So why is driving farmers off the land in the United States in the 1920s good, but driving farmers off the land in China in the 2000s bad?

No one's driving them in either case--it's just the reality of an industrialized economy. If you're suggesting they're headed toward a period like our '30s I don't think I'd go that far. their economy will do better--their society worse.

As farms become more efficient, there is less of a need for farmers, and there is no good reason for us to subsidize the 'family farm' any more than we subsidize the 'family barbershop', the 'family delicatessen, or the 'family liquor store.'

The PRC is well aware of this problem and is simply too sclerotic a system to solve it. It is a major reason why they cannot raise their currency. They are hoping, I guess, to encourage enough of the world's unskilled manufacturing to move there in order to employ the surplus population. In this regard, they face severe competition from Southeast Asia, South Asia, parts of Central America, Eastern Europe etc. And since many of those places are opting for free markets, transparency, and enforceable property rights including trademarks, they are more desirable places to manufacture than the PRC.

Not just unskilled manufacturing.

China has millions of highly trained engineers, many of them educated at US schools, and as X noted the other day, a million Taiwanese managing $ 100 billion worth of Taiwanese-sponsored industries.

The domestic-consumption Sino-automotive industry is booming, with sales up 2000% in '04.
Now, those rattle-trap rust buckets would be laughed off any American or European street, unless they were a home-built shop-class-project job, but to the people buying them, they're just as spiffy as the Model T's were to early 20th century American buyers.

Orrin's right, I believe, that China will do adequately in the economic department during the 21st century.

Michael,

I hope you're right. However, it seems to me that Chinese science is limited by their lack of respect for patents, trademarks, trade secrets, etc which is not just a matter of the Communists engaged in ripping off us 'foreign devils' but is also part of their culture as they don't respect their own.

Perhaps so.

It's not so much that I expect world-class technology to be invented in China, as it is that I expect them to be able to reverse-engineer and Jerry-rig some home-grown version of someone else's world-class technology, and prosper thereby.

They certainly will have to be more active in protecting intellectual property if they want to be long-term trading partners with everyone else.

The problem is not even so much that they steal our technology but that they steal each other's as well. If you gain no competitive advantage by technological innovation, you will not engage in technological innovation. This has been shown time and time again throughout history. And this is precisely the conundrum faced by the PRC.

No, it's limited by their lack of imagination and individual initiative, same as Japan.

Bart;

You're completely wrong on that. I work in the computer software industry. I am not aware of any other industry that is more rife with stealing other people's technology. Such stealing is not only rarely considered bad, it's frequently considered good form. Consider web pages - what web developer would even form the idea that it was wrong to steal techniques from someone else's webpage? I've built my entire career on recycling other people's ideas and let me say that it's not been unprofitable. "Open Source" is nothing more than pre-emptive surrender to intellectual property theft. Is the American software industry, then, a quagmire of uninnovative products?

Guy, can I get you to attend our Tuesday tech discussion group at Livewire Cafe in Paia, Maui? Four o'clock.

Mr. Eager;

Sure. Send me a plane ticket :-). Should I give my "there are only three original ideas in computer science – everything else is recycled" talk? I can't tell you how many times I've been hailed as an "innovative solution guy" because I slapped some new jargon on a 20 year old concept. It's the one place you can many people's ahistorical tendencies pay.

You'd go over very big, Guy.

I keep my mouth shut, not knowing what they are talking about. But they're all big on open source programs.