Streetwise Professor

September 23, 2010

Tom Friedman: Gung Ho!

Filed under: Economics,Politics — The Professor @ 5:03 pm

Thomas Friedman has apparently felt the heat over his get-a-room slobbering over China.  He wrote a virtually incomprehensible column (well, even more incomprehensible than normal) today in which he tries to square the circle of reconciling his cheerleading for the PRC with the country’s repressive, authoritarian, rule (h/t R):

I know, I know. With enough cheap currency, labor and capital — and authoritarianism — you can build anything in nine months. Still, it gets your attention. Some of my Chinese friends chide me for overidealizing China. I tell them: “Guilty as charged.” But have no illusions. I am not praising China because I want to emulate their system. I am praising it because I am worried about my system. In deliberately spotlighting China’s impressive growth engine, I am hoping to light a spark under America.

Studying China’s ability to invest for the future doesn’t make me feel we have the wrong system. It makes me feel that we are abusing our right system. There is absolutely no reason our democracy should not be able to generate the kind of focus, legitimacy, unity and stick-to-it-iveness to do big things — democratically — that China does autocratically. We’ve done it before. But we’re not doing it now because too many of our poll-driven, toxically partisan, cable-TV-addicted, money-corrupted political class are more interested in what keeps them in power than what would again make America powerful, more interested in defeating each other than saving the country.

To start with, consider the sentences: “Some of my Chinese friends chide me for overidealizing China.  I tell them: ‘Guilty as charged.’ But have no illusions.”  Does that make any sense?  He’s guilty of over-idealizing, but he has no illusions?  Uhm, doesn’t “over-idealizing” by definition presuppose buying into illusions?

Friedman ties himself in knots trying to simultaneously (a) praise China for its top-down, authoritarian economic policy, (b) disclaim any intent of praising its system, and (c) bashing the United States for having lost connection with what made it great.

The whole column is a mess, but it does betray quite clearly what Tom Friedman thinks is the right policy, and what made the US great: politically directed, centralized policy making focused on massive prestige projects:

“How can you compete with a country that is run like a company?” an Indian entrepreneur at the forum asked me of China. He then answered his own question: For democracy to be effective and deliver the policies and infrastructure our societies need requires the political center to be focused, united and energized. That means electing candidates who will do what is right for the country not just for their ideological wing or whoever comes with the biggest bag of money. For democracies to address big problems — and that’s all we have these days — requires a lot of people pulling in the same direction, and that is precisely what we’re lacking.

. . . .

Orville Schell of the Asia Society, one of America’s best China watchers, who was with me in Tianjin, put it perfectly: “Because we have recently begun to find ourselves so unable to get things done, we tend to look with a certain overidealistic yearning when it comes to China. We see what they have done and project onto them something we miss, fearfully miss, in ourselves” — that “can-do,” “get-it-done,” “everyone-pull-together,” “whatever-it-takes” attitude that built our highways, dams and put a man on the moon.

What bilge.  First of all, anybody who thinks it is best to run a country’s economy like a company is a fool: hell, anybody that thinks that anybody should or can “run” an economy  period is a fool.  Notice too the infrastructure and prestige project infatuation.

Moreover, I really appreciate the very practical advice: we need politicians that want to do the right thing.


How much does this guy get paid?

When discussing policy alternatives, it is always useful to start with a firm understanding of the realities of political systems, rather than dreamy and counterfactual abstractions.  The reality is that tying one’s hopes to politicians “doing the right thing” is a fool’s errand.  But we are talking about Thomas Friedman, aren’t we?

Note too the fascination with collective,  “pulling in the same direction”, “everyone-pull-together” with its not so implicit suggestion that central direction that gets us to pull together is needed to return America to economic greatness.

To the contrary.  What has made the American economy more productive than any in history is the largely uncoordinated actions of millions of individuals, often in competition with one another.  Competition among freely assembled cooperative organizations–firms.  Guys in their basements and garages.  Not governments and mandarins and bureaucrats who act like those paid to whip Chinese boat haulers in the old days.

America’s current economic problems are largely a manifestation of the unceasing efforts of the government to impose central direction and control.  And the current political firestorm sweeping the country is directly attributable to millions of people pushing back.

Carlson’s 2d Marine Raider Battalion used the Chinese expression “Gung ho” as a motto: it was soon adopted by the rest of the Marine Corps.  Gung ho means “Pull together,” or “work together in harmony.”  That’s Tom Friedman’s idea of how an economy and a polity should work.  It also happens to be the idea held by Obama, and a good part of Congress and the bureaucracy.

It is appealing to a certain kind of mind that makes analogies between tribes or firms or military units or other formal organizations on the one hand, and entire economies on the other.  A kind of mind that has no comprehension of emergent order, spontaneous organization, ordered liberty, or decentralized coordination through competition and the price system.  “Gung ho” makes sense as an ethos for a military unit: it makes no sense as an organizing principle for an economy.   And it is certainly not the American system whose disappearance Friedman laments.

Nor should Friedman be cut any slack whatsoever in his lame attempt to distinguish his admiration for the achievements of China from the brutal realities of its government.  And here is just a taste of that reality:

Across a remote tract of southern Africa, naturally fortified by mountains and patrolled by hundreds of soldiers with dogs trained to tear intruders apart, teams of mining experts are hard at work.

Yet they are not speakers of Shona, the native language of this land on the border between Zimbabwe and Mozambique. No, thousands of miles from home, under a broiling African sun, these slim, pale-skinned figures are members of the Chinese military.

Working alongside henchmen from one of Africa’s most murderous regimes — headed by Robert Mugabe — the Chinese are here to oversee Beijing’s investment in the world’s most controversial commodity: blood diamonds.

High-ranking officials of China’s People’s Liberation Army, they have been striving to escape detection for their role in this blood-thirsty — but hugely lucrative — trade.

For here, carved out of the African bush, is a runway big enough for huge cargo planes. There is also sophisticated radar equipment, a fully-operational control tower and comfortable barracks for the Chinese officials overseeing the entire operation.

. . . .

Secret documents obtained by the Mail reveal that the company given the rights to the diamond fields —called Mbada Diamond Company — is fronted by Mugabe’s trusted former personal helicopter pilot, with Chinese military officials as silent partners.

The documents reveal that the pilot — Robert Mhlanga, who has no experience of mining — was personally appointed by Mugabe, with Chinese partners named as Deng Hongyan, Zhang Shibin, Zhang Hui, Jiang Zhaoyao and Cheng Qins. With military camps set up around the perimeter, and three separate fences erected to keep out smugglers and spies, local villagers told me appalling stories of how they have been driven from the land at gunpoint.

Soldiers set their dogs on one girl, who was mauled and killed in front of her parents. The military said this was a warning to others to keep away from the fields; at least seven people caught near the fields were killed by the military in the last month alone and their bodies dumped.

There’s more.  Not just in that article.  Not just in Zimbabwe, but in Sudan and across Africa, not to mention in China itself.

Sorry, Tom, but it’s a package deal.  Governments who think about people purely instrumentally, who think that they can push them around to achieve this economic result or build that glittering piece of infrastructure have a tendency of engaging in brutal behavior.

No, Friedman is just another example in a depressingly long line of soi disant intellectuals who are enamored with authoritarians red or brown; who marvel at their gargantuan achievements; and who somehow believe that the bloody and brutal behavior of such authoritarians is some sort of minor bug that can be eliminated while retaining the supposed economic benefits.

That was a lie in the 1930s.  It was a lie in the 1940s.  It was a lie in the 1960s and 1970s.  And it is a lie now.

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  1. Here is the great intellectual challenge: 6 months before Pearl Harbor the economic output of the US was such that Japan thought a sneak attack could cripple the US’s economy.

    But 6 months after the attack, with the combination of both central planning and operational research, the US transformed it’s manufacturing industry into a giant capable of rearming its Navy completely, and producing both the atom and hydrogen bomb within 4 years.

    That is pretty damned impressive: a combination of central planning and individualism guided by theory.

    Comment by michael webster — September 23, 2010 @ 8:54 pm

  2. […] Times, but apparently Craig Pirrong does, and I read Pirrong’s Streetwise Professor blog, and Pirrong’s latest post on Friedman reminds me again why I don’t read Tom Friedman’s columns. At least I […]

    Pingback by Tom Friedman wants us to get big things done « Knowledge Problem — September 24, 2010 @ 7:45 am

  3. […] authoritarian controls on politics. As mentioned in the prior post, Craig Pirrong responds that “it’s a package deal. Governments who think about people purely instrumentally, […]

    Pingback by China’s central government-based energy conservation policies « Knowledge Problem — September 24, 2010 @ 9:11 am

  4. When someone praises a country that is “run like a company” I have to laugh. Ask anyone who works in the corporate world and ask them if they think their company is run with the utmost efficiency or is run in an incredibly inept and inefficient manner. Dilbert and The Office are not tradining tools for management courses in graduate business schools. They are parodies of the natural state of large, centrally managed companies.

    For democracy to be effective and deliver the policies and infrastructure our societies need doesn’t requires the political center to be focused, united and energized. What is required is for individuals to be empowered to be innovative, to be incentivized and to be allowed to let their creative powers be set free to increase productivity. More often than not, the “political center” is part of the problem, not part of the answer. Friedman is an idiot.

    Comment by Charles — September 24, 2010 @ 10:09 am

  5. That’s the problem with “run it like a company” analogies. You think you are getting GE under Jack Welch, and instead it’s the fools who drove GM into the ground. The reason the market beats centrralized planning is not that every company is managed better than the government. It’s that the market is ruthless and punishes inefficiency. Bad companies fail, great ones thrive, the rest have examples to follow, and new people can always enter the market. In contrast, the government always remains and doesn’t need to fix badly managed offices or get rid of failed policies. Therefore, private companies have a discipline that the government never needs.

    Comment by Chris Durnell — September 24, 2010 @ 11:50 am

  6. Webster’s point is important because it can show us an example where size can function. The key to the government being able to successfully conduct the war was clarity of purpose. Similarly, large corporations work best when they are focused. Thus, it is much easier to run a company like Coca Cola than it is to run General Electric. And we find that large successful companies more often than not are well focused.

    We shouldn’t trivialize the difficulty of the coordination problems size brings. Read any history of World War II and you will see how incredibly difficult it was to maintain the support of the U.S. citizenry and to coordinate the efforts of the military.

    Lastly, China’s economic success is rather limited in who shares in the success. Although China’s median standard of living has increased greatly. It’s important to see this for what it is. As you move toward central and western China things are much as they have always been (very, very, poor). Additionally, what often makes China successful is the very low wages they pay.

    The choices offered those who are earning these very low wages are few. People often liken poverty in the U.S. to Poverty in less developed countries. They are in fact quite different. Which is not to trivialize poverty here. Hungry is hungry. But, the problems facing people in China are at least an order of magnitude worse than people in say, here in L.A..

    I seriously doubt the large east Asian immigrant population here would be happy to hear the U.S. government was going to model it’s economic system after China’s.

    Comment by David Hoopes — September 24, 2010 @ 12:25 pm

  7. @Tim–Gung ho might be a reasonable model for an economy in time of total war. It is not a model for a nation not in such a conflict. In normal times, the function of an economy is to coordinate and reconcile the preferences of vast numbers of individuals each pursuing individual goals. In total war, you are facing a problem of collective action/public goods: victory or defeat impacts everyone, and is in some ways the ultimate public good. Under those circumstances, more government direction to address public goods problems is appropriate. Moreover, that is a situation in which crucial knowledge is centralized, rather than dispersed: the crucial knowledge relates to strategy, intelligence, etc. Again, this calls for more centralization. But even then, as David notes, the coordination problems are immense. And not all nations address them very well. Ironically, the German war economy was not particularly efficient in coordinating economic activity. Instead, economic fiefdoms under different power centers worked at cross purposes. And even in the US, there were some enormous problems in centralized direction. (Harry Truman actually made a name for himself leading Senatorial investigations of corruption in procurement.)

    The problem is that people like Friedman look at wartime economies as a model for all seasons. They tend to get a certain frisson from the exercise of power in wartime; they have their own visions of what the economy should produce and what it shouldn’t; and want to extend the wartime exercise of power into peacetime in order to realize their particular visions. They believe their private goods (what they value) to be public ones, amenable to the usual (centralized) methods for providing public goods.

    But that is essentially an arrogation of power, and an assertion of the superiority of a particular vision over that of the great unwashed.

    And that’s what we see in China, and what we are seeing all too often in the US today.

    The ProfessorComment by The Professor — September 24, 2010 @ 4:51 pm

  8. Nor should Friedman be cut any slack whatsoever in his lame attempt to distinguish his admiration for the achievements of China from the brutal realities of its government. And here is just a taste of that reality:

    Oh, spare us the crocodile tears. We’re all aware you only care about corporate human rights abuses when they’re done by Chinese (and Russians).

    BP and Coast Guard Threaten to Arrest Journalists for Covering Oil Polluted Shoreline in Louisiana

    At least China doesn’t claim to be spreading “democracy” and “freedom” to Africa, but instead invests in infrastructure that benefits everyday African lives.

    Comment by Sublime Oblivion — September 24, 2010 @ 7:05 pm

  9. About the main theme of the post: I believe that in this day and age, the Chinese model is emerging to be the best alternative.

    In just a few years, its technocratic leadership, unbeholden to corporate elites or populist whims, have managed to build what is now the world’s biggest renewable energy sector – a key strategic coup given the challenges they face with accelerating climate change and peak coal. These successes have been replicated throughout many other sectors, especially in the more technologically advanced ones.

    Soon enough it will overtake and bury the fiscally-overstretched, stagnant Western world, and take the decisive (and necessary!) lead in addressing the Limits to Growth on this planet.

    Comment by Sublime Oblivion — September 24, 2010 @ 7:12 pm

  10. […] This post was mentioned on Twitter by R, JasonG. JasonG said: Streetwise Professor » Tom Friedman: Gung Ho! […]

    Pingback by Tweets that mention Streetwise Professor » Tom Friedman: Gung Ho! -- — September 24, 2010 @ 8:44 pm

  11. BTW, I’ve read the article and would take it with a pinch of salt.

    1. “Mocking the ‘monkeys in the West’ who have been outraged by Mugabe’s brutality, my source — a cold-hearted killer — predicted that the diamond deal with Beijing would mean they could stay in power indefinitely.
    ‘You can write 1,000 stories, and print them 1,000 times, but it won’t make any difference,’ smirked the official. ‘We have all the diamonds, so we have all the weapons — and we will kill anyone who tries to take anything from us.’ ”

    LOL. Is he trying out for a starring villain role in a movie, or is the author exaggerating?

    2. Let’s not also forget that the Daily Mail comes out with headlines such as Russia: A totalitarian regime in thrall to a Tsar who’s creating the new Facist empire.

    Comment by Sublime Oblivion — September 24, 2010 @ 8:50 pm

  12. S.O., of course, you would not mention specifically what’s wrong about that Daily Mail headline. Namely: nothing at all.

    Comment by Ivan — September 25, 2010 @ 2:37 am

  13. Well Sublime substandard, hopefully the Chinese decisive approach to sustainability will to be to eliminate the shallow end of the gene pool, you know idiots like yourself, from contaminating society an further.

    Be careful what you wish for S/O, you might just get it.

    Comment by Andrew — September 25, 2010 @ 3:14 am

  14. @S/O: In the ’20s and ’30s you would have been cheerleading for Mussolini, Stalin, and/or Hitler. Technocratic leadership my ass. That is a delusion held mainly by technocrats who are wildly overimpressed with their own knowledge and power. The Fatal Conceit. Renewable energy, blah blah blah. You are self-satirizing.

    The ProfessorComment by The Professor — September 25, 2010 @ 11:05 am

  15. @S/O. Hardly going to defend kleptocratic and brutal Nigeria (also known as Russia with jungle), nor Shell’s complicity therewith. And the Coast Guard’s conniving with BP is reprehensible, although hardly anything remotely comparable to the kind of brutality I was writing about. If that’s the best you can do, I pretty much rest my case.

    Interesting how you and Friedman are both enamored with China. I doubt Shell claims to be spreading democracy or freedom either, BTW.

    Your serial whataboutism notwithstanding, take a serious look at China’s dealings in the developing world. They are almost exclusively malign, by orders of magnitude more extreme, bloody, and brutal than anything that you can lay at the feet of Shell and all the majors together. Myanmar/Burma. Sudan. Zimbabwe. North Korea. Not to mention how it treats its own people.

    You think the Chinese give a rat’s ass about African lives? You are more out of your mind than usual. Han Chinese despise their own minorities (Tibetans, Uighers, etc.), to say nothing of black Africans. In fact, I can speak from direct experience that Han Chinese are pretty unabashed about their racism.

    The ProfessorComment by The Professor — September 25, 2010 @ 11:22 am

  16. With all due respect to SWP, who has been feeding the Dragon ever since Nixon went to China? And who said shipping all those low paid manufacturing jobs to China would lead to the invisible hand making Americans happier and richer because we would all get highly paid FIRE (Finance Insurance Real Estate) or tech design jobs?

    Republicans (and a lot of Democrats led by Clinton) fed the beast. From 1972 on they allied America as Oceania with Eastasia, because after all, Oceania has always been at war with Eurasia. When Bush tentatively tried to get friendly with Eurasia as a hedge against Eastasia getting more ornery in 2001, Cheney and co killed this by making Mikhail Khodorkovsky the deal breaker and made damn sure the Colored Revolutions were backed fully 100% by Washington and the Russians’ noses were rubbed in it.

    So I don’t have much use for SWP suddenly warning us about the Yellow Peril after supporting policies for years that might have fueled it and for reducing any U.S. ability to condemn Chinese empire/base building worldwide by staying silent about America’s 120 country base empire.

    AK shouldn’t buy into all the hype about China’s economic growth being completely solid or them NOT cooking their books. But by the same token, the Professor and mainstream Republicans in general have been feeding the beast they now see as a threat. Talk about self-fulfilling prophecies.

    Through predatory trading, China had killed its U.S. competitor in rare-earth materials, establishing almost a global monopoly.

    The world depends on China.

    Japan capitulated and released the captain.

    Now Beijing has decided to rub Japan’s nose in her humiliation by demanding a full apology and compensation.

    Suddenly, the world sees, no longer as through a glass darkly, the China that has emerged from a quarter century of American indulgence, patronage and tutelage since Tiananmen Square.

    The Chinese tiger is all grown up, and it’s not cuddly anymore.

    And with Beijing’s threat to use its monopoly of rare-earth materials to bend nations to its will, how does the Milton Friedmanite free-trade ideology of the Republican Party, which fed Beijing $2 trillion in trade surpluses at America’s expense over two decades, look now?

    How do all those lockstep Republican votes for Most Favored Nation status for Beijing, ushering her into the World Trade Organization and looking the other way as China dumped into our markets, thieved our technology and carted off our factories look today?

    The self-sufficient republic that could stand alone in the world is more dependent than Japan on China for rare-earth elements vital to our industries, for the necessities of our daily life, and for the loans to finance our massive trade and budget deficits.

    How does the interdependence of nations in a global economy look now, compared to the independence American patriots from Alexander Hamilton to Calvin Coolidge guaranteed to us, that enabled us to win World War II in Europe and the Pacific in less than four years?

    Comment by Mr. X — September 29, 2010 @ 7:46 am

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