China blackmail markets in everything

by on August 23, 2014 at 2:05 am in Economics, Law, Medicine | Permalink

In Beijing, I met Benjamin Liebman, a professor at Columbia Law School, who has published a study on “malpractice mobs” in China. He told me that protests consistently extract more money from hospitals than legal proceedings do. Family members can even hire professional protesters. One report in Shenzhen mentioned an average price of fifty yuan a day for the service of a protester. The radiologist in Shanghai told me, “If your mother dies in the hospital, there will be an agency that comes to you and says, ‘We can help you. We can have twenty guys who can come to the hospital, blackmail them, and share fifty per cent of the profits.’ They’re very professional.”

The article, by Christopher Beam in The New Yorker, is interesting throughout.

Ray Lopez August 23, 2014 at 2:42 am

Further proof that the Chinese are more interested in money than democracy.

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Ray Lopez August 23, 2014 at 2:46 am

…or to elaborate, if it’s against the law to extort, and against the law to clamor for democracy, then either the cost of being a dissident is much higher than the cost of being an extortionist (both illegal), or, logically, the Chinese are more interested in money than democracy.

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affenkopf August 23, 2014 at 2:57 am

Both are against the law but does the Chinese government crack down on both equally hard?

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affenkopf August 23, 2014 at 2:58 am

Well, you already wrote that the cost of being a dissident could be much higher. Sorry, posted before my first coffee.

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Brett August 23, 2014 at 3:10 am

It’s more that when the government is unaccountable to the people directly, and the law is difficult and its enforcement often corrupt, people resort to various kinds of ground-up action and extralegal stuff. It’s the same reason why they have tons of wildcat strikes.

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Kabal August 23, 2014 at 3:24 am

Without the thread context, wonder what people would guess as to the country referred to by Brett’s comment:

Egypt?
Russia?
Venezuela?
China?
…U.S.?

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dan1111 August 23, 2014 at 4:21 am

@Ray, where in the article did it say that all 1.3 billion people are doing this?

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Ray Lopez August 23, 2014 at 8:49 am

@dan1111 – the fact that enough people are doing it to be reported makes my point. When all 1.3 billion (an exaggerated number btw, the population of China is likely 30% less than the official figures) engage in this behavior, then that would make your point.

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Adrian Ratnapala August 23, 2014 at 3:12 am

“protests consistently extract more money from hospitals than legal proceedings do”.

I guess it is no shock that having an inadequate legal system encourages civil disturbance. The surprise is that these businesses are consciously playing out the connection.

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Tom Davies August 23, 2014 at 4:21 am

Why do you have to have had a relative die in the hospital? Why can’t an identical extortion attempt succeed without this?

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dan1111 August 23, 2014 at 4:35 am

My guess is the sympathy of the public is necessary for success. Otherwise it would just be a band of troublemakers who quickly get arrested.

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derek August 23, 2014 at 10:58 am

A far simpler reason. There is money to be extorted.

Not too different from the US where the one who has the money pays without any regard to responsibility.

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Michael Foody August 23, 2014 at 1:53 pm

This doesn’t seem like that inefficient of a system. Instead of a few legal system experts extorting rents by threatening expensive litigation we have unskilled labor extracting rents. The court of public opinion might be less well calibrated towards truth finding than courts of law, but both are largely zero sum games and transaction costs are lower if specialized experts stay out of things.

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freethinker August 24, 2014 at 8:10 am

wonder if the mob which blackmails hospitals in China also blackmails teachers who give low grades . That will make them very popular with parents of lethargic kids

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Consumer August 25, 2014 at 10:34 am

How is this different that the pervasive “accident injury” litigation practice in North America? Largely it does not matter if you are really injured or not as long as you hire the right agency that will legally extort the insurance company of the other invilved party.

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