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Montana Viewpoint

CHINA AND CAPITALISM

As China turns capitalist who will run the show, the citizens or mega-businesses?

November 17, 2003

When the United States was just a young country, a German poet named Schiller wrote a poem about America that said, in effect, "you are a new country off to a fresh start, and you have the opportunity to avoid the mistakes that this old continent, Europe, has made."

I was reminded of this poem - the only thing I remember from my one German class - when I visited China last month. I was there as one of twelve legislators from across America in a legislative study group called the Eleanor Roosevelt Global Leadership Institute. The Institute is funded by the Rockefeller Brothers Foundation, who picked up the tab for the trip as well.

We looked at trade, labor, and environmental issues in three Chinese cities, and had the opportunity to talk with people involved in those issues who were not members of the government, and with those who were. My preconception of China as a backward country was blown away pretty quickly.

China has enormous problems, enormous opportunities, and an incredible desire and ability to succeed. Much, much more ability than I had ever given them credit for. In the cities that we visited - Shanghai, Xiamen, and Guangzhou - massive investments are being made by Japanese, Taiwanese, and American firms. Thousands of buildings were under construction, many of them skyscrapers, and from the looks of the traffic and the stores, people had plenty of money to spend.

This is happening because China recently began moving from a centrally controlled communist economy to a less centrally controlled capitalist economy, and maybe even towards democracy. That's what got me thinking about that poem by Schiller. Here is an enormous nation making an extraordinary, even revolutionary, change in its political and economic philosophy; and basically, they are starting from scratch.

At the end of the trip, the American Consul General in Guangzhou arranged for a few members of the Chinese press to interview us and get our impressions. One reporter asked for our opinion of what we had seen in China, and asked us to "answer candidly and honestly, not like politicians or diplomats."

My response was to say that China is starting on a path that other nations have been going down for centuries, and has the opportunity to take the best and discard the worst. I talked of Montana, where for over a century two or three companies not only controlled the politics, they wrote the laws to benefit themselves rather than the citizens. As China moves to a market economy, I cautioned, they need to make sure that citizens, and not multinational corporations, decide what's best for China. Capitalism is good, I pointed out, and we need those multinational corporations, but a nation needs to work with them - not for them.

I believe that there is a balance that needs to be maintained between corporate interests and the interests of individual citizens, and I think we've let that balance slip in America. It was over 100 years ago that Teddy Roosevelt referred to the "malefactors of great wealth" and began to bust the corporate trusts that controlled not just the economy, but the government as well. In essence, it was his goal to wrest government from the hands of corporations and return it to the people.

If government has any function, it is to protect its citizens from that from which they cannot individually protect themselves. That's true whether we're talking about crime or national defense or epidemics. It's no less true of outrageous electricity prices due to artificially created energy shortages or of life saving drugs priced beyond our reach by the world's most profitable companies.

We've had lesson after lesson about major corporations reporting inflated profits with dishonest accounting, and lifelong employees left without pensions (but not the executives) when those companies went bankrupt.

People who run big business are human, and like many people left to their own devices have a tendency to set their own ethical standards, both personally and in their business practices. As long as those practices are good for the country and do no harm to our citizens, fine and good. When they do, then it's time for government to step in and protect the citizens. That's not being done in America today as is made obvious by almost daily news stories about corporate excess or wrongdoing.

Not regulating big business harms the majority of America's citizens, and helps only the people who, quite frankly, are already helping themselves. China has a chance to nip that kind of conduct in the bud, but America has some major pruning to do, and we'd better start doing it if we're going to survive as a democracy where the citizens run the show.

Jim Elliott
Phone: 406-444-1556
Mail: State Senate Helena, MT 59620

jim@jimelliott.org