The differences between Capitalism, Communism, Socialism, and a Social Safety Net

April 4, 2017

Socialism and communism are ideological doctrines that have similarities as well as differences. One point that is frequently raised to distinguish socialism from communism is that socialism generally refers to an economic system, and communism refers to both an economic system and a political system.

The fall of communism in the Soviet Union did not mean socialism failed. It meant the autocratic, one-party state that defined communism failed.

After all, Russia still has a social safety net that funds health care and pension programs.  With at least five years of coverage, men age 60 and women age 55 are covered for old-age pensions. Russia also offers a disability pension and a survivor pension.

Having socialist safety net programs does not mean a country is socialist or communist. For example, the United States is not a socialist country just because it has Medicare, and Social Security. The difference is that the United States has a multi-party political system and still has private ownership of property and a capitalist business system.

China changed in the early 1980s when its Communist Party adopted elements of capitalism and joined the World Trade Organization. It’s true that part of China’s economy is still state-run, but there are not as many social programs as there once were under the previous communist system.

That leads to this question: If China allows capitalism to coexist with socialism, is it still a Communist country? Just to make a point, in 2014 Bloomberg reported that about 75-percent of China’s industrial output came from private businesses and not state-owned enterprises.

While no one in China may own land (yet), private citizens and even foreigners may lease land in urban areas while land in most rural areas is still owned by village collectives in conjunction with the central government and cannot be bought or sold because no one holds the title to most rural land. There is also no property tax, rent, or mortgages that come with interest payments for rural areas. This means being poor in rural China isn’t the same as being poor in the United States, because families can’t lose their homes to a bank.

Imagine what it must be like to not worry about making the rent, mortgage, and property tax payments. There are almost 600-million rural Chinese, and they even get to vote in democratic elections for their village leaders.

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Lloyd Lofthouse is the award-winning author of My Splendid Concubine, Crazy is Normal, Running with the Enemy, and The Redemption of Don Juan Casanova.

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China sold porcelain, tea, and silk to the West; the West forced Opium on China

December 14, 2016

Chinese porcelain originated in the Shang Dynasty (16th century BC), and Jingdezhen in Jiangxi province is a well-known Chinese city where porcelain has been an important production center in China since the early Han Dynasty (206 BC – 220 AD).

Caravans carried China’s famous porcelains west: ceramic lusterware, lacquerware, snow-white vases, bowls, glasses, and dishes with sophisticated patterns. Only the Chinese knew the secret of making the thinnest and resonant porcelain, making it very expensive in European markets. Silk Road Encyclopedia.com and Gotheborg.com

Chinese porcelain was also available in the American colonies as early as the 17th century, but it did not become commonplace until after 1730. Before the U.S. Revolution, porcelain was exported to the colonies mainly by English and Dutch traders. European traders sailed to Canton (Guangzhou) in southern China, exchanged their goods (mostly opium) for Chinese products, and then returned to sell porcelain and other Chinese imports on the European and colonial markets. In addition to porcelain, teas, and silks were also exported from China in large quantities. Mount Vernon.org

Early American Trade With China says, “The demand for Chinese products: tea, porcelain, silk, and nankeen (a coarse, strong cotton cloth), continued after the U.S. Revolution. Having seen the British make great profits from the trade when the colonies were prevented from direct trade with China, Americans were eager to secure these profits for themselves.”

This hunger for Chinese products, while the Chinese found little in the West to buy, led to the Opium Wars, which Britain and France started, and won, to force China to even the trade imbalance.

China continued to sell the West silk, porcelain. and tea, while the West sold opium to China even though China’s emperors did not want the opium trade.

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Lloyd Lofthouse is the award-winning author of My Splendid Concubine [3rd edition]. When you love a Chinese woman, you marry her family and culture too. This is the unique love story Sir Robert Hart did not want the world to discover.

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Where Have All the Jobs Gone?

August 23, 2016

In 2012, U.S. News and World Report said, “America Lost 2.7 Million Jobs to China in 10 Years.”

In 2013, Think Progress.org wrote, “Study Finds Free Trade With China Lowered American Manufacturing By 29.6 Percent.”

In 2014, the Economic Policy Institute reported, “Growing U.S. trade deficit with China cost 3.2 million jobs between 2001 and 2013, with job losses in every state.”

In 2015, Boomberg.com published, “After Doubts, Economists Find China Kills U.S. Factory Jobs.”

In 2016, NPR broadcast on All Things Considered that “China Killed 1 Million U.S. Jobs, But Don’t Blame trade Deals.”

And those previous 5 stories are only the tip of Mt. Everest. When I Googled “U.S. Jobs Lost to China,” there were almost 70 million hits.

That’s why I find the following information so interesting: 59.2 percent of the civilian labor force age 16 and older had jobs in 1950, but in 2015, that ratio was 66.8 percent. Isn’t that an increase in jobs instead of jobs lost? – Labor Force Change, BLS.gov, table 4, page 22

In addition, Heritage.org says, “Those who attack China often do not examine real economic events: They do not measure actual failed businesses and actual job losses. Instead, they assume the U.S.–China trade deficit means that both production and production jobs are moving from the U.S. to China. … Imports do not cause unemployment; quite the opposite, they are a signal of prosperity and plentiful jobs.” The Heritage Foundation is an American conservative think tank based in Washington D.C. and the foundation took a leading role in the conservative movement during the Presidency of Ronald Reagan.  Therefore, you can’t blame alleged liberals for this report.

Cato.org, an American libertarian think tank (To be clear, libertarians are not liberals.) founded by the Charles Koch Foundation, (yes, that Koch) supports what Heritage says: “In the quarter century between 1983 and 2007, as real GDP more than doubled and the real value of U.S. trade increased five-fold, the U.S. economy created 46 million net new jobs, or 1.84 million net new jobs per year.”

If what Heritiage.org and Cato.org says is true, is the United States really losing jobs?

First, after the 2007-08 global financial crises caused by U.S. Banks and Wall Street greed, trade between the United States and the world shrunk by 12 percent and almost 9 million jobs were lost in the U.S. — jobs that were not lost to China. In fact, since 2009, more than 9 million jobs were added back making up for those lost jobs.

That proves that the United States has not had a reduction in jobs, but “In the U.S., jobs paying between $14 and $21 per hour made up about 60% of those jobs lost during the recession … such mid-wage jobs have comprised only about 27% of jobs gained during the recovery through mid-2012. In contrast, lower-paying jobs constituted about 58% of the jobs regained.”

Did you know that the United States has the 2nd largest manufacturing sector in the world, and that China only became #1 recently? Brookings.edu says, “As recently as 2010, the United States had the world’s largest manufacturing sector measured by its valued-added and, while it has now been surpassed by China, the United States remains a very large manufacturer.”

I wouldn’t be surprised if you said no.

At this point you may be confused or in denial.  You might be thinking that this can’t be true. How can the U.S. have such a large manufacturing sector when millions of jobs have been lost there?

Bright Hub Engineering.com offers one answer: “Robots have replaced a lot of activities formerly carried out by a human, with one robot replacing as many as ten workers.”

“In the last fifteen years, manufacturing in the United States has undergone a fundamental shift,” Arena Solutions.com reports. “As millions of U.S. manufacturing jobs have been lost to … automation, output has steadily continued to grow. And while U.S. manufacturing output has decreased by only 1% since 1990, manufacturing jobs have decreased by over 30% in the same time period.”

Losing manufacturing jobs is not only happening in the US. The Harvard Business Review.org says, “Manufacturing employment decline is a global phenomenon. As a Bloomberg story summarized: “Some 22 million manufacturing jobs were lost globally between 1995 and 2002 as industrial output soared 30 percent.”

Instead of blaming China, blame the real culprits: robots and the greedy rich who are behind the decisions to replace humans with automation. If one robot can replace ten humans, that’s a lot of increased profits, and more job losses are on the way. Earlier this year CBS Money Watch reported The robot revolution will take 5 million jobs from humans.

After all, Robots don’t need Social Security, medical care, retirement plans, paid sick leave or vacations — in fact, they don’t earn any money, even minimum wage with no benefits, making robots better than human slaves.

China is also going through its own robot revolution. FT Magazine reported this June that “Factories in China are replacing humans with robots in a new automation-driven industrial revolution.”

The manager of one Chinese company that makes stainless steel sinks in Guangdong talked about 9 robots doing the job of 140 full-time workers, “These machines are cheaper, more precise and more reliable than people.”

But what happens when there are no human jobs left for people to earn money so they can buy stainless steel sinks and all the other consumer crap factories churn out around the world? After all, robots don’t read books, watch films, use sinks or toilets, or even eat.

Are the world’s rich and powerful planning to get rid of the rest of us and replace us with robots, because they certainly are not creating robots to replace them?

Lloyd Lofthouse is the award-winning author of My Splendid Concubine [3rd edition]. When you love a Chinese woman, you marry her family and culture too. This is the unique love story Sir Robert Hart did not want the world to discover.

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Why do most Chinese save so much?

May 25, 2016

Hung Huang, one of China’s four Opras, and the CEO of China Interactive Media Group, the host of China’s TV talk show Crossing Over and one of the top-five most popular Bloggers in China wrote a post for the New York Times Economix Blog about why the Chinese save so much.

She thinks the Chinese save out of fear.

I don’t agree, because China is not unique when it comes to Asians saving money. Galbi Think.org says, “Savings rates for East Asian economies averaged about 35% of GDP.

For a comparison, the long term saving rate in the US has dropped to 5.4% for the last three years. – YCHARTS.Inc.

Another study reported by All Business.com says, “The fact that the saving rate of rural households (in China) is considerably higher than that of urban households—even though their income levels are so much lower—is surprising.”

That isn’t so surprising to me. I married into a Chinese family, and I’ve come to believe the Chinese can out frugal anyone. The less earned, the more the Chinese save.  All it takes is saying no to buying frivolous junk and eating out when the money isn’t there.

In fact, I found the comments to Huang’s New York Times Economix Blog post to be more convincing than what she thinks.

Melvin Chin said in a comment, “Asians, including Chinese, Japanese, and Koreans, are predominantly brought up with the concepts of frugality and saving from very young. … Saving teaches them to be proud of what is accumulated, enjoy the fruits of abundance, and cherish the habit as a virtue.”

Ray said, “The strong family connection is the reason for Chinese to save. It is the same in Taiwan. Almost every elder person I know saves for their descendants.”

Fei said, “Simply look at the generations of Chinese who live in North America, you’ll find out that the majority of them still maintain a lifelong enthusiasm of saving … because saving is a habit that’s deeply rooted in the Chinese culture.”

If all Asian cultures are so good at saving money and are all collective cultures, what does that say about self-centered individualistic cultures like the U.S.?

Lloyd Lofthouse is the award-winning author of My Splendid Concubine [3rd edition]. When you love a Chinese woman, you marry her family and culture too. This is the unique love story Sir Robert Hart did not want the world to discover.

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The Global Hooters Girls

March 23, 2016

As of 2014 there were more than 460 Hooters company-owned locations and franchises throughout the United States. The company has restaurants in 44 U.S. states, the US Virgin Islands, and Guam. Hooters also operates restaurants in 24 other countries, and China is one of them. In fact, the first Hooters in China opened October, 2004.

With more than 234 million middle class Chinese, 113 million more than the United States, the fact that Hooters is doing business in China shows how fast China is changing as the Middle Kingdom evolves into an Asian Super Power that is beginning to look more like the U.S.  China is roaring toward capitalism with all the trappings of a consumer society.

Will the two countries become equal partners one day, because of companies like Hooters, McDonalds, KFC, Pizza Hut, Ford and GM? For instance, KFC has more than 4,500 outlets in China and Chinese buyers are obsessed with Buick. According to the New York Times, Buick is the hottest luxury brand in China. Imagine the profits that American companies would lose if China and the U.S. went to war.

I’ve never been to a Hooters in any country, but on my next trip to China, I might visit one since they are six spread out between Shanghai, Beijing, Xi’an and Chingdu. I’ve already watched the YouTube videos. See for yourself.

As fast at McDonald’s, KFC, Pizza Hut, Starbucks, GM, and Ford are all growing in China (and making money), it’s easy to imagine that Hooters may have more stores in China one day than the U.S.

Lloyd Lofthouse is the award-winning author of My Splendid Concubine [3rd edition]. When you love a Chinese woman, you marry her family and culture too. This is the unique love story Sir Robert Hart did not want the world to discover.

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Will the real Emperors of Greed please Stand

March 16, 2016

From several pieces I’ve read in the U.S. media and a few comments I’ve received on this Blog, it appears that some people think the Chinese are the emperors of greed, but they aren’t.

In fact, greed is everywhere — even, GASP, in the United States.

For example, ABC’s Good Morning America reported, “Phantom Debt Collectors from India Harass Americans, Demand Money.”

GMA reported, “Hundreds of thousands of cash-strapped Americans have been targeted by abusive debt collectors operating out of overseas call centers suspected of links to organized crime in India, law enforcement officials told ABC News.”

Working through call centers in India, the commission estimates that the criminals have dialed at least 2.5 million calls, persuading already cash-strapped victims to send them more than $5 million.

Another example is A New Crime Wave of Identity Theft: Is Your Child in Danger.

“It’s undetected and undetectable. They’ll use your child’s Social Security number with a different name and a different birth date.” In fact, over several years, 57,000 cases of child identity theft was reported to the Federal Trade Commission. A new report from All Clear ID estimates that one in 10 U.S. children are victims.

“Olivia McNamara was starting her freshman year at Vanderbilt University when she applied for her first credit card. After being rejected twice, she did some digging and found that someone had stolen her identity and had run up massive debt – to the tune of $1.5 million. When she was 9, someone had stolen her Social Security number and set up false identities and more than 42 accounts. All of them had defaulted.”

Then in June 2012, the AARP Bulletin reported (on page 20), Locked out of Luck by Sid Kirchheimer. The piece said, “The overwhelming majority of locksmiths with an 800 phone number are not legitimate … In reality, the pro arrives in a van with no fixed address and a scam in mind. … The work is faulty plus expensive—often $1,000 or more, and demanded in cash.”

AARP even has a book out by fraud expert Doug Shadel, Outsmarting the Scam Artist. Shadel and a team of scientists interviewed thousands of victims and dozens of scam artists who revealed their trade secrets.

The Federal Trade Commission warns, “Consumer frauds pose a threat to consumers and the economy. Even the most wary and sophisticated consumers may fall victim to fraudulent offers – in the mail, in the media, and on the Internet.”

The FTC report stated that in the year prior to the survey the number of victims of the most common types of consumer fraud reached almost 36 million with 53 million incidents.

In fact, in 2010, the Better Business Bureau reported, “$2.9 trillion is lost to fraud annually.” In a decade that adds up to $29 trillion or almost twice the National Federal debt.

So, next time you read in the media or in a Blog that China, or any other country, is filled with crooks and corruption, remember that China is not alone. Don’t stereotype anyone. After all, the Chinese were not behind the 2008 financial crisis that cost the U.S. economy more than $22 Trillion in addition to nine-million jobs, and that does not  count what the rest of the world lost. – U.S. Government Accountability Office

One last thought. The 2008 financial crises caused nine-million working Americans to lose their jobs in a few months, but the Economic Policy Institute reports that the U.S. trade deficit with China cost only 3.2 million American jobs between 2001 and 2013 (12 years or about 258 thousand jobs a year).  In addition, a recent report from PBS.org and the BBC says that one in three jobs today will be lost to software, robots and smart machines by 2025—not to China.

Lloyd Lofthouse is the award-winning author of My Splendid Concubine [3rd edition]. When you love a Chinese woman, you marry her family and culture too. This is the unique love story Sir Robert Hart did not want the world to discover.

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What happens to the alleged culprits of Food Fraud in China? Part 2 of 2

December 23, 2015

If you read Part One of this two part series, you are probably thinking it isn’t safe to eat in China so you will stick to American food.

However, Wall Street Journal.com reported, “Struggles with food safety are not a specifically Chinese problem. Many countries, including the U.S. and Japan, have gone through similar growing pains in the food industry, says Wu Ming, a professor at Beijing University’s school of public health.”

Professor Ming is correct. Down to Earth.org reports, “Every day in the US about 200,000 people become sick, 900 are hospitalized and 14 die (that’s more than 5,000 annually) due to food borne illnesses (and few if any people are punished for these deaths). According to the Center for Disease Control (CDC), about one quarter of the American population suffers from food poisoning each year.”

It’s just business as usual and those food deaths are collateral damage on the way to making profits.

New U.S. Laws for food safety cover all food except meat, poultry and some egg products and there are other exceptions too. In fact, the CDC.gov reports, “Every year, about 48 million of us, roughly one in six people in the United States, get sick from eating contaminated food—it could be you, your spouse, your kids, your parents, or other loved ones.”

And if you believe China is not doing anything about food safety, think again. I Googled “arrests in China for food safety”.

The first hit for 2014 from Food Safety News reported, “Chinese Police Arrest More Than 100 People for Selling Contaminated Pork.”

In 2013, The Guardian reported, “China arrests 900 in fake meat scandal.”

In addition, the U.S. is no saint. Sustainable Business Forum.com says, “Unlike the U.S., China arrests Food Safety Violators.”

Helena Bottemiller of Food Safety News.com recently reported, “Current statutes (in the U.S.) do not provide sufficient criminal sanctions for those who knowingly violate our food safety laws,” said Leahy, who has become an outspoken advocate of food safety reform. “Knowingly distributing adulterated food is merely a misdemeanor right now, and the Sentencing Commission has found that it generally does not result in jail time.”

In conclusion, if you are in the food industry in China and want to take short cuts regarding food safety to boost profits while possibly killing people along the way, the United States is a safer place to commit murder while making a profit, because in China, you might go to prison and even be executed.

Return to or Start with Part 1

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Lloyd Lofthouse is the award-winning author of My Splendid Concubine [3rd edition]. When you love a Chinese woman, you marry her family and culture too. This is the lusty love story Sir Robert Hart did not want the world to discover.

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