Economic Update: China’s Economic Record and Strategy

Economic Update: China’s Economic Record and Strategy


This program
is a follow-up on an earlier program we did. That program was devoted to the Soviet Union,
that first example in the modern period of history of an attempt to build a socialist
society. I built that program and the one today around
the following assumption; that in many conversations about capitalism and socialism as alternative
systems mention is made, particularly by the older generations, of the Soviet Union and
today about the People’s Republic of China. These are looked at as examples (good, bad
or mixed) of what socialism is. They certainly are examples of what some of
the early efforts at building socialism look like and because they’re spoken about so often,
referred to and thought about, it seemed a reasonable time for me to devote some attention
to analyzing them. We did that with the Soviet Union in the earlier
program and today we’re going to do it with the People’s Republic of China. Before I jump into it let me be really clear
about how we are going to do it. This is not an exercise in “we’re good. They’re bad. ” Either way that comes from the Cold War
which was supposed to have ended in 1989-90 but clearly hasn’t, or at least the Cold War
is alive and kicking in the minds of some of our fellow citizens. This is too bad because it prevents the kind
of balanced approach of looking at the pros and the cons that a mature and intelligent
conversation ought to be about. Capitalism has strengths and weaknesses. Socialism is an alternative and it has strengths
and weaknesses. We’d all be better off if we were able to
talk about all of that without resorting to childish invocations of how “we’re good
and they’re bad”. You really ought to get over that at a certain
point in your life or else something’s wrong. We’re not going to go there so let’s go. Let me begin by talking about what economists
often talk about when comparing different kinds of societies and
comparing different countries. You might remember that Adam Smith’s great
work “The Wealth of Nations” published back in 1776 was about explaining why some
way nations are wealthy and some nations are not and to account for that, to understand
it. Part of that was a very generous impulse Mr.
Smith understood that poor countries would like to not be poor and wanted to learn what
the rich countries might be able to teach them about how to get to that situation. China was one of the poor countries at the
time Adam Smith wrote and it got poorer after that. By the 20th century (the last hundred years
or so) the Chinese people were not only the most numerous people of any country on earth
(they remain today the most populous country on this planet by far) but also very poor. The capitalist part of the world had grown
much richer in the intervening couple of centuries so they were even further behind as well as
being absolutely poor. So, they were focused, like most of the people
in the world are, on overcoming poverty. So that’s been their major goal and it’s a
reasonable place to start to assess how well they’ve done. If these numbers trouble you then please understand
it’s because you did not know about them before, not because there’s anything wrong with the
numbers. Over the last 20 years the People’s Republic
of China has increased its output of goods and services faster than any other country
on this planet. In the case of the comparison between the
People’s Republic of China on the one hand and the United States of America on the other
they’re not even close. Let me explain with some numbers. The rate of growth of output of goods and
services (the productivity of the economy, if you like) [for China] in 2005 was 11%. In 2017 it was 15%. In 2010 it was 12% and it has slowed down
since then. Over the last year it was a mere 6.4%. If you wanted to average it out it was probably
in the neighborhood of 10-11% over the last 10, 15, 20 years. By comparison, let me give you the numbers
for the United States of America. Its average growth rate in the 1950s and 60s
was 4%. In the 70s and 80s it fell to 3% and in the
last 10 years it has averaged 2%. In the latest year it was 3.2%; half of what
it was in China, but for most of the last 20 years the rate of growth of China has been
2 to 3 to 4 times that of the United States. That, in a simple way, tells us something. Number one it explains why we’re reading and
hearing so much about China; because they have become the second most important economy
in the world because they have achieved these extraordinary rates of economic growth. Number two it will help you understand something
else about the people of China: they are not about to be pushed around, neither by Mr.
Trump nor anybody else because they have the economic strength
to resist. Number three, if you’re the government of
the People’s Republic of China (and that is a government in which the Communist Party
of China is dominant) you are hardly about to change the way you organize your economy
given how well it has been doing. Governments change either willingly or under
pressure when they’re doing badly for their people. It makes people bitter, angry, critical, and
liable to push for change. This is something Americans no doubt understands
since it’s a situation we face here in American capitalism, or in Europe with
their capitalism that’s not doing really well for an enormous number of people. As a consequence, criticisms are rising. You see a rediscovery of socialism, for example,
here in the United States, you see the yellow vest movement demanding fundamental changes
in France and you see all kinds of other movements we don’t have the time, today, to go into. I like to deal with them occasionally, at
least, in other programs. This is already enough to explain to you why
the People’s Republic of China is the economic phenomena of our time. Let me turn next to the second most typical
statistic to look at if you’re comparing countries and you’re trying to understand what’s going
on with the development or not, of wealth and poverty. This number is called the “real wage”. Here’s what it means: how much can people
afford to buy with the average wages they get. To understand that we look at two numbers. First, how much money is given to people per
hour for the work they do and on the other hand what are the prices of the things they
buy with the wages they get. In other words, if your wage goes up by 10
percent but so do all the prices you face, you’re not one bit better off. You got 10 percent more money but it doesn’t
buy you anything but the same quantity of things it bought you before. When we adjust the wages workers get for the
prices they have to pay, we get what’s called the “average real wage”. What you can afford with the money you get. Let’s compare the last 20 years in the United
States that is this century so far in the United States with that in China. In the United States real wages (the average
wage of the American worker) has stagnated. It has gone nowhere. That’s true not only for the 20 years we’re
talking about of this century, it’s true for the last 25 years of the 20th century. Here’s a statistic for you to think about
as an American if you’re watching this program from the United States or listening to it
on the radio here. In 1973 the wage of the United States, the
average wage of an American, was able to buy (here we go now) MORE things than it was in
2018. The real wage in the United States is less
today than it was then. It’s not less by a lot but it means that over
the last 40 to 45 years Americans who have worked harder than ever, who have been more
productive than they ever were across that time, have not shared in their greater productivity. Their real income, their real wages have not
gone up. The real hourly wage in the United States
is lower today than it was in 1973 and that is something to think about. But now comes the Chinese story. Over the same period of time, the last 20-25
years, real wages in the People’s Republic of China have quadrupled. Let me tell you that again. The basket of goods and services that an average
worker gets in China for an average hour of his or her work is four times greater today
than it was 25 years ago. Yes, Chinese wages remain below the average
in the United States because they were and they still are a poor country when you divide
their total economy by the enormous number of people that live in that country. But if you want to understand why the people
of China support their government here’s a clue: their real wages went up four times
over the last 25 years in a society led by a government in which the Communist Party
is the dominant political force. Let me pause to let all of this sink in. This is not about whether you like these numbers
or don’t this is not about whether you’re critical of many aspects of Chinese society
or you’re not. I myself find things in China I admire and
things in China I would like to avoid. I try to look at the strengths and weaknesses. But when it comes to the economics of their
socialist system and I compare its performance over decades to this moment, there is no contest
about which system has served its people better in terms of economic growth of output. The economy as a whole and the real wages
of the average worker in that society. Is China an example of equality? No. It has a great deal of inequality. There the United States and China have something
in common; high inequality that’s actually getting worse. We will continue after the mid program break
to talk about what’s going on in China so that we understand what the internal
mechanisms are that explain this performance. Before breaking let me remind you, please,
to make use of our websites: rdwolff.com and democracyatwork.info. Please subscribe to our YouTube channel. Just go to youtube.com/democracyatwork. And finally I want to thank our Patreon community
for the support it continues to provide. We are grateful and appreciative. We’ll be right back. Welcome back friends to the second half of
today’s economic update. We’ve been talking about the People’s Republic
of China. In the first half today we spoke particularly
about its performance as an economy: its rate of growth in production of goods and services
on the one hand and the rate of growth of the average real wage of a Chinese working
person on the other. Having shown the remarkable success of their
economic growth program in both those ways I want to turn now to how they did that. How do they organize their economy and particularly
in what ways differently from that of the United States or Western Europe that might
help us account for their extraordinary performance? First, and perhaps most important for many
of you that are watching and listening, is to understand that the Chinese economy for
quite some time now has had a mixture of privately-owned enterprises and state-owned enterprises. wYou might think of it as a mixed economy
between private and state. It is also true over the last 2025 years that
the role of the private sector has been enlarged, relative to the role of the state sector. However, that has to be made a little more
complicated by noting that the Chinese, in managing this balance between the state and
the private, give the dominance to the state. They say that the state-owned enterprises
will always be the leading sectors, the main industrial groups within the Chinese economy. There’s plenty of room for private enterprises
but the leading part of the economy will be the state. Why are the Chinese doing that? First and foremost, they are doing it because
it’s their way of learning from the experience of the Soviet Union. When the Soviet Union’s kind of socialism
(in which the state was overwhelmingly dominant and the private sector
was really quite restricted), when the Soviet Union collapsed in on itself in 1989 it went
through an extremely quick transition from an overwhelmingly state industrial sector
to an overwhelmingly private one. This was pushed by the folks in Russia who
wanted these changes, it was pushed by foreign advisers led by Jeffrey Sachs now of Columbia
University. It was called a kind of “cold shower treatment”
or sometimes “shock therapy” as a way of fixing what was understood to be wrong. The Chinese analysis is that the suffering
of the Russian people in the 30 years since then (the failures of the Russian economy
in the 30 years since then) had largely to do with the excessive speed and the excessive
extent of what happened in the Soviet Union. They have been determined not to repeat that
mistake. In other words, their communist party’s plan
is to make the transition slow and limited. Yes, foreign enterprises can come in if they’re
private capitalist enterprises, and many have. Yes, Chinese people can set up private enterprises
as many have. But the leading sectors of the economy will
remain state-owned enterprises running the program of economic development that the state
organizes under the leadership of the Chinese Communist Party. It’s important to understand that the Chinese
kind of socialism is itself a learning process in which what happened to the Soviet system
is playing a major role, in this case of what not to do in the way that happened in the
Soviet Union. But it is not the only factor that’s involved. To continue the comparison with the Soviet
Union, because the Soviet Union was the first socialist country and completely isolated
after the 1920s, surrounded by a world that hated what they were doing, they couldn’t
and didn’t find a way to build their economy by exporting. They could not produce for the
rest of the world, make a lot of money that way and use it to develop their own economy. They had to do it pretty much on their own. The Chinese have taken a different path there
as well. Early on the Chinese decided (at the end of
the last century the beginning of this one) to hitch their economic wagon to the world
market, to become the producer of goods and services for sale around the world. In order to do that they had to build industries
that produced what the rest of the world did either at a higher quality or at a lower price
or both. Basically, they’ve done that which is why
Chinese automobiles join Chinese appliances, Chinese clothing, Chinese you-fill-in-the-blank
is everywhere. Most of what you will see in an average Walmart
is made in China and there’s a reason why Walmart stocks up on Chinese goods, and they’re
not the only company of course. So, they hitched their wagon to the world
market and they’ve done very, very well because of it. The Russians couldn’t do that and the Chinese
could and they did. Here’s another thing: private capitalists
didn’t go into Russia hardly at all but they have been rushing, stumbling all over themselves
to get into China. The Chinese understand that and they offered
Western capitalist enterprises the following deal. We need your technology, the Chinese said. We need your money, your capital to be invested. So here’s the deal. We offer you, we will provide you with well
disciplined, efficient, hard-working workers at a very low wage (the one that we have here
in our poor country) and we will build the roads and provide the supports for you to
be able to make a lot of money producing here in China more cheaply than you could ever
produce in America, or Western Europe, or Japan etc. All we ask in exchange is that you share your
advanced technology because that’s why we’re doing this with you. You will have access to our workers and you
will have access to our customers to sell your product, but we want your technology
and your capital. Nobody put a gun to any capitalist enterprises’
head. They made the decision to accept the offer
of the Chinese because it was profitable them for them to do so. If it meant that they laid off workers in
their home countries, these capitalist enterprises, they could care less. They did that. They abandon whole industries. They abandon whole communities. That’s how capitalism has always worked only
this time, with this destruction of working people in the West there was a boon to the
workers of China, which is why I gave you the numbers about the average real wage. So, the Chinese used the world market. The deal they struck with private capitalists
and the lessons they learned from the Soviet Union to organize what they call a special
Chinese kind of socialism that allows for private enterprise (a considerable amount),
allows for market dealings (a considerable amount), but controls from the top through
the state-owned enterprises the leading or dominant sectors of the Chinese economy. The last part of the show for today is to
give a little historical context China is an old civilization and a quite homogeneous
civilization. The Han people are the dominant ethnic group
and other ethnicities are small and scattered. The Chinese are a proud people with a long
history of a pretty well-developed civilization which at various times over the last couple
of thousand years was much more developed than civilizations in the West were. So for them it was doubly embarrassing, humiliating
is the word they used, to fall under the control of foreign colonialists in the 17th, 18th,
19th century from Britain, from France, from Germany, from the United States. It culminated in a horrible moment of rebellion
called the Boxer Rebellion at the end of the 19th century when a futile effort by the Chinese
authorities to push back against the Western imperialists was defeated. China was never made into a colony. They’re very proud of that. But they had to give away Hong Kong and parts
of their country to the foreigner who controlled them, who settled their merchants and other
companies in these special territories where they didn’t find
themselves subject to Chinese Authority or Chinese law. The Chinese, as a people, made a commitment
to find their own way, to break, led by Sun Yat-sen at the beginning of the 20th century. And when that wasn’t sufficient and when they
were added the humiliation of the invasion of their country by the Japanese in the 1930s
a revolt of a much deeper sort took place in China. They were successful. At first it was an alliance between the nationalists,
who wanted to build up a capitalist China. and the Communists, who wanted to build up
a socialist China. But they worked together to push the Japanese
out. By 1945 they had done so, together with the
fight of the United States and its allies against Japan. As soon as World War II was over the alliance
between the capitalist / nationalist Chinese under their leader Chiang Kai-shek ended up
in a civil war with the Communists, their former allies, led by Mao Zedong. A civil war broke out from 1945 to 1949 ending
with the decisive and complete victory of the Communist Red Army. The Chiang Kai-shek people left the mainland
of China and went to Taiwan where their descendants still live and still imagine that they, on
the little island, are China whereas the vast mass of people on the mainland are something
else. No one hardly is left in the world who shares
this delusion. From 1949 to now, 70 years, is historically
not a long time. But from a decimated, poor, colonialized country
China is now the number two economy in the world. It is an incredible achievement. Not to understand that, not to understand
what this means in the minds in the feelings and in the pocketbooks of the Chinese people,
not to understand that it has involved moving four to five hundred million people off of
the poverty-stricken countryside into the urban industrial jobs along the coast of China,
these are misunderstandings that make no sense. You are not helped in understanding, let alone
fixing the problems of the world, by living in the delusion that the things I’ve tried
to get across today are not the case, don’t have to be taken into account and somehow
don’t matter. Unfortunately, in the mainstream media of
the United States, and in other parts of the West, most of this is simply not reported
on, not covered, evaded. That doesn’t do anyone a service unless it’s
the people who run the kinds of society China isn’t, who are afraid of the model and the
example China offers. For my part it is our effort, here at economic
update, to provide the kind of information on the basis of which rational decisions can
be made about making the world a better place. I hope you have found these in-depth analyses
of the Soviet Union and China a useful part of the ongoing debate about capitalism and
its alternatives, the number one of which is varieties of socialism. Thank you for your attention and I look forward
to speaking with you again next week.

100 thoughts on “Economic Update: China’s Economic Record and Strategy

  1. The rise of China has been good for Chinese workers, it's responsible for raising more people out of poverty than almost any other force in history, but it may be detrimental for the world's workers as a whole and international worker solidarity. The system is still based on serious exploitation of those workers, but rather than having capitalists solely decide what to do with the surplus value produced by the workers', it's ultimately the bureaucratic apparatus of the CCP (just as it was with the USSR–as he already mentioned). As Deng Xiaoping said in a more positive context, "it doesn't matter whether a cat is black or white, if it catches mice it is a good cat." Well, it can work the other way as well: it doesn't matter if it's capitalists or Party members, either way the workers are exploited. I forget who said this, perhaps Chomsky, but it seems like one of the primary aims of the CCP is to prevent workers from organizing. It's a little bit of an overstatement, but it gets the point across. Our problem in the West is that we've yet to democratize our economy in the same way as our politics (at least, that's what it says on our brochures), but China isn't democratized in either sphere. China may very well have a bright future, but if it continues to be based on manufacturing reliant on cheap labour it will be the greatest force for oppression of the working class on Earth. Not only due it taking on the worst aspects of capitalism, but the leadership has a vested interest in maintaining worker conditions below a certain threshold because of the middle-income trap. Once the Chinese worker's wages approach a value that eliminates their competitive edge over other countries in the sphere of manufacturing, and therefore the lower production costs no longer offset the cost of shipping, it'll hit a plateau of diminishing returns where raising the real wage of the average Chinese worker will actually conflict with the desire to maintain the country's global economic dominance. Will the CCP place living standards ahead of geopolitical concerns? Perhaps, but more likely the only way the bulk of the Chinese people will transition into the high-income bracket is if China is able to make a smooth transition into high valued added and service industries, which would require a complete economic overhaul, or the workers actually unite.

  2. A brilliant presentation easy to understand. China communist governance is a socialist capitalist economy model after Singapore. Except the control of private enterprise is stifling causing resentment. State owned enterprise can be a rational model during nation building and to ward off MNC to dictate price to consumer causing instability to wealth distribution. However the heavy subsidies for state enterprise to compete internationally deprived MNCs of a competitive edge. The rise of China is inevitable and even through prediction of the ancient sages China will become dominant world economy. But in recent years China have been too aggressive and impatient to rise up, given there are still lingering wariness by most S.E. Asian nations of China's power and role. Other military efforts and trade route policies were to quick and TOP bold to implement when stability in relations with many countries have not had time to evolve and mature. It's precarious that most initiatives are hung on the charisma of one sole leader.

  3. How can you say that China is a socialistic country, when james O'Brien says that under socialism everyone earns the same… could you please explain, thank you.

  4. How can you say that China is a socialist state when not all means of production in China are owned by the state?

  5. Also when you talk that American businesses or companies have moved out and destroyed communities, could you please name them? Who moved, where they moved (in China), from where (in the USA), and what community they destroyed (in the USA)? Please, we need details, facts and accuracy as much as possible!

  6. Thank you for the information. I had a general sense that this was the case, but you have filled in the blanks and confirmed what I basically always knew. 👍

  7. KICK COMMUNIST CHINA OUT OF THE IMF, WTO, AND THE UN SECURITY COUNCIL NOW !!

  8. When Allen Greenspan credited the "success" of the economy on the uncertainty of the middle class – you KNOW the system is not there to help YOU.
    Quote: "if the workers are more insecure, that's very healthy for the society" because "they'll serve the masters gladly and passively."
    and when he says Healthy – he means for the rich,
    and when he says Masters – you know who he is talking about.
    Sick.

  9. An excellent and unbiased overview which Trump and the current law makers of the US should learn and be enlightened on the reality of events that is the true way in making a nation great. It is certainly not the "Make America Great" as per the doctrine of Trump.

  10. Way to go, Richard. This is really good. Thanks for your hard work. I will share this widely. You should be so much better known. Best wishes always!

  11. Improvement of quality of life is good. But all the countries of the world must move away from the consumption model and practice birth control.

  12. Understand that we have had predominantly democratic presidents that have sold out our companies to China. Have put Americans in the welfare lines by taking our work elsewhere. China has stolen our technology. And We have Freedom. The people of China do not have Freedom. The democratic party has made life bad for the people with the intentions of coming back as a savior. Socialism Fails consistently that means 100%.

  13. He's incomplete in his analysis. He doesn't address why US companies went all the way to China beyond going into the great conditions China provided. Ultimately, it's a huge investment and annoying at that, to start over production in a foreign country. You have much better control in your home country where you live and speak the language and know the culture, all other things being equal. They never would have set up in China to the extent they have if the US government hadn't been constantly increasing rules and regulations as well as growing almost exponentially. When the government grows, it crowds out private investment because the money is going to shit social programs or whatever. As this retarded looking clown says…the Chinese government has actually shrunk relative to the size of the private sector which is true. The US has done quite the opposite. So in other words, REAL capitalism i.e. small government and a big as possible private economy is still the way to go. China may be Communist socially and still economically even in a way, but the US is more communist than even China economically as evidenced by the relative growth of our shit government. This moron is misleading a lot of you morons into thinking communism is good in any way. It's the opposite if you have even a couple brain cells. Real economic growth only happens with free market forces. It's fucking natural forces that compel living things do things. You can only be motivated to do anything if it benefits yourself or at least other people that you care about. Wake up please and stop liking anyone who says some things true (which this guy is doing) but fucks up other things or leaves out critical info (which this guy is also doing). That's what Satan does btw if you believe in that sort of thing.

  14. Where US tries to expand it breaks and China comes in and rebuilds. One destroys and the other one builds. One is an artisan and the other one is a destroyer. Both men are trying to build the same structure. The old structure has to be destroyed so the new one can be elected. No one knows how this gonna end but the animals are still watching in awe

  15. Excellent lesson in past and current history.

    My thoughts on our current state of this trade war —-

    China has grown so fast and far that it feels that it’s direction and methods are the right one to follow going forward. Plus with their President now a life time position he will have a difficult time controlling if he shows weakness in the face of the west.

    On the other hand trump is desperate for a win over this with China to nail down his 2d term. Personally if he loses he looks weak and he runs the risk of getting voted out of office which will also mean that he loses the “protection “ of AG Bill Barr and he loses the possibility of interfering in the state lawsuits current and upcoming which exposes he , his family and his business to lawsuits.

    All of which means that this trade problem is not going away until after the November 2020 election and well into the 1st term of whoever wins if not longer.

    But whatever happens trade between the 2 countries is already changed in that no American firm in China would ever want to be put in this position again – so they and other foreign companies manufacturering their will/ are moving their operations to other countries or splitting them up into smaller parts so that another trade war or even actual war won’t effect them dramatically like this has done.

  16. Well done Sir.
    The US needs to find it's own new way too. Changes are made inside a country's borders, not outside. Progress of one country is not a threat to others countries. It is a device to our own people and other people who want to do businesses with us.

  17. China, the great world power, is a contrived Deep State creation. They did not make all that money with fair trade deals. It was all spoon fed to them by the corporate globalists whose intent was to make China the next great world power that they could use to control the world. China is run like a huge corporation, with the Communist party serving as a board of Directors would a huge corporation. I ask you, is there any democracy in any of the corporations you are aware of? Heck no, it’s all command and control!!

    Trump has really thrown a monkey wrench into that agenda. China will soon begin to unravel with all its slave labor and unfair practices/authoritarian governance at home, and do not forget the mobile executive vans that execute folks for politically incorrect stances and then harvest their organs to be sold on the world market!! By the way the price of buying an exit visa to migrate to the U.S. from China is $60,000.

    Is that what great powers do? The rest of the world and I do NOT think so!

  18. To become the producer of goods and services stolen from American companies that the democratic party planned by forcing American companies to seek cheaper costs of production in china. I would like to debate you on this topic. I have a Masters in Business and taught Economics, Accounting, finance and Marketing.

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  20. Communism (the ultimate form of socialism) leads to dictatorships and the loss of freedom. The reason China is doing well economically is because it is embracing capitalism not communism and because US leaders cater to them. If they did not have capitalistic countries to sell to where would they be? If they ever allow their people to be free they would overthrow their leaders. I would never want to live in a communist country. There's only 5 left. North Korea – would anyone want to live there? Cuba? I don't think so. Vietnam or Laos? No thanks. Now China is using technology to create a state like the one George Orwell wrote about in 1984. Now you get a social ranking based on everything you say or do and there are consequences if you don't do and say what they want you to do and say. The gov't controls the people instead of the other way around. Our ancestors gave their lives to create a free country. If you embrace communism you give your precious freedom away to the people who run the government. And you won't get it back. Especially once they take your guns away. There is no freedom to worship God in China. There is no free speech. There is no freedom of the press. You do what the state tells you or they put you in a "re-education" camp.

  21. The one thing that the US does by far better than China is….self promotion! We are the best in the world at….self promotion.

  22. Actually, Chiang Kai-shek, took no action against the Japanese. His soldiers had to be dragged into conscription against their will in chains. He didn't pay them and they survived by looting their own countrymen. He only fought the communists. It was a false alliance. Read Tuchman's "Stillwell in China."

  23. Twenty year real wage stagnation proves that capitalism does not work. It breeds extreme income inequality that impedes economic development for the whole society. Can some economist explain?

  24. I really appreciate your progress n I am glad I have found you. Thank you for speaking the truth to the world what has been the real story of China today and the pass. Looking forward for more and more people to only speak the truth or to search about the truth rather then listen to those major media which most of the time spread the fake news for their own benefit.

  25. Exactly what I was talking about the whole time. China did not steal the technology the companies traded themselves for the privilege of having cheap labor and excess to huge market

  26. Americans prefer to remain deceived, and to blame-the-victims — Iran, and Russia, and China, and Venezuela, etc. — even as our Government imposes entirely unjustified and unjustifiable strangulating economic blockades (“sanctions”) against countries that America’s voracious and vicious megacorporate aristocracy (America’s billionaires) want to control so as for those lands to become additional parts of the U.S. regime’s global dictatorship.

  27. The simple answer to the question is if you are rich than capitalism is more suitable for you but if you are poor than you must think what good makes you talking about someone else's wealth and be pro- capitalist or organize you self with the people like yourself and start working for your interes involving people like you

  28. Thank you Professor for yet another very comprehensive and explanatory session on China's "COMMUTALIST" approach to economy. 🙂

  29. Whether we're good is debatable, but socialism is the most murderous ideology in human history and there is no sugar coating it.

  30. American ""commoners"" love their country but their political and economic leaders don't give a poop about anything but money and power. But they sure do wave the flag , spit on kneeling black football players, wear U.S. flag pins, and say ""God bless America"" A LOT , while they loot the treasury, corrupt every institution in America, falsify history, lie about everything, and violate the Constitution daily.

  31. WE'RE GOOD, THEY"RE BAD!!! That is SELF-EVIDENT. China HARVESTS ORGANS FROM POLITICAL PRISONERS. Is THAT good? PLEASE!!! The COMMUNISTS ARE A SATANIC CULT. PERIOD!!! So do NOT give me "China increased its output of goods and services". All that is IRRELEVANT, if THERE ARE NO RIGHTS — even to LIFE itself.

  32. As someone that has been to China and done business there, I would argue that China is nowhere near a socialist/communist country anymore nor a true capitalistic country but rather a facist style economic model for the last ~40 years, especially based on your previous video comparing facism and communism (from an economic standpoint). It has privately owned businesses where the local government backs their local capitalists and tilts it to their advantage against foreign companies (similar to how the Germans and Italians did to get out of the Great Depression before WWII). They provide free subsidized international shipping for local companies, high tariff barriers for foreign companies, and a government system to transfer technology from outside companies to local industries. The companies can be helped and influenced by the government but aren't controlled by the majority of people at all or anything close to a collective.

    The society is also very different from a socialist government as there are very little government safety nets/public benefits. Plus from my observations, the economic divide between the rich and poor is waaay bigger than the US, especially if you compare the economic powerhouses in Shanghai/Shenzhen to the towns in the countryside. You have cities where entire districts are filled with luxury houses and expensive cars and right outside it is a town that barely has running water. It's true they are improving a lot, but I just don't see how it is close to communist or socialist with its economic system as it is today.

  33. Sadly, you have presented what has happened and not how it has happened. Your simplistic numbers facts are things that paint an interesting picture. However, the methodology used to obtain their fantastic growth borders on morals that tests ones soul. Are you saying that the end results justifies the means? Surely your research produced more info than this.

  34. I grew up in socialist/communist country and now have lived in US for a long time. Main difference between capitalism and communism is this. In capitalism big business controls the government. In communism the government controls the the big business.

  35. The success of China is due primarily to the mental and physical fortitude of the Chinese People. No country in the world can keep such people down.

  36. Out of the nuclear ashes of the WW2 defeat, Japan started copying German cameras and car exporting. Japan hired US quality control expert to improve the quality of Japanese cars, and Japanese products. From "Made in Japan" meaning junky products, "Made in Japan" became meaning German like quality. Sony of Japan was among the first to purchase the transistor technology license from Bell Labs of AT&T, and Sony sold the first transistor radios. With its transistor engineering expertise, Japan took over the market for transistor TV's, radios, hi-fi stereo, VCR, CD, DVD besides cameras and cars. Starting with the Four Tigers, other Pacific Rim countries started to copy Japan, like once Japan copied Germany. After IBM developed the IBM Personal Computer, almost everybody started to clone the IBM PC. China formed a special-zone next to Hong Kong to join in this frenzy of the Tigers. With its size, it has become the mother of the tigers. Before, the Qing dynasty was really another foreigner like the foreigners in the concessions. Like the Mongols, the Manchus were from north of the Great Wall. People and cultures north of the Great Wall were nomadic in nature, and they were not know for their industries. Once these nomadic governments were kicked out of China, it reverted to its historical industrial leanings. The book "The Genius of China" shows that 50% of ancient inventions were made by China like paper, steel, rockets, drilling natural gas, printing, and on and on. The Japanese and the Tigers depend heavily on copying Western technologies, as they are relatively small countries. Japan tried to be not just a copier of Western technologies, but it was not that successful in that attempt. It is easier to copy than to truly innovate by doing a lot of basic research hard work. The US under the Republic Party platform is starting to get "lazy" by reducing funding of basic research to its universities, although the US (and European) basic research programs are so extensive that even the Republican Party will not be able to destroy these overnight, so that there still are huge amounts of basic research efforts remaining in the universities and national labs. With global warming looming ever larger and ever closer, major innovations may be needed to save the human race from extinction, which Professor Guy McPherson claims may happen as soon as in the next decade. If McPherson is correct, this is the end times of the Bible. The Four Horsemen may be Watts riding the horsepower of the white steam of the steam engine, the Blackhorse is black coal and oil of the horsepower of power plants and cars, the red horse may be the Republic Party which calls climate change a hoax, and the green horse of the greedy green back. If McPherson is right, time is short.

  37. Thank you for telling the truth. I sometimes think I'm alone and looking at all the new stations and Talking Heads and thinking that they're complete liars and out-of-control on everything that they say, and then someone like you comes along and speaks a truth and I no longer think everybody is insane and double speaking and double thinking. Thank you for laying things out and a truthful matter

  38. After this The Rise of China, maybe it's a time to make "RISE AND FALL OF The United States". Hoo Yah!!! Huge national debts, high poverty level in the nation, student loan crisis, opioid crisis, 2008/2009 Great Recessions, 17 years War in Iraq and Afghanistan, rise of ISIS and the rise of an apocalypse tv host con-man president that attacked 2 neighbours (Canada & Mexico), attack the world by retreating from Paris agreement, arm selling to Saudi, screwed the allies in Europe and Asia, backstabbed the largest trading partner and you know what the American like him about: "But, but, but… he gave us tax break"," he gave us subsidy for the farm losses". The tax break is mostly benefited the top 5% of the population and the farm losses are caused by (he) stabbing China and were resulted from China retaliation. And guess what, he gives you the subsidy is because "THAT IS NOT MY MONEY, STUPID" and the same reason he want to build a freaking wall between Mexico, "IT'S NOT MY FREAKING MONEY" and on top of that: He and the country rich people will benefit the most in the corporate tax break.

  39. Because all our jobs went to China so corporations could save on labour therefore making themselves rich. No miracle by China here just human greed at work. Yes it’s true the American people have been sold out by their politicians who have been bought and sold by corporate America.

  40. This video is a typical progressive-socialist approach to the data i.e. starting the narrative in the middle to manipulate the outcome. Amazingly, nothing is said about China under Deng adopting a free market economy because the old command economy used by Mao and the Communist Party both bankrupted and starved the populace of China so a change was made. This video asserts China is a socialist "system" but doesn't use the term "socialist economy." Note now Chairman Xi is once again resurrecting policies of government economic control. If Chairman Xi maintains this policy China will once again become among the poorest nations on earth like Venezuela.

  41. The professor skipped on why the Chinese government likes to keep the state owned enterprises (SOE) at the forefront of big industries, like banking, steel, etc) :

    The Good:

    SOE allows for rapid response and direct control, since the state officials are decision makers, if there is a situation that requires emergency response, there is no need to wait for legislative instruments to implement policy or law. The decisions can simply be made and the legislative response may follow to legitimize the decision, or the person who made the poor decision be held accountable.

    The Officers/Directors of SOEs are not accountable to shareholders, in legal terms they do not owe fiduciary/directors duties to individuals or the company for profit. SOE answers to the state directly and while they do make money, they are not entirely fixated on profit. They can, and have often (during down turns) run at a loss to maintain the stability of a market. For example, if steel price falls and smelting steel is a process resulting in net loss of profits, SOE can keep the plants running and keep paying the workers without resulting in immediate shut down. The excess steel is bought by the state or simply kept in storage until the price recovers or a project uses it up.

    SOEs can be the laboratories of the industry in adopting technology. Since they are market leaders, have huge resources and is connected to the state. When a new technology releases and can improve an industry, the first step in testing is generally facilitated by the government and SOE to try it out. This testing allows good regulations and if viable, introduction to the private sector.

    Since SOE are market leaders, it gives the government levers to directly influence each sector of the economy gradually. For example, if there are too much steel production, the Chinese government can either find SOEs which can use more steel, or shift the entire steel production line from mining to logistics to slow down. In a capital driven market, the ripple effect comes with price fluctuations and can be rigid, slow and unforeseeable, leading to lay offs, insolvencies and bankruptcies.

    SOEs are persistent and resourceful. SOEs can comfortably tackle large projects in terms of decades of non-stop investment without return. It allows the government to start projects almost impossible in a democracy, especially if a project runs across multiple election cycles and could potentially be shelved or terminated by the other political parties. For example, the three gorges dam took 8 years (two election cycles) to complete and cost approximately 20 Billion USD to build (and 10 billion to relocate locals). The projected was funded by SOE bank and headed by SOE construction companies. It is estimated it would be approximately 10 years after completion to break even, making the entire project cycle 18 years before any SOE would see any profit from the site. Currently the hydro-electric power plants produces about 22,500 MW/h, or (for those of you who likes TV) about 7 Chernobyl style power plants at operating capacity while being completely carbon neutral (and without the 3.6 roentgens).

    The Bad:

    SOEs are not efficient. Since they are not driven for profit and they are essentially 'too big to fail' where the government relies on them to be industry leaders, there is no incentive to be as efficiently as possible. SOE are also not allowed to conduct business at peak efficiency on principle, if a SOE conducted their business and offered the cheapest goods they could, it would effectively kill smaller private companies who cannot hope to compete since they do not have such economy of scale.

    SOE are huge and not transparent. SOE typically employ thousands and sometimes hundreds of thousands of people, all the bureaucracy is slow and time consuming. It also allows for corruption and back door dealings with little or no oversight since it is difficult to detect once the stuff is buried in the paperwork. For example, it is common for large SOEs to award subcontracts or introduce new technology to private enterprises of friends/family or individuals favoured by the communist party.

    SOEs holds the livelihood and the economy of the entire country and gives a LOT of power to the single ruling party. It effectively allows the Chinese communist party to dictate market trends and set practices. Certainly it can be in a pursuit of efficiency and development of the citizens, but it can also be used as leverage against rising political trends, used as a tool to suppress discontent. After all, total power corrupts totally, so far the economy benefits are staggering and seems to have kept the Chinese population on the right trend.

  42. I thought it would add to the perspective with this lecture by Ang Yuen Yuen at the 2019 Camden Conference. The link is as follows: https://youtu.be/2_bNB4S_HTw

  43. So back in 1973 average wage in China was 20cent per hr now it's $1 or less per hr back ,in 1973 I remembered making $5.25 now I'm making $28.00 what you make really matter where you live in the US.

  44. Richard Wolff is a socialist, a staunch Supporter of labor unions. He has a habit of exaggerating the facts that favor socialism and labor unions while discrediting capitalism and the business owners. @3:25, he claims that China was a poor nation in 1776, the year Adam Smith published the book, "The Wealth of Nations." History tells us China's economy in 1776 exceeded the combined European nations' GDP. China fell into poverty after the European invasion and colonization during the mid 1800s. China was a capitalist nation well before Smith or Marx demonized capitalism as one of the evil 'ism.' Today, both China and Russia have embraced more capitalist practices while discarding much socialist ideology because both nations had tried socialism and found it wanting. Richard Wolff on the other hand prefer socialism and loves its under pining, the labor unions, despite his gaining all the benefits that comes with living in the USA which started out as capitalism but gradually adopted ever more socialist policies. Today, the USA has so much socialist characteristics that no one can claim USA is practicing capitalism, and American capitalism failed the America. Wolff is sly and stealthy like a wolf: he will pounce on the easy targets while passing up the harder targets. Wolff will not readily admit that under socialism the socialists who administer socialism become the elites, the Men of Power, as was the case in the USSR. Essentially, Wolff is your typical socialist; he decides what is good for you instead of the free market. And in the process he becomes your Master.

  45. Not only are our wages effectively less, we also have so many more things to buy that we didn't used to, such as ridiculous health insurance. We used to get pensions, and benefits….there are still many wonderful things in life, but that won't come from government…I happen to be doing well, because I have a full time job, and getting social security…I love my full time job, although it is now through and agency, with an hourly wage with no benefits..they call me a contractor now…I was first laid off, and my job went to India…3 years later, I was rehired as a contractor…God Bless America…it's all I know; The American way…….

  46. Basically,the analyses are right, but there's something that western world is proud of: democracy, freedom, human rights, and overwhelming private capital the real trap both for the West and those developing countries. democracy means one vote for one person but does not mean to express voters real needs; freedom means to be whatever you want to be but much much more for those who are extremely rich; human rights is nothing but an excuse that to destroy a community, a country, or numberless victims lives; and overwhelming private capital actually controls all especially in USA which leads to none of all reform for the good of people of the whole nation even if it's so little. Those facts block any countries from real reform and improvement, on the other hand make the people and countries vibrate from left to right or from right to left all the way round.

  47. All true but do not overlook or underestimate the considerable violence in appropriating land ,money and privately owned resources by the Communist party on its population in its efforts to transition its economy into a modern and technologically advanced system !!
    The leadership is going further now by instituting strong censorship rules and a social credit rating system applicable to every citizen !!Economic updates should also include cultural and social changes that limit freedom and honest Chinese reporting !!

  48. I’m a 72 year old retiree living in China with my wife, and it is virtually impossible to get this across to Americans. They’re simply ignorant and prejudice about Chinese advancement. They make excuses, talk about communism, no elections, etc. like it was 1970. I say, what about elections? Look at the idiot we got with an election. Thanks for the great lesson.

  49. I’m a big fan of yours. But you seem to fail to acknowledge that China use all types of illegal and sheep tactics in order to have that huge production. Like paying their people slave wages or otherwise. you have to input these numbers as well because they committed fraud to get where they’re going so of course they’re going to have a high productivity

  50. You also failed to acknowledge that President Bill Clinton signed the order for Chainat to become part of the world trade organization. Once they became part of the organization they turn into a cancer and took advantage and broke all the rules to get where they are today. Please I understand your logic but please don’t leave out any information please Chyna in this strong position in the first place they lied she didn’t steal to get there. Those are the facts!

  51. one more is that the inequality in USA and China is different in that in USA inequality is definite and desperate, however in China is relative and changeable. Young men with good education are hopeful in finding decent jobs,in China large number of poor youths can go to universities with aid of government loans which can be easily paid off within 3years, and what about in America?

  52. Thank you, Prof. Wolff, for this educational video. It is the best video I've seen so far concerning the rise of China.

  53. Chinese CPI is very much state-sponsored propaganda
    you should take a grain of salt and give it 10%-25% adjustment for realism

  54. trumps trade wars . Putin says Russia will supply soy beans, poultry meat to China : https://www.reuters.com/article/us-russia-meat-china-putin-idUSKCN1NX1C4

  55. Thank you Dr WOLF Our world today needs more Experts like you .Well done and GOD ALMIGHTY RICHLY BLESS YOU IMMENSELY AMEN AND AMEN……

  56. I have received an important Lessons on Economics And how To get things done…. in my little way…. Is highly Appreciated… Remain blessed Amen and Amen

  57. You need to keep up. China’s economy is tanking.

    You need to be less simplistic when treating complex issues, if you are giving economic rather than political updates.

    The problem you are dealing with is the fall of the middle class.

    The middle class owns the means of production. The working class work for the middle class.

    The buying power of the working class is key to everything. If the working class makes a satisfactory wage, and the middle class at the same time makes a satisfactory profit, an economy does fine, and everyone gets to be better off.

    But the working class doesn’t take responsibility or risk in decision making. The middle class does that for everyone.

    The absolute vicissitudes of life in general affect production existentially.

    The middle class has to make decisions about how to keep production going when the vicissitudes are against it (or for it).

    The working class has been told by liars that since they don’t make decisions, they should not suffer The vicissitudes of business.

    That’s nonsense on the face of it.

    The socialist solution was to make the working class the owners of production.

    One of the vicissitudes is that, in fact, some producers are more equal than others.

    Without the middle class, nothing is produced.

    The upper class, or the elites do not produce anything. They receive “rent.” They are the Rentiere Class.Their portion is a percentage of the values of goods, services and commodities traded.

    The elite class has changed since information became a valued commodity. They have to be more intelligent than before.

    Intelligence has surpassed nobility of character as the most desirable characteristic of elites.

    The result is moral decay and the erosion of the middle class, whose former functions have gone to the elite class.

    The executive secretary and the promotion pool have been replaced by computer programs that function with the force of AI. It takes far less time to input two instructions than it used to take the boss to dictate a letter, or discuss a decision with his subordinate.

    The middle class who can, move into the elite. The middle class who can’t, move into the working class, which they despise, and which doesn’t want or need them.

    Incompetent elites and over educated, over priced labor have made production impossible, and information unreliable. The engine of progress and the most valuable commodity have been rendered self-destructive.

    The huge divide between the wealthy and the not wealthy is evidence of the vanished middle class. That gap is where they used to be.

    The only solution is Romanticism, whose project is to imagine a brilliant world in the gap. This must be followed immediately with the Victorian/American work ethic to realize what was imagined.

    Unfortunately we have quite the opposite of the Enlightenment going on now, so the world will move on, like Spain and Islam, into a Romanticism of bad science and twisted thought.

    Progress is in the backward direction.

    We are looking at either The Last Day’s, or a Second Dark Age.

  58. Gee it was the Soviet Union who was the first country to put a man into space, and whose rocket engines (and engine designs) we still use today, because they are BETTER than what "capitalists" industry designed / built. To me, Prof. Wolff has earned a place in history to be called a national treasure.

  59. Any places in the whole world have high cost of living its a suicide,it's big gap between affordable and couldn't afford already this will bring chaos social .Futures for growth to all countries
    are less,can any one predicted foods ,waters,shelters enough to supply to all the humanity.If the superpower crave for being the biggest then will fall hard because the mind never rest.

  60. There is no capitalism, there is no communism… There is only artificial attempts to control an economy. Zero control would be anarcho capitalist caveman barter warlord horror show. 100% control would be futuristic AI controlled dystopic hell on earth. You can't regulate economies — it's not possible. (That won't stop them from trying). All you should do is punish thieves & murderers. If a government successfully stamps out crime, the economy should prosper; if not, it shall collapse. If a government is corrupt, it won't fight crime.

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