Economics still is not a science (could Mao improve today’s Chinese economy?)

Assuming a continuation of current policies, the paper predicts the Chinese economy will expand by 7-8 per cent for the next 10 years or so, with growth slowing to 5.2 per cent on average between 2024 and 2036 and then a rate of just 3.6 per cent between 2036 and 2050.

That is actually slower than the growth rate of 3.9 per cent it predicts between 2036 and 2050 if China were to return to Maoist policies introduced in the aftermath of the disastrous Great Leap Forward, in which between 30m and 40m died in a famine that was largely the result of economic mismanagement.

The authors of the paper were focused only on economic factors and did not consider the impact of individual policies or the enormous social costs of Mao’s “brutal” political movements and purges, which left many millions dead, ostracised or imprisoned in gulags.

Putting Mao aside, the 7-8% prediction already is clearly wrong and this is a July 2015 working paper.  By the way, the four economists who wrote the paper (NBER) are working at “…the Federal Reserve Bank of Dallas, Princeton, Yale and Sciences Po in Paris.”  And get this:

They concluded that the abolition of the private sector in China and the return to a command economy would yield an annual average GDP growth rate of 4 to 5 per cent between now and 2050.

The journalist who wrote the FT piece is the very good Jamal Anderlini, who understands the Chinese economy, and perhaps the limits of growth models, better than these researchers do.  That’s the actual fact here which we don’t take seriously enough.