Understanding China: What it Can Teach Us.

polluted river in chinaEnvironmental, worker and consumer protections have been considered by many conservatives and capitalists to be a form of socialist policy.  Commentators on FOX News and GOP henchmen alike have all tried equating regulation by government to be a form of socialism. Laws that protect the environment, workers and consumers may limit free-market practices. Because these regulations are seen as anti-capitalistic they automatically assume that these laws must be the opposite of capitalism, which is socialism. So, is having government impose regulations on businesses a form of socialism? To answer this we need to look no further than China.

First, what is China? People refer to China as communist, neo-capitalist and socialist. So which is it?  China is all these things! Its complicated but we must first recognize the difference between a system of government and the economic system practiced by that government. China’s government is made up of a single party, authoritarian government that retains power with oppression and suppression.  From 1949 up until 1979, China practiced strict communism under the heavy-handed rule of the Chinese Communist Party. Shortly after the death of Mao Tse-tung the ruling Communist Party began initiating drastic economic reforms by embracing capitalism to a point. Currently 40-50% of China’s GDP is still run by state-controlled industry. Economists have widely begun to define China’s economic system as that of “state-capitalism”, meaning that while private citizens are able produce and earn freely, there are still many industries under the complete control of the state. In China most power generation, oil, telecommunications, aviation and shipping enterprises are still under the control of its authoritarian government. Almost all other industries operate under free-market capitalism, as we know it. Under this system of state-capitalism, China’s average growth on average has been about 10% per year, peaking at 14% just before the great recession. (Double that of the U.S. economy.) Also, over the past 20 years, millions of Chinese have been lifted out of poverty. (Millions more still remain impoverished.)

Here in America and around the world, people are amazed at China’s huge growth in such a short period of time. Economist and politicians like to argue which parts of China’s “state-capitalism” are responsible for this growth. Some will say it is solely due to their embracing of free-market practices. Others will point towards the huge government initiatives, which involve enormous government spending on infrastructure. Especially with the recent “Great Recession”, people in the West are beginning to wonder if our own economic woes are the result of our Western style  laissez-faire capitalism.  People may praise China for achieving unprecedented economic growth, but there is a huge negative side to it that no one can ignore, especially those who live in China; POLLUTION.

While the U.S. is still the largest polluter in terms of emissions per capita, China’s total emissions and waste have surpassed that of the U.S. The result in China is nothing short of catastrophic. 400,000 people die each year prematurely from lung disease alone. Cancer is now China’s number one cause of death. 16 of the world’s top 20 polluted cities China air quality chartare in China.  But the problem isn’t only in the cities. The air quality is horrible throughout the country. The main cause of air pollution has been increased coal burning to keep up with China’s continually rising demand for electricity. Most coal burning plants in China are half as efficient as those in the U.S. and twice as dirty. Other contributors to air pollution are industrial emissions and the millions of cars added, many of which operate on low-grade gasoline.  The air quality in most of China’s cities is 3 times above what most would consider safe levels. I’ve been to China a number of times and I can tell you how horrible it is. The haze on some days is so dense it can literally block the view of an entire building just across the street.  After one week in the country, I was coughing horribly. I couldn’t wait to get out of there and felt pity for the millions who can’t leave.

China also has a huge pollution problem with their water supply. About 500 million people don’t have access to clean drinking water. 80% of China lacks sewage treatment facilities. 90% of China drinks water that either contains some arsenic, fluorine or sulfites.  The World Bank estimates that 750,000 people die prematurely each year in China from either lung, cardiovascular, or stomach and bladder cancers caused by drinking polluted water. Fertilizers, industrial waste and human sewage are the main causes of water pollution in China.  Thousands of instances have been reported where industry is seen dumpling toxic waste into China’s waterways and there are continued reports of mass death and sickness in villages along these polluted waterways.

Another problem in China is their lack of worker protections. We have all heard stories about China’s cheap labor force, where people work long hours in horrible conditions. Just this past week there were massive riots at the now famous Foxconn factory, which makes Apple products.  This is only one instance reported on Western news. The Chinese government has suppressed many other instances of worker protests.

So who’s to blame for all of this?  China’s embracing of capitalism has certainly increased their economic growth and hence their emissions and waste. It is also China’s cheap labor force and lack of safety regulations that has attracted many foreign businesses. But China still operates half of its economy according to socialist practices. Shouldn’t the socialist facet of their economic strategy impose stricter guidelines to curb this massive pollution and protect workers? Well, not really. China’s lack of regulation isn’t the result of their adherence to free-market capitalism. Nor is it a result of their continued use of socialism. In China there is a lack of regulation because there is an authoritarian government!  The people of China, while dying and complaining about their country’s pollution and working conditions have no voice to force the government into protecting the people.  The Chinese people do not get a chance to vote and therefore aren’t able to hold their government officials accountable when government doesn’t act in the best interests of the people. Because China’s ruling Communist Party has absolute control, they have little interest in protecting the public.  Regulations are only the result of democracy, a democracy that the people of China don’t have.

In an effort to sustain China’s quick economic growth and superpower status, they are slow to implement regulations that could impede this growth.  However, the people of China are getting fed up. If the ruling communist party wishes to retain power and prolong their inevitable overthrow, they will need to appease the people with some form of pollution control and labor standards. Whether it’s in the national interests, the interests of the people or just their own interests to retain power, the leaders of China have recently stepped up efforts to curb pollution.  China today is actually the largest developer and user of renewable energy.  But it may still be too little too late for millions of Chinese people.

What can we learn from all of this here in the U.S?  Whether they are stricter pollution standards or increased worker safety laws, regulations can slow down economic growth by cutting into business’s profits. Because of this, people think of these regulations as being anti-capitalistic.  But just because regulations may slow growth by cutting into profits does not make them socialist actions either.  Socialism is the state-control of production and markets. China has a mix of capitalism, socialism and little to no regulatory system.  Their lack of a regulatory system is because their authoritarian government lacks the motive to protect the people and is not a result of their market practices. We in the U.S. have regulations, but it’s not due to capitalism or socialism. We have regulations because we are a democracy. People in the U.S. have a voice where the government works for the people. The people of the United States demanded protections and then our elected officials were obliged to act on our demands.

Americans use of the word “socialism” comes with serious negative connotations. Why? Because we are used to equating socialism with authoritarian style governments such as those of China, the former Soviet Union and North Korea. But the two ideas of socialism and unelected governments have nothing to do with one another.

It just happens that the authoritarian governments of China, and the former Soviet Republic practiced communism, which is in essence an extreme form of socialism.  But just because these regimes practiced socialism, doesn’t make socialism authoritarian. Nor does capitalism and free-markets automatically turn governments into democracies. There is a difference between socialism practiced in China and the former U.S.S.R. verses how socialism is practiced in the U.S. and Europe. One is run by authoritarian governments and the other is practiced by democratic governments, elected by the people. Democracies can and do implement parts of socialism. The exact form of socialism and its purpose depends on the will of the people.  In the converse there are also many dictatorships or authoritarian governments that practice capitalism.  When opposing socialist policies, conservatives in the U.S. love to cite the atrocities of socialist regimes like Hitler, Stalin, and Mao. But this argument ignores the fact that these were oppressive, authoritarian governments that imposed strict socialism on its people. These situations cannot be used to compare our democratically elected government using aspects of socialism to counteract any negative results of laissez-faire capitalism.

We don’t have government regulations that protect the environment and worker protection laws because of an oppressive government run by a dictator or authoritarian party. We have regulations because our democratically elected government functions for the people and has an interest in protecting the people. This is the key.  Americans have to get out of their head the idea that socialist practices automatically equals authoritative rule.  We must also understand that our regulations are not a form of socialism, they are a result of our democracy.