Epic Fail

NASA image of the two Koreas at night.

Ben Burgis, in Quillette, offers one point in defending Marxism from the charge that capitalism/free markets is just a more efficient way to help the poor rise out of poverty, which I did not have time to consider in my last post. The school bell was about to ring, and I had to run to teach a class. 

“If one of the primary drivers of the global decline of extreme poverty,” he writes, “is its decline in the People’s Republic, is this a success story for ‘free market’ capitalism or for a modified and liberalized form of state socialism?”

Interesting point. But note that, for all its recent growth, the GDP per capita of China is still below the world average: $10,999 vs. $11,673. It is not that whatever China is doing now is any great success, but that whatever China had been doing before must have been truly awful. And, of course, the difference is that before, they were adhering to Marxist theory, whereas since Deng Xiao Ping they have pushed free-market reforms. Then the growth began, and it has now allowed them to claw their way back to the middle.

Perhaps it will continue. But for a true comparison of systems, the test would be two jurisdictions, similar in culture, which differ as much as possible only on whether their government/economy has been Marxist or capitalist.

Happily, China offers us several comparisons of this sort: how has “Mainland” China done in comparison to Taiwan, resolutely free-market Hong Kong, Macau, or Singapore? Answer: GDP per capita for Taiwan is $26,518; for Hong Kong, $50,567; for Singapore $62,984; for Macau $86,339. It looks as though the choice of Marxist economics has cost China dearly.

There are similar comparisons available elsewhere: for example, North versus South Korea. South Korea $32,766. Statistics for North Korea are not reliable, but even the government figures show it as $1,300. Current news reports are that the nation is again experiencing a severe famine.

We might also compare Venezuela to Colombia. But that would not be an entirely uncontroversial comparison. After all, Venezuela has the world’s largest oil reserves. And Colombia has only recently emerged from a decades-long civil war. Even so, GDP per capita in Colombia stands at just over $7,000, in Venezuela $3,000. Nobody seems to be starving in Colombia.

Regrettably, we have lost some other possible test cases in Eastern Europe: East with West Germany would have been a good one. But then, there was a reason why the Eastern Bloc collapsed, wasn’t there? And in the absence of either war or revolution? They imploded for economic reasons.

It is hard to imagine where else in the social sciences you could get data that could be clearer.