Slumdog Millionaire: China under the KMT?

Three things that helped me understand the early Cold War were Slumdog Millionare, The Man Who Stayed Behind, and I Chose China.
slumdog_millionaire

One thing the Communists were really good at, when they took over a
country, is giving a lower-middle-class lifestyle to almost everyone,
and keeping it there. In economies that could have integrated with
the west (Cuba, East Germany, Poland, Czechoslovakia, Romania, even
North Korea) this was really bad. In economies that started out
tremendously, and bitterly poor (the Soviet Union and China) this
wasn’t necessarily a bad deal.

I think India now is what China would have been if the KMT had won the
civil war. More-or-less western government tend not to go crazy, so
no cultural revolution, no great disruption, etc. But Communists
countries tend to do far more for the extreme poor, so you get
gigantic slums like in Bombay which simply do not exist in China.

13 thoughts on “Slumdog Millionaire: China under the KMT?”

  1. Very interesting point (although the sole shudders to even contemplate whether China’s current prosperity can be traded off with Great Leap Forward and the Great Proletarian Cultural Revolution). Democracy made India slower to shed autarky than some more authoritarian regimes.

    Does Vietnam count as a middle case? It is certainly no Laos or Cambodia, but would it possibly not be more prosperous now had it not had its economy militarized for as long as it did? (I seem to recall Vietnam having the fourth largest military in the world in 1975.) For that matter, I have to think that Cambodia would be better off today had Maoism never visited that state.

  2. Dexter,

    Thanks for your great comment!

    Probably because of the bureaucratic needs of a command-and-control ecoomy, there seems to have been a natural tendency for Communist states to fall into bureaucratic stupor — that great worker’s paradise of everyone being lower-middle-class. By 1959 or so China probably had everything in place for such a Polandization – Peng Dehuai in the Army, Liu Shaoqi as President, Deng Xiaoping as Chairman, Zhou Enlai at the Foreign Ministery.

    Unfortunately, the corpses of the Czar and the Great Qing did not have the bureaucratic tradition early on to stop a catatstrophically bad executive. Hence, Stalin and Mao.

    Fortunately for Vietnam, Ho never had the opportunity to govern as he might have wished, which allowed middle class values to survive in Saigon.

    Eventually, democratic soclialist (India, Brazil, Argentina) and communist socialist (China, Russia, Vietnam) countries all had the opportunity to integrate into a relatively free global economy.

    China is currently about twice as wealthy per capita as India, and this is largely a result of China liberalizing her economy a decade before India did the same. It Chiang had managed to win the Civil War, who knows what his economic policies would have been.

    On a personal note, I have photos of my wife’s mother’s family Great Seal. There is no documentation or explanation to go along with it. Their family records were burned during the Cultural Revolution, so that they could not be used against them.

  3. The Indian state of Bengal has been electing the Communist Party for at least 30 years now and the slums of Calcutta are generally seen as the worst in India, and that is certainly an achievement in India which has some strong contenders for the title. I remember reading an article a few years ago about how people who lived on the sidewalks in Calcutta were moving to live on the sidewalks in Mumbai because that meant an improvement in their standard of living.

    Maybe the political authorities in Calcutta have not been able to provide a lower middle class lifestyle to the slum dwellers on Calcutta because the Indian national government constrains the power of the Communist government officials in Calcutta to commit mass murder.

  4. Mark in Texas,

    Thanks for the comment!

    Maybe the political authorities in Calcutta have not been able to provide a lower middle class lifestyle to the slum dwellers on Calcutta because the Indian national government constrains the power of the Communist government officials in Calcutta to commit mass murder.

    I agree. Or at least, the confiscation of property, the creation of a command-and-control economy, the power of arbitrary arrest and detention, and so on.

  5. India will fall far behind China, India’s primitive social stucture is just one of their diadvantages

    Karla Hoff, an economist at the World Bank who is currently working at Princeton University, and her colleagues reported the results of experiments conducted in villages in the Indian state of Uttar Pradesh (American Economic Review, vol 98, p 494). In these tests, two players started out with 50 rupees each. The first could choose to give his to the second, in which case the experimenters added a further 100 rupees, giving the second player 200 rupees in total. The second player could decide to keep the money for himself, or share it equally with the first player. A third player then entered the game, who could punish the second player – for each 2 rupees he was willing to spend, the second player was docked 10 rupees.

    The results were startling. Even when the second player shared the money fairly, two-thirds of the time the newcomer decided to punish him anyway – a spiteful act with seemingly no altruistic payoff. “We asked one guy why,” says Hoff. “He said he thought it was fun.”

    Hoff found that high-caste players were more likely to punish their fellow gamers spitefully than low-caste players, leading her to suggest that context is everything. It is not that people in Uttar Pradesh are nastier than elsewhere, but rather that the structure of their society makes them acutely conscious of status. The sensitivity of higher castes to their position makes them tend not to support any changes that threaten to level the social hierarchy, such as development projects. But higher castes can also put others down, safe in the knowledge that “untouchables” are unlikely to strike back. “If you’re low caste it’s dangerous to rise in status,” says Hoff. “You’ll get beaten up or worse.”

    I saw a collection of photos showing low caste people destitute, missing an arm and leg, ect . They complained about upper caste oppression and suffered the consiquences. On pic was of a low caste Indian girl who got uppity by refusing to have sex with a high caste for a dollar, her family house was burnt down. Police do nothing.
    Two of the kids who starred in Slumdog Millionare have just had their houses bulldozed in a slum clearance. One father complained and got a police beating. Alll Indians are aware of the children working as slaves in all kinds of jobs including dangerous ones, when I say children I don’t mean teens. There is a big demand for docile 6 year old girls to work as domestic servants.

    Most of the Muslim and Christian converts are former low caste Hindus.

  6. Dear Poster,
    Clearly you have no knowledge of both your own history, as well as India’s history, so let me break it down to you. Comparing India and China’s growth on the basis of the type of regime alone is clearly an exercise in futility. China was “communist” (political theorists would say more accurately “maoist”) under Mao (till 1975) where horrible events like the GLF and the Cultural Revolution took place.

    India, on the other hand, was considered “Socialist” (autarchic) during the same time. China’s progress has been attributed to “opening up” the economy under Deng. While China had been modernizing its economy since the 1980s and conducting liberalization (which is equivalent to saying destroying its communist roots), India was still stuck in its centrally planned command economy till 1992.

    Suffice it to say that neither China’s Maoism nor India’s pseudo-Socialism has ever done anything good for the poor. It was opening up their markets, and allowing private enterprise that did the trick. China has had a head start of a decade and a half over India. As someone who has spent considerable time in both countries, I can easily assert that while China’s progress is astounding in the least, it comes with a cost that is deadly to the dissenting few. I would much rather have India’s poverty and freedom over China’s paranoid dictatorship.

    Besides India will catch up and overtake China by the turn of the next century. That’s what history has taught us – constructing a house on unstable, shaky sand (the silenced masses) will inevitably fall down. India’s democracy on the other hand is the turtle of the story – it’s slower, but the foundations are not cancerous.

  7. Genetic pacification? .
    ” For most humans, little has changed since time immemorial. ‘They’ trust only close kin and long-time friends. ‘They’ kill over questions of honor and loss of face. And ‘they’ admire men whom we consider to be thugs.

    But there has been change in some regions, like the European world, East Asia, and parts of South Asia. For the historical economist Gregory Clark, the ultimate reason is the rise of the State and its monopoly on the use of violence. This monopoly created a new set of selection pressures. What had once been rewarded in the struggle for existence was now penalized. And vice versa.”

    Dissenting or disruptive personalities are quite a bit rarer among Chinese .

    10 Questions for Greg Clark
    “[T}o try and explain differences in income internationally in 1910 I found that asking simple questions like “Why could Indian textile mills not make much profit even though they were in a free trade association with England which had wages five times as high?” led to completely unexpected conclusions. You could show that the standard institutional explanation made no sense when you assembled detailed evidence from trade journals, factory reports, and the accounts of observers. Instead it was the puzzling behavior of the workers inside the factories that was the key.[…]

    The book challenges the modern orthodoxy of economics – that people are essentially the same everywhere, and with the right set of institutions, growth is inevitable – in three ways. First by showing that there were societies like medieval England where the institutional structure provided every incentive for growth, yet there was no growth. Second by pointing out that by objective measures the institutions of many highly successful modern economies, such as in Scandinavia, provide much poorer incentives to individuals than those of very poor economies. And lastly by showing that in the long run economic institutions that would prevent growth tend to get replaced endogenously by ones that are pro-growth[…]

  8. India is a total and absolute disaster. The cultural revolution did get rid off the land lords (basically higher caste chinese).

    India is riddled with religious, ethnic and cultural tensions on so many ends that it is an absolute joke. India cannot even deal with Pakistan or bangladesh, two countries which should not even exist. This is why India is a laughing stock, and always will be.

    By the way pakistan, bangladesh, muslim areas in general of India were all buddhist areas until the muslims forced them to convert. It were generally the hindus, even the lower caste hindus that refused to convert amidst discrimination.

    There is also the little fact that India’s military is an absolute joke that can barely keep up with pakistan a third rate power that only exists due to foreign support. China could easily take over india.

    India needs land reform and industrialization. It is not the free market that drives the economy. It is infrastructure and the government encouraging production. Look at the US economy from 1789-1971, it utilized the American system of economics (though, to a lesser extent from 1913-1971) which did just that. Sovereign credit and investments were made into the nation to build even basic infrastructure that India lacks. The Manhattan project and the space program also brought about advancements such as nuclear energy and the Internet that we are using today. China is also basically using sovereign credit to improve the lives of its people, which has been successful. China’s economy is now only 1/3rd exports and it’s foreign exchange reserves are only 60% in dollars.

    It was the post-1971 free market chicago school system that brought down america. Now the US healthcare system and infrastructure is crumbling due to neglect from all of the years past. The purchasing power for US citizens has also decreased dramatically, only to be partially subsidized by ponzi credit bubbles.

    Developing countries usually fall into the trap of either free-market system or socialism and communism. There is a third way and it has been the only productive element to any economic system which are the principles of the American school of economics.

    Democracy? Democracy is a joke it is the rule of money and totally irrelevant. This is why the founding fathers of the US loathed democracy and created a federal constitutional republic. It wasn’t until the seventh amendment that mob rule formally began in the US.

  9. Lere,

    Excellent book. I have positively looked at works by Greg Clark [1], Nicholas Wade [2], and Steven Pinker [3].

    Genetic pacification, I think, will be part of our future — as well as our past.

    Rob,

    Whiel most of your post is more provacative than substantive, your conclusion is strong:

    Developing countries usually fall into the trap of either free-market system or socialism and communism. There is a third way and it has been the only productive element to any economic system which are the principles of the American school of economics.

    Democracy? Democracy is a joke it is the rule of money and totally irrelevant. This is why the founding fathers of the US loathed democracy and created a federal constitutional republic. It wasn’t until the seventh amendment that mob rule formally began in the US.

    Democracy is over-rated. In the United States, its main function is to allow the people to remove intolerate leaders — something totally different from the idea of the people as the authors of the laws.

    (I am a fan of initiatives and referenda on a state-level, though, as they serve the experimental function of federalism.)

    [1] http://www.tdaxp.com/archive/2008/01/20/review-of-a-farewell-to-alms-by-gregory-clark.html
    [2] http://www.tdaxp.com/archive/2007/05/02/review-of-before-the-dawn-by-nicholas-wade.html
    [3] http://www.tdaxp.com/archive/2006/07/06/notes-on-buller-pinker-and-ridley.html

  10. Simon,

    In general I agree. India has less political risk than China, the economic growth of both India and China largely comes from their market-oriented reforms, etc.

    My only main disagreement, besides your assertion I do not know history, is with this paragraph:

    Suffice it to say that neither China’s Maoism nor India’s pseudo-Socialism has ever done anything good for the poor. It was opening up their markets, and allowing private enterprise that did the trick. China has had a head start of a decade and a half over India. As someone who has spent considerable time in both countries, I can easily assert that while China’s progress is astounding in the least, it comes with a cost that is deadly to the dissenting few. I would much rather have India’s poverty and freedom over China’s paranoid dictatorship.

    Soviet-style Communism (such as China enjoyed when Liu was stronger than mao, as well as when Hua was stronger then Deng) as proven very effective at moving entire societies to a lower-middle-class standard of living. I would rather live free. Give me the choice between freedom and starvation, or leadership of the party, an apartment, and rice, however, many would choose differently.

  11. I’ve only mentioned informally how documented historical events have shaped the world today, and the general trend for tomorrow.

    In the long term India certainly has much greater political risk than China.
    There are also the military implications. India has a very weak military, and pakistan is allied with China. If there ever is a conflict between the two and especially considering America’s declining influence there may come a time where India becomes an occupied territory of China even. The Indian leadership is totally clueless and corrupt.

    If you look at the project demographics the muslim population in all of south asia is booming, once the muslim population gets large enough of course it will demand another partition and independence as it always does. There can only be either islamic law for muslims and dhimmis, or muslims can have their own nation altogether. There have been many examples of this, even look at Lebanon or the various conflicts with muslims occurring around the world right now. The muslims were dormant for a few centuries ever since the Western empires became the predominant force in the world. It was only after the collapse of the stagnant Ottoman Empire and the realignment of islam shifting away from turkey back to saudi arabia and the eventual independence of such nations did islam re-emerge on the world stage.

    India is even having trouble hosting the commonwealth games now. Even Malaysia, a much smaller nation was able to host the games in ’98.
    In fact during the 1950s the average gdp per capita of India was higher than that of China.

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