The big bad Chinese subsidies
This is in reply to a thread on X where Matt Stoller claims that 100% of China's success is due to state subsidies.
The "China subsidized its way to success" is really just a cope shibboleth that some Americans repeat without thinking to signal group unity across political lines. It means "It's not our fault, it's the big bad Chinese subsidies!"
It's so obviously not true that it's really embarrassing to see otherwise intelligent people repeat it.
Every government subsidizes stuff...that's what they do. They take tax money and spend it on public goods which are then distributed for free or at below market rates.
The US just subsidizes dumb unproductive stuff like 20 year wars to take Afghanistan from the Taliban and give it back to them again, Wall Street paychecks, corn & boomer assets bubbles...because doing this bought votes and enriched the politically well-connected.
The Chinese subsidize useful infrastructure and services that make their country a better place to build stuff, live and do business: like an electrical grid that doesn't crap out when it rains, health care, rail, roads and public transport and lots and lots and lots of education.
And they did these subsidies by fostering market conditions that created a lot of inexpensive supply instead of simply giving cash handouts to private parties offering fixed supply. (Hello US healthcare "system"!)
China did other stuff too, like made it really hard for people to "invest" in number go up games (us equities, crypto) which incentivize large groups of smart people to be economically unproductive. And capped finance salaries to make working in finance less attractive relative to getting a real job.
And China also generally had a plan that lasted longer then current news cycle.
If we slapped massive tariffs on foreign products and subsidized production we’d fix this quickly, business people just don’t want that.
Chinese vehicles have had like what 100-125% tariffs on them in the USA for years now. How come US cars cost 2x-3x more than Chinese cars and are, besides Telsa, still garbage?
They like the cheap subsidized profits.
Of course they do! American cars are garbage because of the cheap subsidized profits they can make by selling garbage cars for a lot of money! Why spend money to figure out how to make better cars when you have a captive customer base with no better options? They're businessmen, not idiots!
And even if they wanted to make better cars, who are they going to hire? The smart people all went into finance and software and they don't have the skills and education needed for this anyways. And the capital is there too..why would you want to invest in a business with cost of goods sold, machinery and inventory? That sounds way less profitable and way more work than working in PE, VC or banking!