The Chinese like free trade when it helps them achieve hegemony

From Henrique Shneider:

China has a long history of “state consequentialism.” According to this philosophy, all actions that make the state stronger are morally good. It even makes it the moral task of the state and its servants to take actions that make it stronger. While such thinking is not particular to China, the most ancient form of state consequentialism is Mohism, a philosophical movement that emerged there around the fifth century BC.

Two hundred years later, Chinese Legalism pushed state consequentialism to the next level. Han Fei, its chief proponent, was opposed to domestic markets with the free exchange of goods. His ideal was a central planner that determined input and output and prices. However, he loved the idea of export – if controlled by the state. In chapter 46 of his Han Feizi text, he wrote: “If people attend to public duties and sell their produce to foreigners, then the state will become rich. If the state is rich, then the army will become strong. In consequence, hegemony will be attained.”

Hegemony is usually the political goal of state consequentialism. With such a rich tradition in this philosophy, it may be that Xi Jinping’s China is only embracing free trade to become a new hegemon.

There are three reasons to believe this hypothesis. First, state consequentialist thinking is very much alive in China (and elsewhere). Second, Mao Zedong, the founder of the People’s Republic, was a great admirer of Han Fei. Third, the Legalists’ texts are widely read in the Communist Party’s cadre schools.

My grandfather was fond of saying “If you buy cheap, you pay dear.” The real price of cheap imports from non-democratic countries like Russia, China, North Korea or Iran is that you are funding their military expansion. Democracies, with the arguable exception of the US, tend to have other priorities.

Source: The Chinese like free trade when it helps them achieve hegemony

5 thoughts on “The Chinese like free trade when it helps them achieve hegemony

  1. […] A major concern as China moves away from free market reforms and towards more autocratic control. See China’s push for hegemony. […]

  2. Gary Major says:

    Good point Colin.

    I quite often read the phrase in property investing circles that because something is cheap doesn’t make it a bargain.

    Another analogy is the loss leader pricing big shops may engage in to destroy the competition. Once its gone the prices go up higher than the competition they destroyed.

  3. funstein19 says:

    So your grandfather didn’t like cheap stocks? Certainly wasn’t a value investor if he felt “if you buy cheap you pay dear”… must have thought buying at the top was best…or does is his advice not universal?

    • ColinTwiggs says:

      He was a great value investor.
      If you buy a cheap car, with defects, you will have many regrets. No matter how good the price. As with bottom-fishing for stocks.
      That is entirely different from buying a quality vehicle at a good price (value investing).

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s