"Markets will drift towards efficiency"
Isn't this actually one of the benefits of capitalism ?
Either you let capitalism allocate capital or you let the government -which makes you a communist.
If by benefit you mean existential risk, then yes. A big benefit. Although in the end, these kinds of markets might drift into oblivion as well, by virtue of being conquered by stronger states. So in that sense, it will all sort itself out. You may get slain by by communists, but at least you're not a communist yourself. So there's that.
It was supposed to turn the Chinese into capitalists, and hence into potential allies. They're not communists any more, that's for sure, of course, they're not Western "liberal-democrats", either, which is why the West is in this whole conundrum.
> Isn't this actually one of the benefits of capitalism ?
Is it a benefit if that efficiency turns your industrialized economy into a financialized economy that can't manufacture enough bullets to fight a war that you start?
Yes it is a benefit of capitalism. But capitalism isn't perfect if you are in a long term strategic battle.
That is why states that created capitalism like Dutch and British always had a strong comportment of fiscal-military state where the government made sure that they could defend their country and their trade.
The problem is that if somebody much larger then you comes along, this gets increasingly difficult. Specially if they are part of the same world and market as you. As Britain learned with the rise of Germany and far more so the US.
The US basically invited China, because they were concerned about the Soviets. This was smart in a struggle with the soviets. But unfortunately China was the much larger strategic danger all along.
The good thing is, that if China continues on along the same lines, the US will continue to do pretty well in a China dominated world. Just as Britain do in a US one. And as the Dutch did in a British one.
The question is, if China will behave the same or not in the long term given that they are not democratic and not even slightly germanic.
Imo markets tend to have 2 trajectories. Either the market leader builds a moat that precludes competition (often through semi-illegal means).
Or the companies engange in fierce competition and the big players will either outspend or outproduce or straight up buy their competitors which tends to result in either monopolies or oligopolies with barely any competition.
Exactly. This is why the European single market is so regulated. Not because it is a socialist market, quite the opposite. It wants to save capitalism both from itself and from the protectionism of its states. The European project is a deeply capitalist project.
Capitalism and corporatism is not the same. Corporatism is a bit socialist in it's essence.
In classical capitalism, there aren't two or three monopolistic players that dominate each industry, there are thousands of companies competing with each other. And that competition brings costs down, so no outsourcing is needed.
Nope. That's not at all what those terms mean. Capitalism is not "when competition," and socialism is not "when no competition."
Capitalism = private ownership of means of production
Socialism = collective ownership of means of production
Capitalist monopolies are privately owned. A monopoly is no less privately owned than a minor company in a sector with healthy competition, and there is nothing remotely collective about a monopoly. A lack of competition does not in any way mean that "the people" own the organization. Not theoretically, and not actually.
Collectively owned socialist enterprises are not necessarily free of competition. In fact, heated competition over quotas had a lot to do with many of socialism's worst blunders.
Competition does not remotely guarantee that costs are low by international standards either.
They are orthogonal; it is possible to have socialist corporatism, but there is nothing inherently socialist about corporatism (or inherently corporatist about socialism.)
