Russia Misses out on Joys of Capitalism; China Doesn't
Markowitz, Jack, Tribune-Review/Pittsburgh Tribune-Review
Let us leave this scene of trillion-dollar deficits and out-of- whack public policy ... and go halfway around the world to view a couple of economic lessons at a distance, clearly:
How and why, for example, China's economy is doing so much better than Russia's.
Americans and Europeans buy untold billions worth of goods "Made in China" and almost nothing "Made in Russia." Yet they had the same chance. Both are former centrally planned Communist states, and the Chinese aren't even "former" yet. The party remains in charge even as economic progress runs circles around its dogmas.
The difference is this. The Chinese have -- and the Russians haven't -- created an environment that encourages investment. Foreigners' money, technology and market instinct are welcome in Chinese plants that provide jobs to poor workers.
China picked up capitalism's key idea -- bring money, investors!
It's so simple. But not to everybody. "Foreign aid" as viewed by the United Nations, American liberals and international bureaucrats is still stuck in the alms-giving cliche: a transfer of income from "rich" countries to "poor," with governments as middlemen.
But that's the "welfare" model, says author George Melloan, and it works no better for countries than individuals. It doesn't set them on their own feet as producers. The natural pity felt for the starving thousands becomes "a nice favor for Congress to do for wealthy American farmers, but it often puts small farmers in Africa out of business." Their crop prices can't compete with what is dumped on them "free."
In contrast, China (and India) offered multinational companies "a vast supply of low-cost labor and . …