While I’m not oblivious to geopolitical concerns, I don’t worry about China becoming a more prosperous nation. Yes, more wealth could enable the nation’s dictators to finance some unwelcome aggression, but I mostly think higher living standards will create pressure for political liberalization.
In any event, the United States is in no danger of being overtaken by China in our lifetimes (or probably ever).
With that bit of background, you can understand why I have a somewhat relaxed reaction to the news that Chinese regulators nailed a McDonald’s franchise for allegedly breaking the rule about serving chicken wings within 30 minutes of preparation.
Here’s my discussion of the topic on Fox News.
I’ve written about the burden of regulation, and I’ve highlighted examples of absurd regulation, but the most important part of this interview is the explanation that wealthier societies can afford higher standards.
Communism and other statist ideologies are evil, but it’s also worth noting that most of the worst examples of environmental degradation occur in societies with heavy government control, not wealthy capitalist nations.
Breaded, fried food is tasty, and also very safe. If the interior of the wings or whatever gets to 150F for 15 seconds, or 160F for 3 seconds, then there are no bad bacteria which will multiply in 8 hours.
The oily, breaded surface is protective. Usual food bacteria don’t grow well in oil.
If the wings weren’t properly cooked to begin with, then they are unsafe to eat from the start, no waiting required.
You will not hear me praising China, other than for the fact that 1.3 billion people went form near zero freedom to at least partial freedom. You will also not see me joining patriotic campaigns of protectionism and China bashing.
But that does not mean that the monumental and overall very positive changes happening in China and the rest of the three billion developing world do not matter for America and the West, or that they are decidedly positive for Western world citizens.
Primarily because, a world where three billion people in the developing world have at least partially risen and thus inevitably dropped the relative prosperity standing of Americans, from six times world average prosperity to, say two, IS a big change. And a world where your parents were in the top 5% of world prosperity while you are simply in the top 25% will feel very-very different to Americans. Because relative prosperity does matter. If it did not, then we would never see class warfare protesters, as the average “occupy” protester still enjoys a standard of living in the top 20%, by worldwide standards. But the problem is that the top 1% has MORE. So relative prosperity does matter and that is why the average American’s descent from the top 10% or prosperity to simply the top 30% in the next generation will have a very different feel to it.
Sure Americans, as well as the rest of the world, are likely to benefit from the rise of three billion emerging world citizens, in absolute terms! I say “likely” because even in absolute terms the benefit will be partially or entirely offset by competitive pressure and displacement of the American producer and consumer by the developing world producer and consumer — especially when it comes to goods and services with low supply elasticity – so that the overall effect may even be negative, even in absolute terms (noticed being crowded out by three billion emerging world consumers at the gas pump?)
But the carnage will be in relative terms. The real hammering will happen as the average American citizen descends from 6x world prosperity to 2x possibly within a single generation. THAT world will feel very different, to your children — and to you.
So,… the traditional American moral principles of property rights, individual freedom and the pursuit of happiness aside, ….
The utilitarian question for the American middle class is this: Do you prefer being at the, say, 40% prosperity level in a country that is in the top 10% (putting you somewhere in the top 15% worldwide) or do you prefer using redistribution and central planning to pad your standard of living from the 40% level to the 60% level but live in a country that has essentially copied the rest of the world and has thus inevitably descended from the top 10% of prosperity to something like 40% worldwide in one generation?
In another incarnation the thirty trillion a year question for the west is this: Is this the time for the less than one billion people of the still privileged but relatively declining western world to flatten their effort/reward curves, to inevitably burden exceptionalism to support mediocrity, at a time when three billion emerging world souls are headed in the opposite direction steepening their once flat line effort/reward curves?
THIS, more than anything else, will determine your future in the years to come.
Dan, you would rather eat McDonald’s in China than Chinese food? China probably has the best Chinese food! What a waste, eat McDonald’s in America, eat delicious Chinese food in China. Yeesh.
This one I’ll have to disagree (actually agreed with you on the light bulbs).
The road we are headed down will result in a drastic drop in our world standing. We will likely soon not be able to sell our debt on the world market and when that happens our ability to print money and spend above our means is over. China and others are already making noise about a post dollar trade unit.
Real inflation is rising, unfunded mandates are rising, baby boomers are about to put a strain on the system and, thanks to years of baby boomer abortions, there will be insufficient tax payers to support it all.
Precious metals “rising” in price is evidence of the terribly negative effect of “Quantitative Easing.” Is open devaluation that far behind?