Comment by next_xibalba
4 months ago
The Chinese heavily subsidize their companies and have large government bureaus that strategically guide industries over long time frames. For example, the CCP has been on a long, intentional path to destroying all international solar manufacturers via subsidies, dumping, etc.
This is not how free markets function.
You are right. China does not really implement free market without government interaction. Then again, neither does the US or any other country for that matter.
The US used its massive state surveillance apparel to spy on essentially every country in the world, not only for diplomatic advantage, which you might argue would be fair game, but also to steal industrial secrets and promote US companies (see e.g. https://www.mediapart.fr/en/journal/france/290615/revealed-m... for France, one of their supposed allies).
Paraphrasing you:
> The US heavily subsidize their companies and have large government bureaus that strategically guide industries over long time frames. For example, the US has been on a long, intentional path to destroying all international corn producers via subsidies, dumping, etc.
The US essentially destroyed the traditional crop growing in Mexico by a combination of subsidies and free trade agreements.
It is _true_ that China does not play a fair free trade game. It is _not true_ that the US, or any other country, does. (The reasons for it should be obvious btw, free trade only works if legislation is more or less the same everywhere, otherwise it's just stupid.)
[dead]
A free market just means that people are allowed to buy and sell what they want. If a government decides to help some industries that is irrelevant.
It stops being free when government attacks economic activity, not when it promotes it.
"Dumping" (selling at an artificially low price) is widely considered an attack on economic activity of the competitors, even though it may spur the economic activity of the consumers of the products being dumped.
In this regard, the Chinese government pouring large subsidies into solar panel production both spurred the economic activity around installing solar panels, and attacked / thwarted in around production of the panels themselves, if the production happens outside China. Only the US was able to somehow develop solar panel production.
"attack on economic activity of the competitors"
Thats competition. It is a feature of markets.
not a bug.
2 replies →
I'm not really disagreeing with you as it's not like there is a 100% true definition of a free market, different people can have different conceptions, but the original Adam Smith / classical view is that a free market should essentially be 100% driven by the private market on supply and demand - with as little government intervention as possible on either side of the ledger (subsidy or blocking)
Monopoly is a free market game and thete is only one winner. Free markets as such is an utopia dream.
1 reply →
mmm by that definition, which market is truly free market again? I'm not sure you can find one tbh
1 reply →
> For example, the CCP has been on a long, intentional path to destroying all international solar manufacturers via subsidies, dumping, etc.
You should see what Microsoft did. Forgetting the corruption the open document format, free/subsidised licences for students is almost the same thing.
Let's rather choose a set of principles and apply them without exception?
Lol, how is this not a free market? Apple subsidizes dozens of organizations internally to advance its strategic interests, what’s the difference?
Corporate internal markets are well-known as non-free, and when a sufficiently large company is picking and choosing winners in a national economy that's also not a free market.
I think this concept is an exercise in fantasy. There’s simply no such thing as a free market. Why we single out subsidy as non free is arbitrary. What activities constitute legitimate free market behavior? There’s no actual logically sound distinction. The real distinction is “what we do is free market and what our opponents do is not”
1 reply →
I'll leave it as an exercise for the reader to spot the difference between Apple and the Chinese government.
I’m not hearing an argument, and I won’t be thinking one up for you. Seems like only a difference of degree to me.
12 replies →
Well, Apple and Chinese government are one and the same when it comes to spending billions to further their agenda, that’s why that wasn’t a good example.
Yes, they do favor their own companies and provide subsidies etc. that’s not the problem though, the problem is that they’re undercutting other companies by selling below cost thanks to those subsidies. Otherwise, we would have to call our farming subsidies the same.
I was originally trying to point out that it has always been important to keep your vital industries secure, it was very stupid of Intel and others to transfer so much technology abroad (to anyone) just to increase their margins, I think ASML did the best: You can purchase our machine, but that’s pretty much it.
The amount of what-about-ism in this thread is amazing. No, large companies with semi-monopolies using their power to influence government organizations is not part of a free market either. But OP never claimed that it was.
The whole point is that when in some market there is some nation trying to disturb the free market mechanism in its favor, other countries can't just be naïve and stand by doing nothing. They have to counter act and this is what happend in The Netherlands.