Does Economic Freedom Foster Tolerance?

[Velasco]

It seems to me that the theories of laissez faire brought that type of society portrayed in some Dickens novels. Utopian socialists like Saint-Simon or Marxist theories appeared as a reaction to the miserable conditions of the working class during the Industrial Revolution. I'd say that dogmatism, Marxist or Smithsian, is not a good thing. On the other hand I'd say that Keynes' ideas lifted many Americans out of poverty after the Great Depression and the social market economy improved the living conditions of many Europeans after the Second World War. Also, some social conquers are unthinkable without the action of some "marxist" trade unions. I don't want a type of society like China, with a bureaucratic and oppresive government machine working besides a deregulated market economy. And I don't like the reactionary dictatorial Pinochet model with a Milton Friedman's "freedom" scheme in the economy. Globalization is too complex to say if it's a good or a bad thing. I'd say that it's impossible that globalization would bring prosperity and diversity to the great masses of dispossesed without a certain sense of fairness in the economic exchanges. For example, it's impossible to talk about an actual free trade if you subsidize the Iowa corn crops and, at the same time, you demand the lift of trade barriers to the corn crops in Mexico or Peru. 

[Politico]

Globalization is too complex to say if it's a good or a bad thing

"When goods do not cross borders, soldiers will."
- Frédéric Bastiat (Disciple of Adam Smith and founder of the concept of opportunity cost)

The record shows that globalization ultimately promotes peace and prosperity.

[Velasco]

Such generalizations never work. You can see some bad effects of globalization in this thread:

https://uselectionatlas.org/FORUM/index.php?topic=156967.0

Sometimes dogmas work badly with the facts in the present-day world. By the way I don't support the opposite dogma, i.e., total proteccionism. If we want to discuss seriously about the effects of globalization we should keep in mind a lot of social, economic and cultural factors, among others. It's not as easy as collecting quotes from somebody.

[Politico]

The last time we turned away from a commitment to globalization, we ended up with Hitler, Mussolini, Stalin, etc. No thank you. When goods cross borders, that's a serious impediment to soldiers crossing those same borders. Peace is reason enough for globalization.

[Velasco]

I wonder if we are discussing about the same issues.

[Politico]

I wonder if we are discussing about the same issues.

At least we can agree that the chick in your signature is hot.

[opebo]

The record shows that globalization ultimately promotes peace and prosperity.

For some.  The developed country workers have to accept drastically diminished standard of living for this plutocrat utopia, Politico.

[Politico]

The record shows that globalization ultimately promotes peace and prosperity.

For some.  The developed country workers have to accept drastically diminished standard of living for this plutocrat utopia, Politico.

Yes, because housing, TV sets, computers, food, medicine, cars, clothing, etc. in 1970 were so superior to what is consumed in middle America today *rolls eyes*

It all boils down to productivity, and we're second to none in that department.

[Velasco]

Argh.

Does no one here understand how correlations work? Seriously, people.

"Black Americans are generally poorer than White Americans"

"Obama is not poor!"

I want to cry.

Also, China is not economically free. That left-wingers still claim this is bizarre. And Chile went dictatorship-->market economy-->democracy.

And Argentina has never pursued liberal policies. Looking up Menem he certainly does not seem to prove your point very convincingly.

Don't complain. I didn't wrote that China had a "free"economy, I questioned the concept of freedom applied to economics. By the way, where did you read any mention to black Americans? I know perfectly what happened in Chile after 1990 and Menem policies are generally regarded as "neoliberal", do you have another opinion? Feel free to elaborate some argumentation, maybe I will change my mind if you're convincing enough. Argh, those right-wingers or centrists or whatever...

[Gustaf]

Argh.

Does no one here understand how correlations work? Seriously, people.

"Black Americans are generally poorer than White Americans"

"Obama is not poor!"

I want to cry.

Also, China is not economically free. That left-wingers still claim this is bizarre. And Chile went dictatorship-->market economy-->democracy.

And Argentina has never pursued liberal policies. Looking up Menem he certainly does not seem to prove your point very convincingly.

Don't complain. I didn't wrote that China had a "free"economy, I questioned the concept of freedom applied to economics. By the way, where did you read any mention to black Americans? I know perfectly what happened in Chile after 1990 and Menem policies are generally regarded as "neoliberal", do you have another opinion? Feel free to elaborate some argumentation, maybe I will change my mind if you're convincing enough. Argh, those right-wingers or centrists or whatever...

You said that China has a market economy. I'm not sure what definition of market economy and free economy you're using though.

Maybe you didn't understand my example. You're trying to disprove correlation with examples. That's not how it works.

Well, first off, Menem's policies did seem to initially spur growth. Secondly, the main failure of Argentina had to do with macro policies (currency especially) rather than micro policies. Maybe most importantly I'm a bit skeptical about a Peronist being a proper liberal. Argentina has been a very illiberal country over the last century so I can't help but doubt that one man and his agenda eradicated all of that in a term.

[opebo]

Yes, because housing, TV sets, computers, food, medicine, cars, clothing, etc. in 1970 were so superior to what is consumed in middle America today *rolls eyes*

Well, it is true that most of those things were superior in 1970, and a far superior value for money (as a percentage of median income) - certainly cars, housing, clothes, and food.  Only the electronic stuff, which is a mere incidental expense, was worse then, and medicine, which they at least they had access to due to unionization.

[Velasco]

You said that China has a market economy. I'm not sure what definition of market economy and free economy you're using though.

You didn't understand me because you relate "free" with "market economy". That's the system of common places that rules in our world, I know. I wrote "deregulated market economy" if I remember well. On the other hand I think that market economy may be more free or less free, but unlike certain people, I don't think that freedom is related to deregulation. I think more in questions like fairness, equal opportunities and limitations to great corporations. Maybe I'm a left-winger on certain issues, yeah.

You must be logged in to read this quote.

Of course Peronists are not liberal, ideologically speaking. They're populist and oportunistic above all, sometimes right-wing like Menem, sometimes left-wing or so like Kirchner. But you know well the difference between being socially or economically liberal. I regard privatization and deregulation as economically liberal policies and certainly Cavallo was an economic neoliberal. You are right about the currency but Menem did more things in these years, most of them drove to the disaster and the unlucky De La Rua paid the broken dishes.

[Gustaf]

You said that China has a market economy. I'm not sure what definition of market economy and free economy you're using though.

You didn't understand me because you relate "free" with "market economy". That's the system of common places that rules in our world, I know. I wrote "deregulated market economy" if I remember well. On the other hand I think that market economy may be more free or less free, but unlike certain people, I don't think that freedom is related to deregulation. I think more in questions like fairness, equal opportunities and limitations to great corporations. Maybe I'm a left-winger on certain issues, yeah.

You must be logged in to read this quote.

Of course Peronists are not liberal, ideologically speaking. They're populist and oportunistic above all, sometimes right-wing like Menem, sometimes left-wing or so like Kirchner. But you know well the difference between being socially or economically liberal. I regard privatization and deregulation as economically liberal policies and certainly Cavallo was an economic neoliberal. You are right about the currency but Menem did more things in these years, most of them drove to the disaster and the unlucky De La Rua paid the broken dishes.

So, how is China's economy a deregulated market economy then?

How did Menem's liberal policies drive the country to disaster? The thing that certainly was bad for Argentina was the set of illiberal policies that pushed the country from one of the richest in the world to the state it was in when Menem took over.

I guess I found the example amusing, since Argentina is a classic example in economic history of how regulating the economy is a bad idea.

[Velasco]

China is deregulated until the point that the Govenment's concerns are safe. Look at the labour market, for example. Do you think that China after Den Xiao Ping is still a planned economy in the Soviet sense? I'd say that enterprises have a considerable room for maneuvre, when the national security and the internal order are not in question.

About Menem it's pretty clear that the unreal currency system affected to the productive and exporting sectors and didn't help to fight the inflation rates. Privatizations were made quickly and it's the general impression that the companies were sold at a loss. The emblem is YPF, the oil company, that was sold to the Spanish Repsol and was nationalized again by Cristina Fernández with, say, bad manners.

When Menem took the office the situation was pretty bad. After years of currency bubble came the Corralito. I'd say that this is not a good record.

Many tend to forget that regulation and social market economy worked well in Europe for so many years. In Argentina played factors like corruption, clientelar webs and other particularities that made modernization impossible, despite the great potential and resources of the country. On the other hand I can't see how we can avoid another Lehman brothers or how can we fight against money laundering or drug and arms traffics without a certain regulation, this time at an international level. Maybe abolishing fiscal paradises could help too.

[Gustaf]

China is deregulated until the point that the Govenment's concerns are safe. Look at the labour market, for example. Do you think that China after Den Xiao Ping is still a planned economy in the Soviet sense? I'd say that enterprises have a considerable room for maneuvre, when the national security and the internal order are not in question.

About Menem it's pretty clear that the unreal currency system affected to the productive and exporting sectors and didn't help to fight the inflation rates. Privatizations were made quickly and it's the general impression that the companies were sold at a loss. The emblem is YPF, the oil company, that was sold to the Spanish Repsol and was nationalized again by Cristina Fernández with, say, bad manners.

When Menem took the office the situation was pretty bad. After years of currency bubble came the Corralito. I'd say that this is not a good record.

Many tend to forget that regulation and social market economy worked well in Europe for so many years. In Argentina played factors like corruption, clientelar webs and other particularities that made modernization impossible, despite the great potential and resources of the country. On the other hand I can't see how we can avoid another Lehman brothers or how can we fight against money laundering or drug and arms traffics without a certain regulation, this time at an international level. Maybe abolishing fiscal paradises could help too.

I'll start with the easy part. I think you're mixing apples and oranges when it comes to Latin America. I understand that in a Latin American context what you call liberal often means 'entrenched elites stealing public money'. That's obviously not good, but few normal liberals would support that. In fact, those are the kind of things that would generally lower a country's score when it comes to economic freedom, as used in this paper (which remains amusingly removed from this entire thread for some reason). In a similar vein, 'regulation' is a very vague term. Some regulations are required for a free market economy to work. Others are just oppressive tools to help corrupt government officials extract rents.

As for China...

"The State Constitution of 1982 specified that the state is to guide the country's economic development by making broad decisions on economic priorities and policies, and that the State Council, which exercises executive control, was to direct its subordinate bodies in preparing and implementing the national economic plan and the state budget. A major portion of the government system (bureaucracy) is devoted to managing the economy in a top-down chain of command with all but a few of the more than 100 ministries, commissions, administrations, bureaus, academies, and corporations under the State Council being concerned with economic matters."

" Economic plans and policies are implemented by a variety of direct and indirect control mechanisms. Direct control is exercised by designating specific physical output quotas and supply allocations for some goods and services. Indirect instruments—also called "economic levers"—operate by affecting market incentives. These included levying taxes, setting prices for products and supplies, allocating investment funds, monitoring and controlling financial transactions by the banking system, and controlling the allocation of key resources, such as skilled labor, electric power, transportation, steel, and chemicals (including fertilizers)."

And so on. My ex's uncle was running a Chinese company, until the government decided the sector needed consolidation and shut down all small businesses within it. It's a country where people aren't allowed to move freely within its own borders. Foreigners can't buy stock there. Etc, etc.

If you think China is a market economy comparable to a Western nation, you're very mistaken. It's not as centrally planned as it was back under Mao, sure. They allow some market mechanisms, which explains why the people there are immensely better off now (China's move towards market economy is one of the greatest strikes against global poverty in the last several decades). But it is still nowhere near our level of economic freedom.

[© tweed]

of all the ideologically loaded concepts in the world, 'economic freedom'...

[Velasco]

I'll start with the easy part. I think you're mixing apples and oranges when it comes to Latin America. I understand that in a Latin American context what you call liberal often means 'entrenched elites stealing public money'. That's obviously not good, but few normal liberals would support that. In fact, those are the kind of things that would generally lower a country's score when it comes to economic freedom, as used in this paper (which remains amusingly removed from this entire thread for some reason). In a similar vein, 'regulation' is a very vague term. Some regulations are required for a free market economy to work. Others are just oppressive tools to help corrupt government officials extract rents.

Neoliberal economic policies blessed by IMF and other institutions. It seems that you have an idealized idea of liberals: corruption is not related with a concrete ideology, it's simply stealing money. This occurs in "free" economies (see Italy, for example) as well in "non-free economies". If "free economies" were totally free of corruption, the world would be a better place, for sure, but this is not how the things work. I talked about regulation in the context of the market economy, concretely I was thinking about regulation of financial markets and financial transactions, when they are related with fiscal paradises and money laundering. I mentioned "social market economy" too. I know what´s an orange and what's an apple.

You must be logged in to read this quote.

Not completely comparable, the Chinese model of capitalism is very peculiar. I mentioned deregulation, and I think that I am right in what is related with the labour force. By the way, it's undeniable that the economic growth has been spectacular, but not all people lives better now; this only affects to the rich people and the emerging middle class, not to the great contingent working in semi-slavery conditions. About planning, it's true that Chinese authorities mark the general objectives, but they play with capitalist rules. In fact they are playing the globalization game better than any country in the world. Are they protectionist? Surely they are when their interests are in play but, well, other capitalist countries also are. Remember US and the subsidies for agricultural activities. It's you who insist in "free economy". I wrote about deregulation and capitalism, without adjectives.

[Gustaf]

Huh? That corruption is not linked to an ideology was precisely my point. You mentioned selling companies at a loss, that's typically a sign of corruption rather than some principle of liberalism.

Economic freedom doesn't mean "no regulation" nor does it mean "selling government assets to oligarchs in corrupt deals"

Please provide proof about most Chinese people not having had an increase in welfare and living conditions. I've never met a Chinese who thought that. Especially the ones who remember the starvation of the Mao years.

[Velasco]

Huh? That corruption is not linked to an ideology was precisely my point. You mentioned selling companies at a loss, that's typically a sign of corruption rather than some principle of liberalism.

Economic freedom doesn't mean "no regulation" nor does it mean "selling government assets to oligarchs in corrupt deals"

Please provide proof about most Chinese people not having had an increase in welfare and living conditions. I've never met a Chinese who thought that. Especially the ones who remember the starvation of the Mao years.

Perhaps I didn't understand your previous post, I thought that you considered corruption related with illiberal ideologies. On the other hand I didn't mean that corruption was the consequence of deregulation. In Spain some companies were sold at a loss during the González and Aznar governments, I prefer to think that the privatization of Telefónica (our main telecom) was not related to corruption.  If I was wrong blame the weather; these days it's too hot to think.


I asked Google about working conditions in China. The first result is:

http://www.networkideas.org/news/jul2002/news11_Chinese_Textile.htm

I'll extract some random paragraphs. About living conditions in the countryside:

You must be logged in to read this quote.

About how people emigrated from the countryside to the cities percieve their situation:

You must be logged in to read this quote.

(De) regulation in the labour market:

You must be logged in to read this quote.

About payments:

You must be logged in to read this quote.

You must be logged in to read this quote.

Conclusion:

You must be logged in to read this quote.

I'm pretty sure that there are a lot of similar reports available in the web.

[Gustaf]

This doesn't cite any hard facts. China's GDP per capita over the last 30 years has gone up by a factor of 20 (http://en.wikipedia.org/wiki/Historical_GDP_of_the_People's_Republic_of_China).

You're arguing that while the average went up 2 000 % most people did not gain anything. That's an extraordinary claim, one that I assume is based not on wishful thinking or ideological rigour but on some actual facts.

Of course, no one is claiming that poor people in China have it great. I've been there, so I'm well aware. But I've also met Chinese people who had to eat their cats as children because they were starving. Here is another fun fact:

"Widespread famine occurred, especially in rural areas, according to 1982 census figures, and the death rate climbed from 1.2 percent in 1958 to 1.5 percent in 1959, 2.5 percent in 1960, and then dropped back to 1.4 percent in 1961. From 1958 to 1961, over 14 million people apparently died of starvation, and the number of reported births was about 23 million fewer than under normal conditions."

http://en.wikipedia.org/wiki/Economic_history_of_the_People%27s_Republic_of_China#First_Five-Year_Plan.2C_1953-57

Your claim is that this was somehow better for the Chinese people than their current situation, but I'm still lacking any data or objective research backing up this claim.

I'll note though, that it IS true that many rural people in China are suffering a lot. One of the main reasons for this is precisely over-regulation though - namely, that they aren't allowed to move to the cities where all the prospects are and when they still do they thus end up being illegal immigrants in their own country, without rights to social welfare.

Here is another study for you: http://www.tandfonline.com/doi/abs/10.1080/00220389908422604

"Per capita disposable incomes more than tripled in the cities and almost quadrupled in the rural areas."

The article shows that the gap between urban and rural areas in terms of income was lower in 1996 (2.02) than it was in 1978 (2.46) and also that the share of people living below the poverty line in rural China fell from 1988 to 1995. In 1995 the number of poor people in China (in absolute terms) was 70 million, compared to 270 million in 1978. That's 200 million people leaving poverty. It also points out that one of the reasons for the persistent inequality is the government policies being biased in favour of urban areas.

I could find more studies but I've seen no actual research backing up your claim.

[Velasco]

No, Gustaf, I'm not arguing that this spectacular (as I recalled before) GDP increase didn't benefit anybody. I think that economics is not only what you call "hard facts", i.e., macroeconomics. Living and working conditions affect people and you can't argue that the average Chinese worker has a great standard of living. Low wages and exhausting working days are facts; hard or soft they affect people, so they're important.

On the other hand that's right about the Cultural Revolution and the secular famines. I didn't want to make any defence or the Maoist China. I'd say that China went from one extreme to another and neither of them are in my tastes. Probably there are a lot of middle ways between both. It's useless to discuss in terms of Mao vs. Den Xiao Ping.

One of the studies that you linked summarizes:

You must be logged in to read this quote.

The article that I linked you before also mentioned the huge inequality between urban and rural areas. I think that it's undeniable that the huge industrialization and the quick conversion of China to capitalism and deregulation have affected the traditional way of living in the rural areas and in some cases have empoverished farmers. This type of phenomena is not unusual in other countries that experienced migratory movements between country and cities. It's only that in China it has a huge magnitude. I think that Chinese industrial workers need a Dickens.

You must be logged in to read this quote.

I think that Chinese authorities try to limit the damage. The migratory avalanche produced by the economic changes in China has epic proportions. This is not about regulation or deregulation, they're trying to build gates in the open field.

You must be logged in to read this quote.

I limited myself to make a quick search while I was posting this morning. Since my claim is not what you think it is, I don't know what data do you need. I wanted to state the terrible working conditions of the bulk of the Chinese labour force. If you want a defence of the previous model, I'm not interested.

[Gustaf]

I think you're moving the goal posts now. Your original claim, at least as I understood it, was that globalization and economic freedom is not always a good thing for a country and you proved this by pointing to China.

I firstly pointed out that you can't rebut a correlation with an example, which I assume you accepted since you didn't respond to it.

Secondly, I pointed out that China isn't really a free market economy.

Thirdly, I pointed out that if you want to prove that deregulation has been bad for China you can't point out that there are poor people there. You have to prove that they are worse off than they were before. And that you have yet to do, probably because it simply isn't the case.

I frankly think it's a bit insulting to the victims of Mao to claim the suffering they endured as an extreme which is somehow comparable to the extraordinary improvement in living conditions the Chinese have experienced over the last few decades.

No one is saying the Chinese model is the best one, but it's also pretty clear that most of the suffering in China stems, not from capitalism, but from an oppressive, still nominally Communist, government.

[Velasco]

I think you're moving the goal posts now. Your original claim, at least as I understood it, was that globalization and economic freedom is not always a good thing for a country and you proved this by pointing to China.

I mantain that claim. Globalization and the present-day forms of capitalism tend to marginalize sizeable sectors of the population. That's the reason why I put the example of the textile industry workers. On the other hand marginalized people usually don't appear in macro-economic statistics like GDP.

You must be logged in to read this quote.

This discussion is becoming circular and not constructive, i.e., useless. I have to come back again to the same arguments because of your misconceptions. My point was that deregulation is not good for everybody. I mentioned people who are richer now and "emerging middle classes". Some people are worse than before simply because they are marginalized by the economic processes and by the Chinese authorities, as you pointed before.

You must be logged in to read this quote.

Another misconception and this time unacceptable. If you think that I'm insulting Mao's victims or defending the old regime, I'll have to think that you have a simplistic vision of the world or that you are distorting my attempts of argumentation to fit with your views and prejudices.

In my opinion the sufferings of wide sectors of the Chinese population are caused by the opressive nature of the political regime together with the economic processes, capitalists in their nature. China is a capitalist economy living together with a bureaucratic government machine, still nominally communist.

I think that I'm not going to follow with this discussion, Gustaf. I hate walking in circles.

 

[opebo]

No one is saying the Chinese model is the best one, but it's also pretty clear that most of the suffering in China stems, not from capitalism, but from an oppressive, still nominally Communist, government.

That is pure crap.  Suffering comes from poverty, from having to work a lot, having to move far from home for work, being confined in factory towns/encampments, etc.  The vast majority of people in China couldn't care less about free speech (which obviously doesn't exist for working-class people under capitalism either, anyway), or 'political rights'.  Their suffering comes from their boss, not from the CPC.

[Gustaf]

I think you're moving the goal posts now. Your original claim, at least as I understood it, was that globalization and economic freedom is not always a good thing for a country and you proved this by pointing to China.

I mantain that claim. Globalization and the present-day forms of capitalism tend to marginalize sizeable sectors of the population. That's the reason why I put the example of the textile industry workers. On the other hand marginalized people usually don't appear in macro-economic statistics like GDP.

You must be logged in to read this quote.

This discussion is becoming circular and not constructive, i.e., useless. I have to come back again to the same arguments because of your misconceptions. My point was that deregulation is not good for everybody. I mentioned people who are richer now and "emerging middle classes". Some people are worse than before simply because they are marginalized by the economic processes and by the Chinese authorities, as you pointed before.

You must be logged in to read this quote.

Another misconception and this time unacceptable. If you think that I'm insulting Mao's victims or defending the old regime, I'll have to think that you have a simplistic vision of the world or that you are distorting my attempts of argumentation to fit with your views and prejudices.

In my opinion the sufferings of wide sectors of the Chinese population are caused by the opressive nature of the political regime together with the economic processes, capitalists in their nature. China is a capitalist economy living together with a bureaucratic government machine, still nominally communist.

I think that I'm not going to follow with this discussion, Gustaf. I hate walking in circles.

 

So, you make a claim, I disprove it and your response is a) to maintain it and b) to run away from the debate?

Jesus. I don't get why people join political forums if they cannot handle being questioned. If pointing out what your views are and how they are at odds with reality makes you uncomfortable you should probably change them.

See, the discussion isn't walking in circles. I've moved it forward by producing evidence and analysis supporting my position. You aren't able to do so, because your view here is not based on reality and it is in part a bit morally reprehensive which makes it hard for you to defend it in a straight manner.

You claimed that current China, the best situation the people of that country has ever had, and  the Maoist era were extremes at opposite ends. I pointed out that that's pretty offensive to the people who had to suffer Mao's oppression. You're perfectly free to explain how it isn't, if you can. But don't act as if that is unfair from me.

Marginalized people do appear in the statistics I gave you above, which look at trends for low-income people and at income inequality. Show me a statistic indicating that, say, the bottom decile in China is poorer now than in 1980. Since you're so convinced of your opinion I assume you have read such a fact at some point because you wouldn't base your views on nothing but ideological dogma, would you?