Who would be the most able American to deliver the end of the world in December 2012?

[KrazyHorse]

As I understand the story, that's mainly because others are kept from competing by stifling bureaucracy. Favored companies can get permits, unfavored ones can't.

There are also a number of alternative possibilities why companies can't survive without government help. None of them mean that China is richer due to interventionism. For instance, a government might use taxes to subsidize certain companies' operations. These companies might drive up the cost of labor, pricing the non-subsidized companies out of the market. Yet without the taxation and subsidization, the society would be better off because the companies which thrived would be the most efficient at turning inputs into outputs rather than the ones the government picked (never mind the distortionary effect of the taxes).

[DaShi]

They are also heavily subsidized. I'm making no statements about whether the system is fair or even right in the longterm. But it has benefited China immensely.

Generally, businesses in China are heavily regulated. It is just fortunate for most of them that the government is very pro-business.

[KrazyHorse]

It hasn't benefited China. You may be engaging in a the fallacy of composition, if I understand your argument. Subsidization helps any given company thrive. Economywide though, subsidization does not magically mean that more companies thrive, simply that different ones do.

[DaShi]

Subsidies do benefit domestic companies over foreign ones.

[Hauldren Collider]

Not really. They benefit companies that export over companies that import, and whatever industries are subsidized over whatever industries aren't.

[DaShi]

As I understand the story, that's mainly because others are kept from competing by stifling bureaucracy. Favored companies can get permits, unfavored ones can't.

There are also a number of alternative possibilities why companies can't survive without government help. None of them mean that China is richer due to interventionism. For instance, a government might use taxes to subsidize certain companies' operations. These companies might drive up the cost of labor, pricing the non-subsidized companies out of the market. Yet without the taxation and subsidization, the society would be better off because the companies which thrived would be the most efficient at turning inputs into outputs rather than the ones the government picked (never mind the distortionary effect of the taxes).

That is a good point, Chinese companies are horribly inefficient due to both a lack of true competition and an education system that favors rote learning over innovation. On one hand, the lack of competition has allowed China to create megacorporations in a relatively short time, on the other, these corporations probably couldn't compete well internationally or domestically against foreign companies without a lot of government support. It is the latter that China fears the most.

[DaShi]

Not really. They benefit companies that export over companies that import, and whatever industries are subsidized over whatever industries aren't.

No, I just covered this in my previous post.

[Hauldren Collider]

Sounds like they could hit a Japan-style crash and burn, only worse.

Also, rote learning is great for a country playing catch-up but it rapidly loses effectiveness as you approach the education level of advanced countries.

[DaShi]

Sounds like they could hit a Japan-style crash and burn, only worse.

Haven't heard that every year for the past 20 years.

[Jon Miller]

China has seen a larger boost to economic development than India. This is even with the advantage India has of being more English friendly.

China has more state support of business than India.

These seem linked?

JM

[SlowwHand]

Considering that China runs a lot, if not all, of the businesses, is that really a big surprise?

[Hauldren Collider]

China has seen a larger boost to economic development than India. This is even with the advantage India has of being more English friendly.

China has more state support of business than India.

These seem linked?

JM

....no?

Come on, JM. You're supposed to be a scientist.

[KrazyHorse]

Subsidies do benefit domestic companies over foreign ones.

Now you're falling into the mercantilist fallacy.

[KrazyHorse]

China has seen a larger boost to economic development than India. This is even with the advantage India has of being more English friendly.

China has more state support of business than India.

These seem linked?

JM

The US is massively richer than either and has far less state control of the economy. Seem linked to you?

[Jon Miller]

We started far earlier. Which has a huge benefit, when you look at nations as diverse as Sweden and the US.

I don't consider the US and China comparable in this fashion. Additionally, our economic development has been a lot lower than China is recent years.

JM