Thursday, October 06, 2005

Access to Information: The Power of Truth

Dick Morris on China

Dick Morris has an interesting column this week covering the decision of a young WSJ reporter to leave his post as a correspondent in China to join the Marines.

Matt Pottinger, a a 32-year-old journalist, who has reported on China for the past five years, is indeed doing something very altruistic and praiseworthy. News like this often gets overlooked, and I commend Morris for bringing it out.

In the process, Morris also brings out some concerns about the current state of affairs in China, which come from this young correspondent. Pottinger suggests that China’s government continues to exercise extensive control over news and information as a means of continuing its own control. In our own country, we might bemoan the frequent biases demonstrated in our national news media, but at least we have choices. We also have the Internet, which has become an important alternative outlet for communication which bypasses the middleman of editorial supervision and avoids the high cost of paper and ink or broadcasting over government-allocated communication channels.

Our free access to information is something we often take for granted. Information is traveling more freely and faster than ever before, and this means we can make more informed decisions about allocating resources, whether personal (i.e., where we spend our time) or financial. We tell our government to keep its hands off of this information flow, because it is an important dimension of our personal and economic freedom.

Not so in China, where Pottinger explains that “tens of thousands” of government officials monitor what Chinese people are accessing online. Could this number ever be large enough to circumvent the will of 1.3 billion people? We should not underestimate the power of fear and intimidation. Sadly, Pottinger also comments that Western companies help support this practice through our exports of technology. Herein lies a real dilemma: can there be meaningful restrictions on trade in technology that would have helped this situation? One hates to think that your technology that can be used for good by people of goodwill who love freedom can also be used to oppress if it is in the wrong hands.

On the other hand, we should also not underestimate the stifling power of government control on the engines of economic development, and ultimately on the sustainability of that government. Pottinger also points out that economic progress in China has been based on manufacturing and “speculative real-estate deals.” Investments in real estate represent long-term bets on the future. They require a good crystal ball with even the best of information. Once that capital is committed, it cannot easily be redeployed, like machinery or equipment that can be adaptable to other uses. We experienced this drag after overinvestment in real estate in the 1980s, which was precipitated by dramatic changes in tax policy that made such investments less favorable. Manufacturing can also involve significant capital commitments, which are subject to fickle market changes. (Gee, only a few months ago it seemed like investing in SUV manufacturing was the thing to do.)

Query whether this stifling of information will have adverse economic effects, which will itself help the economic engine of China sputter or stall – ultimately causing the government to collapse under its own weight. The truth is still powerful. People like Mr. Pottinger help to demonstrate that. Thanks, Dick Morris, for a great story.

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