China is well behind us

[bokamba]

People who talk incessantly about China's development as some kind of zero-sum game that the US is losing are foolish ninnies. Tom Friedman is one of the best-known and most obnoxious examples, but there are millions of people who think like him. Yes, China's growth is faster (because it's a poor country--duh!) and yes, its trains are better (

Comments

Chickens and eggs

[writer1985]

The fuel crisis because OPEC issued an embargo. Price control and rationing was the response.

Also, are you referring to Thomas Friedman's recent column. It's not about China at all, anymore than Montesquieu's Persian Letters were about Persia.

Re: Chickens and eggs

[bokamba]

Yes, of course I know OPEC started the crisis, but price controls caused the shortages. Without price controls, the price of fuel would have gone way up, but fuel wouldn't have become entirely unavailable. Which is worse: expensive gas, or waiting in line for hours and getting less than you need, or none at all? If you are a truck driver, it's better to suffer high prices for a while than be unable to drive your truck. (I forgot to mention that China has price controls on fuel, in addition to their other foolish policies.)

I don't read Thomas Friedman's columns with any regularity but I have read and heard enough from him to get the impression that he is a poster boy for the idea that China's supposedly amazing economic plan is the way of the future.

Re: Chickens and eggs

[writer1985]

But if gas were extremely expensive, the only people who could afford it would be the rich, not the truck drivers. As a matter of fact, rationing gave priority to trucks and other commercial vehicles. I agree that unregulated prices would have curtailed demand, but ultimately supply was controlled by OPEC, using oil as a bargaining chip to achieve international economic and political goals. It's like Lysistrata!

The crisis ended because of a voluntary decrease in demand (e.g. extremely ugly but fuel-efficient cars), the development of alternative fuel sources (which I know you hate, except for nuclear power), and increased production from other, non-OPEC nations and apparently some OPEC member nations. All of which led to the oil surplus in the 1980s.

I don't know anything at all about China's economic plan or Thomas Friedman's ideas about it, other than this article from over a year ago. His argument here makes sense: if China is investing in the future, and we are wringing our hands over manufacturing job losses in Detroit, China

Re: Chickens and eggs

[bokamba]

Despite the best efforts of the people in charge of rationing systems to distribute the rationed goods such that they will be put to their best use, they cannot do so with the agility or precision of a free market setting prices. Economies are far too complex to manage well, and some people always find a way to cheat (e.g. bribery or loopholes). But you can't cheat a price

[writer1985]

A couple other things I just picked up on.

No, it's not a zero-sum game. We have no one to blame for our recession but ourselves.

I question the "arbitrary" nature of these energy use reduction goals. I've experienced electricity rationing in India. It's called load-shedding there; it's scheduled for certain times of day; and it exists because after years of drought, there is little water in the hydroelectric dam in my grandfather's town. Power cuts are hardly arbitrary in a situation like that. In fact, investment in alternative energy sources is exactly what the town needs; however the initial financial outlay is a significant deterrent. That's where subsidies come in.