Should the Experience of China Silence Those Who Think That Democracy Is Good for Growth
should the experience of China silence those who think that democracy is good for growth
The economic prosperity of China is well established. Not even the most democratic of people can dispute China’s long run growth. Over the past 20 years China’s GDP has grown by an average of 10.3% a year, and is predicted to become the world’s largest economy by 2025 (this currently disputed due to signs showing that this level of growth is completely unsustainable and is soon to come to an end). So what is there secret? Is it China’s largely state controlled command economy that has fuelled their growth? Is it the time at which this growth has taken place? Or is it something completely different?
First, let us examine the root of the question. Democracy. There are 2 types of democracy, and both must be addressed. Political democracy is the right of every individual to equal opportunities to express how their country should be run, in the form of an elected government. In this sense, there is no doubt that China is a communist state. The complete lack of any form of election clearly demonstrates that there is no intent to even consider the views of the public. The other type of democracy and perhaps the more important one is economic democracy. A free market economy is the most democratic form of economy where there exists no form of government and all firms are privately owned and run. This view was first introduced by John Maynard Keynes and he suggested that market forces are the only form of control necessary in an economy, due to the fact that they are able to set the price of any good or service at an equilibrium price, where demand equals supply. A command economy is the opposite, where the government control all sectors of the economy and determine the nature, quantity and price of each good. Currently, there is no country that is a complete free market economy, and the only state to be a complete command economy is North Korea, most countries are a mix of both
The economic prosperity of China is well established. Not even the most democratic of people can dispute China’s long run growth. Over the past 20 years China’s GDP has grown by an average of 10.3% a year, and is predicted to become the world’s largest economy by 2025 (this currently disputed due to signs showing that this level of growth is completely unsustainable and is soon to come to an end). So what is there secret? Is it China’s largely state controlled command economy that has fuelled their growth? Is it the time at which this growth has taken place? Or is it something completely different?
First, let us examine the root of the question. Democracy. There are 2 types of democracy, and both must be addressed. Political democracy is the right of every individual to equal opportunities to express how their country should be run, in the form of an elected government. In this sense, there is no doubt that China is a communist state. The complete lack of any form of election clearly demonstrates that there is no intent to even consider the views of the public. The other type of democracy and perhaps the more important one is economic democracy. A free market economy is the most democratic form of economy where there exists no form of government and all firms are privately owned and run. This view was first introduced by John Maynard Keynes and he suggested that market forces are the only form of control necessary in an economy, due to the fact that they are able to set the price of any good or service at an equilibrium price, where demand equals supply. A command economy is the opposite, where the government control all sectors of the economy and determine the nature, quantity and price of each good. Currently, there is no country that is a complete free market economy, and the only state to be a complete command economy is North Korea, most countries are a mix of both