Imagethief

The problem with America's China policy is not ideological. True, there is the difficulty of dealing with a single-party state where the entire governmental apparatus is under the control of a small, doctrinaire political elite. But the Republicans are going to lose the House this fall. The problem is that America is wrong about economic principles. And not fancy economic principles such as Income Velocity of Money, which caused some of us to get a D on our Econ 101 midterm. America is wrong about economic principles so basic that even a doddering old Commie with a high school education like Deng Xiaoping understood them.

Economic progress requires division of labor, freedom of trade, and pursuit of self-interest. One person produces one sort of thing--a sack of rice, perhaps. Another person produces another sort of thing--transformation to an ownership society, maybe. Being self-interested, both people want both things, so they trade. The trade may not be a wise one. When Americans traded their rice sack of votes for George Bush's transformation to an ownership society, they got bungled pension and Medicare reforms and a 2006 budget deficit equal to 80 percent of the Chinese government's annual budget. But freedom of trade must be allowed. Taking the sack of rice by force destroys the pursuit of self-interest, which destroys the division of labor, which keeps anybody from doing anything about economic progress. The best minds of the nation join the Red Guards and run wild through the countryside trying to grow rice with Mao Thought while the fat, crazy peasant who had those thoughts in the first place controls the nation's minds.