamental restructuring.”

“The government has allowed some business freedom, but the overall regulatory framework lacks transparency and remains complex, arbitrary, and unevenly implemented. Enforcement of regulations can be ineffective, hampered by petty corruption and bureaucracy.”

“The state continues to control the financial system as its primary tool for managing the rest of the economy...”

“China’s judicial system is weak, and many companies resort to arbitration. Local officials can ignore court decisions with impunity. All land is state-owned, but individuals and firms may own and transfer long-term leases (subject to many restrictions) as well as structures and personal property. Chinese courts have an inconsistent record in protecting the legal rights of foreigners. Intellectual property rights are not enforced effectively. Copyrights, patents, brand names, trademarks, and trade secrets are routinely stolen.”

Come to think of it, some of that actually sounds like the Obama economic agenda.

This does, too: In China the top income tax rate is 45 percent, 10 points higher than in the United States. But, Obama and Stern would be happy to copy that part of China's economic plan.

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