QUESTION:

I am a great admirer of your Socrates model, but there’s one thing in your personal pronouncements that seem to contain a contradiction. On the one hand you are predicting a decline of the U.S.A. and other western economies, mainly caused by excessive government interference in the economy. However, on the other hand you are predicting a rise in the prominence of China occurring simultaneously with the decline in the Western economies, yet the Chinese economy is still dominated by State-owned enterprises (SOEs) and that is unlikely to change anytime soon. Can you please explain this apparent contradiction?

Also, you (perhaps justifiably) continually put the boot into Western governments for their excessive involvement in their economies and yet you rarely, if ever, criticise the Chinese government’s heavy involvement in the Chinese economy. Why the double standard? Is Socrates is actually predicting a near-term decline in Chinese government involvement in their economy? And is there an allied Socrates prediction for increased democracy in China in the near-term?

Thanks for your great service,

Andrew.

ANSWER: You are missing the timing and overlap. It is true that the Chinese government is still trying to manage its transition to a free economy. Ultimately, that will happen. However, the difference between the former communist regions such as Europe, Russia, and China, in comparison to Western Europe, such as North America, Australia, New Zealand, and Japan, is significant whereas the former region has people who do not depend on government and the latter still expects government to be there to take care of us until we die. A collapse in government in the former communist regions will not be as devastating to the common people and it would be in the Western developed world. China and Russia learned that Marxism failed. It is simply our turn in the West to experience the same as they did with the collapse of socialism.

After 2032, the financial capital of the world will simply migrate to China. It always migrates. You are assuming that the government of China will survive in its current form. They too will change and alter. In the West, governments are not interested in reform. They are only interested in holding on to power. This is simply how empires, nations, and city-states have always historically failed.

China is moving through its reform stage that began in 1989.95. We should see the first political shake up by 2021/2022. That is simply how long it will take from the beginning in 1989.95. They are simply at a different point in their own cyclical history.