State Capitalism and Democratic Capitalism Duke It Out

For those of you who missed last night's debate on China vs. American capitalism hosted by Intelligence Squared U.S., here is the video. There was one decided winner with 85 percent of the audience's votes, but we won't spoil the surprise.


Check out the video here:

Robert Rosenkranz, CEO of Intelligence Squared U.S., provided the below framework for the discussion.

Why China is Better:

  • China is communist in name only. In most of the ways that matter, China is a model of capitalism.
  • Firms are free to buy the labor, technology and raw materials needed to produce the products they want in open competition with others and to sell them at market price.
  • If you include government firms, goods produced in a market system accounts for a substantially larger share of China's output than they do in America.
  • In the past 30 years, China has saved more than half of its total output and has invested most of those savings in capital assets. American savings rates only recently reached 6 percent of total output.
  • China's economy has grown tenfold, while the U.S. has barely doubled in the last 30 years.
  • Why America is Better:

  • Rule of law is more developed. Property rights are more secure and innovation is protected by intellectual property.
  • This makes America's economy far more innovative, which results in companies like Google, Apple and Facebook. Nothing comparable has come from China.
  • American permits individuals to move freely in search of jobs and opportunities. But for millions of people living in rural China, there is no such freedom.
  • Corruption by government officials is far more prevalent in China.
  • Crony capitalism is rife in China.
  • "In the final analysis, this debate is not just about economics." said Rosenkranz. "But about which system, American democratic capitalism or Chinese state capitalism, will be the model that developing countries around the world admire and seek to emulate."

    We'd like to hear what you think. Which model of capitalism should developing countries copy? Tell us your thoughts in the comments below.

    Related Articles

    How schizophrenia is linked to common personality type

    Both schizophrenics and people with a common personality type share similar brain patterns.

    (shutterstock)
    Mind & Brain
    • A new study shows that people with a common personality type share brain activity with patients diagnosed with schizophrenia.
    • The study gives insight into how the brain activity associated with mental illnesses relates to brain activity in healthy individuals.
    • This finding not only improves our understanding of how the brain works but may one day be applied to treatments.
    Keep reading Show less

    Human skeletal stem cells isolated in breakthrough discovery

    It's a development that could one day lead to much better treatments for osteoporosis, joint damage, and bone fractures.

    Image: Nissim Benvenisty
    Surprising Science
    • Scientists have isolated skeletal stem cells in adult and fetal bones for the first time.
    • These cells could one day help treat damaged bone and cartilage.
    • The team was able to grow skeletal stem cells from cells found within liposuctioned fat.
    Keep reading Show less

    How exercise helps your gut bacteria

    Gut bacteria play an important role in how you feel and think and how well your body fights off disease. New research shows that exercise can give your gut bacteria a boost.

    National Institutes of Health
    Surprising Science
    • Two studies from the University of Illinois show that gut bacteria can be changed by exercise alone.
    • Our understanding of how gut bacteria impacts our overall health is an emerging field, and this research sheds light on the many different ways exercise affects your body.
    • Exercising to improve your gut bacteria will prevent diseases and encourage brain health.
    Keep reading Show less