Hitting The Information Wall

In "Hitting China's Wall." Paul Krugman opines that "All the signs coming from the economic data show that China is in big trouble."


He does not do a very deep job at explaining what he means. He claims that China is running out of peasants... Although there are 600 millions of them out there. Anyway, I wanted to deepen the debate, so, I sent him this:
Economy and politics are entangled. China's economic problems are nothing relative to its political problems.


The number one consumption in the developed world is information. That's what Chinese consumers will really want in the end. That sort of consumption, the Chinese dictatorship cannot afford to let the People of China enjoy.

So the leadership is reluctant to allow ever more base material consumption: once that has proven unsatisfying, it would lead to ever more questions, of a deep emotional, rational, and then philosophical, thus political, nature. This is basically the psychological mechanism that led the children of the elite to turn against their parents at the time of Tiananmen.

On the other side of the mountains, India has opted for democracy. democracy depends upon openness and information. As time enfolds, India will be able to become increasingly the master of both, and that's what people want. Worldwide.

Thus the present Chinese political system blocks the long term production of the most advanced service, information. That's what really hobbles the Chinese economy: getting ten dollars making a 600 dollar i-phone gets you only that far.

The Chinese surveillance apparatus, with its 50,000 Internet censoring goons, is only dwarfed by the American one, with its 1.2 million watchdogs. It's an economy killer, be it there, or here.

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