Posted on 01/30/2008 1:50:21 PM PST by FewsOrange
Should we worry that the people of China, India and other undeveloped countries are getting richer? Apparently so, according to the newspapers and the "experts" they quote. They don't come right out and say that global prosperity is bad for us. Instead they say, as The New York Times recently said, "As development rolls across once-destitute countries at a breakneck pace, lifting billions out of poverty, demand for food, metals and fuel is red-hot, and suppliers are struggling to meet it. Prices are spiraling, and Americans find themselves in what amounts to a bidding war with overseas buyers for products as diverse as milk and gasoline [http://tinyurl.com/2m6m8n]."
It is certainly true that China's economy is expanding dramatically -- 10 percent last year. The Chinese build factories like crazy to pump out the inexpensive exports we Americans love to buy. To do that, Chinese producers have to purchase oil, steel and lots of other commodities. The new demand drives prices up.
And as the Chinese and other people get richer, they improve their diets and eat more meat, putting pressure on world food prices.
So media handwringers suggest we should worry about the poor becoming rich.
Actually, we shouldn't. It would be a sad world if one person's economic success depended on another's failure?
More of us would understand this if we learned what the great economics writer Henry Hazlitt preached in his classic book, "Economics in One Lesson": "The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy."
In the short run, richer Chinese and Indians bid up the prices of things. But that's just the beginning of the story. Increased demand and higher prices create opportunities for entrepreneurs.
When the price of, say, oil goes up, entrepreneurs and inventors have a strong incentive to: 1) find more, 2) find alternatives, and 3) find ways to use oil more efficiently. You and I cannot foresee what they will invent, but that means nothing. Predictions about the end of progress have been issued countless times. There is no reason to think they will be right this time.
Assuming government stays out of the way. Our current "leaders" are full of promises about "protecting" workers and industries, creating new "green" industries, and starting worker-retraining programs. For example, Hillary Clinton promises government support for "research (to) stimulate the development of new technologies and life-saving medicines [http://tinyurl.com/37zo3s]." Mitt Romney wants "to initiate a bold, far-reaching research initiative -- an Energy Revolution, if you will. It will be our generation's equivalent of the Manhattan Project or the mission to the moon [http://tinyurl.com/3a92ut]."
The media lap it up, apparently believing that no one will produce unless our wise leaders create an inducement. Nonsense.
The market would deliver the goods if government doesn't impose crippling regulations and tax away everyone's capital to fund its coercive utopian schemes. I like what Henry David Thoreau once said: "This government never furthered any enterprise but by the alacrity with which it got out of the way."
George Mason University economist Alexander Tabarrok has another way to demonstrate the benefits of spreading prosperity. Tabarrok wrote in Forbes [http://tinyurl.com/32hqw3] recently that the bigger the market, the more worthwhile it is for companies to make products that require costly research and development, such as medicines and chemicals. As the Chinese and Indians become more able to buy things, businesses everywhere will find it profitable to make products that yesterday weren't profitable enough. The result will be cures for diseases and other products that make our lives better.
Tabarrok takes this a step further: "Amazingly, there are only about 6 million scientists and engineers in the entire world, nearly a quarter of whom are in the U.S. Poverty means that millions of potentially world-class scientists today spend their lives trying to eke out a subsistence living, rather than leading mankind's charge into the future. But if the world as a whole were as wealthy as the U.S. and were devoting the same share of population to research and development, there would be more than five times as many scientists and engineers worldwide."
When it comes to being wealthy, the more the merrier.
I just wish Ronald Reagan would have woken up and pumped trillions of dollars in the old Soviet Union. Just think how much better this world would be. /s
Those who back what we’re doing with China should hang their heads in shame, crawl into a closet, roll up in a ball and rock back and forth.
Should we worry that the people of China, India and other undeveloped countries are getting richer?
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yes if the Chinese government takes a slice of all that money and uses it to build nukes to threaten Taiwan and keep its own citizens under authoritarian control.
When will libertarians understand that governments can oppress people? They claim to but do they really when they give very bad governments a pass?
I’m not drawing a false equivalence, but I remember drinking Stolichnaya during the Cold War. Someone was buying it and importing it (meaning that it wasn’t smuggled).
Now that I think about it, I stopped drinking Stoli after the Soviets shot down KAL 007. So it was available during the Reagan era.
Oh how can you say that? You are so Asiaphobic! /s
Yep. Good point.
I don’t think anyone is going to buy into the idea that Reagan was trying to exploit trade with Russia while trying to bankrupt it.
We sure have a lot of folks on the forum today trying to take Reagan to task to justify what they want to do today.
It would be nice if just once it was addressing the same issue on the same scale.
It's difficult to get rich selling stuff to poor people.
I doubt the Chinese would want to nuke Taiwan. Too close to the mainland.
Again, I am not defending our current situation with China. I can assume the Reagan wouldn't be too pleased with it either. But I can also assume that Reagan, through his belief in free markets, would have been pondering some way to introduce it to the Chinese. We know that he lectured the Soviets on the subject nearly every chance he got.
China has greatly raised our standard of living because of our trade with China. In short, we all have more goods and services than we would otherwise have without trade with China.
It is impossible for America to make all the goods and services that we currently consume today. Where we would get the capacity to do so when we are at full employment in economic terms? This is the key fact that stops the anti-China folks in their tracks. Of course, we could go back to the days when VCRs cost $1,000 but were made here in the good ole USA.
Let China produce all the toasters it wants and we will buy them cheap with our higher paying jobs (it’s called comparative advantage folks).
As the people in China becomes more prosperous from our trade, China will become more Westernized.
It is a win-win for all of us.
I do not think there is any way in hell Ronald Reagan would have supported massive trade with Russia, while it remained a communist authoritarian state forcing troops to keep their guns trained on it’s easter block citizen, to keep them from fleeing.
What is China today if not the same thing?
And besides, this is all utter nonsense. We didn’t conduct massive trade with Russia under Reagan. Acting as if he would have been for it is pointless. He didn’t implement it.
Meanwhile, to hell with the regular American workers who watch their jobs go overseas. As long as CEO’s and shareholders can make more money, then everything is fine.
One other good reason to applaud their growing wealth: painless population control.
Almost all first world nations (except the US) have to encourage their citizens to reproduce at anything close to replacement rates.
Wealth beats warfare as the Malthusian Solution of Choice.
Darn, he just dropped out.
LOL!
Well, since Reagan facilitated the break-up of the old Soviet Union, giving whole nations the opportunity to escape the oppression of the USSR and switch to free-market economies, pumping trillions of dollars into their economy is effectively just what he did! ...and it's been a great thing.
He didn't mind the thought of the people of the USSR becoming wealthy, because wealthy people have more power against an oppressive and wealthy government.
The same is true of India and China.
Be careful not to confuse the government and the people. The people of China probably don't like the communist government much more than you do. Making them wealthier will only help to weaken their government's power over them.
Wealth, particularly widespread wealth, is a good thing.
Shhh!!! We dasn’t check all those containers that go out from Chinese ports labeled “Maching Tools,” thousands and thousands of them.
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