Mark W. Hendrickson

Mark W. Hendrickson is a faculty member, economist, and contributing scholar with the Center for Vision and Values at Grove City College, Grove City, Pennsylvania. These articles are from V & V, a web site of the Center for Vision & Values.

China's "Superior" Economic Model?

In a recent piece for the Wall Street Journal, Andy Stern, an Obama insider and one of organized labor's more aggressive personalities, praised what he called "China's superior economic model."

Does China have a superior economic model? That depends: Superior to what?

Mr. Stern, who headed the Service Employees International Union, cited Andy Grove, founder and chairman of Intel, who concedes the 20th century's "decisive victory of free-market principles over planned economies." That is true. However, both Stern and Grove proceed to assert that some unspecified degree of government economic planning will generate more prosperity than free markets. Stern writes that the "free-market fundamentalist" model that made America prosperous "is being thrown onto the trash heap of history in the 21st century." He argues that we should jettison our "empirically failing free-market extremism."

Really? Pardon my candor, but what planet does Mr. Stern inhabit? For something to be "empirically failing," it must first exist. Where in America is this supposed extreme "free market" system that Stern disdains?

In the United States today, government has largely nationalized the home mortgage market; cartelized the financial system; partially commandeered the auto industry; begun to take over the energy industry; plays the dominant role in the retirement, education, and health care of most Americans; has a leviathan bureaucracy that does everything from shutting down the development of domestic energy, to telling corporations which states they can operate in, to blowing taxpayers' money on boondoggles. As for the boondoggles, they are both great (ethanol and solar energy) and small ($2.6 million to study whether alcohol increases a Chinese prostitute's chances of contracting AIDS).

That said, I share Mr. Stern's dissatisfaction with our sluggish economic growth, and agree that we should not be too proud to observe and learn from competitors like China. In fact, there are two important lessons we can learn from China right now:

First, China's impressive economic growth rates prove rather than disprove the need for free markets. While China's leaders dictate certain economic priorities and parameters, and insist upon loyalty to the Communist Party's political monopoly, they often practice a policy of benign neglect toward provincial and regional entrepreneurs, giving them considerable latitude in a free-wheeling, wild west scramble to find ways to create as much wealth as they can.

A second important lesson from the Chinese, and one that helps to explain why their growth rate is higher than ours, is that we are drowning in debt while they are awash in savings.

Before we jump to the conclusion that China's economic model is the way of the future, we should remember that we have heard similar projections before. In the late 1980s, commentators raved about the Japanese economic model. Predictions abounded that the Japanese economy was so powerful and unstoppable that it would soon surpass our own and be the wealthiest in the world. Like the Chinese state today, the Japanese government worked closely with businesses to forge an industrial policy that (allegedly) would prove far superior to a free-market model. Then the wheels fell off and the bubble burst. Since then, Japan has struggled with economic stagnation and malaise.

China, of course, has a much larger population than Japan, and it certainly is possible that it eventually will have the largest GDP in the world, but to the extent that the Chinese government calls the economic shots and tries to pick winners and losers, China runs the risk of ending up like every other country (including our own) that has squelched free markets - broke and stagnant.

It is ironic that the former head of a major American labor union is enamored with a political system and economic model in which workers earn low wages and are not represented by independent labor unions. The precarious state of individual rights and liberty in China doesn't seem a great concern to Andy Stern. Instead, he is eager to sign on to a system that (according to Professor Ralph Reiland in an Investor's Business Daily commentary) enables the sons of China's top Communist Party leaders to buy $400,000 Ferraris and $32-million mansions.

China's hard-working people and high savings rate are impelling China's rapid economic development, and for that China deserves our respect. But the political system of crony capitalism run by the Chinese politburo is antidemocratic and elitist to the core. For Andy Stern to claim that such a model is superior to freedom and free enterprise . . . well, you can draw your own conclusions.

When Clarence Thomas Came for a Visit

On Tuesday, November 15, Supreme Court Justice Clarence Thomas visited Grove City College. I had a choice to make - whether to meet him or attend to the tons of work I had to finish before several looming deadlines.

I don't share our society's fascination with famous people. I never go out of my way to meet them, and when I do meet them, I don't ask them for their autographs like some starry-eyed teenager. The father of a close friend once told me that every man, regardless of how important a position he may hold, puts his pants on one leg at a time. A person and the position that he or she holds are two different things, and the office does not automatically confer greatness.

I decided to set aside everything to meet Justice Thomas. This man has bravely and heroically defended the U.S. Constitution for the last two decades, and for this alone, he has earned my gratitude. It would have been selfish of me not to have taken a couple of hours out of my schedule to express my appreciation to him for his valiant efforts - especially since I would probably never have another opportunity to do so.

I arrived early at a private luncheon for the Grove City faculty and Justice Thomas. He arrived early, too, and since I was the only one there at the moment, he came up to me and we introduced ourselves. That was the beginning of an uplifting, inspiring day for me.

I can attest that Clarence Thomas is a warm, down-to-earth, personable man. The first question he asked me, when I told him that I taught economics, was whether I was familiar with the work of Ludwig von Mises. When I replied that I had earned my doctorate under Hans Sennholz, who had earned his under Mises, we were off to the races.

Besides economics, we compared notes about our upbringing. I had read part of Justice Thomas' autobiography and was amazed at some of the uncanny parallels in our lives. Both of us were raised not by our fathers but by older, stern male relatives who practiced "tough love" and even kicked us out of the house during our rebellious, angry, cheap-wine-drinking, socialist-leaning college years. As young men, we both had our Christian reawakenings. I should mention that my youth was not nearly as challenging as his, because he had to deal with the cruel racism that permeated the Deep South when he was a boy - an awful burden that he has transcended, largely through the Christian grace of forgiving those who had done wrong.

Justice Thomas is one of the most amazing people I have ever met. Indeed, I am groping for words that do full justice to the impact that Justice Thomas had on those of us who listened to him in the intimate setting of small classrooms and other occasions. I wish you could have seen the way our students' faces lit up while listening to him. We have very mature, attentive students at Grove City College, but I have never seen them as rapt as when Justice Thomas was speaking with them. He shared wisdom, personal vignettes, historical perspective, and helpful insights, but there was another level of communication going on that transcended his words:

It may sound corny to say this in this cynical day and age, but we were blown away by the sheer goodness and virtue of this man. I truly found Clarence Thomas to be the epitome of humility, integrity, public service, and faithfulness - both to God and to the solemn responsibilities of his important office. In regard to the latter, Justice Thomas was always discreet, carefully withholding his personal opinions whenever a question was asked about an issue that the Supreme Court would be adjudicating. He reiterated that his job was not to make rules for the rest of us - to presume to judge whether a law or application of a law was good or bad, wise or imprudent - but simply to determine whether it was constitutional.

Before meeting Justice Thomas, I respected him immensely. After meeting him, my admiration grew exponentially. Again, call me corny, but I was affected in a spiritual way - like I was a better person for having been in the presence of this good man. I don't feel that way often.

Godspeed, Justice Thomas. And thank you not only for what you are doing but also for who you are.

Barry and the Babe

Barry Bonds' Dec. 16 sentencing for obstruction of justice is an anticlimactic addendum to a sterling, though marred, baseball career.

Without a doubt, Bonds was a great hitter who didn't need performance-enhancing drugs to put up Hall of Fame numbers. Bonds had dedication and self-discipline. He worked hard for many years to stay in shape, prolong his career, and be the best he could be. Unfortunately for his reputation, the consensus is that he went too far.

It's interesting to reflect on how far people will go to gain an edge. Movie and TV stars "cheat" on what nature gives them - some with plastic surgery, others with breast augmentations, perhaps some even with steroids. Like them, Bonds tried to give the public what they were looking for - in his case, the ability to hit a baseball an awe-inspiring distance. In sports, though, cheating to gain an unfair advantage offends most Americans' sense of fair play.

At this unhappy time for baseball, let's look back at a player to whom Bonds was frequently compared - the game's greatest icon: Babe Ruth. When Bonds surpassed Ruth's career homerun total, he remarked that we shouldn't have to hear about the Babe any more. It's sad that he resented being spoken of in the same breath as the Babe. He should have felt honored.

Babe Ruth was sui generis - one of a kind. He occupies an irreplaceable and unmatchable spot in American sports history. In fact, you can make the case that he single-handedly elevated professional sports to national prominence.

Ruth became a legend by virtue of his prodigious athletic feats and his larger-than-life character. Where Bonds was sometimes reserved and cool toward reporters and the public, the Babe was gregarious and sunny. The fun-loving Babe led a colorful life, and he gladly made numerous visits to children in hospitals. He loved people, and people in turn loved him.

As a slugger, Ruth has no equal. Only 35 times in major league history has a player achieved a season slugging percentage of at least .700. Ruth did it nine times. Bonds did it four times, all after bulking up late in his career. Ruth hit at that level much longer, compiling an incredible cumulative slugging percentage of .711 for his 15-year career with the Yankees.

Bonds' highest slugging percentage, in 2001, was an astounding 127 points above the runner-up, Sammy Sosa (another slugger who tested positive for steroids). That is dominance! But Ruth's highest slugging percentage, in 1920, was even more impressive. The runner-up, Hall of Famer George Sisler, batted an eye-popping .420, was second in the league in doubles, triples, and homers-yet had a slugging percentage 215 points lower than the Babe. The next year, Ruth's slugging percentage was 240 points higher than the runner-up, Hall of Fame outfielder Harry Heilmann, who batted .394.

The bulked-up Barry Bonds smashed some long home runs, but never did he hit a 500-foot homer. Ruth hit dozens of homers over 500 feet, set the distance mark in every American League park, and hit the longest verifiable home run in major league history in Detroit in 1921 - at least 570 feet on the fly. Bonds' power was concentrated in four seasons. Babe hit his last 500-foot home run 18 years after his first. It's scary to think what Babe would have accomplished if he had half of Barry Bonds' commitment to training.

Babe's preternatural power was such that he occasionally reached second base before an infielder would catch one of his pop-ups. (Showing his fun-loving personality, he hit one pop-up so high that the infielder lost sight of it, so Babe caught it himself in his bare hands.) Another news account tells of Babe hitting a screaming line drive that nearly hit the pitcher's head before sailing over the centerfielder and hitting the centerfield wall 500 feet away (yes, some of those early ballparks were that deep in center field) on one bounce.

The greatness of Ruth would not be complete if we did not acknowledge several other dimensions of his baseball skills. Tris Speaker, Hall of Fame outfielder, testified that Ruth was one of the five or six greatest outfielders he ever saw. The Babe stole home 10 times in his career. As a pitcher, Ruth won over 100 games; still has the 17th-lowest career ERA and the fourth-lowest World Series ERA; had a winning record in head-to-head match-ups with the great Walter Johnson; and pitched complete game victories in 1930, after not pitching for a decade, and again in 1933 after an additional three-year hiatus. He also played on seven World Series winners (three in Boston, four in New York).

I wish Barry Bonds peace. Meanwhile, baseball fans, let us rejoice in the baseball miracle that was Babe Ruth. *