How did the rise of China occur (economic superpower)? ❖ Deng Xiao Ping embraced free market principles, market oriented reforms ❖ Deng went against communist ideologies by allowing far investments and trade ❖ Four dragon industries ➢ Adopting industrial policies ➢ He opened the coastal province borders through Shenzhen ➢ Setting up special economic zones ➢ Getting china started in the economic trajectory ➢ Lifted a lot of ppl out of poverty ❖ China joined the WTO- World Trade Organization (World’s factory) in 2001 ➢ Having access to the world’s resources ❖ Growing problems over corruption and income equality (Anti corruption drive, those people were prosecuted) ❖ Made in China 2025 to boost technology and AI “China Dream” How did the rise of China occur? ❖ Deng Xiaoping: economic reforms went from a planned economy to a socialist market economy ➢ Opened China to the world for foreign investment ➢ Emulated the Four Asian Dragons – manufacturing sector ❖ Jiang Zemin (the next president) – continued reforms ❖ Joined the World Trade Organization in 2001 ❖ Xi Jin Ping ➢ Anti-corruption campaign ➢ Made in China 2025 ➢ China dream “0.76 China’s Human Development Index in 2016” State capitalism (socialism) “Invisible hand” of the market force and the “visible hand” of the state 1. Many key companies are owned by the government, even though privately owned companies are also allowed 2. The Chinese government sets big-picture plans and provides studies to encourage the development of key industries and markets (e.g. 5G and telecommunications) What are the features of China’s economic system? ❖ 3 Engines ➢ Central govt: strategic planning and ➢ Local govt: compete with each other to create business friendly policies ➢ Enterprises ❖ Development administration: every 5 years, the government produces a strategic plan by huge consultation (institutionalized discussions) ❖ State ownership of land and some enterprises ❖ China protects its owned infinite industries ❖ China producing electricity to the entire country ❖ Bullet trains makes cities in China interconnected State-owned enterprises ❖ 82 out of 143 Chinese on the 2021 Fortune Global 500 are SOEs ❖ There are 150,000+ state-owned enterprises in China Private companies that are influenced by the state ❖ The Chinese government has 5-year plans to set out key targets ❖ The targets to let local government and companies know the government’s expectations signaling areas that will likely receive the most government support Strengths and weaknesses of capitalism Strengths 1. State can stimulate economic growth effectively a. Economic Development Board in Singapore increases industrial development and investment, corporate financing 2. States can provide basic needs_ 3. SOEs boost national economy 4. Privatization of companies that state no longer needs to support a. Entrepreneurial state capitalism — effective distribution of resources Weaknesses 1. Favoritism towards certain companies — Unequal distribution of support especially towards private companies 2. Rise powers relied on capitalist model for economic growth → liberal democracies purely state capitalist model 3. State companies use capital less efficiently than private ones 4. Become less competitive and less innovative 5. Cronyism— appointing people to positions of power because of nepotism (not because they are towards sector that actually need support actually qualified) Capability theory (Nussbaum built on Amartya Sen’s idea) ❖ It is the freedom to achieve well-being ❖ Freedom to achieve well-being and what people are able to do and be “Whether you have the opportunity to accomplish the things you value” is true freedom The Human Development Report ❖ UN development report is based on the capability approach ❖ “The expansion of people’s freedoms to live long, health and creative lives; to advance other goals they have reason Nussbaum’s list of capabilities for a good life 1. Life: Being able to live to the end of a human life of normal length, and to not have one’s life reduced to not worth living 2. Bodily health: Being able to have a good life which includes (but not limited to) reproductive health, nourishment, shelter, and mobility 3. Bodily integrity: able to change locations freely, in addition to, having sovereignty over one’s body which includes being secure against assault 4. Senses, imagination and thought: Being able to use senses, imagine, think and reason; and to have the educational opportunity is necessary to realize these capacities 5. Emotions: Being able to have attachments to things and persons outside ourselves (this includes being able to love others, grieve at the loss of loved ones and be angry when it is justified) 6. Practical reason: Being able to form a conception of the good and to engage in critical reflection about the planning of one’s own life 7. Affiliation: Being able to live others, have friendship and be treated with dignity 8. Play: Being able to laugh, to play, to enjoy recreational activities 9. Control over one’s environment: a. Political: able to effectively participate in the political life which includes having the right to free speech and association b. Material: able to own property, not just formally, but materially(that is,as a real opportunity). Furthermore, having the ability to seek employment on an equal basis as others, and the freedom from unwarranted search and seizure 10. Other species: able to have concern for and live with other animals, plants and the environment at large Nordic Model ❖ Nordic Countries: Denmark, Norway, Sweden, Finland and Iceland ❖ Created a development model that goes beyond economic growth to prioritize long-term holistic development How has the Nordic model emphasized development for overall society? ❖ Safety net system ➢ Promote entrepreneurship and economy— sabbatical of 6 months to start business and can return to old jobs if it fails ➢ Affordable housing ➢ Free access to healthcare ❖ Higher quality education ➢ High requirements for teachers (Masters degree) ➢ Holistic education model ➢ Focus on talent ➢ Public education to 99% of children — prepares them for a competitive workforce ❖ Gender equality ➢ Women in the workforce → contribution towards social welfare (education, education, healthcare etc.) ❖ Anti-corruption Income equality Nordic countries have lower Gini coefficients (a measure of income inequality) Tax rate comparisons ❖ In Nordic countries, tax rates are relatively high on nearly all income, not just that of wealthy people ❖ By comparison, the top tax bracket in the US in 2022 was 37% GDP per capita ❖ Nordic countries are pretty high (Norway is 6) ❖ Human development index (HDI) Corruptions Perceptions Index (CPI), Global gender gap index Nordic countries are higher in these indexes What are the strengths and weaknesses of the Nordic model? Strengths Weaknesses 1. No class divides 2. Economic equality 3. Historical explanation for Nordic model’s success- did not rely on inequality for their development 4. Higher interpersonal trust betters happiness and well-being, legitimacy 1. Ecological disaster – high resource use and CO2 emissions 2. Renewable energy irrelevant as they have carbon intensive imports 3. Lowest sustainable development index (based on resource use) – 0.55à0.328 today 4. Other countries outside of the Nordic region require less resources but also have high happiness and well-being To what extent does the Nordic model exemplify the capabilities approach to well-being/ development? Agree Disagree 1. More opportunities for education 2. High social cohesion – affiliation 3. Emphasis on well-being: high spending on education, low income inequality, high degree of autonomy and freedom (democracy and liberal values) 1. Ecological impact – unable to live well with other species (thus does not exemplify capabilities approach) Can the Nordic model be replicated in order by countries? Yes No 1. Costa Rica, Germany, etc can also replicate high welfare (and with less resource use too) 2. Possible in high-resource countries if 1. Costa Rica, Germany can follow high welfare model but would cause high resource use (not sustainable) 2. African countries don’t have resources they redistribute their resources better (e.g. from military spending to education) (e.g. US) 3. Can improve the quality of institutions (anti-corruption and establish democratic values), create more social cohesion to achieve free education and eliminate corruption; require foreign aid and may cause dependency 3. Countries focused on economic growth cannot be sustainable 4. Low-trust societies are caught in a vicious cycle of corruption – hard to reform institutions Capitalism ❖ Controlled by private companies and people Communism ❖ Overthrow the class system ❖ Everything is owned by the state, no private property Marxism What are the problems of capitalism? ❖ Alienated: work can be the greatest source of joy, and the person has to see themselves on the object or work they do, a feeling of disconnection of who you are and what you can contribute to your existence ❖ We don’t want to be let go, it expressed a deep place at the world’s heart ❖ Workers get paid little (shrink their wages, to skim of their income profits) ❖ Capitalism is unstable ➢ Price freakish and rare ➢ We produce more than we need (crises of overproduction) ➢ Modern economy is productive ➢ The world forces us to work despite having the resources that we don't have to work ❖ Capitalism is bad for capitalist ➢ Marriage is an extension of business, people are staying together for money not love ➢ Put economic interest at priority ➢ Commodity fetishism ➢ Destroys intrapersonal relationships (economic activity > social activity) ❖ Share everyone’s wealth Marx predicted capitalism ❖ Steeply graduated income tax ❖ Free education Humans are not naturally hard-wired to be self-interested capitalist workers ❖ Instead, Marxists believe that humans interact in a three-sided relation that includes: ➢ The natural world ➢ Social relations and institutions ➢ Human persons Why is capitalism not necessarily a “natural” way of life? ❖ Thus we are not naturally self-interested individuals; we are only acting s Dialectic: Marx thinks that history shapes us, and we continue to reproduce history History shapes our “norms” today ❖ History is just dead facts— it shapes who we are, and we continue to shape ourselves in certain ways today ❖ Thus there are no objective “laws” of life Freedom is much broader than the typicalist idea of freedom ❖ Freedom is social self-determination— our collective ability to shape ourselves and the world ❖ It is more than just individual choice in the free market based on individual wants and needs Critique 1: Capitalism is disabling ❖ Capitalism is disabling because this way of life does not allow social self-determination ❖ People under capitalism can’t envision another alternative, because the status quo seems “natural” Critique 2: Capitalism is exploitative ❖ Marx thinks capitalism is exploitative: capital is the result of our labor ❖ Owners control the production proves and gets all benefits from our labor to become our capital Criticism 3: Capitalism alienates us from seeking help from the political sphere ❖ In modern capitalist societies, our economic lives are separated from our political/civil lives ❖ All we do is work, work, work to pay rent and put food on the table ❖ Rarely does political authority intervene ❖ Politicians are forced to maintain a business friendly environment because they rely on big businesses ❖ Thus we cannot seek help from the political sphere ❖ Not exploitative: we still retain a degree of autonomy— who we work for, what we do. Capitalists owners bear the risk of entrepreneurship Are Marxists critiques of capitalism valid? Why or why not? Invalid 1. We work hard to earn things which gives us self determination 2. Capitalism does not alienate us because there is still sources such as NGOs nowadays and European court, that can help you seek help and voice out your opinions (Dakato access pipeline) 3. Unsustainable: labor/work is necessary and resources are limited (temporary paradise) 4. Class divides will reappear after Marxist socialist/communist reforms 5. Make the state vulnerable and put the state in danger— Realists is an anarchy, impossible to stop working 6. Alienation from political/civil society not necessarily valid as we may still seek help from NGOs, international courts, and other IGOs Valid 1. Exploitative— Jeff Bezos and other billionaires profit from laborers which suffer from poor working conditions are paid very little 2. Human rights: individual anatomy (liberty/freedom)— Allows for true self-determination or liberation 3. Unfairness: inequity (different starting points) 4. Political rights are diminished as business are prioritized — not taxing rich (tax evasion) Homework reading: Global times: How the Chinese state uses Marxism today?
