Every so often you read a news article so revealing that it triggers this thought: I wonder if we’ll look back on that story in five years and say, “We should have seen this coming. That story was the warning sign.”
Then later in the piece he writes:
When I visited China in September, I wrote that I heard a new meme from Chinese businesspeople whom I met: “Make your money and get out.” More than ever, I heard a lack of confidence in the Chinese economic model. We should hope that China can make a stable transition from one-party Communism to a more consensual, multiparty system — and a stable diversification of its low-wage, high-export, state-led command economy — the way South Korea, Taiwan, Indonesia and Singapore have done. Its huge savings will help.
What you don't get from Friedman is a root cause for this type of thinking. He takes the corruption itself as the cause. But what causes the corruption?
One possibility is that it is endemic to communism, which ends up turning the ruling elite into the Mafia. So China is now replaying a history that happened in Russia after Gorbachev. Another possibility, however, is that Chinese rulers learned their lesson from American businessmen. In other words, the "get mine now" approach is embedded in our current capitalism, which the Chinese have otherwise imitated so well.
Read this Wikipedia entry about Enron. Doesn't it seem a foretelling of the Financial Crisis? Now take a look at this piece on exorbitant CEO compensation. It may be entirely legal, hence not corrupt in an official sense, yet doesn't it convey the exact same feel?
Friedman is right to worry about what is happening in China now. But shouldn't he also be holding up a mirror to us and come to a similar conclusion?