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Tuesday, July 29, 2008

Not a command economy?

There is a spectrum of economies from the laissez faire to the full on command economy. Most modern economies are so-called mixed economies where governments are involved to greater or lesser extents in the operation of markets. For instance, the U.S. touts itself as a free-market economy but it really isn't. Government is involved in just about every market there is, whether through taxation, regulation, standardization, or criminalization.

Granted, the U.S. ranks high on the economic freedom scores from Fraser and Heritage, but those are relative measures. The U.S. is perhaps a mixed economy leaning closer to free-market ideals whereas other countries are mixed economies leaning closer (and perhaps very close) to command economy. One example might be China, about which the following paragraph was written:

The city [Beijing] has put in place a series of drastic pollution controls since July 20 that included pulling half the city's 3.3 million vehicles off the roads, halting most construction and closing some factories in the capital and surrounding provinces.

I am confident that the city government doesn't do anything without the blessing of the national government. Thus, the report could have pinned responsibility where it truly is. Nevertheless, my point is that it is virtually inconceivable that such a paragraph would be written about a city in the United States that was hosting a sporting event (rather than suffering, let's say, a natural disaster).

I think the paragraph says much more about the state of the Chinese economy and society than all the teddy bears, televisions, and whatnot they produce.
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