Do you think china's economic system is travelling towards the capitalism?

Dear Professor Wolff, please explain me why communist china has free markets and free trading in their economic system.

Official response from submitted

The nature and meaning of "free" in the phrase "free markets" remains an issue of contention and debate among those who study the institution. Let me assume that you mean markets with minimal government interventions. In that meaning, there were free markets throughout most of the histories of most 20th century "communist" countries such as the USSR and the PRC. The USSR, for example, differentiated between major grain production and distribution (markets and trade but heavily shaped by government planning and interventions) and the production and distribution of meat, dairy, vegetables, fruits where the markets were enabled to function much more "freely." Modern Chinese economists tend to believe that markets - if limited and controlled and regulated - can be useful deployed in the service of economies such as theirs with heavy government involvement in the ownership and control of undustries. They also believe that case by case decisions can and should be made as to how free markets should be as mechanisms of distribution consistent with the government's plans and ownership/control projects and goals.

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  • Richard Wolff
    responded with submitted 2017-01-19 20:53:12 -0500
  • Mounika Midasala
    published this page in Ask Prof. Wolff 2017-01-19 12:49:36 -0500