'Black Cat-White Cat' theory in America
- By Mitchell Blatt
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E-mail China.org.cn, May 17, 2015
First-time visitors to China who see its cities' bright lights and giant video screens playing advertisements on the walls of skyscrapers might think it is strange that a communist country has so much commercialism and aggressive pursuit of profit in the markets, but as Deng said, there is not necessarily a contradiction in this. "A planned economy is not the definition of socialism, because there is planning under capitalism; the market economy happens under socialism, too. Planning and market forces are both ways of controlling economic activity," Deng argued.
There is a good deal of theoretical discussion about how China's current system is compatible with socialism. Since the Communist Party of China hasn't given up on the idea of socialism, they must somehow justify it ideologically, but as far as the average person is concerned, theory doesn't matter as much as numbers do. High growth rates and hundreds of millions of people lifted out of poverty is what matters.
Deng is right, though, that capitalist systems also use planning to help their economies. The U.S. government gives loans to private companies and designs tax credits to benefit certain industries. The government spends money on scientific research, which has beneficial impacts on the country's economy and society as a whole.
Capitalist countries also spend large amounts of money on welfare. America has Social Security for people who retire, Medicare to provide healthcare to the elderly, Medicaid for healthcare for the poor and many more programs. Although many Republicans want to cut spending or change the provisions of these entitlement programs, few elected politicians are trying to abolish them outright.
Profit-motivated capitalists have also determined that some level of welfare spending is necessary to provide a stable foundation for society. Under Hong Kong's system, which constantly ranks No. 1 in the Heritage Foundation/Wall Street Journal Index of Economic Freedom, about half of the public benefits from free or subsidized housing. Having a lot of people living on the streets would certainly decrease the availability of labor.
The middle class and upper class also benefit from government policies toward business. The Export-Import Bank, for example, helps secure loans for foreign companies buying American products, and it helps American companies export products. Those companies employ people and bring money to the U.S., and the bank runs at a profit, according to its own accounting. In fact, with China spending more and more money on financing exports, America's Export-Import bank is all the more important to compete globally. Tea Party Republicans have tried to kill the bank a few times, though, and it faces reauthorization by a Congress filled with hostile Tea Partiers again in June.
To conservatives, any government involvement in the economy is equivalent to "picking winners and losers." It is harder for competitors to compete if some companies have government loans and other help. Airline operators might say the same thing about China's high-speed train service. For routes less than 600 kilometers, it is more convenient for people to take trains, so airlines have cut flights on many of those routes.
Airlines might wish to earn more money. So be it. Every citizen of the country can use trains. Only a small amount of the public are airline executives. When a large segment of the public opts to use trains, it indicates that train travel better suits their needs than air travel. They have thereby benefited from the competition of government-run rail.
Rail is but one example, and it may be that, outside of the East Coast, trains actually aren't very practical in much of America. But there are many government functions without which Americans would be worse off. The government can catch mice, too.
The author is a columnist with China.org.cn. For more information please visit: http://www.china.org.cn/opinion/MitchellBlatt.htm
Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.
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