PODCAST: Hexapodia LII: Growth, Development, China, the Solow Model, & the Future of South & Southeast Asia

Key Insights:* The Chinese Communist Party is very like an aristocracy—or maybe it isn’t…* If it is, it will in the long run have the same strong growth-retarding effects on the economy that aristocracies traditionally have…* Or maybe it won’t: China today is not Europe in the 1600s…* We probably will not be able to get Noah to read Franklin Ford: Robe & Sword: The Regrouping of the French Nobility After Louis XIV <https://archive.org/details/robesword0000unse_g7d2> to dive more deeply into analogies & contrasts…* Southeast Asia’s future is very bright because of friendshoring…* India’s future is likely to be rather bright too—it looks like a much better economic partner for the rest of the world over the next two generations than does China…* You can get pretty far by just massively forcing your society to build lots and lots and lots of capital…* Especially if you have an outside country you can point to and say “give me one—or five—of those!”…* But quantity of investment has a quality of its own only so far…* We think of technology as the hard stuff…* But actually the hard stuff is institutions, property rights, government—people actually doing what they said they would do, rather than exerting their social power to welsh on their commitments…* We are surprised and amazed at China's technological excellence in electric vehicles, in battery and solar technology, in high-speed rail, and so forth…* But those are relatively small slices of what a truly prosperous economy needs…* For everything else, we have reason to fear that the logics of soft budget constraints and authoritarian systems are not things China will be able to evade indefinitely…* Is that a middle-income trap? It certainly functions like one…* Hexapodia!References:* Brad DeLong: DRAFT: What Is Going on wiþ China’s Economy?:* Daniel W. Drezner: The End of the Rise of China? * Daniel W. Drezner: The Rising Dangers of a Falling China* Daniel W. Drezner: Can U.S. Domestic Politics Cope With a Falling China?* Arpit Gupta: What's Going on with China's Stagnation? * János Kornai, Eric Maskin, & Gérard Roland: Understanding the Soft Budget Constraint <https://www.jstor.org/stable/3217457>* Adam S. Posen: The End of China’s Economic Miracle <https://www.foreignaffairs.com/china/end-china-economic-miracle-beijing-washington>* Kenneth Rogoff: The Debt Supercycle Comes to China <https://www.project-syndicate.org/commentary/country-garden-shows-debt-supercycle-comes-to-china-by-kenneth-rogoff-2023-08>* Noah Smith: Real estate is China's economic Achilles heel* Noah Smith: Why is China smashing its tech industry? * Adam Tooze: Whither China? Part I - Authoritarian impasse? * Adam Tooze: Whither China? Part II - Posen v. Pettis or "authoritarian impasse" v. "structural dead-end” * Adam Tooze: Whither China? Part III: Policy hubris and the end of infallibility * Lingling Wei & Stella Yifan Xie: China’s 40-Year Boom Is Over. What Comes Next? <https://www.wsj.com/world/china/china-economy-debt-slowdown-recession-622a3be4>+, of course:* Vernor Vinge: A Fire Upon the Deep <https://archive.org/details/fireupondeep00ving_0/mode/1up> Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe