Markets in everything China fact of the day

Mr. Yu’s daughter had died in a cascade of concrete and bricks, one
of at least 240 students at a high school here who lost their lives in
the May 12 earthquake.
Mr. Yu became a leader of grieving parents demanding to know if the
school, like so many others, had crumbled because of poor construction.

The
contract had been thrust in Mr. Yu’s face during a long police
interrogation the day before. In exchange for his silence and for
affirming that the ruling Communist Party “mobilized society to help
us,” he would get a cash payment and a pension.

…Officials have come knocking on parents’ doors day and night. They
are so intent on getting parents to comply that in one case, a mayor
offered to pay the airfare of a mother who left the province so she
could return to sign the contract, the mother said.

The payment
amounts vary by school but are roughly the same. Parents in Hanwang, a
river town at the foot of mist-shrouded mountains, said they were being
offered the equivalent of $8,800 in cash and a per-parent pension of
nearly $5,600.

Here is the full story.

Comments

milton friedman must be smiling in his grave now. what would coase say?

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Sounds a bit like the payoffs that the families of victims of 9/11 got. Get cash in exchange for signing a 'do not sue' contract.

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Hey, I'm optimistic. At least their government is promoting the concept of contract. Ours seems to do everything to undermine it, when they acknowledge it at all.

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China has come a long way since the days of Mao. Glad grieving, dissenting parents aren't getting shot or imprisoned!

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It probably would have been a lot cheaper to built safer buildings in the first place than compensate these families, and that's ignoring the enormous waste of life.

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I didn't think of the children... On one hand, China has a large population, so life is cheap, but on the other hand, Erik is onto something. I was just curious how the money is converted to US$? Does that number take into account cost of living and PPP? Here, 5000$ would be enough to cover the funeral. Thats a lot lower than what the 911 victims (family's) received.

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I wonder what effect this will have on that region, since it seems like a large number of the current generation of children were killed or injured, and for many families under the one child policy they may not be able to have another kid.

I recall hearing that the government of China was planning on making an exception for those who lost an only-child in the earthquake. I don't know whether this actually happened or will happen but there was some kind of announcement to this effect earlier.

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Erik,

The Chinese government is making an exception to it's child policy for earthquake victims. How generous of them.

Dave,

Just reading the summary, this clearly is not a free market, but more like a coerced settlement foisted on parents. The contract portion is more of a paperwork formality. As others pointed out, this is an improvement from just being imprisoned or shot.

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I'm with Dave in spirit, but the simple truth is that judges/juries put prices on humans every day.

I'm less incensed about this than I was with 9/11 payments.

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Government pays hush money to citizens in response to collapse...but enough about the banks.

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