Lesson time 14:28 min
Paul explains China’s rapid economic growth and details how the influx of their exported goods impact economies and rules of trade worldwide.
I went to grad school in the mid-1970s. I had to pick a field of specialization. And I thought to myself, what really matters for the world is development economics. The most important thing is taking the really poor people in the world and helping them make their way up towards a higher standard of living. And I didn't. I didn't do development economics. Because in the mid-1970s, development economics was a very depressing field. It was about trying to understand why developing countries didn't actually seem to develop. It was about why does India stagnate. But all of that changed. First, a few smaller Asian countries-- Korea, Taiwan-- had remarkable economic takeoffs. And then the big kahuna, China, goes into this massive surge. And there's been nothing like it in the history of the world. No one has ever had this much economic growth for this many people over such a sustained period as China has achieved. This is one of the great economic miracles of human history. I think if I were Chinese, I would probably start by saying China is naturally the center of the world. And there was this brief interregnum when these upstarts from elsewhere crowded in on us, but now nature is returning to its proper course. And there's something to that. You have a communist regime which, for the first 40 years of its existence, was totally hermetic, inward-looking, barely dealt with the outside world. But then they reformed. They opened up. They opened up to trade. They opened up to private enterprise. It was not, by any means, a full free market society. It still remains a place where political influence matters a lot. It's still a very crony capitalist place. It's still a very undemocratic place. But they opened it up enough so that enterprise-- people with energy, people trying to make something happen-- had room for their drive, for their talents. And it turned out that there's an awful lot of drive there. How much of it was good policy? I don't actually think there was a whole lot of effective government direction. I don't think that the bureaucrats had any very good idea where they were going. There has been a great willingness to invest in the essentials. The Chinese don't shy away from building roads and railroads and bridges and ports. They don't dither about it. They get the job done in a way that I think we could learn something from. They had a huge reserve of underemployed people in-- essentially peasants with too much time on their hands who they could put to work. And that drives a lot of the growth. They've actually, I think, almost stumbled into taking advantage of some of these economic geography factors. They have an economy which is a series of industrial clusters, groups of firms producing related or the same product all benefiting from all of those forces-- the specialized suppliers, the strong local market, the interchange. So there's one city that produces most of the world's buttons, and there's another city that prod...
For Nobel Prize-winner Paul Krugman, economics is not a set of answers—it’s a way of understanding the world. In his economics MasterClass, Paul teaches you the principles that shape political and social issues, including access to health care, the tax debate, globalization, and political polarization. Heighten your ability to read between the lines and decipher the underlying economics at play.
Featured Masterclass Instructor
Nobel Prize-winning economist Paul Krugman teaches you the economic theories that drive history, policy, and help explain the world around you.Explore the Class
Great class to learn some economics. Would have liked if classes can be more audience targeted i.e For Beginners, Intermediate, Advanced
I watched this twice. "Every purchase is a sale."
Very good and informative class. Paul is a great instructor and his down to earth style, certainly lets ideas sink in.
This is an amazing session and gave me a whole different perspective on economics and think big. I am grateful to Paul Sir.