Andy Stern's Chinese Lantern 2

Naked capitalism has made China richer.

The first article in this series discussed Andy Stern's report of his trip to China during which he realized that the Chinese are outperforming us economically.  That's not news; anyone who visits China comes home impressed with their dynamism and economic optimism.

What's remarkable is that Mr. Stern gave us the proper solution to our economic problems:

America needs to embrace a plan for growth and innovation, with a streamlined government as a partner with the private sector.  [emphasis added]

He was impressed that in a single city, China is building 1.5 million square feet of usable floor space every day, including 700,000 units of public housing annually.  This burgeoning economic activity would lead anyone to wonder why we can't emulate the Chinese economic model.

As President of the Service Employees International Union (SEIU), Mr. Stern used every means at his command to increase government employment, cost, and inefficiency at all levels.  The more government employees there were, the more dues-paying union members he had.  The more dues, the more money he could throw into the political process to help elect people who'd offer government employees yet more money and hire even more of them - in a word, Democrats.

We've written that it's nearly impossible for our modern American elites to confess to error.  For Mr. Stern to admit that his lifelong career of encouraging "bloated, morbidly obese" government is wrong and for him to admit that only a streamlined government can successfully partner with the private sector, even in a somewhat cloaked and sideways fashion, is truly remarkable.  One wonders if he realizes what he's said.

Government Is The Problem

Our economic problems today are not caused by the private sector; private businesses make egregious errors all the time.  Bankruptcy is the usual penalty, but that's not supposed to take down the whole economy.  No, our problem is with government.

We have enough unemployed construction workers that we could build 700,000 units of public housing annually, but the government won't get out of the way and let them do it.  Government-run subsidized housing programs produce vastly overpriced "housing" units that are essentially uninhabitable.

High taxes and burdensome regulations in Democrat-run cities drive out productive workers and attract welfare recipients.  This disaster cycle has bankrupted major American cities.

It's possible for government to be too streamlined.  The Chinese government didn't impose environmental or safety regulations when building the Beijing Olympics.  As you'd expect, there were many more deaths among the construction crews than there would be in the US.

Economic activity there  was, and national growth, but at a high cost in human lives.  Is that the sort of economic activity that Mr. Stern desires, and is he arguing for an end to burdensome regulations and red tape?

We understand the concept of special enterprise zones as well as the Chinese:

Meanwhile, the Chinese government can boast that it has established in Western China an economic zone for cloud computing and automotive and aerospace production resulting in 12.5% annual growth and 49% growth in annual tax revenue, with wages rising more than 10% a year.  [emphasis added]

The most important characteristic of an "economic zone" is that it's a place where government regulations don't apply.  Even Chinese regulation is too heavy for maximum growth, so they've set up special places where the private sector can go pedal to the metal.

Mr. Stern Gets It - Sort Of

After singing the praises of "streamlined government," Mr. Stern demonstrated his clear understanding of our economic problem when he said:

The current debates about China's currency, the trade imbalance, our debt and China's excessive use of pirated American intellectual property are evidence that the Global Revolution—coupled with Deng Xiaoping's government-led, growth-oriented reforms—has created the planet's second-largest economy. It's on a clear trajectory to knock America off its perch [as the world's largest, most advanced economy] by 2025.  [emphasis added]

What does Mr. Stern say has guided China's spectacular economic growth?  Deng Xiaoping's government-led, growth-oriented reforms!

Let's take a quick peek at Chinese history to properly understand those reforms:

  • The Quing dynasty collapsed in the early 1900's.  The invading Japanese established Pu Ti, the last Emperor, as a puppet in Manchuria where he "ruled" under their control until 1945.
  • Mao Tse-Tung's Communists and Chiang Kai-Shek's Nationalist Party fought a civil war after the Japanese lost World War II and had to leave China.  Mao's Communists won in 1949.
  • Mao correctly observed that "power grows from the barrel of a gun," but found that China wasn't wealthy enough to buy world-class guns or pay soldiers to carry them.
  • To kick-start the Chinese economy, Mao ran the "great leap forward" from 1958 to 1961 which forced the collectivization of all economic activity based on Marx's theories as practiced in the Soviet Union.  The required purges eliminated many of Mao's political rivals, but it was an economic disaster - the economy showed negative growth, and estimates of death from starvation and summary execution range from 18 to 45 million.
  • Despite this ample evidence of economic failure and years of mass starvation, Mao never abandoned his Marxist convictions.  Sound familiar?
  • Deng Xiaoping disagreed with Mao's economics.  Despite his long history of working within the Communist party, he was purged twice during Mao's reign.  He survived to gain control of the Chinese government around 1978.  He's credited with developing "Socialism with Chinese characteristics" and with starting the Chinese economic boom.

Just what exactly were Mr. Xiaoping's reforms?  What is "Socialism with Chinese characteristics?"  It's market-driven capitalism, pure and simple.

Under the concealing blanket of Communist-party domination, the Chinese government created 19th-century-style economic Darwinism, red in tooth and claw.

It's backed by government power, compliant courts, a 5,000 year tradition of officials being on the take, and people having no more rights than they can enforce through personal connections to the powerful.  Not too attractive when looking up from the bottom of the social structure, but the trains do run on time.  Public works are constructed on time and on budget or else, just as once was so in America and Western Europe.

As Mr. Stern says, we have much to learn from the Red Chinese, but it's not their Redness insofar as there is much remaining.  We'll consider exactly what we should learn from the Chinese in the next article in this series.

Will Offensicht is a staff writer for and an internationally published author by a different name.  Read other articles by Will Offensicht or other articles on Foreign Affairs.
Reader Comments

A 5000 year tradition of officials being on the take? How is this possible unless the Earth is at least 5000 years old? Is Scragged formally stating that the young Earth creationists are wrong?

December 16, 2011 9:52 AM

"Young Earth" creationists believe the earth is somewhere between 8-10,000 years old. Some go as low as 6,000. No one goes lower than that. Understand the belief before you mock it.

December 16, 2011 9:55 AM

"We have enough unemployed construction workers that we could build 700,000 units of public housing annually, but the government won't get out of the way and let them do it."

Why would we want to build more housing? We've already got way too much of it already, courtesy of the government funded housing bubble.

December 16, 2011 12:43 PM


I think what Offensicht was talking about was that with a purer form of capitalism, i.e., no unemployment insurance, few if any regulations, and low or no corporate taxes we have the ability to build the 700,000 units. The people who are unemployed would have to take a job since they would not be paid to sit. The company would not have to plow through the ridiculous number of forms and regulations that bureaucrats impose and the tax expense would be taken out of the equation. These units that cost less would then be affordable and better than the government subsidized housing that the government tries to mandate. What has it mandates gotten us so far? Inferior products, unemployment and a society that expects something for nothing.

December 16, 2011 1:48 PM

Andy Stern is a dyed in the wool communist, and wants the government to control everything under their "enlightened" authority. He's gotten to where he's gotten by deluding the less than bright (for the most part) SEIU employees, sucking up to the leftist power brokers until he got to be one, then promoting economic and social revolution. When Andy quotes his hero Mao about power coming from the barrel of a gun we understand why he and his co-believers are all hot for gun control.

If Andy the Blowhard can give evidence of any government planned and controlled economy being a success anywhere I'd like to see him present it someplace anyplace. He can't, so he blows smoke up our tailpipes about the wonders of China's system hoping against hope that when his buddy Obama gains full control and declares himself "president for life" or some such, he'll be one of the czars.

December 17, 2011 1:31 PM


You are absolutely 100% correct in your assessment of Stern.To confront him with logic is a waste of breath. What we have to do is to take off our kid gloves and put on our boxing gloves. We must confront every statement that the left makes loudly and often. We must remember to remind all of the American people that every democrat senator voted for obamacare and that they are as a result all to be considered socialists, marxists, communists and liberals that are bent on destroying our country. Tell them to take a good look at obama's handling of our country and ask if they think that he is destroying our country. No nice innuendos, plain talk is what we need.

December 17, 2011 4:23 PM

@Werebat - To be a bit more precise than Ifon, James Ussher, Archibiship of Ireland, counted generations and set the date of creation as 4004 BC. Since it's 2011 now, more or less, that gives 6,015 years since creation. China got started about 1,000 years after creation.

Old earthers don't like the fact that Genesis says God made trees in the Garden. Those trees looked older than they were, so did Adam. Old earthers disrespect this as God being tricky, giving things "apparant age."

But it's OK to be tricky if you document it. For example, the Bible says the stars wer created AFTER the lesser lignts of heaven. God put the light in the cosmos heading for the earth and then hung the stars at the ends of the light rays to keep the light going.

So much for light speed issues. God did something clever, and documented it.

December 19, 2011 5:51 AM
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