Bernie Tells a Whopper About China

Oh, I try to stay clear of politics these days. You know, yeah.

But sometimes, someone makes such an outrageous claim that I can’t help myself from chiming in. This post is courtesy of Bernie Sanders, who said the following in an interview recently on CNN:

“China is an authoritarian country … but can anyone deny, I mean the facts are clear, that they have taken more people out of poverty than any country in history. Why you criticize when I say that — that’s the truth. So that is the fact. End of discussion.”

First, the fact. Yes, China has taken more people out of poverty than any country in history.

Second, the non-fact. End of discussion. Nope. Not in a million years. Not until Bernie answers this one question: How did China relieve its destitution and poverty?

Answer: capitalism

So you see, Bernie has just disproved the over-arching thesis of everything he says about economics. He is crediting authoritarianism (and socialism??) for China’s growth. Major whooper alert.

Here are the other facts that Bernie has eschewed.

During the years that socialist command economics were under full-force in China, how many people were brought out of poverty? That’s the wrong question. How many people died because of their oppressive policies. Uncountable.

From Mao’s take-over in 1949 until the wakening years after his death thirty years later, China was severely impoverished. GDP per capita was among the lowest in the world. They were isolated from the world economy. The great famine of 1958-1961 killed millions. Their army was in tatters. When they attacked northern Vietnam in January of 1979 (hey, weren’t the Vietnamese their socialist comrades!), they were embarrassingly rebuffed by their southern neighbors who were actually poorer than they were!

So what happened? What changed? How is it that the impoverished China of the early 1980s has grown into an economic powerhouse?

I have to say it again: capitalism.

Economic reforms loosened the strings on individual achievements which were muzzled under the socialist command economy. And while the authoritative communist regime continued their hold onto power with a death grip (think Tienanmen Square 1989), the new economic freedoms allowed unprecedented growth and unprecedented foreign investment.  In other words, capitalism started doing its thing.

Let me leave you with an example from Vietnam, who following China’s lead, also implemented market reforms in the 1980s that began to raise the Vietnamese out of poverty as well.

In 1984, there was famine in parts of Vietnam. Their lush farm lands couldn’t even feed their own people. They had to import low-quality grains from places like Bulgaria. I’ve had many Vietnamese families tell me about those years living under a socialist command economy. The common Vietnamese word they use is “kho” – meaning miserable. And then the market reforms hit. The government began allowing farmers to exceed their government quotas of rice in order to sell the excess or plant other cash crops. What happened when farmers began to have incentive to grow more knowing that they would actually benefit from it? Production soared. Within a few short years of allowing people to pursue their own personal interests, Vietnam went from not being able to feed their own people to being one of the largest rice exporters in the world.

The transformation was remarkable. And yes, it all happened under an authoritarian communist regime.

But it’s not the regime that gets the credit, it’s the individuals (and also government entities) who took a risk to invest money, to solicit investment, to plant extra, to think big, to dream for a better life for their families. There was profit to be had by the people. And they did it. They used the mighty tool called capitalism, even within a tightly controlled economy, to better their lives.

So let’s make this very clear: socialism didn’t build China’s wealth. Not by a long shot.  Socialism doesn’t pull anyone out of poverty. It just holds back growth potential. Imagine where China would be today if Mao allowed entrepreneurship back as early as 1949?

So, Bernie, your China example is just disproving your point about capitalism.

Life, liberty, and the pursuit of happiness. China has been experiencing their own brand of this for the past thirty years, no thanks to socialism.