We are already seeing some people heading off to China and opportunity: “Shut Out at Home, Americans Seek Opportunity in China”
According to the CIA, not always a reliable source, China’s 2008 GDP is about 7800 000 000 000$, US 2008 GDP is about 1429 000 000 000$. Since China is growing about nine percent faster than the US …
In many important respects it has already surpassed the US. Innovation in the US is very rapidly drying up, while we are seeing dramatic and important innovations coming out of China – for example improvements in the synthesis of liquid fuel from coal, the new CBHD (High density DVDs at low density prices), and critical advances in the most esoteric of the pure sciences, General Relativity. They are on the leading edge in heavy industry, consumer goodies, and basic pure research.
Although Mainland China is in part still a centralized command economy based on terror, pillage, and murder, in other important ways it is vastly more capitalist than the US. It absorbed capitalism from Hong Kong, which was a lot closer to the hard core capitalism of Manchester and the Industrial Revolution than the diluted and castrated capitalism of the US and Europe, therefore can expect rapid growth rates that catch up to Hong Kong and Singapore, thus massively surpass the US and Europe.
It is often said that America has rule of law and China does not, yet we have lost track of the difference between rule of law and rule of lawyers: Reflect on the numerous outrageous patent-the-wheel lawsuits and the destruction of the light plane industry when lawyers discovered they could sue people who build planes for not building them as wisely and well as lawyers and courts supposedly would have. The car industry and the vaccine industry nearly went the same way, requiring federal interventions that suspended what we are now calling rule of law for some industries, but not others.
A big Chinese advantage is that their political elite is less arrogant and less out of contact with reality. It is willing to acknowledge that government interventions can fail, can have bad results. When government intervention fails cataclysmally in the US, then that branch of the government is immediately given more wealth, power, and prestige, that area of the economy promptly becomes more socialist. When government intervention fails in china, then that branch of the government eventually loses wealth, power, and prestige, that area of the economy becomes less socialist. Thus remaining socialism in China are those parts of socialism that are functioning well, while newly expanded socialism in the US, for example accounting, finance, and perhaps soon health care, is failing disastrously. The American governing elite is solidly immersed in a cloud of lies and denial, rationalizing away, or simply lying barefaced, about all their failures. The Enron case led to increased government intervention against truthful accounting, rather than diminished government intervention against truthful accounting, the disastrous losses from affirmative action lending led to an increased takeover of the finance industry, and we are likely to soon see the same in health care.
The Chinese elite still tends to the traditional chinese and communist view that the political elite are the genuinely productive ones, and the entrepeneurs are parasites, and if they were to act on that view, they would return China to the poverty and chaos it has long endured. Because of this continual threat, the entrepeneurial class in China is to a substantial extent overseas based and cyberspace based. Chinese companies are largely run through servers located in tax havens, but such non violent defenses could easily fall to a sufficiently determined attack. Meanwhile, however, the US government is engaged in a sufficiently determined attack on tax havens, having recently successfully pressured the Swiss to deny financial services to Americans, blissfully unaware of the increasing dependence of the American economy on entrepeneurial skills and knowledge mediated through such havens. Interpreting the golden goose as a parasite, as a challenge to their authority and a rejection of their superior wisdom, they prepare to slay the golden goose.