Remember Red Dawn? A true American Classic, obviously, but even I didn't know that it would offer such powerful insights in to the wisdom of free-market trade policies.
I am quoting from memory here, but recall that at one stage, the warrior-teenagers ask the downed fighter pilot whether America has any allies in the war. He responds, "Six hundred million screaming Chinamen."
One of the kids says, "I thought there were a billion Chinamen."
Pilot: "There were."
Now, people interested in industrial policy might be hard pressed to see how Chinese workers are helping their American counterparts. The argument against that notion is pretty simple: The wages in China are so low that American workers cannot compete. Worse, Chinese factories are not bound by expensive environmental regulations that price American companies out of the market.
Free-market theory explains that the best way to make China a better trading party is not to enact punitive tariffs, but to make the Chinese people rich. Only then will the Chinese people, given a taste of a better life, begin demanding reforms from their industrial and political leaders. Craziness? The New York Times has an interesting article this morning. Seems that the Chinese workers are beginning to get a little pissy. Or a lot. And mostly because of the lack of environmental controls:
The riots in Xinchang are a part of a rising tide of discontent in China, with the number of mass protests like these skyrocketing to 74,000 incidents last year from about 10,000 a decade earlier, according to government figures. The details have varied from incident to incident, but the recent protests all share a common foundation of accumulated anger over the failure of China's political system to respond to legitimate grievances and defiance of the local authorities, who are often seen as corrupt.
A sign of the leadership's growing concern over the increasing turbulence can be seen in a proliferation of high-level statements about the demonstrations.
Yes, I know that a lot of Pittsburgh people are going to hate this post. And yes, I admit that waiting for these reforms to shake out is a lot harder for people whose jobs are on the line. I'm no libertarian utopian. But I do think it is a positive sign that Chinese workers might some day be seen as allies rather than enemies in high-blown efforts to "level the playing field." In fact, I think they are a lot more likely to achieve real reform than any army of industrial economists from the WTO or the Department of Commerce.
How to act on this? Patrick Swayze for president.
Wolverines!
