Alternate Leader in Free Market Capitalism: If Not the US, Then Whom?

Deleted member 94708

That said, in the era we’re discussing global shipment of goods wasn’t yet economical enough for Qing China’s nascent industries to be outcompeted in the way that Kenya’s are today.

My belief that such a policy wouldn’t work isn’t rooted in assuming that it wouldn’t result in growth but in believing that the side effects of such growth would be debilitating.
 
Secondly, the environmental consequences of a near libertarian regulatory scheme in a nation with as fragile of an environment as China’s was by 1850 do not even bear thinking upon. The costs of remediating the damage done over the last thirty years IOTL are conservatively expected to soak up between one and three trillion USD each year once China comes to fully reckon with them, and the drag on growth from pollution, most especially of scarce water resources, is increasingly evident and estimated at hundreds of billions each year already. A larger, richer China with far weaker regulations would be a sea of poisons of various kinds, and the costs of dealing with the resultant problems would be measured in tenths of GDP each year..

I have to disagree with this perspective. Its worth considering that the nations with some of the most egregious environmental catastrophes are hardly known as bastions of economic liberty. I'd like to suggest that, with few regulations and a prosperous private sector, the environmental damage will be greatly mitigated.
 
China’s history IOTL in the Nanjing Decade provides a glimpse into what direction economic development would have taken under a weak, or in this case ideologically-limited, government; there was a reason that despite significant economic growth and the formation of a large mercantile and industrial elite in the Yangtze River Valley, the CCP was still able to mobilize millions of people from the poor peasantry to defeat the KMT.

Also, while import substitution doesn’t work worth a damn as a path to development, many of that nations which have followed the prescriptions of classical economics and the IMF have remained inpoverished, their low labor costs outweighed by the vastly superior concentration of capital that industrial nations can bring to production.

I would posit that China’s government-sponsored centralization of capital in a few coastal regions was precisely what enabled them to compete and become the world’s workshop, and that everything which followed that decision through about 2010 has been based on the principle of using the funds, trade surpluses, and tax revenues from those expanding regions to fund the development of the rest of the country. Only since then has the domestic consumer market and the purchasing power of the country been sufficiently strong to make itself felt as the driving force behind economic growth.


I agree everything you said, but I think that the situation regarding international competition is a lot different in the second half of the 1800s than in the 20th century. Japan required concentration of capital by the government in the 1800s because there was so little capital in the first place and they restricted foreign trade so much. In China, there was much more capital and the Qi government would be setting up a modern central bank in the style of the Bank of England. Foreign investment would also increase growth and income.


Your criticisms have made me realize a major problem, though. The middle income trap. I can't see a way my Qi China could escape it. I would have to rewrite the entire thing to provide for government investment in universities, agricultural schools, and infrastructure. The current way the Qi Dynasty is written would only make them a giant Brazil or Thailand. It seems to me there would be a very long Nanjing decade, so to speak, and then things would start to stall out in about the 1930s, when the Second Industrial Revolution has made high technology and the service sector much more important. China would also be experiencing Dust Bowls and pollution problems and would probably get taken over by a military coup, who start repressing everyone and implementing stupid things like tariffs.
 

Deleted member 94708

I have to disagree with this perspective. Its worth considering that the nations with some of the most egregious environmental catastrophes are hardly known as bastions of economic liberty. I'd like to suggest that, with few regulations and a prosperous private sector, the environmental damage will be greatly mitigated.

Oh, by no means am I saying that an unregulated market economy can come anywhere near the sheer per capita environmental damage cranked out by powers like the USSR. But that doesn’t matter when you’re using 1880-1960 industrial technology in a country which is already the most environmentally fragile on earth and wildly overpopulated to boot.

IOTL China’s vast pollution problems have been caused by both SOE’s and private enterprises, with the former responsible for most air pollution and the latter for soil and water pollution, but both have been enabled by a weak regulatory scheme of exactly the sort described here. China’s history IOTL puts the lie to the notion that a minimalist environmental protection regime could do the job.
 
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Deleted member 94708

I agree everything you said, but I think that the situation regarding international competition is a lot different in the second half of the 1800s than in the 20th century. Japan required concentration of capital by the government in the 1800s because there was so little capital in the first place and they restricted foreign trade so much. In China, there was much more capital and the Qi government would be setting up a modern central bank in the style of the Bank of England. Foreign investment would also increase growth and income.


Your criticisms have made me realize a major problem, though. The middle income trap. I can't see a way my Qi China could escape it. I would have to rewrite the entire thing to provide for government investment in universities, agricultural schools, and infrastructure. The current way the Qi Dynasty is written would only make them a giant Brazil or Thailand. It seems to me there would be a very long Nanjing decade, so to speak, and then things would start to stall out in about the 1930s, when the Second Industrial Revolution has made high technology and the service sector much more important. China would also be experiencing Dust Bowls and pollution problems and would probably get taken over by a military coup, who start repressing everyone and implementing stupid things like tariffs.

I’m of the opinion that the middle income trap is a product of the competitive international environment which only arose after 1965 or so, so I’m not worried about that, so much as the “dust bowls and water pollution reduce 70% of China’s arable land to uselessness while apocalyptic revolutionary peasant movements revolt all the time”.
 
Oh, by no means am I saying that an unregulated market economy can come anywhere near the sheer per capita environmental damage cranked out by powers like the USSR. But that doesn’t matter when you’re using 1880-1960 industrial technology in a country which is already the most environmentally fragile on earth and wildly overpopulated to boot.

IOTL China’s vast pollution problems have been caused by both SOE’s and private enterprises, with the former responsible for most air pollution and the latter for soil and water pollution, but both have been enabled by a weak regulatory scheme of exactly the sort described here. China’s history IOTL puts the lie to the notion that a minimalist environmental protection regime could do the job.

Either way, we've moved far off topic. If you want a thread about the dangers of an early industrialized China, you should make one. Not that I dislike the conversation, I just feel it's rude for us to clutter the thread.
 
It's been a while since anyone's touched this thread--I should start it back up.

I wonder how a surviving Carthage that maintains its trading power-status would do in 2018. They'd definitely contend for the title of most free-market capitalistic, in my view.
 
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