Monday, January 30, 2012

Foundations of Civilization-What About China?

Let's ponder the foundational elements of a lasting modern and advanced civilization and see how China is doing on each aspect.   In doing so, we'll test the currently popular assumption that China will overtake the US in the coming decades--which may or may not be true.    I'm certainly not a China expert, but I'm more familiar with the failures of communism and central planning.   So, with that caveat, I'm taking a stab at rating the USA and China on major elements of civilized societies on a scale from one to ten where 1 is lowest.

Here's my brainstorm list of what I believe to be essential features of modern society and where China stands on them:
  1. Rule of Law- a long standing constitution or written legal code based on an ethical and a moral value system.    China has a constitution but it establishes the communist party as the ultimate authority.   Rule of law is corrupted/changeable because the communist party is corrupted.  And the communist party is corrupted because there is no real democracy (see below).  Therefore there is little consistent rule of law or even human rights (also see below).  China 2, USA 8 and declining
  2. Human Rights. Basic human rights is a natural follow-on from the Rule of Law and a moral and ethical tradition.  (For instance, law in the West naturally springs from the Judeo-Christian traditions).   China is officially atheist, forbids religious practice, and places the state as "God". There is nothing like a Bill of Rights in China (or anywhere else).  Everyone knows that human rights is a disaster in China.  China 1, USA, 9
  3. Property Rights-laws to protect people's legal ownership of homes, land, intellectual property and property.  My understanding is that China doesn't yet have property rights like we're accustomed to in the West but is making movement in this direction.  Local communist party officials are still regularly seizing homes and property for their own benefit.  There is no recourse except protest with a hope to garner media attention.  Everyone has heard about frequent protests in China and seized property is a common reason.  Another reason for protest is corruption and malfeasance by local communist party leadership.   China 3, USA 9
  4. Free market enterprise as the predominant type of economy as opposed to mostly government led enterprise.    China is a company masquerading like a country.  The truth is that most of China's economy is centrally planned with the government throwing money at any and all projects regardless if there is true economic justification or not.  We will eventually learn of massive capital mis-allocation and bad loans in the banking system.  China's private sector is doing well and making big strides until the latest financial crisis.  China may be the epicenter of another financial crisis in the years ahead.  China 5, USA 8 and declining
  5. Specialization of labor is the key to advance civilization.  China is doing well and trying to revamp their educational system.   China 7, USA 9
  6. Democracy in Government (local and national) is essential to avoid serious conflict in the society.  Elections give voice to the people especially in conjunction with advanced educational systems and a free press.   China?   Forget about it!  China 2, USA 9
  7. Capital markets and transparent information. Money and credit is the way businessmen can form new businesses and grow the economy and take care of the needs and wants of the population.   When there is an open exchange for trading shares, then it's incumbent on public companies to provide material information that affects share price.   In China, publicly traded stocks experienced a burst bubble and is now viewed to be highly corrupted.  The Shanghai composite is off over 60% from the bubble peak.  Financial information reported by a Chinese corporate concerns is suspect.   The government itself lies as necessary.  There is nearly a complete moral vacuum in China.    China 3, USA 7
  8. Free press and Internet is essential to uncover corruption, exchange of ideas and communicate important information.   China?   Forget about it!   China 2, USA 8 and declining
  9. Relatively homogeneous people  Present day China resembles an empire and encompasses many different ethnic and religious groups.  Even in recent years, many people have been killed by the  Chinese military in quelling unrest by these disparate groups yearning for rights and recognition.   China 5, USA 8
  10. Functioning government to support courts, defense, schools  China is all about government control and is organizing society pretty well.    China 8, USA 8
  11. Infrastructure-roads, bridges and airports for transportation and movement of goods  Any country must be able for people and goods to move and have access to import/export markets.  China 4, USA 10
  12. Agriculture and/or natural resources A country must be able to feed itself or trade something that it has in order to buy food.  China is rich in agriculture and natural resources, so that's good for them   China 8, USA 9
  13. Advanced Educational System to at least a junior high school level    China 8, USA 7 and declining
Score:  China 58, USA 109

So, on thirteen measures of foundational elements of modern civilization, China rates poorly on many.  Although the US rates highly on most, on many measures the US is in decline due to such things as increasing government interference in the economy and the media has increasingly become politically biased toward liberalism (the President himself attacking the only "opposition" media such as Fox News).  There has also been a decline in moral values in America reflected in crony capitalism, the widespread fraud resulting in the collapse of the sub-prime mortgage market in 2007, corruption in corporations and in government.  Business bashing by the current administration is disturbing as free market enterprise has been a remarkable success in the vast majority of American history.  That's hardly a complete summary.

China may be rising but it may not last unless reforms continue in many of the basic areas.  The lack of democracy is one of many things that could be their downfall.

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