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Comment by Al-Khwarizmi | Hacker News Reader

US: "You must embrace the free market, open the markets, liberalize everything, avoid protectionism. It's better for you because it's more efficient, you will be richer, blah blah."

Western countries: "OK."

China: applies protectionism, obtains unprecedented growth, steamrolls markets

US, Western countries: "Free market is obviously much better, protectionism and planned economies are inefficient and can't work, but... but... they're cheating!"

At least the US acts in their own interest (anarchy, i.e. the free market, makes sense if you're the strongest). What's pathetic is that European countries believe all the neoliberal dogmatic BS when we don't even benefit from it.

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The idea is that if everyone plays by the free market rules, the average country will be better off.

If every country plays by these rules except one, which uses mercantilist tactics to win zero sum games, that one country will have an advantage.

If every country plays by mercantilist rules, that advantage will not be there for everyone, since now the game has changed.

China's "unprecedented" growth was achieved by Japan and Korea during their peak growth period. Britain was the original champion of liberalization while the US was protectionist for much of its history. The EU is still quite a bit richer than China and has done well during this liberal period since nearly destroying itself in WW2. There are so many details you are choosing to ignore.

Anything works when you are the strongest, the argument is greater good vs. individual gain. The mercantilist model works well when you are the only one executing it into a free market. If everyone is behaving in a protectionist manner, than it gives no advantage and (in theory) everyone in the market has lower growth. However, the 'strongest' parameter still applies, and we can see this right now with the tariff war between the US and China. The US still has the strongest economy at the moment, so the instant the US began behaving in a protectionist manner the Chinese suddenly became much more interested in (slightly more) serious negotiation.

I actually don't fault China for executing their strategy, it certainly made logical sense and has lifted hundreds of millions of people out of poverty. I also don't fault Europe for executing their strategy and they have benefited from it - Europe was ravaged by wars over its history and one of the ways to avoid that was tight economic integration. Different circumstances require different strategies.

Do you really think the mercantilist model is sustainable in the long run? It seems to me that it works great for playing catch up, but only if there are nations willing to purchase your goods.

China doesn't have the domestic market they could have if they hadn't weakened their currency by transferring wealth from savers to the exporters.

China is the monkey's paw to Western liberalism.

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