www.thornwalker.com/ditch/lights154.htm

August 17, 2007

Strakon Lights Up
 

Chinese junk
 

 
I've owned two Chinese-made DVD/VCR decks, and together they lasted 18 months. To put it more precisely, the second one is still functioning, but only as a DVD player. Its tape-transport mechanism went belly-up after five months' use. I spent a total of $175 on the two decks, buying the first at Wal-Mart ($75) and the second at Radio Shack ($100).

I knew I was taking a risk, buying cheap Chinese junk, but I'm dirt poor, and I was desperate to enter — finally! — the wonderful world of DVDs. And then, of course, I was desperate not to have to leave it. I wished I could afford something made in Japan or Korea, but I couldn't put together the necessary money all at one time. (By the way, I'm old enough to remember when the phrase "cheap Japanese junk" was current.) Now, however, I won't be buying any more Chinese gear until its reputation begins to approach that of modern Japanese or Korean gear.

The first piece of DVD/VCR junk I bought bore a hitherto-respectable Japanese brand name — but like every other deck Wal-Mart was selling, it turned out to have been made by Celestials laboring away somewhere in the Middle Kingdom. If I'd performed my due diligence before hitting the Super Store, I might have saved myself some trouble; but I'm not an obsessive Consumer Reports type of guy. I am, however, capable of learning from experience. I assume millions of other Americans are learning similar lessons at present — insofar as they are allowed to. More on that last point later.

Even if I had thumbed through a year's worth of Consumer Reports, though, I'd still have been in a fix. The fact is that when poor people go to market they have to make choices that are harder than those faced by their more affluent brethren. They have to buy inferior products; or devote a disproportionate share of their resources to buy a standard product in a given area; or make do with less; or just do without until they can afford better products. And that's the case in America, Kazakhstan, Japan, Liberia, Cuba, and everywhere else in our universe of scarcity. No political-economic system has succeeded in repealing scarcity; but if we drop cultural and genetic and other kinds of inheritance out of the equation, we can see that, for people of modest means, good things are in shorter supply and less widely available under the more-statist systems than they are under the less-statist.

That's some plain and compelling free-market analysis, I think, but in looking at the avalanche of Chinese junk we have to do some unpacking and unfolding, since an overall free-market environment exists nowhere in the world.
 

First we have to understand that the structure of Chinese imports under the present system of elite-managed trade (masquerading as "free trade"), which achieved its apotheosis during the Clinton regime, is certainly different from the structure that would obtain under a free market. Under elite-managed trade, the Central Government awards crucial subsidies to established corporations with political ties both apparent and obscure. The subsidy most characteristic of the Clintonistas was delivered by their foreign ministry and their trade ministry ("State Department" and "Department of Commerce" in Amspeak). Those entities busily cut deals with dirigiste foreign states in order to protect and bolster favored transnationals based in America. That's what Clinton Trade Minister Ron Brown was up to when he and his corporate buddies took that fatal plane ride in the Balkans, in 1996.

It's my guess that without managed trade, we'd be more likely to see Chinese products retailed in this country under, say, the Celestial Happy Smiles brand (I've made that up) rather than under brands we had learned to trust, such as Sanyo and Mattel. But we might not be seeing too much in the way of Celestial Happy Smiles stuff, not yet. In a free market and in an environment of justly held property, it takes time for an industrializing, commercializing country to spin up its quality control, not to mention an entire culture of standard business practice, to levels considered acceptable in advanced economies. Managed trade has short-circuited that process.

And the short-circuiting is worsened by the Chinese system, which (despite all the Yankee Happy Smiles on the mug of our internationalists) is not a free-market system. Like the American system, it is a system heavy with fascism; and unlike the American system, it is a system with a Communist heritage.

I shudder to quote Michael Ledeen, a neocon who has himself been accused of flirting with fascism, but he did write a revealing piece for the Wall Street Journal in 2002, observing that

China is not, as is invariably said, in transition from communism to a freer and more democratic state. It is, instead, something we have never seen before: a maturing fascist regime.... The current and past generations of Chinese leaders, from Deng Xiaoping to Jiang Zemin, may have scrapped the communist economic system, but they have not embraced capitalism. To be sure, the state no longer owns "the means of production." There is now private property, and, early last June [2001], businessmen were formally admitted to the Communist Party. Profit is no longer taboo; it is actively encouraged at all levels of Chinese society, in public and private sectors. And the state is fully engaged in business enterprise, from the vast corporations owned wholly or in part by the armed forces, to others with top management and large shareholders simultaneously holding government jobs.

This is neither socialism nor capitalism; it is the infamous "third way" of the corporate state, first institutionalized in the 1920s by the founder of fascism, Benito Mussolini, then copied by other fascists in Europe. ("From Communism to Fascism?," February 22, 2002, posted at Benador Associates, emphasis added)

... Nearly all the leading financial, business and industrial figures in China [are] invariably the close relatives, sons, daughters, nephews, wives, etc., of China's highest-ranking Communist Party officials. ("China: Towards Democracy or Fascism?," World Tibet Network News, September 30, 2004)

Realizing that the demise of communism deprived the CCP of an ideology and a reason to exist, Jiang (Zemin), Hu (Jintao), and their peers are quietly remaking China into a fascist state bearing a striking resemblance to its '20s predecessors, the kind of highly nationalistic right-wing dictatorship that emerged in the '20s and 30s in Germany, Spain, Japan, Romania, and most notably Italy. Since at least the late '80s CCP leaders have instituted economic programs recalling fascist ideas of "planned capitalism."

According to the media, 80 percent of all manufactured toys being offered for sale in America are manufactured in China. Affluent people, not just poor people, are frantically sorting through their children's toys in an effort to identify the items they've suddenly been told are dangerous. And then there's that Chinese-made Gilchrist & Soames toothpaste, which, it transpires, is laced with a dicey component of anti-freeze. Given the Britishoid brand name of Gilchrist & Soames, TLD's lords and ladies will haahdly be surprised to learn that the dentifrice can be found in "luxury hotels around the world." In other words, people able to throw down hundreds or, for all I know, thousands of dollars a night for a hotel room are feeling a sting similar to the one that little Strakon le miserable felt on the home-electronics front. Well, dammit, the rich shouldn't have to put up with such nonsense!

On cue, the cry is rising from all quarters that our regulators have failed — and that they have to do better, and have to be given more resources and more power. In particular, after more than three decades of suppressing innovation, persecuting manufacturers with insufficient political wiring, distorting the market for safety information, interfering with consumer preferences, and generally gumming up the works but good, the Consumer Product Safety Commission turns out to be staffed by two geezers pushing walkers and one trainee nose-picker with acne. All right, I exaggerate; but I'm sick and tired of hearing this "woefully understaffed" bushwa every time the bureaucrats are embarrassed by events.

In fact, outfits such as the CPSC cannot be "properly" staffed, because the job they are ostensibly assigned to do cannot be done. Government cannot ensure safety or acceptable quality any more than it can ensure peace and prosperity. You'll find my most extensive writing on this subject in a column, pegged on the Firestone tire disaster, that I wrote in 2000: "Regulatory blowout." But for present purposes, let's get at the claim of unsafe products by asking a simple question: Is it even true? — followed by a somewhat less simple one: What does true mean in this context?

Anyone who has been around (or under) government for a little while knows that government people don't always tell the truth and that sometimes even if they're willing to tell it, they can't recognize it. That's also the case, no doubt, with all of us who don't make our living in statish ways; but insofar as it depends on the initiation of force and the claim of special authority over the rest of society, government positively casts itself into the pit of epistemological chaos and darkness, and therefore into untruth. Government substitutes force and command for the ever-changing preferences of free actors in society, peacefully induced into cooperation by competition and the price system, which is the society-wide expression of the current choices of all free actors.

Companies sometimes undertake voluntary recalls. That's just what Mattel and Gilchrist & Soames did with their toys and toothpaste, respectively; the earlier recalls of tainted made-in-China pet food were voluntary, too. Recalls of tainted or otherwise unsafe products are commendable, and at first glance they appear to be a market phenomenon: obviously they're in the self-interest of companies that want to preserve their reputation. But some recalls are only apparently voluntary; the company initiates them, to be sure, but only in response to standards laid down by politicians, bureaucrats, and their kept scientists. In any case, when we see an entire series of recalls carried out by established companies over a relatively short period of time, we must take an especially close look at the political-economic climate in which they are occurring.

In a climate polluted by government and government science, truth recedes, and one especially powerful engine pulling truth down into the darkness is politics. That includes international politics. The companies involved in China are the beneficiaries of U.S. government intervention. As such, they must be prepared to continue to play the game with their political friends. Did the fact that the companies hit the panic button when they did have nothing to do with politics? We have at least to wonder whether the current fuss has actually emerged from covert dickerings and bickerings between Beijing and Washington, and has less to do with product safety, in any objective sense, than with North Korea or Iran or the recently established "Energy Club" among Russia, China, and the Pipeline-istans. Alternatively, it may have more to do with domestic political pressures and resentments that are finding a safety valve in the news releases of the regulatory bureaucracy.
 

But "quid est veritas," anyway? Now, I'm a believer in objective truth, but just here I'm writing, if you will, as a Hayekian. No one can know the "truth," in terms of what all people should consider safe, what they should bring to market, and what they should buy. In fact only the actor can know that, for himself and in terms sufficient to himself; and his knowledge and his choice to act on that knowledge are subject to change at any time.

Are Chinese toys less safe than the toys that our parents found safe enough for us thirty or forty years ago? Are Chinese products, overall, really less safe than American products now? To what extent does the present safety crisis reflect the modern government culture of unbalanced safety — bureaucratically defined — that condemns children to (certifiably non-toxic) plastic bubbles at the expense of their learning how to live in the world, cope with it, and enjoy it? Does the government really have any business substituting its own standards for those of parents who wish to provide their children with affordable toys?

No one man can know how all people in a society should value things, but he can know "the facts" of a thing, assuming his logic is sound and his sources reliable: According to thirty years of analysis by nine different labs, Substance X contains three parts per million of Substance Y. And 6 percent of rats fed two pounds of the stuff every day come down with hyperspondulix of the precocia sinistra. (Considerable slipping and sliding is possible even at this level, of course.) Let us assume in arguendo that only the government knows the facts. Well, why would that be so? We have to understand that leviathan's crushing regulatory climate stifles both the market for safety information and the non-government safety-certification industry. Moreover, it distorts the operations of the insurance industry and the workings of tort claims under the common law. It didn't take me too long to confirm that the video gear I bought was junk, but if the general run of Chinese products tend to be junk, and especially if Chinese toys and toothpaste contain toxic junk, why are most people finding out about it only now?
 

As for the question of why 80 percent of the toys offered for sale in America come from China, I am tempted to make the case that the de-industrialization of America has gone far beyond what one would expect under the law of comparative advantage, and that it owes much to the U.S. system of mixed fascism and socialism.

But then I'd have to write a long article instead of just a brief sketch, wouldn't I?

August 17, 2007;
revised August 20, 2007

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