Can China Provide a New Economic Model?

WASHINGTON– Can we say that “US-style free market capitalism”, as a reality, as a model and as an aspiration, is languishing, its future uncertain and its demise as established reference not unthinkable? A bit too strong? Well, no. The developed economies are still recovering from the almost unprecedented 2008-2009 recession –a disaster that put in serious doubt all the established, canonic principles about the superiority of markets. Markets –we believed– are supposed to favor a rational allocation of resources, leading to higher growth. But they favored reckless speculation. Markets are supposed to self-regulate. And they did not. On balance they are supposed to spread wealth. Whereas we have much higher concentration of wealth among very few. So, markets failed, while public policy, supposedly created by wise democratic elected leaders and implemented through state of the art institutions, failed to regulate them.

Unorthodox China

And then, if this were not enough, on the other side of a conceptual divide, we have China’ spectacular growth. China certainly does not follow the accepted US- style free market parameters. In China there is a new kind of capitalism. But it is largely “state capitalism”, quite different from the one we know. And yet China, following its own distinctive path, has grown for thirty years at rates almost without precedent, and it still grows strongly today, defying accepted parameters about what it takes to achieve sustainable growth. And China is not alone in following an unorthodox path. In a different way, post communist Russia moved away from early free market reforms and in the Putin era emphasized a strong role of the state in controlling its most strategic assets: oil and gas, while keeping a lid on political and policy debates.

“Dirigiste” variations

Likewise, other countries, France, Japan, South Korea, Italy in various degrees, while theoretically free market economies, in the past adopted and tinkered with various “dirigiste” models, whereby the state tries in some fashion to direct the economy using a combination of large state owned assets and public policy. The private sector in some instances operated through oligopolies that in practice restricted choice and thus thwarted individual freedoms. So, the classical, unfettered idea of free markets has neither universal appeal nor consistent application –even when it is favored.

America set the standard…until now

That said, until recently, we would not have had this conversation about the possible demise of markets. We needed the 2008 debacle and, in parallel, the spectacular rise of China, (outside the rules), to call into questions what was previously accepted as a matter of faith. But now, “The End” is the topic of books. Ian Bremmer of the Eurasia Group in New York just wrote one:  The End of The Free Market.

Looking back, for quite a long time, the free market capitalism model had an enormous, inherent advantage, as it was sponsored by the US, at the same time the self-appointed champion of free markets and the unchallenged, largest economy in the world. By virtue of its sheer size and reach the US-sponsored model became the standard. The fall of communism after 1989 simply reinforced this primacy. In the 1990s, beyond its traditional strongholds in the West, free market principles spread around the world, up to the point that most sensible policy makers and a large chorus of analysts believed and affirmed that there was no real alternative.

There being no plausible alternatives, all smart people would get on board. And yet, although this belief was strongly held for a while, this may not be forever. As investment firms brochures routinely warn: “past performance is no guarantee of future profitability“. The uncontested domination of a cardinal idea for a very long time does not mean that it really is and that it will continue to be the only standard. The scary creaking noises within the free market edifice, along with the growth of other, ostensibly successful, models, allow speculation and doubts as to the viability of the old parameters.

China grows, America does not do well

As indicated, the spectacular rise of China took place and is taking place largely outside this free market model. The fact that China beginning in the 1980s loosened its old socialist model does not mean that it “converted” and adopted free market capitalism the way we understand it. Even though there is a now a thriving private sector in China, it operates within an environment defined by large state enterprises, funded by state banks –while this large system is managed by state functionaries. What is astonishing is that, by our free market parameters, this huge state capitalism apparatus should not work. And yet it did, and, so far, it does.

This rise “outside the rules” by the Chinese giant, matched with the equally spectacular failures of the free market system in recent years has given pause to many. Is it possible that the free market gospel may not be so true after all? Indeed, the inability to prevent and correct the distortions that led to the real estate bubble in the US and then the bubble cascading effects on an unchecked financial system biased towards speculative investments have created doubts as to the long term viability of such an accident prone system. The system came very, very close to self-destruction in the fall of 2008 because of its many unchecked vulnerabilities.

State capitalism viable?

In the light of the gigantic US recession and China’s stellar record to date it is legitimate to ask whether state managed/controlled capitalism is viable long term both in China and elsewhere. If not, is old fashioned free market capitalism, perhaps revamped and strengthened by better, stronger rules, still the winning formula? This is not an idle, academic question. Models do matter.

Let us remember that intellectual and political interest in Soviet style communism in the 1930s was strengthened by wishful thinking encouraged by leftist propaganda but also by severe loss confidence in capitalism because of the devastating Depression. Many in the West, shocked by the prolonged recession, thought or wanted to believe that perhaps there was something better out there. While unemployment had reached epic proportions in America, Stalin’s USSR was growing. It turned out that the pro-Soviet enthusiasts were wrong. No, on balance there was not anything qualitatively superior out there in the old Soviet Union.  

But the continuing ideological confrontation, sustained in large part by the purported “superiority” of communism, was extremely damaging to human progress for a many generations, as the Myth of Communism diverted resources and intellectual capital in the pursuit of what was ultimately a delusion as to the superiority of planned economies. So, it is not idle to try and examine the merit of state capitalism as an alternative to capitalism, right at the time in which faith in capitalism has been eroded, while we are still trying to extricate ourselves from the wreckage of this long and painful recession.

Capitalism is not the only possible model

First of all, a bit of context. Capitalism is not the result of universally shared human aspirations. Capitalism if a child of the West, and thus of a distinctive cultural patrimony, of a particular way of thinking. Although it might have aspirations of universal adoption, capitalism is our own rather specific intellectual product. Western civilization concocted and articulated its modern principles it in the XVIII Century, along with other basic notions of popular sovereignty, government accountability and individual rights. There is a remarkable coherence in the constructs that constitute the intellectual underpinnings of modern Western industrial and post-industrial democracies. Among all our cherished tenets absolutely central is the notion that the markets should ultimately determine economic success or failure of all economic efforts.

Freedom of choice

By markets we mean people who freely express economic choices by buying, adopting, promoting, shunning, selling whatever is introduced by all economic participants. Unhindered free markets in turn are premised on free individuals as key economic actors both as consumers and as producers, acting as single people or in association with others. More broadly, free markets are supposed to be good for democracy because they are all about free choice, while the favor a good, if not optimal, allocation of resources. The America Revolution of 1776 created the first practical laboratory for both democratic government based on popular sovereignty, (free people exercising free choices within a rules based system), and an economic system based on individual enterprise and (mostly) open markets.

We did not practice our faith so well

True, if we go beyond these epic early beginnings, we Westerners have not really practiced all what we preached. Both in the US and elsewhere, we have preached free markets and often practiced the opposite. Western countries say they want free trade; but in truth they do not always mean it so strongly; at least not when it is not convenient. In trade relations they practiced protectionism when they thought (quite often) that they needed to nurture still weak industries. Later on, all western countries created subsidies for domestic champions. They practiced dumping. They created tariffs and non tariff barriers. They created rules of origin, preferential v. non preferential regimes, quotas, standards, at times arbitrary and discriminatory, (industrial, health, phyto-sanitary, you name it), aimed at penalizing foreign competitors. It is true that, broadly speaking, since the end of WWII, international trade has been progressively liberalized, but not completely and in recent years talks aimed at achieving more liberalization, (the Doha Round), have come to a standstill. By the same token, in domestic economic matters we have subsidies, preferential taxation, special exemptions, incentives, tax holidays, regulations of all types and varieties and targeted government procurement aimed at supporting this or that, from the housing industry to corn based ethanol.

Plenty of “exceptions” amounting to market distortions

All of the above, whatever the justifications, amount to market distortions, and thus they represent our own way of not actually practicing what we preach. Close to home, in the US, in the most recent recession, the very notion of “too big to fail” applied to large banks and to General Motors is a denial, in practice, of free market principles, whereby failure should not be rewarded through bailouts via tax payer’s money. But, whatever the economic orthodoxy, bailouts were and are politically  justified in the name of a wider social good –saving jobs—and as a means to prevent the ripple effects of catastrophic failures that would sweep away indiscriminately the bad stuff and the good stuff. (And here is precisely the issue. Economic performance problems may start when economic decisions are taken in the name of political objectives. In America we have done this because of exceptional circumstances. In countries where the state capitalism model is dominant the use of economic assets for political ends is the norm. The open issue is whether or not this will work in terms of sustainable growth).

Mixed economy models abound

Beyond all these market distortion “exceptions”, as indicated above, in the West we also have variations on the strict, “orthodox”, free market model that envisage “mixed economies”, in which there is both a private sector and a public sector controlling strategic economic assets somehow working together for the greater good. The mixed economy model came out of the Social Democratic experience in Western Europe. But then there are also Asian and Latin American variations.

Temper the ill effects of markets

The idea was to temper the harshness of “pure markets” via public policy mechanisms that would protect people, especially the most vulnerable, from the ill effects of sharp market turns. Some basic services, such as health care, would be provided and essentially subsidized by the state. The state would also own and thus direct certain strategic sectors: banks, utilities, energy, railways. The private sector would operate within this system in which some basic assets are controlled by the state. Supposedly, the strength of this mixed economy model is that partial state control would act both as a shock absorber and as a promoter of economic activities in strategic areas that the private sector, driven by narrow short term gain objectives, might not pursue.

Weakness: bad allocation of resources

The weakness of this model is that in an environment in which key economic assets are used in ways that are not primarily economic resources are not economically allocated; and so it is good bye to standard incentives to be competitive, productive and innovative. As a result, mixed economies may be more equitable and politically more desirable for the economically vulnerable; but their growth is anemic and their record as innovators unimpressive. (Look at Europe). The trade off seems to be between more safety today and less growth tomorrow.

Still, overall, more a free market than not

While all this is true, even if we take all these aberrations and variations on the standard of “free markets” fully into account, on balance, in the West we still have economies that are mostly, if not perfectly, market economies. Not the true brand everywhere, as exceptions and deviations are abundant; but mostly market economies. And by that we mean that overall the preponderance of economic activities is undertaken by a risk taking private sector; while democratically elected governments provide the rules of the game and act, more or less, as impartial referees, as opposed to be actively engaged in the game.

After Communism, no serious challenge

Most importantly, it seemed that, in the 1990s, after the end of the political and ideological confrontation with the East, with the defeat of communism as a doctrine that had proclaimed its superiority based on being “scientific” and morally superior, free market capitalism was the only contestant left standing. After the end of the Cold War, a fight that we won because in the long run communism could not compete, it really seemed that the whole world would come to recognize the superior value of free political institutions, combined with economic rules aimed at enhancing real competition among a plurality of players with expected benefits for all. The whole world could finally enjoy systems that would foster better allocation of resources resulting in more innovation, more price competition and ultimately maximum utility for all.

Now there are alternatives: China

Well, if this was the thinking in the early 1990s, it is no longer so. China for one has emerged as an extremely significant success story based on principles other than market capitalism, something that we call “state capitalism”. And Russia in a similar way has its own brand of state capitalism. Other resource rich countries such as Saudi Arabia have their own variations on this theme.

But China, of course, takes center stage because of its incredible rate of growth, (about 10 per cent a year), and the sheer size of its population: 1,3 billion people, that is more than 4 times America’s population. Everything else being equal, assuming rates of growth close to the current trend around 9 or 10 per cent a year, China will soon become the dominant economic world power and, lo and behold, it will achieve this remarkable transformation from developing economy to world leader in record time –and without following free market capitalism.

This was not supposed to happen

This is most disconcerting, because, according to the free market orthodoxy, it should not have happened The consensus was that this would be impossible. We thought that we had been through all that: nothing works better than free market capitalism, nothing does. And everybody, from Brasilia to Djakarta supposedly knows this. And this is why many developing countries that in the past had adopted statist policies and practices backtracked in the 1990s. Following what became known for a while as the “Washington Consensus”, the free market therapy prescribed and administered to all past sinners by the International Monetary Fund and all major international foreign aid donors, emerging markets went on a steady diet of privatization, deregulation and policies aimed at favoring the gold standard: “private sector development”. Repeat with me: “Free markets work; nothing else does. Period”.

Mixed economies retreated after the end of socialism

By the same token, “mixed economy” countries in Western Europe also came around and adopted a more pro-market bias. In the past they had built up state owned enterprises and banks with the objective of tempering the unpredictability of markets. The idea was that a bit of capitalism and a bit of statism, nicely blended, long term would yield more stability and more fairness in the allocation of resources. But when the Soviet Union, the most significant bastion of a statist ideology, collapsed because of its internal rot, while turbocharged America was roaring ahead in the 1990s, there were very few left that would strongly defend socialism or any variations thereof, not even the more benign, watered down Western European versions. And so, mixed economies became less mixed. Public assets were privatized, some deregulation was enacted, hoping that a new dose of free market medicine would revitalize sluggish economies.

Thatcher: socialism bad for the soul

And the most articulate early critics of the mixed economy, like Mrs. Thatcher in the United Kingdom in the 1980s, correctly pointed out that socialism’s real evil is not so much in its gigantic, systemic inefficiency; but in its stifling of human ingenuity and creativity. When people live in a system that prevents them from aggressively pursuing an idea in the market place, they become dull, unimaginative and unproductive. Or so we believed and said.

What is statism?

But here comes China, showing that there can be an alternative model; and by all accounts, a very successful one, founded –it seems– on the very statist principles that we thought had died because of their intrinsic failings.

Let’s see why statism “should” fail. It should fail because in this model public powers use economic assets for political objectives, as opposed to allowing the free allocation of resources to where market forces indicate they will be most productive, on the basis of a simple system of risks and rewards. By definition this should lead to distortions and bad allocation of resources. “It cannot work”. But it does…at least, so far. Let’s dig deeper.

State capitalism is not against growth but it wants growth to happen in a certain way, according to its designs. State capitalism is not premised on a closed system. It does recognize international market forces and now globalization. But instead of unleashing the full force of the private sector, hoping that by creating the best business environment domestic champions will do well, domestically and internationally, state capitalism in neo-mercantilist fashion selects and breeds its own champions and moves them around according to its plans and priorities.

Top down allocation of resources

This may seem clever and astute. The state can harness vast resources through the control of assets, the state owned enterprises, (SOEs), taxation and a large pool of savings collected via a state controlled banking system. It then allocates smartly these resources to winning sectors. Furthermore, it makes the growth of its pre-selected champions easier, by giving them large assets, by sending smart state functionaries to run them and by providing them with cheap capital ladled as needed by compliant state owned banks.

Freedom of action without the burdens of competitors and watchful shareholders

The great advantage of such enterprises, unhindered by competition and/or adversarial regulatory regimes, is that they can move about with greater easiness. They can embark in long term domestic or foreign investments, once the state determined that this is a good thing, without any accountability to shareholders who may object to this or that and show their displeasure by selling the stock. Foreign sales can be offered at very low prices, thus undercutting Western competitors. Lending to developing countries usually takes place outside all the complex conditionalities created by Western donors. Domestically and internationally, the SOEs, as vehicles of the state, are political entities that perform economic activities in support of state policies. Their goals are not to maximize shareholders value. Their goals are to support state polices that, while aimed at promoting growth, most fundamentally are aimed at strengthening the ruling political system as well as foreign policy strategies. And this is quite different from the role performed by large corporations, even gigantic corporations in the West.

Can this system self-correct?

But the strength of this system, at least in terms of its ability to build up resilient champions that will benefit from large resources and lack of competitive impediments, is also, at least in theory, its weakness.

The whole idea of state champions works very well to the extent that we assume supreme wisdom on the part of government decision-makers. But what if they are wrong and squander huge resources pursuing economically unsound objectives? For a while it is possible to keep subsidizing money losing enterprises and wrong headed policies; but after a while the cost becomes too high.

The US “industrial policies” debate in the 1980s

We had a bit of this debate in the US before the complete ideological demise of any form of statism. We used to call this model “industrial policy”. Some believed that it was possible for the state in America to engage in some kind of long term economic planning, by allocating large amounts of capital to strategic investments and by co-opting the private sector so that all players –the public sector and the private sector– would march in step towards a set economic goal.

But this design, objected the critics, would have implied picking ahead of time “winners and losers” that would be inevitably chosen on the basis of political favor rather than economic merit. And suppose the public technocrats pick a loser and pour resources into it and then, to avoid failure, pour some more, and so on. Then you would have a gigantic, state sponsored “lemon” subsidized by the taxpayers.

And here is the built in strategic weakness –or so we thought. The creation of state champions may sound nice in principle; but in general a bunch of bureaucrats, however well meaning, will not be able to work better than the market. They will make mistakes and they will hide them through more subsidies and more soft loans –easy to do, at least for a while, without a market checking on performance and eventually punishing inefficiencies.

States not so good at picking winners

More broadly, history has shown that when the state gets to manage enterprises, these entities become part of the spoils systems. Jobs, including the top ones, are given as political favors and rewards. Competence is rarely the main factor that guarantees a successful career as a state functionary running this bank or that corporation.

And so, almost by definition, this system becomes heavy, bureaucratic and inefficient. We have seen this in Europe, in Asia, in Latin America and in Africa. The large state run corporations, from mining to airlines to utilities do not work well. They become vehicles of political power, fictitious employment and prizes to be given to political friends; but hardly engines geared at creating value.

Will the Chinese variation on state capitalism also falter?

Well, if it is indeed so, then, give or take a little time, is it going to be good bye to the up to now Chinese state capitalism variation as well? I would be inclined to say yes. I would be inclined to think that, while this Chinese model has worked remarkably well for more than thirty years, sooner or later its built in, systemic weaknesses will show and they will prove that the state, even with best intentions, is not at all the best steward of national wealth.

China: low labor cost, low prices

China succeeded because of a remarkable combination of favorable elements skillfully exploited by the political leadership. Its abundant, extremely cheap and fairly disciplined labor force allowed the creation of large scale, basic, export oriented manufacturing enterprises. Relaxed or non existent environmental and labor standard allowed companies to maximize profits without having to bother with any cumbersome, costly externalities. And export oriented policies were and are aided by an artificially low currency that keeps prices of Chinese made goods quite low.

The sheer magnitude of this effort, nurtured over decades, and the obvious economic advantage for Western consumers in buying very cheap made in China consumer goods, as opposed to same quality but higher price domestic goods, guaranteed the stupendous success of this economic strategy. Until labor will be cheap and the currency will stay low, it will be hard for Western manufactures, constrained by much higher operating costs, including higher labor costs, to compete on price. So far, so good for China.

Is this model sustainable?

But, as always, the trick is never to grow a lot for a while; but to find a formula that allows a self-sustaining decent rate of growth for the long term. An export oriented strategy based on market dominance of basic consumer goods works up to a point. There are only so many toasters, shoes, shirts, vacuum cleaners and consumer electronics that western markets can absorb at this astonishing rate.  It is unthinkable that saturated export markets will be able to suck in more cheap consumer goods in increasing amounts indefinitely, thus guaranteeing fantastic rates of growth for the Chinese producers and ultimately for the whole Chinese economy –essentially forever.

Can China innovate?

So, the real game, in the future, will be competing up market, on quality and value. And here it all becomes a lot more complicated. One would need to leverage a great more than cheap labor and the production mastery of commoditized low to medium value items. It is not at all self-evident that a system in which vast resources are allocated by political fiat will be also efficient in effectively exploring and exploiting future avenues of technology and new economic sectors. The ability to apportion large amounts of state controlled capital to preselected targets is a huge advantage; but it is no guarantee of success when political leaders are moving into uncharted territory, as opposed to skillfully gaining market share in labor intensive sectors in which low cost is the determining factor.

Spending on R&D may not yield intended results

True enough, China has accumulated vast amounts of capital. It now has the luxury to embark in ambitious infrastructure projects, from new highways to a planned vast network of high speed trains. And this is good. But the future will be about innovation and ever more sophisticated systems and technologies, combined with institutions and systems flexible enough and nimble enough to drive innovation while taking full advantage from its windfall. China has now the money to invest in large scale R&D efforts. But this is no guarantee of success.

Saudi Arabia has plenty of money to invest in R&D as well. And Saudi Arabia has undertaken massive efforts aimed at diversifying its oil economy via the creation, through large allocations of public funds, of brand new technology universities. But, even there, intentions may not match results. Spending a lot of money, while still lacking the “free market institutional eco-system” and the attendant incentives of clearly spelled and clearly embraced individual risks and rewards that is second nature within capitalistic societies may not be enough.

Can state capitalism foster innovation?

The key question then is: are state owned enterprises or a private sector that can thrive only through privileged relations with the state the best breeding ground for creating innovation and for successfully spreading it?

Well, not on the basis of broad historic experience. As indicated, state owned entities obeying to a political, rather than a business, mandate may work well in specific environments, especially export oriented commoditized, labor intensive products in which technology is simple and low prices provides the key competitive edge. But it is unlikely that a centralized, top down system will breed the free wheeling, unhindered –at the same time collaborative and competitive atmosphere– that, as the record so far indicates, is the true precursor to genuine innovation. Somehow state control and freedom to push the envelope any way one pleases do not seem to go well together.

Size does matter

That said, it would be foolish to dismiss thirty years of Chinese torrid growth as a mere aberration. To start with: size matters. Indeed, because of size and volume, Chinese exports have wiped out entire sectors of several Western economies. This impact is not without consequence. The West lost key positions. Entire economic sectors have been erased, accumulated know how vanished, while there has been difficulty in reacting. Indeed, in the West there has been difficulty in finding ways to climb back and find new niches up market, in sectors that are less price sensitive. America and others lost traditional industries to China and did not succeed in replacing these voids with new, higher value, thriving sectors.

Chinese growth caused major changes in the economic structure of the West

And then we see other consequences of massive outsourcing. While the Chinese, as yet, may not be the innovators, (just look at the number of patents issued in the West and in China), China is now the place where you actually go to make things, most things, including the strategically more significant assembly of higher value electronics. To the extent that western companies nowadays “must go” to China to get anything manufactured, because only China now has the manpower and the facilities to allow for the scaling up and mass production of almost anything, then we have a major change probably not without consequences.

Grove: those who can “scale up” may end up winning

Andy Grove, former Intel CEO, wrote in BusinessWeek that in the US we have lost the “scaling up” capacity in high tech. A still solid US R&D base is comforting; but it is not the whole story when we are talking about industrial prowess. America still has lots of good R&D, and it still leads the world. But, as Grove says, those who do the product development and subsequent scaling up today, (the Chinese), have a good chance to acquire the skills to become tomorrow’s innovators. And, besides, having outsourced scaling up and the whole manufacturing effort, America lost the manufacturing base, all those jobs and all the skills related to them. Foxconn, the giant electronics manufacturer in China, employs 1 million people, projecting 1.3 million workers by next year. In contrast, America has 1.8 million worldwide employed by Walmart. I wonder who wins in the end, the largest tech manufacturer or the largest retailer?

In the end, it may not really matter much if we have and retain all the patents, if indeed China is the only “go to place” to make anything that is commercially viable. The fact that we retain a lock on innovation is ultimately not terribly significant, if we have lost the actual material capacity to make stuff.

Did major quantitative changes produce a qualitative shift?

So, here we have a situation in which, in truth, large quantitative changes –the shifting to China of most large scale manufacturing –both low value and increasingly higher value— has created a qualitative change, in as much as for many industries there are no cost effective alternatives to producing in China.

What remains to be seen, of course, is whether Grove’s prediction is correct or not. He claims that those who do the scaling up eventually will learn what it takes to become innovators. The unknown here is whether or not it may take “more” to become effective innovators. The question is, does America really want to wait and find out, lacking in the meantime plausible alternatives to large scale manufacturing of higher value goods in China?

Other issues: managing large scale social transformations

But, while very important, this only one part of the story. Long term, China’s true success will be in creating a self-sustaining economy that will be able to include not just those who have already been lifted from poverty but the additional 400 to 500 million people, (possibly more), who have yet to benefit from this historic transformation. And here things get really complicated.

There is no precedent of a predominantly “top down” state being good at managing enormous social and economic transformations, without major glitches that may result in discontent and popular unrest. And let’s remember that if control of resources within state capitalism is an advantage, it is also a liability, to the extent that large numbers of people may feel disenfranchised and left out, without any say in the way in which most national resources are allocated.

Democracy defuses tensions

Democracy is messy and thus it has many weaknesses. But it has the advantage of creating some kind of institutional legitimacy via a political process in which the popular vote does affect policy outcomes. Power is delegated and power may be taken away at the next elections. When there are no such safety valves, then the dangers of building up pressure are higher.

In China, so far, everything worked remarkably well, given the huge upside potential of a system that could grow by exploiting the advantages of cornering world markets for cheap consumer goods. But, at some point, that export-led growth window will be much smaller or closed altogether. And then the rate of growth will slow down. And so, expectations of quick upward mobility will not be met for all those hundreds of millions who are still patiently waiting to get a seat at the table of prosperity. And this is when problems may start. Problems that a centralized system may not be able to solve; at least not with the speed expected by unhappy people.

With all its weaknesses, Western style accident prone, sometimes irresponsible and myopic free market capitalism still gets my vote.

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