Ali’s blog

Mostly quant stuff with occasional digressions

Chinese development and society

Posted by alifinmath on January 15, 2008

I never heard of Paul Goodman but he seems to have written an intriguing book on the nouveau riche in China, and the social and state structures which have permitted them to prosper. Only in the libertarian worldview do rich people emerge from nowhere but their own efforts and ingenuity. In reality, if we examine how many of the large American fortunes were made after the Civil War we see a dispiriting picture of bribery and corruption. Seldom did an entrepreneur become rich by inventing a better mousetrap or a better steel alloy. Usually it was by financial skullduggery or illegally establishing a monopoly position — with the connivance or open support of corrupt officials. This describes people such as Vanderbilt, Gould, and Rockefeller. Indeed — contrary to popular supposition — business has often asked for greater government involvement: the railroads were the first example (they wanted government to regulate competition and prices, as laissez faire was driving them bankrupt). State structures and business activity are intimately interwoven in the development of both European and American capitalism (something academics like Samuelson and others of his ilk conveniently gloss over). But I digress. The account by Goodman explains how a Chinese bourgoisie has emerged from the Chinese party system.

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