A report from the Financial Times’s Beijing correspondent should leave everybody in the Western world laughing out loud (and the Chinese too if they were allowed to). It is only slightly exaggerated to say that the rulers of Western countries, and the US government at the first rank, have been dead scared of the Chinese government and the supposed mighty economy it runs with a visible fist. The US government has been working hard to change its trade policy and espouse industrial policies on the Chinese model. The Financial Times’s report describes how the development of Chinese AI and much else in that country rely on “the thought of Xi Jinping” (Ryan McMorrow, “China’s Latest Answer to OpenAI Is ‘Chat Xi PT’,” May 22, 2024); a few excerpts:
The country’s newest large language model has been learning from its leader’s political philosophy, known as “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era”, as well as other official literature provided by the Cyberspace Administration of China. …
The creation of the LLM follows extensive efforts by Chinese officials to disseminate Xi’s ideas on politics, economics and culture in a variety of formats. …
CAC [Cyberspace Administration of China], which has led the way in issuing rules for generative AI and introduced a licensing regime, mandates that generative AI providers “embody core socialist values” and says generated content cannot “contain any content that subverts state power”. …
The training set draws heavily from government regulations and policy documents, state media reports and other official publications, according to portions reviewed by the Financial Times.
One of the dozens of text documents in the data package contains 86,314 mentions of Xi Jinping. “Let us unite more closely around the Party Central Committee with Comrade Xi Jinping at its core,” reads one line.
We must “ensure that in thought, politics, and action, we are always in high alignment with the Party Central Committee with General Secretary Xi Jinping at its core,” says another.
What we know from history and the invention of widespread prosperity by the Industrial Revolution in the wake of the Enlightenment, as well as from economic theory, strongly suggests that neither imperial dynasties nor Mao Zedong’s thought nor Xi Jinping’s thought nor any guru cult nor any Central Committee can produce such advancement. It looks like the poor Chinese people may be forced to stay at no higher than their current relative GDP per capita, which stands at about one-fourth of the American level. Joel Mokyr’s A Culture of Growth (Princeton University Press, 2018) provides interesting perspectives on the requirements of general prosperity and individual liberty, which cannot be long separated. Two of my short pieces have also discussed this issue: “Fearing Leviathans With Feet of Clay” (EconLog, November 29, 2022), and “Why the Great Enrichment Stated in the West,” Regulation, Summer 2023.
In a future age more rational than ours (let’s be optimistic), everybody will understand how China failed again when its post-imperial state, from Mao’s to Xi’s, tried to marry tyranny and economic planning with general prosperity. Remember Mao’s Great Leap Forward directed by the visible fist of the state. Of course, a tyrannical state can still be very dangerous for freer individuals in freer countries as it diverts to military power a high proportion of the (relatively meager) resources of its hapless people.
******************************
I have borrowed the featured image of this post from a remarkable collection of propaganda posters dating from Mao’s Great Leap Forward (1958-1961): BG E16/33 (chineseposters.net, IISH collection); see also https://chineseposters.net/posters/e16-33 and https://chineseposters.net/about/faqs#rights. The image is also reproduced below.
A propaganda poster from the Great Leap Forward: BG E16/33 (chineseposters.net, IISH collection)
READER COMMENTS
Atanu Dey
May 25 2024 at 11:58am
China did better than India in the post-Mao era. That was primarily because Deng Xiaoping took Lee Kuan Yew’s advice. India continues to be basket case because practically all its leaders are economic ignoramuses (starting with M K Gandhi and continuing on to the present PM Modi) and Indians don’t have much of a preference for freedom.
Pierre Lemieux
May 25 2024 at 3:46pm
Atanu: India has been a disappointing case for so long, in large part certainly for the reasons you invoke. Since you know much about this topic, which role, positive or negative, do you think British colonialism played?
Atanu Dey
May 27 2024 at 5:13am
Pierre:
Pardon me for the drive-by comment. I saw your reply only now.
I was motivated to learn about the topic of India’s dismal economic performance because it is heartbreaking to see the evident poverty. For no discernible reason — such as terrible resource base (natural or human), shallow culture and history, internal or external conflict, natural disasters — can one explain India’s poverty. Except economic policies, government malfeasance and ineptitude.
The British took their time to set up a system of extractive and extractive policies. The people who took over after the British left in 1947, figured that they could be the new colonial masters. Every institution was left exactly as it was pre-August 1947. The British did what they did because they were colonial rulers. That’s easy to understand, and perhaps even excuse. India became independent but Indians never got free. That’s inexcusable.
“A beggar upon horseback lashes a beggar on foot.
Hurrah for revolution and cannon come again!
The beggars have changed places, but the lash goes on.” — W. B. Yeats
Mactoul
May 27 2024 at 9:40pm
Were the British any more extractive or exploitive than the Mughals or the Marathas?
Government consists of the people themselves and hence it reflects the character of the people themselves.
Post-1947 economic policies of Indian government were recommended by the leading economists of the world and were being implemented in Britain itself.
Mactoul
May 27 2024 at 11:54pm
What would you have? India had almost 200 years experience of living with British institutions, which were probably the best in the world, and you replace them with what?
Institutions designed by a committee on rationalist grounds?
Such as institutions of the French Revolution, Russian revolution etc etc?
Mactoul
May 25 2024 at 9:22pm
I wonder how many national leaders could be said to be not economic ignoramuses?
India has been growing pretty nicely for last 30 years. What more can one reasonably expect?
Jose Pablo
May 26 2024 at 6:07pm
India ranks 124 in GDP (ppp) per capita, sandwiched between Laos and Bangladesh. A lot more can be reasonably expected.
Jose Pablo
May 26 2024 at 7:02pm
In 1950, China’s GDP per capita was 0.71 times India’s GDP per capita. In 2023 China’s GDP per capita is 2.5 times that of India.
I will definitely say that much more could have been expected from India.
[And I realize now that this could also be an argument in favor of “central economic planning” at some stages of development or, at the very least, allow to argue that not everything that looks like “central planning” is real “central planning” and/or that there is a lot of “central planning” going on in “free” countries]
Atanu Dey
May 27 2024 at 5:36am
Jose:
Yes, there’s too much central planning going on in “free” societies. Removing that bug will (I believe) make the society freer and more prosperous.
In the case of India, the problem was (and is) too much centralized control. A small country like Switzerland or Singapore may under some idealized conditions manage to do well with some centralized control but a country that is as large and populous as India suffers very badly. India is heterogeneous along many dimensions. India should have been a loose federation of about 50 independent states each with its own different economic system. That would have revealed that economic freedom matters.
Mactoul
May 27 2024 at 12:01am
These rankings mislead somewhat in that they ignore population size.
Isn’t it a more impressive that a billion plus population grows economically for 30 years than a small less than a million population country?
Jose Pablo
May 27 2024 at 10:11am
China is more populated than India. The comparison was between China and India. India has fared much worse than China
Craig
May 28 2024 at 10:32pm
“China is more populated than India.”
My entire life this was always the case. Factoid widely taught in schools too. And I thought I had read something saying India had passed them: https://www.npr.org/sections/goatsandsoda/2023/06/08/1180454049/india-is-now-the-worlds-most-populous-nation-and-thats-not-necessarily-a-bad-thi#:~:text=India%20is%20now%20the%20world%27s%20most%20populous%20nation,April%20according%20to%20projections%20by%20the%20United%20Nations.
We’re now starting to see the back tail of the one child policy. A nation skewed to males with insufficient females to marry.
Jose Pablo
May 29 2024 at 12:40pm
Yes, Craig. And that is very relevant proof against “central planning”.
And yet, believe it or not, the conclusion many people draw from this episode isn’t that central planning has to be avoided because of its horrendous consequences (a conclusion so clear that you could think doesn’t need clarification).
Well, to my amazement, the conclusion many people draw from this episode is that the problem is not with central planning but with doing it wrong. Central planning should be used, but to promote and encourage fertility rates!
Atanu Dey
May 27 2024 at 5:27am
Mactoul:
You are right that there aren’t many leaders who aren’t economic ignoramuses. But there are a few notable exceptions — Deng Xiaoping, Lee Kuan Yew are my favorites. It was LKY that taught Xiaoping; so in a sense you could say that LKY lifted hundreds of millions out of poverty even though he ruled over only a few million people.
A story goes that a certain English family had retained a very large estate for around 800 years. When asked how that was even possible, the current head of the family said, “Oh yes, we had crooks and drunkards and wastrels as the family head once in a while — but never two in a row.”
In India, there’s have been a wise leader every now and then but never two in a row.
As you point out, yes, there’s been some economic growth over the last couple of decades but it’s nowhere near its potential.
Mactoul
May 28 2024 at 12:00am
I am not sure I would join in praise of Deng Xioping who instituted one-child policy — hardly a work of economic genius, and which directly caused millions of deaths of children that happened to be born in violation of one-child policy.
Lots of children were murdered in most cruel ways.
No loss to India in not having such geniuses as leaders.
steve
May 25 2024 at 12:01pm
The latest is that Trump wants a weaker dollar so that we can better compete with China? Any thoughts? My impression from talking with daughter who lives there is that China is actually an odd mix of pretty competitive markets in some areas but with varying levels of state controls in others and they try to control the overall direction and goals of their economy. They have had great catch up growth but I expect their growth to slow.
Steve
Pierre Lemieux
May 25 2024 at 3:41pm
Steve: A politician or his Central Committee cannot intelligently control a price, and this applies even more to the broad prices that foreign exchange rates are. (Moreover, a rational protectionist-nationalist would want to push the exchange rates of his domestic currency up, not down, but that’s for another discussion.) I broadly agree with the rest of your comment. There was a period after Mao’s death where we could hope that China was becoming capitalist, as Coase and Wang’s book How China Became Capitalist argued. They had some caveats, which I amplified in my Regulation review of the book. It now appears that they were too optimistic–and that my own caveats were not strong enough.
Craig
May 25 2024 at 1:36pm
“China’s Latest Answer to OpenAI Is ‘Chat Xi PT’,”
Its like having a Stasi agent right on your smartphone. Why should Leviathan even bother with an extensive network of informants. Failure to download onto your phone will be a presumptive act of rebellion.
Pierre Lemieux
May 25 2024 at 3:48pm
Craig: Orwell’s Big Brother was small beer, wasn’t he?
Jose Pablo
May 26 2024 at 7:26pm
Its like having a Stasi agent right on your smartphone.
How come?
I think that we frequently fail to realize that AI is “just” a “statistical tool”, very powerful at predicting the word most likely to follow (according to the precedents fed to the system) a given previous “chain of words”.
The “I” in “AI” is just a (very good) marketing campaign. The Stasi guys on the other hand were very “intelligent” for real.
Richard W Fulmer
May 25 2024 at 3:53pm
I asked ChatGPT to define “Xi Jinping thought” and to provide some examples. Here’s the result:
Richard W Fulmer
May 25 2024 at 5:23pm
Asking China’s new AI to assess a business plan for adherence to “Xi Jinping thought” would be an interesting exercise. Could such an AI be tasked with making the plan compliant? If so, what would be the result, and would it bear any resemblance to reality?
This might be a fun project for a PhD student (or for the CIA).
David Seltzer
May 26 2024 at 3:43pm
Pierre: A good friend who came from China to pursue a PHD in mathematics at The University of Illinois referred o Mao’s leap as The Great Leap Backward.
Jose Pablo
May 26 2024 at 6:28pm
And yet, despite all the historical evidence, every self-respecting politician aspires to be/is “forced” to be, an economic planner.
You don’t need to look at China. Look at Biden or Trump. Or go further and try (and fail) to imagine an American wannabe President not discussing his/her “brilliant” ideas as an economic central planner playing a key part in his/her presidential campaign.
Why is it so? Why do voters believe “Presidents” have the ability to “design the economy” they can not possibly have?
Jose Pablo
May 26 2024 at 6:20pm
China failed again when its post-imperial state, from Mao’s to Xi’s, tried to marry tyranny and economic planning with general prosperity. Remember Mao’s Great Leap Forward directed by the visible fist of the state.
It is all a matter of “degree”, isn’t it?
The US also has a significant level of “tyrannical economic planning”: from the Jones Act to the CHIPS Act to the barriers to being a hairdresser (why?), to the (simultaneous) subsidies to the fossil fuel industries and green industries, to the (very) limited number of reproductive doctors that makes fertility clinics such a lucrative business … the list, even in the US, can go on forever.
You probably can’t expect otherwise from tyrannical states but the one million question is why “interventionism” seems to positively correlate with prosperity to such a high degree. Look at California in particular.
Richard W Fulmer
May 27 2024 at 9:03am
I hear that sort of rhetoric all the time: “No country in the world is either purely capitalistic or socialistic, they all have mixed economies.” The implication is that there’s no difference between a mostly capitalistic society and a mostly socialistic society. Yes, the Chinese oppress and enslave 11.5 million Uyghurs, but, hey, the United States erects barriers to being a hairdresser, so what’s the difference?
Quite the opposite. The economically freest countries in the world are also the most prosperous:
Fraser Institiute Economic Freedom Map
Jose Pablo
May 27 2024 at 10:21am
The implication is that there’s no difference between a mostly capitalistic society and a mostly socialistic society
If you said so. But this implication is yours, not mine. Useful in this discussion only if you want to provide great examples of straw man fallacies.
The real implication is that instead of obsessing about what China does or doesn’t, and instead of being dragged to the nationalistic nonsensical behavior that seems now widespread here, the US should be paying more attention to the many areas in which it has room for improvement. Mostly because many pockets of socialism are all well and alive within America. Its size increasing, not decreasing. Not to a lesser extent due to this nonsensical, gorillas banging chests kind of obsession with China.
Forget about China and focus on improving the still very socialist domestic economy.
Jose Pablo
May 26 2024 at 6:46pm
Of course, a tyrannical state can still be very dangerous for freer individuals in freer countries as it diverts to military power a high proportion of the (relatively meager) resources of its hapless people.
If by “tyrannical state” you mean “China”, this looks like a warmongering narrative very loosely connected with reality.
The only “freer individuals” that can realistically feel threatened by the “Chinese diversion of resources to military power” are the Taiwanese. And you can argue that these “freer individuals” don’t live in a “freer country” since only 12 other countries recognized Taiwan as a “country”. With the more relevant among these 12 being Guatemala and Paraguay.
Much more likely the end goal of the “Chinese diversion of resources to military power” is to protect the country against foreign (Japanese?) invasions (it has happened in the past) or against the very threatening capacity of the American army to project power anywhere in the world.
The Chinese have 2/11th the capacity of the Americans to project power (counting the number of aircraft carriers) and, to the best of my knowledge, have never in modern history invaded a foreign “country” (you can not say the same about the US). And yet, the “threat” is China?
Felix
May 26 2024 at 8:56pm
China has attacked Vietnam a couple of times, Burma once or twice, India in the Himalayas, and Kashmir, I believe. They have no historical justification for occupying Tibet or Mongolia. They’ve enslaved Uighurs.
I’m sure there are more examples.
The US isn’t anything to brag about, although it hasn’t stolen territory since 1898, or possibly 1912 if you count the land purchase from Mexico, but that doesn’t make China innocent or even better.
Jose Pablo
May 26 2024 at 9:48pm
that doesn’t make China innocent or even better.
The point is that the examples you mention (some of them refer to one-month occupation, others to events that predate the Communist rule, others to frontier skirmishes, and others are simply internal affairs) don’t provide any base to a narrative of a threatening China enslaving foreign countries by force.
The US has a far greater military ability to invade and occupy foreign countries than China has. And has done it in the past. Looking at the facts (not at narratives), China should feel more threatened by the US than vice versa. And they very likely do so.
Felix
May 26 2024 at 10:15pm
The last US territorial conquest was 1898. China occupied Tibet more recently. China attacked several of its neighbors; you can’t just wave your hands and say that doesn’t make it a threat. It think it owns the entire South China Sea with its Ten Dash Line, including parts of other countries’ EEZs, actively attacks those countries’ outposts, and built artificial islands to tart up its claims.
The US and China are not anywhere close to attacking each other. But China has been far more territorially aggressive to its neighbors than the US has.
China now has a bigger army and navy than the US. If you want to talk capabilities rather than actual actions, China has more capability than the US too, a lot more territorial neighbors to continue attacking, and a lot more recent history of attacking them.
This is not a zero sum game. Just because the US is a world-wide imperial pest doesn’t absolve China of being just as big of a neighborhood pest.
Jose Pablo
May 27 2024 at 10:36am
Tibet was never an internationally recognized country. And it was peacefully brought under China’s rule following the Seventeen Point Agreement. By the same token, you can say that Florida was occupied by the US since its annexation followed an agreement with the Spaniards and the subsequent quelling of the rebellion against the Federal Government of 1861.
But this is not a discussion about history. It is a discussion against the narrative that we, somehow, need an army to protect us against the intentions of the Chinese to invade countries and establish tyrannical governments everywhere. This is nonsensical for many reasons.
First, there is no sign whatsoever that this is going to happen. You can argue that Taiwan is, and always was, part of China.
Second, very very likely the size of the Chinese army would be way smaller if the Americans didn’t have 11 aircraft carriers fully operational.
Third, occupying and tyrannizing a country is way more difficult than it seems. The two more powerful armies in the world couldn’t do it in Afghanistan fighting against a rat-tag mockery of an army. It was also impossible in Vietnam, Iraq, Ukrania, Gaza …
So, to me, the whole narrative seems like a theoretical excuse to bang chests. Boring, dangerous, and extremely inefficient as a way of employing resources.
We are not, by any means, the good guys. They are not, by any means, the bad guys. As simple as that.
Jose Pablo
May 27 2024 at 10:50am
https://www.econlib.org/some-call-it-treason/
Great post by Scott about this same topic, by the way
Pierre Lemieux
May 31 2024 at 2:55pm
Jose: I don’t disagree with Scott’s post. I see trade and its benefits in individualist not collectivist terms–in terms of individual not collective benefits.
Jim Glass
May 27 2024 at 9:57pm
*This* is funny too: The PLA just finished two days of rehearsing an assault on Taiwan, practicing simulated attacks on the island by both air and sea, which Chinese official state media says shows its ability to turn Taiwan into a “dead island”.
If Xi follows up on his repeated promise made externally — and more importantly, internally — to take Taiwan by force, there will be either a war, or no war. War games show this would be the biggest shooting war since WWII. Bloomberg just reported the “no war” option — support for Taiwan via sanctions against China (Ukraine-like) would cause a 5% drop in world GDP the first year.
LOL! 🙂
Certainly! Cultists who force inferior economics oh their nations will *never* make them rich. So what harm can they do? Lenin-think, Stalin-think, Adolf-think, Tojo-think, Putin-think, dumb-derriere gurus who forced failed economics on their peoples. What reason was there to ever take any of them seriously?
For sure, Just like Lenin I, Stalin, Tojo and Adolf did. (Putin is still trying, as is Lenin II via Xi.)
What??? You buried the headline!!! And there’s nothing funny about that. What are your priorities?
Adolf imposed explicitly autarkic policies across his economy in the 1930s to prepare for war. When you hear his name today is your first reaction to laugh out loud at that, and think ‘another fool guru of cult economics’ ?
Pierre Lemieux
May 28 2024 at 1:51pm
Jim: You write:
I don’t think I bury my headline. (I am its creator, after all!) Inhabitants of the Western world have nothing to fear from the Chinese economy–even if it were to become rich, especially if it were to grow rich, which it won’t under a guru despot. As you suggest, in an all-out war, Xi would lose as Hitler did. However, a nuclear exchange would have much larger costs than any preceding war in the history of mankind. So I believe that, like in Putin’s case, Western governments should make sure that the tyrants (and their immediate agents) know what costs they would (personally) incur if they start a war, and thus be incentivized not to start one. Putin should have been made aware of that much earlier.
Comments are closed.