Open Letter to an Anonymous E-Mail Correspondent

by Don Boudreaux on January 25, 2011

in Myths and Fallacies, The Economy, Trade

Mr. or Ms. Americafirst

Dear Sir or Madam:

You accuse me of “treason” to America.  My offense?  Encouraging Uncle Sam not to tax or to otherwise obstruct Americans who wish to trade with Chinese producers on terms that these Americans find attractive.

You argue that “China is a communist dictatorship and so is advantaged by its subsidies and slave labor to out-compete democracies to steal world markets.  American businesses and workers can not compete against this.”

So you apparently believe that communism – or, at least, dictatorship – is a form of economic organization superior to capitalism.  I have some questions for you.

Why has China’s share of global export markets increased only after that country’s liberalization began in the late 1970s?  Because Mao was far more communist and dictatorial than was Deng and his successors, shouldn’t China under Mao have been an even more potent global economic juggernaut than is China today?

Why are Cuba and North Korea not gobbling up world markets, “stealing” American jobs, and “threatening America’s very survival”?

Why is Hong Kong – which has a robust free-market economy, and still uses its own currency – continuing to grow?

Finally, you somewhat inconsistently list “high taxes” and “cumbersome regulations” as causes of America’s alleged inability to compete against the Chinese.  But is not slavery (which you – wrongly – allege to exist in China) a huge tax upon workers, discouraging them from producing efficiently?  Is not communism itself a high tax on productive individual efforts – on the efforts of entrepreneurs, managers, and workers – as well as an unmatched font of “cumbersome regulations”?

In short, why do you presume that China’s economic success springs from its remaining vestiges of communism rather than from its increasing economic liberalization?  And why do you presume that taxes and regulations that weaken America’s economy strengthen China’s economy?

Sincerely,
Donald J. Boudreaux

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