Monday, April 07, 2014


Joseph Stiglitz (3 April) posts on “Social Europe” HERE 
“Reforming China’s State-Market Balance”
“No country in recorded history has grown as fast – and moved as many people out of poverty – as China over the last thirty years. A hallmark of China’s success has been its leaders’ willingness to revise the country’s economic model when and as needed, despite opposition from powerful vested interests. And now, as China implements another series of fundamental reforms, such interests are already lining up to resist. Can the reformers triumph again?
In answering that question, the crucial point to bear in mind is that, as in the past, the current round of reforms will restructure not only the economy, but also the vested interests that will shape future reforms (and even determine whether they are possible). And today, while high-profile initiatives – for example, the government’s widening anti-corruption campaign – receive much attention, the deeper issue that China faces concerns the appropriate roles of the state and the market.”
Stiglitz confronts the dominat issue that has contrary remedial policies for adherents of the idealogical “solutions” to the question that he asks of “the deeper issue” facing China” (and every other country) of “the appropriate roles of the state and the market.”
China’s “deep” question is not unique.  The same question dominates all countries that exist, or can exist anywhere since Homo sapiens walked upright out of the African bush.  
The division of labour was not invented in a ‘pin factory’; it appeared long ago with early humans because of wide natural variations in human abilities; some were good at tracking food, especially sources of meat, other weren’t as good; some were better at making stone tools or woodern weapons to secure food; others good at making fires and securing night-time stopping places; and so on across the skill sets that separated small groups of humans from nature and what was necessary for their survival.  Some, albeit, minmal co-operation within the separated groups trumped short-sighted selfishness in others.  Humanity was never given a free-pass to survive on Earth for ever, or at all.
It was ever thus.  And still is.  Today the first few thousand of the human species is now 7 billion strong and counting.  The false question is not whether we rely on state or market provision; we are bound to have both.  Of course, we can have 'too much' of one and 'too little' of the other.  

The argument is about the appropriate balance for both, because human societies need both and, I would venture to suggest in our high-tech complex societies, they cannot subsist for long with all of one (state provision, say) and no markets, or vice versa, except in the fantasies of those who are not paying attention either to the present arrangements or to history plus so-called ‘pre-history’, which is 'written' in the physical remnants of the past that passed away where we find their skeletal remains amidst their self-created detritus.


Blogger airth10 said...

No doubt that China will have to reform and loosen its state grip on the economy. Without such reform the economy will not continue to expand or progress. Such reform will empower individuals more. That's important because it's from individuals, at grassroots level, where the solutions and methods will come for a sustainable economy.

'For best results cultivate individuals, not groups'.

12:44 pm  
Blogger Gavin Kennedy said...

I agree with you. Social change begins with individuals who innovate, discover new ways of doing things, and as the results spread, other imitate and improve of what other individuals do.

12:48 pm  
Blogger GS Talbert said...

“the appropriate roles of the state and the market.”

This is archaic. The new question is how do we prevent the accumulation of wealth (power) and how do we kill those that have already accumulated wealth (power). There has never been, nor will there ever be, such a thing as a market. There's various ways of balancing relationships of power and influence among people to keep from wealth (power) accruing to the point that individuals or groups can disregard those relationships at will. "Markets when necessary" lol, as if this is a situation where we have to think really hard and clever about how to make all aspects of human life resemble a supermarket. God, the nonsense men like you teach. I bet you were part of the public utilities privatization wave, you have a lot to answer for.

11:23 pm  
Blogger Gavin Kennedy said...

GS Talbert
Many thanks for your lively comment - I seem to have 'lost' your second comment - I pressed publish, perhaps I overloaded the system? Post it agin and I shall carefully publish it this time.

As I take a 'middle' road - as I believe we must - I fail to see what you object to about 'markets where necessary' i.e. where they are better than civil servants and appointed quango's at distribution, innovation, and discovery, and states where necessary, where they are better than markets at re-distribution of incomes (taxation), justice and law making, government, public health and managing pollution, international relations.

I am not a self-appointed judge of how others should behave or what they should think nor do I what you mean by having `a lot to answer for' - to whom, or to which lynch mob?
I am an academic and others may agree with me or not - that is their privilege under natural liberty.

10:42 am  

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