The most important section, I believe, is this one:

quote:

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China’s advance, however, also has a serious negative side that rules it out as a model for Third World development. Bejing’s economic reforms have indeed lifted 300 million urban residents out of poverty, but this has been done at the cost of impoverishing 900 million peasants. China’s rural population, the main force of the Communist revolution, has gained almost nothing from the pro-capitalist reforms introduced in 1979; in fact, China’s rapid growth has been based on the hyper-exploitation of its peasants and workers. China’s industrial expansion has been heavily dependent on a massive flow of foreign investment into coastal cities, which has been attracted by the cheap labour driven there from outlying villages by the abysmal social conditions enforced by the Communist Party leadership.

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It stands to reason doesn't it? China at present has an unemployed homeless population of from 30-45 million people. Why would you travel far from home for a chance at homelessness, super-exploitation, and/or prostitution, unless conditions at home were hopeless?

It has always been the case that industrialization has been achieved on the backs of the rural population. China appears to be no different.

Hopefully, for its people, China is powerful enough to avoid the trap of merely "sweatshop-led growth" that the poorest nations must suffer.

a) That lots of people in China are still desperately poor? We knew that.

b) That globalisation is reducing that number at a fairly steady rate? We knew that, too.

c) That they're dissatisfied with the state of affairs in China? Who isn't?

d) That by refusing to buy Chinese goods and/or to hire Chinese workers, we'd be doing China's poor a big favour? That's spectacularly stupid.

And is there any reason to believe that those 900 million are worse off (aside from the bald, unsupported statement that they are)? I've looked at quite a few empirical studies, and that's the first time I've heard anyone claim that.

[ 29 November 2005: Message edited by: Stephen Gordon ]

quote:

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Originally posted by Stephen Gordon:
I didn't understand the point of that article, which is why I didn't comment the first time. What is the point that they're trying to make?

a) That lots of people in China are still desperately poor? We knew that.

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No, it's pretty clear that's not the point of the article. sigh.

quote:

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b) That globalisation is reducing that number at a fairly steady rate? We knew that, too.

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No, ... deeper sigh ... the article doesn't even say anything remotely like that.

quote:

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c) That they're dissatisfied with the state of affairs in China? Who isn't?

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No, .... even deeper sigh.

quote:

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d) That by refusing to buy Chinese goods and/or to hire Chinese workers, we'd be doing China's poor a big favour? That's spectacularly stupid.

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Heavy, heavy, sigh.

quote:

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And is there any reason to believe that those 900 million are worse off (aside from the bald, unsupported statement that they are)? I've looked at quite a few empirical studies, and that's the first time I've heard anyone claim that.

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Finally, a comment relevant to the article. I'd be interested in seeing those empirical studies. This is one of the few sources that I've looked at at all, and I found it interesting. I also trust it for the reason I gave above and shall repeat below:

People do not leave their homes in the rural interior of China to take their chances in the alien world of industrial coastal cities, at horrid factories, in prostitution, or in abject homeless poverty, ... unless something pushes them there. The article mentions increasingly punitive levels of taxation. I don't see this as all that fanciful a thesis.

I'll be honest with you Stephen, very often your well-planned and presented arguments are brushed off here because there is an ingrained bias against mainstream economics.

I would like to think that in my case, I've do the work to read what you've said and to think about it and maybe change my mind.

Your opinions on consumption taxes combined with significant rebates for lower income groups for instance, I've said that you've gone so far as to put me on a fence when I was predisposed to reject consumption taxes utterly as regressive.

I had a fruitful debate about the IMF and Argentina with you once. [Because of your sympathies towards the IMF's role and your knowledge on the subject.]

I'll try to get around to my rebuttal to Ricardo's comparative advantage (or maybe i'll just try to google one and present it instead) to
account for my dismissal of yours and Krugman's loyalty to the thesis.

Edited to add: Only a comment on "free trade" economists who still insist on nineteenth century economic models but forget the nineteenth century methods still used.

[ 01 December 2005: Message edited by: Erik the Red ]