An article by Philip Pan at the NY Times provided a short review about how China failed to fail over the past 40 years. The title of the article “The land that failed to fail: How China caught up with the West” indicates that many people fail to identify what contributes to success, failure and what does not matter.
There are now many examples of national success and failure and mixed results. It should be easier to learn the lessons of what works, what does not and what does not matter.
There are still those who deny China has been a clear winner from 1978. There have been 40 years of success. There are flaws in what China has been doing.
The UK and USA did have an economic success and rise before China. Japan, South Korea, Singapore, Taiwan and Hong Kong also had rises from undeveloped to fully developed nations. Germany, Canada, Austrlia and Europe have had success.
What does not work
The Soviet Union and Russia provided a lot of lessons to China and the World about what does not work in running a country. Learning this lesson is actually not completely trivial. Venezuela, Cuba, western progressives and some western intellectuals failed to learn about what did not work for the Soviet Union and Russia. Russia itself is still repeating some of its Soviet Union mistakes.
Problems in analysis of what works and what does not
More developing countries need to study and follow how China rose from 1978 through 2018. This is again a lesson that is actually not completely trivial. The World Bank and various NGOs still advise countries with development models that ignore methods which were proven successful with China.
Ethiopia, Rwanda, Kazakhstan, and Bolivia are trying to replicate China’s economic transformation. High-ranking decision-makers visit China on study trips. National planning bodies issue ambitious documents modeled on China’s experience.
Vietnam and many other Asian countries finally appear to be on paths of economic success. There will be more Asian countries and some African countries to find more of what works, what is essential and what are harmful. There are South American and African countries to study what does not work.
America and Europe have insisted that the Western historical path to affluence is the only model of development. The central idea is that democracy and free markets are the only pathways to stability and prosperity.
China’s development model is too often misinterpreted or oversimplified. For many Western analysts, the Beijing Consensus was a non-democratic challenge to liberal capitalism. It was boiled down to a combination of authoritarian rule with pro-market economic policies.
There are various comparisons of China’s development model to the Western development model.
There is a list of six models of development. This list does not include a China development model.
There are several problems:
* analysis of development is often done by political scientists who do not understand business, finance or engineering
* they often do not properly split out what is truly driving success versus what is a problem but not a fatal problem that does not kill success.
There is more than one way to success and multiple options are needed.
Democracy
There is detailed tracking of how democratic a country is. There is a political score from -10 authoritarian to +10 for fully democratic. This does not correlate to economic growth or economic success. There are many very successful countries with full democracy. There are some autocratic countries with economic success. Singapore and China have or will have full development while being mostly autocratic.
Norway and Sweden have economic success but the lessons they provide on development need to be analyzed for what works and what is there and is leaching upon the success.
Details of China’s model
1) China and the West started with small farmers and rural areas. Partly because of worries about an impending food crisis, China started its reform drive by breaking up farming collectives and empowering small-scale farmers. They linked effort to reward, productivity and output sharply increased. It also laid the groundwork for change throughout the economy.
China’s leaders did not simply unleash agricultural markets, as Western development agencies often recommend developing countries do. Instead, they concentrated state policies on ensuring that peasant farmers had the resources, knowledge, and incentives necessary to maximize output.
The gains from reconfiguring incentives were immediate and dramatic: the rural poverty rate fell from 76 percent to 23 percent between 1980 and 1985, as hundreds of millions escaped poverty for the first time. Higher incomes and productivity, in turn, prompted demand for new manufacturing products.
The US and the West also had a strong rural sector first. This was created over a hundred or more years.
2) Invest heavily in knowledge infrastructure. China has invested heavily in education and innovation, producing the well-educated workforce and highly skilled specialists that have motored its economy forward.
3) Prioritize cohesion over participation. Although China is often criticized for being authoritarian, many of its leaders feel more accountable to its people than those in many developing countries that hold regular elections. The primary explanation for this apparent paradox is the country’s high degree of social cohesion and strong sense of nationhood, which result from its ethnic homogeneity (China is 90 percent Han) and its long history as a unified state.
Despite the lack of elections, Chinese leaders have been concerned with performance. Just as General Electric managers are concerned with performance.
4) Build a competent government committed to inclusive development.
* administrative function competence. Government is able to execute.
* The state has worked to ensure that all its citizens are able to participate and gain from economic growth; this is rarer in the developing world than is usually recognized.
* China’s government has been consistently committed to promoting development, adopting aggressive policies to attract investment, promote growth, boost exports, and develop technology and human resources.
5) Invest heavily in infrastructure.
6) Experiment with new policies first, then implements reforms gradually. Lots of trial and error and A-B testing.
The US also has an effective process of creative destruction.
7) Focus on reworking incentives and removing obstacles to growth.
China eschewed the “big bang” approach to reform under which all prices and markets are freed simultaneously, as happened for example in Poland in 1990. Instead it focused on “big issues” such as “incentives, mobility, price flexibility, competition, and openness.
8) Use financial markets to promote development and stability.
9) Use government policy to boost economic competitiveness.
Just as Japan, Korea, Taiwan, Germany, and to some extent even the United States once did, China’s government prioritized certain sectors and companies deemed likely to become globally competitive. It then ensured their access to cheap capital and land, technology, human resources, and regulatory assistance—advantages over their peers elsewhere. It has also used regulation to keep foreigners at bay (such as in restricted industries) or to diminish their influence. Yet it has also used Special Economic Zones (SEZs) to promote foreign investment at certain times, in certain places, and in certain sectors, giving them a larger share in its economy than many of its neighbors do. Protectionism has thus been selectively strategic.
10) Promote self-reliance.
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For long term economical growth of the magnitude that they have achieve only a few countries have done it: USA after WW2, Soviet Union after the Communist Revolution (this is here just to upset people), Singapore, Japan after WW2, and South Korea, after the Korean War. So they have done a “good job”. I do agree with you about the “tiger by the tail”. It will be difficult to deal with the down turn which will eventually come. My guess is that the Chinese government will over react and will be very draconian and end up making the downturn much worse than it should have been.
Yea… will you be regurgitating what you’ve read in high school political science class or will there be any thoughts of your own coming soon? I’ve the the same books too growing up, then I’ve learned that there is more than one model to success and certainly culturally dependent , perhaps you should too.
Seems to me one thing they’re doing right is elevating their population out of poverty and increasing their GDP as a result. Took less than 70 years to become the world’s 2nd biggest economy, while Africa and Latin America had thousands of years and they’re still mired in corruption and poverty (as a simple comparison).
Yes, there are a number of ways to express the idea. However, I think including margin and risk premiums and costs of ideas that did not succeed are opening the possibility of encouraging efforts to invent for profit, rather than just compensating for coming up with a good idea in the course of normal business. I think encouraging inventing for profit is not a good idea, so I would caution against that.
As I mentioned earlier, I do not see a practical way to implement this concept that prevents gaming the system, so the distinction I’m making probably is moot.
Can you expand on this “good job” the Chinese government is doing? Seems to me they have a tiger by the tail.
It’s time you spent some time in China. Why would the public be terrified of its government?
Iy you want to see a terrified public, go the US, where they execute 2,000 people each year without trial and jail 2,000,000–also without trial.
Non-Party candidates can run for office. Non-Party officials can and have become State Ministers.
Do you genuinely not understand that, when 60% of the public approve of what the government is doing, it’s real approval, but when 95% of the public approve of what the government is doing, it’s a population too terrified to say they don’t actually approve?
But it’s much more difficult to rig the democratic approval of government policies which, in China, is 95% and in the US is 22%
One must also consider the importance of the petrodollar standard to the economic rise of China. If the world, or at least international trade were on a gold standard, as it was before the rise of the petrodollar, the immense trade imbalance between the US, and China could not have been sustained.
China would have had to buy sufficient goods, and services from the US, or prices for US goods, and services would have fallen enough to compete with those from China. Under a gold standard, currency becomes more valuable in a nation, as it is drained out for foreign purchases, lowering prices, and automatically balancing trade.
“When citizens are relatively equal (economically), has tended to fairly democratic. When a few individuals hold enormous amounts of wealth, democracy suffers”. You are obviously wrong, there is no connection at all between income equality and quality of life at all (see GINI index list of countries by inequality). By the way, there is more income inequality in China than in USA. In another list of countries by human development index USA is 13th best, Slovakia is 38th and your China is 86th.
Chinese government is aligned with what Chinese Communist Party wants.
Fantasy patents certainly can’t be justified, but I imagine they are but a very minor problem. I guess they clog up the patent processing system a bit, but I doubt they do much other damage.
However, traditional patents, working models and all, perhaps should not be accepted uncritically as a Good Thing. The justification for a patent system is to promote progress. I’ve read articles about research done into the effects of patents on progress. The cases I remember most clearly are that in the cases of the steam engine and the airplane, the existence of patents blocked progress for many years — essentially until the initial patents expired — because of aggressive patent enforcement actions by the patent holders. I don’t know the best answer, but I believe that shows that at least some tweaking of the patent system would be helpful.
When you stop to think about it, almost nobody invents something just in order to obtain a patent to exploit. Nearly all invention happens because someone has a problem to be solved. So invention is going to happen, regardless of whether the work can get patented. Perhaps it would be better if each patent’s term ran only until the cost of making the invention were recovered, or something along that line. I’ll be the first to admit that that probably is impractical to implement, not to mention the opportunities to game the system, but perhaps there is some way to devise a practical approach to patents that better approximates that ideal than the current system does.
That’s of course part of my complaint about the Carter Center, that their definition of a free and fair election is so absurdly narrow that there are easily a half dozen ways to totally rig an election and still have them declare the outcome legitimate.
I lived in USA for 8 years in seventies, this is all BS. You exaggerate. In communist countries government had power practically over everything, you were forced to act as they wanted you, worst of all you had to act you loved them. A slightest defiance would made you an enemy of socialism, they meddled in every aspect of your life. Read 1984 or Animal Farm.
Your newly acquired freedom certainly wasn’t acquired in the US. Political Science Professors Gilens and Page found that ‘the preferences of the average American appear to have a near-zero, statistically non-significant impact upon public policy’.
Page and Gilens found that, “government policy…reflects the wishes of those with money, not the wishes of the millions of ordinary citizens who turn out every two years to choose among the preapproved, money-vetted candidates for federal office”. “When citizens are relatively equal [economically], politics has tended to fairly democratic. When a few individuals hold enormous amounts of wealth, democracy suffers.”
‘Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens’.
Martin Gilens and Benjamin I. Page. https://doi.org/10.1017/S1537592714001595
The Chinese government is aligned with what its people want. Obviously.
Which third world despot use the Carter Center?
If you want to see a totalitarian state you have to spend time in the USA, which employs
– warrantless surveillance of private phone and email conversations by the NSA;
– SWAT team raiding homes;
– shootings of unarmed citizens by police;
– harsh punishment of schoolchildren in the name of zero tolerance;
– endless wars;
– out-of-control spending;
– militarized police;
–roadside strip searches;
– roving TSA sweeps;
– privatized prisons with a profit incentive for jailing Americans;
– fusion centers that collect and disseminate data on citizens’ private transactions;
– militarized agencies with stockpiles of ammunition
No Chinese leader, including Mao, has ever had one such power. The US President has–and exercises all of them. Regularly
The mechanical patent system is in some trouble, too, since abandoning the idea that you should have a working prototype. I’ve seen too many patents granted that read more like plot summaries for bad SF novels than anything a practitioner in the art could apply. You’re not actually supposed to get a patent on something until you can make it work.
“but they’re overseen by the Carter Center ”
Being overseen by the Carter Center doesn’t mean squat; They’re the go-to guys for every third world despot who wants his show “election” endorsed as legit.
“More importantly, their votes count: 95% of voters say the government is doing exactly what they want it to. ”
China is a totalitarian state where opponents of the state can be disappeared. Of course most people way the government is doing exactly what they want it to do. They’re not suicidal!
I spend most of my life living in a communist country. Yes, we had elections. They were compulsory. There was only one candidate for each position. Theoretically you could cast a vote secretly in a booth but if you did so you got yourself in a big trouble same as if you didn´t vote for him. Czechoslovakia in 1930´s was one of the richest countries in the world. After reds took over all so called capitalists countries surpassed us. Since 1989 after so called Velvet Revolution our standard of living has risen to a record level. I cherish my newly acquired freedom too much to give it up to despots who wants us to live under Big Brother of 1984.
I’m also not sure what Shigg means by this, despite him saying this for some years now.
However, I’ve heard other people going on about it at some length, and I think he is drawing from the same well (though I stand to be corrected).
The issues appear to be, starting at why I consider to be the strongest cases.
1. Copyright in particular is just silly at this point, where an author’s great grandchildren stand to retain full control of their work, with regular increases in the terms meaning that there is no prospect of anything going into public.
1 a) The fact is that most people who were writing something 100 years ago are dead now, and in many, many cases their heirs (if any) are untraceable over 3 generations, 2 world wars, name changes, migration etc. As a result there is a vast body of work where nobody can use it, because there is no one to contact to get the required permission.
1b) This has nothing to do with encouraging production. Nobody writes something because they think it will be earning money in 2150 AD.
There is a strong case that a change, such as a renewal fee every 10 years once you reach a certain time after first publication. That would clear out all the deadwood while still letting those very few properties that still earn good money stay in business (such as that certain mouse).
2. Patents are a trickier case. But there is a case to be made that software in particular is not matched by a 20 year patent life. That is several generations of software, and having the first person to come up with “one click ordering” being able to lock that down for multiple generations of products makes it look silly. A 5 or 8 year patent is probably a better match for this technology.
2b) In some ways this is an implementation thing. Software patents have been granted for a bunch of stuff that is arguably not “innovation” or at least not ” not obvious to one who is skilled in the art” and so poor administration of the current system makes the patent idea itself look bad.
2 c) Because the internet, and internet discussion has traditionally been dominated by computer people, the software patent case has been the system that all patents are judged on, rather than mechanical patents (where 20 years seems OK) or drug patents (which are arguably too short).
3. Medical patents, especially drug patents, are messed up in all sorts of ways. And there are a lot of people who could make a lot of money if things were changed. So they will always be prepared to argue that things need to change. In a direction that would just happen to benefit them.
I could write ALL DAY about medical tech IP, so I’ll just note that much of what is publicly referred to as “patent protection” has nothing to do with patents per se, but is direct government approval required to manufacture a given drug. Combined with governments subsidising (or not) or purchasing (or not) products that are functionally equivalent. See epipens: spoiler – not a patent issue.
Actually, in keeping with the mathematics behind investment diversification, it probably only takes 5 or 10 people in the decision loop to diversify away almost all the individual craziness that one person can generate.
The secret, as with investments, is making sure that the different people in the ruling group are actually independent of each other.
Which is why I am wary of calls to make the Senate elected in a “more democratic way” which would make it just a mirror image of the house of representatives. (I am talking of Australia but I think this applies to the USA as well). Have people who are selected differently, with different concerns, really is a “check and balance”.
Likewise, I’m prepared to entertain arguments that the UK really made a mistake when their house of lords lost the ability to actually block legislation.
A democracy is the will of the people, but the will of the people is, by sheer inertia of a huge number of people, going to be more stable and less arbitrary than the will of one person, or even a small number.
That was the issue with monarchy. You can have the best monarch in the world, and then he dies and his son takes over and first thing he sends the army on a surprise late November march to conquer Russia while the navy bombs Pearl Harbour and the nation’s industry gets nationalized. See Marcus Aurelius and his son Commodus.
Sure democracies do stupid things too. But they don’t wake up in the morning and decide to do everything stupid. They have to be pushed and influenced, usually over years, as it requires many, many people to change their minds in order to get major changes in policy.
As attractive as Hong Kong is as an example, it really isn’t a very good one.
Hong Kong is not a whole economy. It is, and even more so was, the port and financial center for a big chunk of China. Using Hong Kong as a “sample economy” is like using London, or New York, or even worse Manhattan, while ignoring the large, poorer, hinterland that is feeding into that city.
If, at the end of the American Revolutionary war, New York had remained in British hands (not at all impossible), and had ended up a separate nation in the British commonwealth, it would probably be a fantastically rich place in per capita terms. But it wouldn’t serve as an example economy any more than it does today, just because a national boundary happened to separate the city center from the rest of the economy.
Likewise, the “City of London” could, had history been slightly different, a separate Kingdom within the UK, and serve a similar story.
Probably best to not pay too much attention to the city states (Hong Kong, Singapore, Monaco, Vatican City….) when talking about how full sized nations should be run.
This is NOT to disagree with your actual point, just with your example.
Which is why, of course, Japan ran into a brick wall once it caught up.
As Korea will soon, and then the others following this path.
(Though running out of young people certainly doesn’t help either.)
That argument implicitly assumes that Yuan, Ming and Qing Dynasty China is the same government system as current China. Which is a pretty unrealistic assumption.
Like saying the British Military is ineffective because they failed to prevent the Normal invasion in 1066.
Sometimes some things are just plain luck. When the Capitalists in the west where looking for cheap educated labor China was willing and able to accommodate them.
Also China is the kind of place where a little chaos can kill millions. For some reason they don’t crack, they break. Maybe not enough flexibility. Controlling people is like controlling water. Give them a space to collect and flow but don’t try and squeeze them too hard because if you do they will escape your grasp.
Its ain’t all apple pie, there is a few flies. But overall I agree the Chinese government is doing a good job.
Most nations have made progress. The most important factor that keeps progress from happening is chaos. Civil disturbances, ethnic strife and civil war will destroy progress and reset the clock. The factors that are important for progress is discipline, order, rule of law, social cohesion, and education.
“Despite the lack of elections”??
Who writes this drivel? China not only holds elections every five years, but they’re overseen by the Carter Center and voter participation is higher than in the US.
More importantly, their votes count: 95% of voters say the government is doing exactly what they want it to.
What do the voters want the government to do? Here’s a clue: by 2021, every Chinese will have a home, a job, plenty of food, education, safe streets, health and old age care. On that day there will be more suicides and executions, and more homeless, poor, hungry and imprisoned people in America than in China.
By 2021, 450,000,000 urban Chinese will have more net worth and disposable income than the average American, their mothers and infants will be less likely to die in childbirth, their children will graduate from high school three years ahead of–and outlive–American kids.
One can easily make the argument that China has failed. At one time, China was the technological superior of the west, but Confucianism, and central planning practiced by emperors more concerned with avoiding change, than feeding the masses stymied technological progress.
The absolute evidence of this, is that the British could dictate terms from their tiny far away island to The Middle Kingdom, which is credited with the invention of the gunpowder used in British Cannon. The Chinese leadership is still mired with an obsession for social order, and an inability to allow it’s citizens to freely assemble, criticize government decisions, and in general participate in the marketplace of ideas.
China’s classic inability to value personal independence continues to be it’s downfall.
I am not sure what you mean by that. Are you saying that people who work hard, learn and develop new technologies and services should not be able to patent their work so they can profit from it, instead allowing anyone to copy their work with no repercussions? If so, why would anyone bother to develop new technologies if they cannot profit from it? That will definitely ruin your economy.
The nations that developed rapidly, likely starting with Japan after it’s opening by the US navy were enabled by preexisting technologies, and preexisting foreign markets to buy commodities, and sell goods, and services. These conditions cannot be compared to those of nations that developed the technology, and created commodity markets di novo.
Imagine how much easier it is to build a house, when you can buy materials, have them delivered to the location, watch “how to” videos online, or even hire contractors, compared to extracting your materials from the local environment, and deciding yourself how to use them.
A true democracy has no checks, and balances. It’s the will of the people.
Perhaps you’re thinking of a representative republic?
The most impressive economic advancement known was the record of the US from 1776, until the federal government, and the federal reserve began “fixing the problem” after the crash of 1929, rather than allowing discharge of debt, failure of bankrupt institutions, and a natural recovery.
Since that time, government has again, and again interfered with people’s economic decisions with disastrous consequences. Another example of the prosperity non-intervention brings is the incredible rise of Hong Kong, once British authorities stopped meddling in local affairs, and let the citizenry choose their actions.
A key point to distinguish is between what’s necessary to advance into unknown economic territory, and what’s necessary to advance into already explored territory.
The West had to break new ground as it advanced economically, not knowing ahead of time what would and wouldn’t work. China has had the advantage of more advanced economies to learn from.
So, the real test for China is when it reaches the same level as the West. Will they have the flexiblity needed to break new ground instead of following?
Working in their advantage, at least in a relative sense, is that Western societies have developed entrenched governing classes which are fat and happy, and somewhat risk averse; They’d rather preserve their own relative status, than risk being eclipsed by ending up with a smaller fraction of a larger pie. So, though we’re aware of the economic model that got us where we are, we no longer practice it.
Free markets are better than command economies, but crony capitalism of the sort that dominates the West in most sectors is not necessarily better, at least as long as the command economy isn’t run by elites who themselves are fat and happy.
With no check and balances that a true democracy provide the Chinese model will eventually sway. It may not happen under the current Stalinist leader but eventually it will. Ultimately democracy also create more evolved human beings that are able to explore other options than the restricting patriarchal model.
There are things to learn from success and failure, but you cannot learn if you believe you already know everything. The IMF type economists fit that description nicely. Developing countries that wish to grow their industries and economy need to protect them at the start from being wiped out by foreign competition, which is counter to laissez faire type of economic theory.
There is a point where having the government involved in the economy is going to bite them though. Governments have other priorities than business, and no matter how competent a government is it won’t be forever. Without the discipline instilled by market forces and profitability, government entities will get in the way. A perfect example of that is the Belt and Road with their non-performing loans to other countries, or making companies take out loans they do not need. Another example is an over reliance on production, creating a mismatch of allocation of resources to need. This is why OBOR is so important to China right now, they have too much production capacity and are trying to find an outlet for it. Governments are blunt instruments and not the best tool when adaptability and finesse is required.
A lot of lessons may be learned by China’s rise, which built on lessons learned in the rise of Japan. I may have issues with the way the Chinese government treats other countries in a few areas, but there is no doubt that they managed to lift a massive number of people out of extreme poverty. Analyzing what they did right and wrong hold lessons for us all.
Intellectual property is not a scarce good. Treating it as such ruins your economy.
For long term economical growth of the magnitude that they have achieve only a few countries have done it: USA after WW2, Soviet Union after the Communist Revolution (this is here just to upset people), Singapore, Japan after WW2, and South Korea, after the Korean War. So they have done a “good job”. I do agree with you about the “tiger by the tail”. It will be difficult to deal with the down turn which will eventually come. My guess is that the Chinese government will over react and will be very draconian and end up making the downturn much worse than it should have been.
Yea… will you be regurgitating what you’ve read in high school political science class or will there be any thoughts of your own coming soon? I’ve the the same books too growing up, then I’ve learned that there is more than one model to success and certainly culturally dependent , perhaps you should too.
Seems to me one thing they’re doing right is elevating their population out of poverty and increasing their GDP as a result. Took less than 70 years to become the world’s 2nd biggest economy, while Africa and Latin America had thousands of years and they’re still mired in corruption and poverty (as a simple comparison).
Yes, there are a number of ways to express the idea. However, I think including margin and risk premiums and costs of ideas that did not succeed are opening the possibility of encouraging efforts to invent for profit, rather than just compensating for coming up with a good idea in the course of normal business. I think encouraging inventing for profit is not a good idea, so I would caution against that.
As I mentioned earlier, I do not see a practical way to implement this concept that prevents gaming the system, so the distinction I’m making probably is moot.
Can you expand on this “good job” the Chinese government is doing? Seems to me they have a tiger by the tail.
It’s time you spent some time in China. Why would the public be terrified of its government?
Iy you want to see a terrified public, go the US, where they execute 2,000 people each year without trial and jail 2,000,000–also without trial.
Non-Party candidates can run for office. Non-Party officials can and have become State Ministers.
Do you genuinely not understand that, when 60% of the public approve of what the government is doing, it’s real approval, but when 95% of the public approve of what the government is doing, it’s a population too terrified to say they don’t actually approve?
But it’s much more difficult to rig the democratic approval of government policies which, in China, is 95% and in the US is 22%
One must also consider the importance of the petrodollar standard to the economic rise of China. If the world, or at least international trade were on a gold standard, as it was before the rise of the petrodollar, the immense trade imbalance between the US, and China could not have been sustained.
China would have had to buy sufficient goods, and services from the US, or prices for US goods, and services would have fallen enough to compete with those from China. Under a gold standard, currency becomes more valuable in a nation, as it is drained out for foreign purchases, lowering prices, and automatically balancing trade.
“When citizens are relatively equal (economically), has tended to fairly democratic. When a few individuals hold enormous amounts of wealth, democracy suffers”. You are obviously wrong, there is no connection at all between income equality and quality of life at all (see GINI index list of countries by inequality). By the way, there is more income inequality in China than in USA. In another list of countries by human development index USA is 13th best, Slovakia is 38th and your China is 86th.
Chinese government is aligned with what Chinese Communist Party wants.
Fantasy patents certainly can’t be justified, but I imagine they are but a very minor problem. I guess they clog up the patent processing system a bit, but I doubt they do much other damage.
However, traditional patents, working models and all, perhaps should not be accepted uncritically as a Good Thing. The justification for a patent system is to promote progress. I’ve read articles about research done into the effects of patents on progress. The cases I remember most clearly are that in the cases of the steam engine and the airplane, the existence of patents blocked progress for many years — essentially until the initial patents expired — because of aggressive patent enforcement actions by the patent holders. I don’t know the best answer, but I believe that shows that at least some tweaking of the patent system would be helpful.
When you stop to think about it, almost nobody invents something just in order to obtain a patent to exploit. Nearly all invention happens because someone has a problem to be solved. So invention is going to happen, regardless of whether the work can get patented. Perhaps it would be better if each patent’s term ran only until the cost of making the invention were recovered, or something along that line. I’ll be the first to admit that that probably is impractical to implement, not to mention the opportunities to game the system, but perhaps there is some way to devise a practical approach to patents that better approximates that ideal than the current system does.
That’s of course part of my complaint about the Carter Center, that their definition of a free and fair election is so absurdly narrow that there are easily a half dozen ways to totally rig an election and still have them declare the outcome legitimate.
I lived in USA for 8 years in seventies, this is all BS. You exaggerate. In communist countries government had power practically over everything, you were forced to act as they wanted you, worst of all you had to act you loved them. A slightest defiance would made you an enemy of socialism, they meddled in every aspect of your life. Read 1984 or Animal Farm.
Your newly acquired freedom certainly wasn’t acquired in the US. Political Science Professors Gilens and Page found that ‘the preferences of the average American appear to have a near-zero, statistically non-significant impact upon public policy’.
Page and Gilens found that, “government policy…reflects the wishes of those with money, not the wishes of the millions of ordinary citizens who turn out every two years to choose among the preapproved, money-vetted candidates for federal office”. “When citizens are relatively equal [economically], politics has tended to fairly democratic. When a few individuals hold enormous amounts of wealth, democracy suffers.”
‘Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens’.
Martin Gilens and Benjamin I. Page. https://doi.org/10.1017/S1537592714001595
The Chinese government is aligned with what its people want. Obviously.
Which third world despot use the Carter Center?
If you want to see a totalitarian state you have to spend time in the USA, which employs
– warrantless surveillance of private phone and email conversations by the NSA;
– SWAT team raiding homes;
– shootings of unarmed citizens by police;
– harsh punishment of schoolchildren in the name of zero tolerance;
– endless wars;
– out-of-control spending;
– militarized police;
–roadside strip searches;
– roving TSA sweeps;
– privatized prisons with a profit incentive for jailing Americans;
– fusion centers that collect and disseminate data on citizens’ private transactions;
– militarized agencies with stockpiles of ammunition
No Chinese leader, including Mao, has ever had one such power. The US President has–and exercises all of them. Regularly
The mechanical patent system is in some trouble, too, since abandoning the idea that you should have a working prototype. I’ve seen too many patents granted that read more like plot summaries for bad SF novels than anything a practitioner in the art could apply. You’re not actually supposed to get a patent on something until you can make it work.
“but they’re overseen by the Carter Center ”
Being overseen by the Carter Center doesn’t mean squat; They’re the go-to guys for every third world despot who wants his show “election” endorsed as legit.
“More importantly, their votes count: 95% of voters say the government is doing exactly what they want it to. ”
China is a totalitarian state where opponents of the state can be disappeared. Of course most people way the government is doing exactly what they want it to do. They’re not suicidal!
I spend most of my life living in a communist country. Yes, we had elections. They were compulsory. There was only one candidate for each position. Theoretically you could cast a vote secretly in a booth but if you did so you got yourself in a big trouble same as if you didn´t vote for him. Czechoslovakia in 1930´s was one of the richest countries in the world. After reds took over all so called capitalists countries surpassed us. Since 1989 after so called Velvet Revolution our standard of living has risen to a record level. I cherish my newly acquired freedom too much to give it up to despots who wants us to live under Big Brother of 1984.
I’m also not sure what Shigg means by this, despite him saying this for some years now.
However, I’ve heard other people going on about it at some length, and I think he is drawing from the same well (though I stand to be corrected).
The issues appear to be, starting at why I consider to be the strongest cases.
1. Copyright in particular is just silly at this point, where an author’s great grandchildren stand to retain full control of their work, with regular increases in the terms meaning that there is no prospect of anything going into public.
1 a) The fact is that most people who were writing something 100 years ago are dead now, and in many, many cases their heirs (if any) are untraceable over 3 generations, 2 world wars, name changes, migration etc. As a result there is a vast body of work where nobody can use it, because there is no one to contact to get the required permission.
1b) This has nothing to do with encouraging production. Nobody writes something because they think it will be earning money in 2150 AD.
There is a strong case that a change, such as a renewal fee every 10 years once you reach a certain time after first publication. That would clear out all the deadwood while still letting those very few properties that still earn good money stay in business (such as that certain mouse).
2. Patents are a trickier case. But there is a case to be made that software in particular is not matched by a 20 year patent life. That is several generations of software, and having the first person to come up with “one click ordering” being able to lock that down for multiple generations of products makes it look silly. A 5 or 8 year patent is probably a better match for this technology.
2b) In some ways this is an implementation thing. Software patents have been granted for a bunch of stuff that is arguably not “innovation” or at least not ” not obvious to one who is skilled in the art” and so poor administration of the current system makes the patent idea itself look bad.
2 c) Because the internet, and internet discussion has traditionally been dominated by computer people, the software patent case has been the system that all patents are judged on, rather than mechanical patents (where 20 years seems OK) or drug patents (which are arguably too short).
3. Medical patents, especially drug patents, are messed up in all sorts of ways. And there are a lot of people who could make a lot of money if things were changed. So they will always be prepared to argue that things need to change. In a direction that would just happen to benefit them.
I could write ALL DAY about medical tech IP, so I’ll just note that much of what is publicly referred to as “patent protection” has nothing to do with patents per se, but is direct government approval required to manufacture a given drug. Combined with governments subsidising (or not) or purchasing (or not) products that are functionally equivalent. See epipens: spoiler – not a patent issue.
Actually, in keeping with the mathematics behind investment diversification, it probably only takes 5 or 10 people in the decision loop to diversify away almost all the individual craziness that one person can generate.
The secret, as with investments, is making sure that the different people in the ruling group are actually independent of each other.
Which is why I am wary of calls to make the Senate elected in a “more democratic way” which would make it just a mirror image of the house of representatives. (I am talking of Australia but I think this applies to the USA as well). Have people who are selected differently, with different concerns, really is a “check and balance”.
Likewise, I’m prepared to entertain arguments that the UK really made a mistake when their house of lords lost the ability to actually block legislation.
A democracy is the will of the people, but the will of the people is, by sheer inertia of a huge number of people, going to be more stable and less arbitrary than the will of one person, or even a small number.
That was the issue with monarchy. You can have the best monarch in the world, and then he dies and his son takes over and first thing he sends the army on a surprise late November march to conquer Russia while the navy bombs Pearl Harbour and the nation’s industry gets nationalized. See Marcus Aurelius and his son Commodus.
Sure democracies do stupid things too. But they don’t wake up in the morning and decide to do everything stupid. They have to be pushed and influenced, usually over years, as it requires many, many people to change their minds in order to get major changes in policy.
As attractive as Hong Kong is as an example, it really isn’t a very good one.
Hong Kong is not a whole economy. It is, and even more so was, the port and financial center for a big chunk of China. Using Hong Kong as a “sample economy” is like using London, or New York, or even worse Manhattan, while ignoring the large, poorer, hinterland that is feeding into that city.
If, at the end of the American Revolutionary war, New York had remained in British hands (not at all impossible), and had ended up a separate nation in the British commonwealth, it would probably be a fantastically rich place in per capita terms. But it wouldn’t serve as an example economy any more than it does today, just because a national boundary happened to separate the city center from the rest of the economy.
Likewise, the “City of London” could, had history been slightly different, a separate Kingdom within the UK, and serve a similar story.
Probably best to not pay too much attention to the city states (Hong Kong, Singapore, Monaco, Vatican City….) when talking about how full sized nations should be run.
This is NOT to disagree with your actual point, just with your example.
Which is why, of course, Japan ran into a brick wall once it caught up.
As Korea will soon, and then the others following this path.
(Though running out of young people certainly doesn’t help either.)
That argument implicitly assumes that Yuan, Ming and Qing Dynasty China is the same government system as current China. Which is a pretty unrealistic assumption.
Like saying the British Military is ineffective because they failed to prevent the Normal invasion in 1066.
One can easily make the argument that China has failed. At one time, China was the technological superior of the west, but Confucianism, and central planning practiced by emperors more concerned with avoiding change, than feeding the masses stymied technological progress.
The absolute evidence of this, is that the British could dictate terms from their tiny far away island to The Middle Kingdom, which is credited with the invention of the gunpowder used in British Cannon. The Chinese leadership is still mired with an obsession for social order, and an inability to allow it’s citizens to freely assemble, criticize government decisions, and in general participate in the marketplace of ideas.
China’s classic inability to value personal independence continues to be it’s downfall.
The nations that developed rapidly, likely starting with Japan after it’s opening by the US navy were enabled by preexisting technologies, and preexisting foreign markets to buy commodities, and sell goods, and services. These conditions cannot be compared to those of nations that developed the technology, and created commodity markets di novo.
Imagine how much easier it is to build a house, when you can buy materials, have them delivered to the location, watch “how to” videos online, or even hire contractors, compared to extracting your materials from the local environment, and deciding yourself how to use them.
A true democracy has no checks, and balances. It’s the will of the people.
Perhaps you’re thinking of a representative republic?
The most impressive economic advancement known was the record of the US from 1776, until the federal government, and the federal reserve began “fixing the problem” after the crash of 1929, rather than allowing discharge of debt, failure of bankrupt institutions, and a natural recovery.
Since that time, government has again, and again interfered with people’s economic decisions with disastrous consequences. Another example of the prosperity non-intervention brings is the incredible rise of Hong Kong, once British authorities stopped meddling in local affairs, and let the citizenry choose their actions.
Sometimes some things are just plain luck. When the Capitalists in the west where looking for cheap educated labor China was willing and able to accommodate them.
Also China is the kind of place where a little chaos can kill millions. For some reason they don’t crack, they break. Maybe not enough flexibility. Controlling people is like controlling water. Give them a space to collect and flow but don’t try and squeeze them too hard because if you do they will escape your grasp.
Its ain’t all apple pie, there is a few flies. But overall I agree the Chinese government is doing a good job.
Most nations have made progress. The most important factor that keeps progress from happening is chaos. Civil disturbances, ethnic strife and civil war will destroy progress and reset the clock. The factors that are important for progress is discipline, order, rule of law, social cohesion, and education.
“Despite the lack of elections”??
Who writes this drivel? China not only holds elections every five years, but they’re overseen by the Carter Center and voter participation is higher than in the US.
More importantly, their votes count: 95% of voters say the government is doing exactly what they want it to.
What do the voters want the government to do? Here’s a clue: by 2021, every Chinese will have a home, a job, plenty of food, education, safe streets, health and old age care. On that day there will be more suicides and executions, and more homeless, poor, hungry and imprisoned people in America than in China.
By 2021, 450,000,000 urban Chinese will have more net worth and disposable income than the average American, their mothers and infants will be less likely to die in childbirth, their children will graduate from high school three years ahead of–and outlive–American kids.
I am not sure what you mean by that. Are you saying that people who work hard, learn and develop new technologies and services should not be able to patent their work so they can profit from it, instead allowing anyone to copy their work with no repercussions? If so, why would anyone bother to develop new technologies if they cannot profit from it? That will definitely ruin your economy.
A key point to distinguish is between what’s necessary to advance into unknown economic territory, and what’s necessary to advance into already explored territory.
The West had to break new ground as it advanced economically, not knowing ahead of time what would and wouldn’t work. China has had the advantage of more advanced economies to learn from.
So, the real test for China is when it reaches the same level as the West. Will they have the flexiblity needed to break new ground instead of following?
Working in their advantage, at least in a relative sense, is that Western societies have developed entrenched governing classes which are fat and happy, and somewhat risk averse; They’d rather preserve their own relative status, than risk being eclipsed by ending up with a smaller fraction of a larger pie. So, though we’re aware of the economic model that got us where we are, we no longer practice it.
Free markets are better than command economies, but crony capitalism of the sort that dominates the West in most sectors is not necessarily better, at least as long as the command economy isn’t run by elites who themselves are fat and happy.
With no check and balances that a true democracy provide the Chinese model will eventually sway. It may not happen under the current Stalinist leader but eventually it will. Ultimately democracy also create more evolved human beings that are able to explore other options than the restricting patriarchal model.
There are things to learn from success and failure, but you cannot learn if you believe you already know everything. The IMF type economists fit that description nicely. Developing countries that wish to grow their industries and economy need to protect them at the start from being wiped out by foreign competition, which is counter to laissez faire type of economic theory.
There is a point where having the government involved in the economy is going to bite them though. Governments have other priorities than business, and no matter how competent a government is it won’t be forever. Without the discipline instilled by market forces and profitability, government entities will get in the way. A perfect example of that is the Belt and Road with their non-performing loans to other countries, or making companies take out loans they do not need. Another example is an over reliance on production, creating a mismatch of allocation of resources to need. This is why OBOR is so important to China right now, they have too much production capacity and are trying to find an outlet for it. Governments are blunt instruments and not the best tool when adaptability and finesse is required.
A lot of lessons may be learned by China’s rise, which built on lessons learned in the rise of Japan. I may have issues with the way the Chinese government treats other countries in a few areas, but there is no doubt that they managed to lift a massive number of people out of extreme poverty. Analyzing what they did right and wrong hold lessons for us all.
Intellectual property is not a scarce good. Treating it as such ruins your economy.