Business

Was Milton Friedman Wrong About China?


“I predict that China will move increasingly toward political freedom if it continues its successful move to economic freedom.”

So spoke Milton Friedman in 2003. It seemed a good idea at the time, especially after the transformations of the dictatorships in Taiwan and South Korea into messy but functioning democracies. But as Joe Biden is now finding out, Chinese President Xi Jinping operates from a very different premise: that the West has had its day, and Beijing’s blend of Communist Party rule and state capitalism is the ticket to Make China Great Again.

He appears to be getting away with it. Under Mr. Xi, Beijing has carried out genocide against China’s Uyghur minority, threatened Taiwan with invasion, shut down a pro-democracy newspaper in Hong Kong, covered up the origins of Covid-19, and so on. Even so, China’s economy continues to boom—it grew more than 18% in the first quarter from a year earlier—and Friedman now looks to have gotten it colossally wrong about capitalism and freedom.

Or did he?

In reality Friedman was never as deterministic as sometimes portrayed. While he did maintain that a free society couldn’t exist without a free economy, he emphasized that the opposite didn’t hold: A free economy could exist without political freedom.



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