Monday, November 19, 2007

An Unreconstructed Marxist Opines on China

George Walden writes in Blomberg a fiesty piece, ‘Adam Smith Goes to China, Marxists Cheer in Dodgy New Orthodoxy’ (here).

Giovanni Arrighi, a sociology professor at Johns Hopkins University in Baltimore, has written a book that I fear could become the new orthodoxy on China’ [apparently Arrighi is a Marxist; unreconstructed too, it seems]:

No one should be surprised that the center of economic gravity is shifting from America to Asia, [Arrighi, ] argues. Already in the 18th century, Adam Smith wrote in ``The Wealth of Nations'' that China was following a ``natural'' path to development, concentrating on agriculture before industry and international trade. This Arrighi describes as an alternative path to opulence.

In fact, the Scottish economist also wrote that China's failure to open its ports robbed the country of foreign machinery and techniques, restricting its manufacturing capacities. Arrighi waves this aside, underlining instead that Europe's emphasis on trade caused the West to develop in what Smith called an ``unnatural'' way.’

What Adam Smith said about China (extract from my 'Adam Smith' manuscript):

He didn’t appear to consider [Britain reaching its ‘full complement of riches’] a likely contingency at any time soon, but he accepted that ‘China seems to have been long stationary, and had probably long ago acquired that full complement of riches which is consistent with the nature of its laws and institutions’, adding, tellingly:

‘But this complement may be much inferior to what, with other laws and institutions, the nature of its soil, climate, and situation, might admit of’.

How Giovanni Arrighi interprets this as ‘an alternative path to opulence’ is baffling. Some alternative path; some opulence! The following two centuries must have seemed idyllic to China’s people under the Emperors, the War Lords and finally Mao ZseDong and his Marxist experiment! (But no opulence.)

Adam Smith also said that ‘other laws and institutions, the nature of its soil, climate, and situation might’ produce a superior complement of riches. He outlined what he meant by the ‘nature and its laws and institutions’ in 18th-century China:

In a country too where, though the rich or the owners of large capitals enjoy a good deal of security, the poor or the owners of small capitals enjoy scare any, but are liable, under the pretence of justice, to be pillaged and plundered at any time by inferior mandarines, the quantity of stock employed in all the different branches of business transacted within it, can never be equal to what the nature and the extent of that business might admit. In every different branch, the oppression of the poor must establish the monopoly of the rich, who, by engrossing the whole trade to themselves, will be able to make very large profits.’ [WN I.ix.15: pp 111-12]


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