Opinion: Free Market Minute

If You Want the World to Be Your Oyster

Don't Try Eating it in Beijing

Why has the air in Beijing, China been so dirty and polluted that, just days before the Summer Olympics were set to begin, athletes worried about the need to wear air filtration masks to protect their health?

Hint: for much the same reason that toys imported from Chinese manufacturers were allowed to contain dangerous levels of lead and other chemicals, leading to U.S. protests and new U.S.
regulation
aimed at these and other goods. China is very much a command-and-control (read: communist-model) country. The consumer is not only not sovreign, one observer recently opined that

“The regime hopes the Olympic Games confirm communism’s favorable intent toward the people and the prosperity and status the government bestows on the nation.
“But the people exist for the benefit of the government. The structure ensures the continuation of the hierarchy, not the future of the people.”

So while I appreciate the opportunity to learn about a part of the world that is unfamiliar at first hand, I am certainly glad that I don’t live there to share the experience directly. As I like to say, the innocent know who they are; the Chinese people are not the bad guys here. When the health of the state is the highest-valued objective, the welfare of its citizens tends to finish any contest last.

Beijing is a densely populated city, but it’s neither the most densely populated nor the most heavily industrialized city in the world. According to recent reports, the Chinese government has spent over $17 billion in recent years, not including the $40 billion spent specifically on preparing for the Olympic Games, trying to bring air quality in Beijing to an acceptable level for athletes and Olympic visitors.

The potential for international embarrassment caused Chinese authorities to order a shut down of nearly all of Beijing’s manufacturing sites (at least 267 factories in and around Beijing) in the days and weeks leading up to the Olympic Games. In addition, authorities banned most private transportation in the city.

Nearby cities and provinces were likewise ordered to halt industrial production, and sent workers home on reduced pay ‘forced holidays.’ The “One World, One Dream” official web site of the 2008 Beijing Olympics describes anti-pollution measures ordered in Olympic co-host city Tianjin. The Chinese government suspended operations at more than eighty industrial and construction sites in Tianjin, halted subway construction, and prohibited citywide transportation of designated materials for several weeks before and after the Olympic activities. The web site even suggests that furloughed workers could spend their ‘holidays’ attending the Games in Beijing.

Total industrial control isn’t the only aspect of life that’s either prescribed or proscribed for the Chinese. Granting limited personal rights (at best) during ordinary times, authorities have made clear what they will tolerate from visitors and locals alike in terms of freedom of speech, of religion and of assembly. Full-bore suppression and censorship of Internet access, including hundreds of non-government-approved web sites, has perhaps made the earliest and most pronounced negative impression on foreign press and visitors to China.

The extreme measures did produce some needed air quality improvement in Beijing, at a tremendous and probably unknowable full cost to Chinese workers and others.

But which ultimately does a better job, including the human and other costs, of protecting citizens from the dangers of harmful product content, environmental pollutants, and product safety hazards—entrepreneurs and markets, or government activism? This series title, “Free Market Minute’ suggests one answer, but in truth, the full answer is a qualified ‘both.’

Since market discipline requires personal freedom as well as some minimal institutional guarantees—private property rights, contract law, and legal means of enforcement/adjudication—in order to be effective, there is an important role for civil government in a civil society. Without these minimal protections, repeated evidence is that citizens are at the mercy of whomever holds the reins of power, including a state that treats citizens as relatively low-valued assets.

In the next FMM, I’ll discuss why market discipline—coupled with the appropriate institutions—is the best possible way for citizens to both get what they want and minimize the possibility of harmful outcomes or abusive practices by other citizens at every level.