Comment by jimbohn
8 hours ago
Yeah, or even just protectionism. Most economists I've heard say that protectionism doesn't work, but I feel like China being quiet and protectionist in the infancy of its key industries was like the move of the century for them.
Neoclassical economics is quite clear that targeted protectionism is desirable under certain exceptions.
As for China, they would be more wealthy without the meddling of their government. There's no reason they couldn't be like Taiwan, but bigger. The Chinese people got to where they are in spite of their anchor.
Median wage in Taiwan is something like $14k, less than many urban areas in China, though obviously higher than the very rural areas in China. [1] It's a Reddit link, but it's using first party government data. I'm linking to it since just linking to a site in Chinese would not be very informative for most.
Huge GDP/capita in certain places is because of outsized industries that don't really translate to the average person. Ireland is another example where it's nearly twice as 'rich' as the US by that same metric, but it's just a nuance of it being an international hub for tax avoidance, not because the Irish are doing especially well.
[1] - https://www.reddit.com/r/taiwan/comments/1jmhhk1/realistic_s...
I remember half of the neoclassical economics focused articles about China from the late 90s and early 00s predicting that by not following ricardian comparative advantage China was shooting itself in the foot.
They kept predicting collapse, too.
Nobody talks much about the ricardian theory of static comparative advantage today. China's rise kind of invalidated it.
America was taken by surprise by its rise because of this. The cordial relations and trade flipped almost overnight to hostility once it was realized that China's economic power now rivaled that of that of the US and was poised to grow even more.
How do you know those economists were wrong? It's easy to conflate China's size with China's success. They liberalized their economy a great deal since the 1980s, which is responsible for the success they have had. That doesn't mean they couldn't be even more successful with further liberalization. Like a larger Taiwan.
Not really. In neoclassical economics protectionism is only justified as a necessary evil and it is always a form of militarism (spending money to weaken or defend against your enemy), rather than building yourself up.
Protectionism and sanctions form a kind of virtuous feedback loop :)
https://incyber.org/en/article/iran-between-isolation-and-te...
>The Iranian Information Technology Organization (ITOI) even set precise rules to evaluate candidates based on three different standards: ISO 27017 (cloud security controls), ISO 27018 (protection of personally identifiable information), and NIST SP 900-145, which concerns the American definition of cloud computing. “They want a comprehensive offer with its three components— IaaS, SaaS, and PaaS https://incyber.org/en/article/iran-between-isolation-and-te...
Not sure tbh.
China could have been like Japan per capita. Protectionism puts a big cap on economic growth potential.
If they had allowed the western tech companies, these tech companies could easily control the information atmosphere and incite riots for instance.
This is what Japan's GDP/capita [1] looks like. I assume you're around my age because we grew up in a time when Japan was set to become the next economic super-power, and it looked like it might even surpass the US. But sometime around 1995, their economy peaked and they've been in pretty bad shape since then. Their current GDP/capita is about 25% lower (and falling) than it was in 1995. They work as a great argument against people who insist to just always buy the dip. What goes down does not always come back up.
By contrast this [2] is China's GDP/capita which is something really close to a vertical line. But for all the talk about economic systems, I think it's just because of good leadership and a motivated population. There's plenty of capitalist countries that aren't going anywhere, and there's endless examples of hybrid/social economic systems that have also gone nowhere. So I think there have to be explanations outside of the economic system itself.
[1] - https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location...
[2] - https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location...
I might have missed something here
"current dollar valuations are more appropriate. Nominal GDP measured in these units are plotted in Figure 2." https://econbrowser.com/archives/2009/06/how_important_i_2#:...
(What do those bumps correspond to?)
Yes you have missed something. I wrote per capita.
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Take a look at a plot of China's gdp per year since 1980. A curve can only get so exponential.
Japan was leveled to the ground by 1945.
What’s the excuse for not having the same GDP per capita 80 years later?
The curve became exponential way too late. And only after they (partially) opened up.
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