Harvard’s Vogel: Deng Would Be Delighted

April 30, 2012

 

Ulam: Was Deng more sort of oriented toward modernizing the country and creating an industrial powerhouse than improving the lot of the average Chinese?

Vogel: I don’t think he saw those as contradictory. I think he saw getting the industry as a benefit for the people. And I think that compared to the first “Great Leap Forward,” where they had the first five-year plan that was so focused on industry, Deng and his advisors felt there had to be a little more balance. They would have to, if anything, slow down industrial growth and not sacrifice individual consumption the way Mao was doing. They had to allow more consumption to provide more incentives that would help drive the economy.

Ulam: There is a new book, “What the U.S. Can Learn From China,” that suggests the U.S. can learn from the Chinese way of doing business. What do you think that the U.S. can learn from China’s growth?

Vogel: Well, I think the question is whether we can find our own way to look after our infrastructure and to make decisions fairly quickly without getting hung up. Can we find our way to make wise decisions and in a timely way, and not allow legal procedures and distribution of wealth to stockholders to overwhelm our political system? I think what Deng and a lot of traditional Chinese thought is that if you have wise officials who are ethical, they will make better decisions for the country than the populists appealing to the masses.

Ulam: They also seem to be doing much better in the competition for natural resources throughout the world.

Vogel: Well, they have the money. I think the issue is that we’re running a system where we’re in debt so much, and they are accumulating hundreds of millions of dollars each year in surpluses. That gives them the capacity to buy up a lot.

Ulam: Also, they don’t have the same sort of scruples about human rights that we might have.

Vogel: They do things much faster. They go right into an African project. But before we would be willing to consider it or send it to the World Bank, it would go through very careful considerations about safety and people, quality and human rights and so forth. And they would just do it. So things get done faster.

The question is: Can we find ways to preserve some of our values and at the same time speed up some of those procedures?

Ulam: A crucial factor in the future economic success of industrialized countries depends upon locking into natural resources. How is this going to play out in China?

Vogel: They have quite a bit of resources. But it will also mean getting new, sustainable resources. China is going to be in plenty of trouble over the next couple of decades. Their economy is going to slow down. And they don’t yet have universal medical care. And they don’t have good education in the countryside. And they have perhaps a couple hundred million people below the poverty line.

Ulam: I gather that they don’t have social security either, right?

Vogel: Well, not quite. People in their work unit had some kind of security system. And they’re gradually extending that in the urban area. Back when the population was not mobile under Mao, the unit took care of them. But now that you have the mobile population you have to develop a national {social} security system. After all, it took us to the FDR period before we really were doing pretty well at that. China’s not there yet.

 

 

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