> Did big businesses in the West really think “investing” in China would lead to “freedom” and such? Isn’t that framing a bit naive?

Yes I think. At least a lot of Western policymakers did buy a "change through trade/investment" story, and it wasn't pulled from nowhere because it had worked in the past.

In postwar Japan and later South Korea, integration into the West's economic system coincided with eventual democratization, closer alignment of values, and alliance.

It was reasonable to think the same thing would work in China, but that doesn't seem to be the case.

Also the US intentionally set China up for investment by doing things like bringing them into the WTO. All that investment wouldn't have happened without some level of government support.

Perhaps it would be more accurate to say that US policymakers deregulated capital flows with China in the hopes that it would lead to political liberalization. Businesses always just follow the money, but for a long time American policy makers had made it difficult to invest in China, from regulatory uncertainty to restrictions on dual use technology exports to high tariffs.

It really was an intentional decision, largely on the part of the Clinton administration, to make investing in the country easier and improve the economic well being of Chinese citizens in the hopes it would inevitably lead to democratization. Clearly, those hopes were just that though

In our current system, which is, without a doubt, a corpocracy, it's easy to forget that before the 1970s, corporations didn't have that much power at all, and they were regularly overruled by other organizations - labor unions, government social welfare programs, religious institutions, grassroots movements, etc. Allowing corporations to maintain access to the US market while outsourcing jobs to countries with slave labor is the exploit/loophole that allowed corporations to amass wealth and MADE corporations as powerful as they are today.

> Did big businesses in the West really think “investing” in China would lead to “freedom” and such? Isn’t that framing a bit naive?

I think the OP would frame this as the Western governments allowing Western businesses to invest in China.

Did big businesses in the West really think “investing” in China would lead to “freedom” and such?

You’re right in your assumption that profit-seeking was the major part of it - like, it wouldn’t have happened otherwise.

But the idea that the West trading and interacting with China would mean the populous (and perhaps government) would come to understand the benefits of a free society, and so China would trend towards a Western political system - probably gradually rather than violently - was a mainstream view from the 80s to the early 2010s.

> Did big businesses in the West really think “investing” in China would lead to “freedom” and such? Isn’t that framing a bit naive?

It worked in south korea and taiwan which were severe military dictatorships before (maybe you could throw japan im there too?) so the history of capitalism liberalizing countries isn't all failures

>Did big businesses in the West really think “investing” in China would lead to “freedom” and such?

BDS is a thing. It toppled South Africa's regime and makes Israelis gnash their teeth. Part of the "sell" for investing in China, and buying Chinese products, was that we were bringing them Capitalism, which would bring them wealth and freedom. The alternative is that you're fueling a Communist regime that is going to become your rival and adversary. Maybe I'm mixing up which was explicit and which was implicit, but there's no way Americans would have been on board with everything if the latter was seen as a real possibility. So either big business knew and suppressed it, or they genuinely themselves believed that they could do business in China and not support strengthening the CCP. (And, before Xi rose to power, that was not an completely unreasonable thought.)

> It's absolutely cutthroat.

Meanwhile in the land of the free, it's consolidation galore with very little competition.

I think your perspective is biasing you.

The US has a massive number of small and medium companies. For example small part machining there are dozens per city.

43% of US GDP is small and medium size business. That’s effectively 50% of China’s entire GDP.

Sure China has more, but it also has 4x the population and an economy more focused on labor intensive industry.

I think that laypeople in the US were willing to see more investments in China with the rationalization that it could lead to more human rights. If you had polled random Americans in 1995 with a question like, "Should the US government and American companies invest in the People's Republic of China in an effort to increase human rights and liberalization there?", most people would have responded "yes".

The miscalculation comes from thinking that the investment would actually have that effect. And I do think some people at the top knew it wouldn't have that effect, but of course, there was cheap labor to be had, and that was what they wanted more than anything else.

It depends though, whom you are asking about failed or successful policies. For example I have seen a normal flat of a friend in China in a capitol of a province, who lives alone in this 4 room apartment. I asked how much rent they had to pay and then asked them what they think, how much they would have to pay for that in Berlin. When I told them they would probably have to pay some 2k EUR rent, they thought for a moment, then just said: "That's insane!". The rent they paid was maybe 1/8 to 1/6 of that. And that apartment was not somewhere far out. It is well within the city and has good public transport connection. People can afford to rent. People can move. Single people. Over here not so much. This is also a result of the state having built houses and apartments.

> Markets can't decide "families can have only one child"

Sure they can. Just make it unaffordable to do anything else.

Yes. Unfortunately, we don't live in capitalism anymore, we live in feudalism. The feudal lords just so happen to wear the skin of formerly capitalist corporations. That's how we get the opposite but identical kind of failure, where basically any desirable city gets almost no housing buildout (because any idiot with a billion dollars can make it arbitrarily expensive to do) and families can't afford to even have one child.

China is still moving millions of people from rural to urban areas every year. The overbuilt housing is a complete non issue that will naturally solve itself in under a decade. Meanwhile in the west there is a massive housing affordability crisis because the government lets special interests make new housing illegal. I am not a fan of the chinese government but their housing policy is one spot where they are obviously better than western policy.

> Markets can't decide "families can have only one child"

Actually they can. It's part of the reason why a lot of capitalist nations are seeing major problems with population stagnation and possibly shrinkage.

The problem is markets don't care at all about society. If they can require that every member of a household has to work and extract all their money as efficiently as possible, then they leave little room for society to have families.

Capitalism is geared towards minimizing workers' free time. And, unfortunately, free time is how babies get made and kids get raised.

That is where western capitalism is failing. Shouting louder and young adults to pull on bootstraps harder isn't making them have kids in their studio apartments.

South Korea and Japan are 2 examples of this train-wreck that's coming for the US and other nations.

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They prebuild 10 years of housing runway but still have another 10 years, aka 100m+ housing shortage for urbanization goals. They realize they got overzealous and was venturing in bubble and and intervened during boom vs after collapse. AKA preplanning and prematurely fixing something, which is the kind of intervention a freer economy can't do.

Family planning was also massive successful in preventing frankly 100s of millions of useless mouths from being born and concentrating resources to upskill 1-2 kids, hence their massive catchup within a few generations. Now they make more technical talent than OCED combined and will have the greatest high skill demographic dividend to milk for at least our life times, giving them 40+ years to sort out better family planning.

BTW US overspending 5-10% of GDP aka 2.5 Trillion per year on healthcare vs OECD baseline is basically more wasteful misallocation than anything PRC has ever done, including RE misallocation (3-5% waste). And at least they still have housing units left to use (being converted into affordable housing), instead of piles of paper work and personal debt. Accumulation of fuckups that are not resolvable in western style capitalism, it will be fatal medium term.

> seems not possible in Russia.

But Russia has never removed the Communists from power. It removed the Communist party, that's true. But plenty of the revolutionaries were themselves Communists; both Gorbachev and Yeltsin were very high-ranking Communists. They liked the idea of economic liberalization, but the political liberalization was only allowed as long as they stayed in power. I'm not sure Russia has seen even a single honest presidential election. The current "president" of Russia is a former KGB officer.

> That's a rewriting of history

You both agree.

“The ‘economic democratization’ argument was a 1990s-era framing to reduce opposition to the PRC joining GATT/WTO” is what they’re talking about. American security analysts believed that making China richer would make it more like us.

Prior to that it was principally geostrategic. But prior to that, the argument was never made.

Interesting point and pardon my naïveté but I’m curious, by “the west began investing” do you mean public sector investments? Or are you including people like jim rodgers long time China bull? I think private sector investment wouldn’t be done for anything other than profit. It seems like trade liberalism is an ideological thing that people seem to believe in above and beyond geopolitical concerns. Those who believe in trade liberalization (globalization) are sort of religious in their belief that it leads to liberalism in all spheres, not just the economic. I’m thinking of classic liberals, economists, Ayn Rand fanboys, etc.

I think that it's both a rewriting of history and a rationalization of the investment on some people's parts.

Nixon's opening of relations with China was definitely a move against the USSR, but that was nothing compared to the extent of investment that was seen after the fall of Communism in Europe. The fact that the CPC was still very much in charge while all of this investing was occurring had to be rationalized somehow in the minds of people who were less cynical, and "it'll help liberalization" was probably one of the rationalizations used. And in some ways, you can use investment as a way to leverage social changes within countries, and some people (though apparently not enough) thought that was the intention with China, but there was only a carrot, not a stick, and by the time there was a desire to use a stick, there was too much dependency on China as a market and producer for the West. That's where we're at now.

> a core tenant that every member in a communist society collectively owns everything

Everyone owns the world oceans (“common heritage of humanity”). How is that going for its fisheries and sea bottoms.

  > I'd argue that communism is the only system of government that guarantees property for all. That's somewhat a core tenant that every member in a communist society collectively owns everything.

If the answer is "yes", you've just reinvented a communist dictatorship. If it's a "no", then such society will run out of food and goods, and something better will rise to replace it.

Communism as such has never existed and will never exist because it ignores human nature. Private property rights are a fundamental tenet of human psychology.

But hey, in defiance of 100+ years of failed attempts, if you want to see Politburos putting people in gulags again for being counterrevolutionaries . . . sure, give it another go.

Capitalism is the worst economic system that has ever been tried . . . except for all the others.