The purpose of our exchange is not to disprove each other but to seek convergence toward truth through communication.
A case can easily be made that state-owned enterprises are economically inefficient, at least in the form currently constituted in China. But the solution does not necessarily lie in privatization. There are ample data to show that the separation of ownership from management enhances the performance of a corporation. China has recognized this fact and moved, at least in policy, toward the separation of the state ownership from the mamagement of its state-owned enterprises. The implementation of this policy is not simple, for cultural, historical and organizational reasons. There is no debate on the desirability of the professionalization of management at this juncture, although it once was an issue had been the subject of serious struggle, the so-called "red vs expert" argument. It is safe to predict that we have not seen the end of the controvercy, given the pervasiveness of the permeation of bougeois values in technology. Still, even if socialist ownership should carry an economic penalty, it may be worth it to keep the system fair and just. It would be more economically efficient to close all hospitals, forbid philosphical discussions, etc, but it would not be a humane society. This is why the argument of tolerating pollution based of affordability is wrong headed. If societal value dictates it, itwill be affordable. Pollution has been allowed to ocur mainly because societal value condones it.
Your second point is a truism, although corruption has not disappeared under capitalism; it only has become more sophisticated. Civilization does not deliver man from evil. It merely makes evil tolerable through the development of fine style and high purpose.
Cheers,
Henry
Enzo Michelangeli wrote:
> Henry,
>
> Your prose is as clear and informative as ever, but you do not disprove or
> even dispute my two thesis:
>
> 1. That state-owned enterprises are a drag on China's development, sucking
> resources that would be much more productive in private hands. Or, as Cao
> puts it:
>
> >> "At present, state firms take up roughly 70 per cent of the means of
> >> production but they are only responsible for 30 per cent of the value of
> >> industrial production," he said.
> >>
> >> Mr Cao quoted figures from the official press showing that up to
> September,
> >> state enterprises had run up losses amounting to 74.8 billion yuan
> (HK$69.56
> >> billion).
>
> 2. That the extensive control of the economy by a meddling bureaucracy has
> resulted in widespread corruption.
>
> Far from being confined to China, these two elements can be verified in any
> country: the more state, the worse. The real challenge for the present
> leadership of the PRC is how to combine efficiency and honesty with a model
> that is faulty, but can't be suddenly thrown away without risking the
> de-legitimization of the political system and a phase of serious
> instability. In a sense, they are facing challenges similar to those
> experienced in Europe by the absolute monarchs in the 17th and 18th century:
> how to ride the tiger of economic development, managing the transition to an
> open society through a phase of enlightened autocracy, slowly divesting
> power but without having to face the guillotine. Which is why the preferred
> traditional philosophy has already shifted from the absolutistic and
> centralistic model of Legalism (liked by Mao Zedong) to a more Confucian
> attitude (hence Deng's attention for the Singapore model).
>
> Cheers --
>
> Enzo