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Wednesday, May 21, 2008

Do You Care?

How much should the well-being of people in other countries matter for domestic policy?:

China’s Class Divide, by Daniel A. Bell, Commentary, NY Times: ...Tsinghua is one of China’s most prestigious universities and it is known for its politically conservative orientation. President Hu Jintao is an alumnus, and most of my colleagues are Communist Party members, as are many of my students.

Yet the atmosphere is anything but conservative. The most popular lecturers tend to be the ones who openly criticize contemporary China. In private, students are quick to express frustration at Internet censorship and official propaganda. In class, student questions are often critical to the point that I need to introduce some “pro-government” views for balance.

Shortly after the uprisings in Tibet in March, I happened to lecture on Locke’s idea of constitutional democracy. A student asked if the “right to rebel” would justify the use of violence by Tibetans fighting for independence. In the interest of class time, I had to shut off the discussion. The next week we discussed Isaiah Berlin’s concept of freedom... Once again, I was forced into the strange position of cutting off debate before it got out of hand.

After the Sichuan earthquake, ..., I was due to lecture on John Rawls’s theory of justice. ... I tried hard to think of an example that the students could grapple with.

Finally I came up with a good one (or so I thought). According to Rawls, the state should give first consideration to the worst-off members of the community. But which “community” matters? Do the state’s obligations extend outside national boundaries? For example, the cyclone in Burma caused more deaths than the Chinese earthquake. Should China help the victims of the Burmese cyclone, even if it means less aid for the rescue mission in China?

When I finished, the class went unexpectedly silent, to the point that I could feel a certain amount of hostility. Finally a student said that of course the Chinese government should help the Chinese first. But why, I said? Another student said, it’s obvious, the victims are Chinese. “But why, why?” I asked, somewhat impatiently. Give me some reasons.

Some students spoke up. There is no global institution that could distribute aid in accordance with Rawls’s principles of justice. The Chinese people pay taxes to the Chinese state, so the state has special obligations to them. The Chinese state couldn’t do much for the Burmese people even if it wanted to.

I responded that the Burmese government is truly awful, blocking aid to its own people, and that the Chinese government could have some influence on it. ...[T]he bell rang. In the past, the ever-polite students would clap in appreciation before leaving. This time, there was no applause.

When I got home, I realized that I had trodden on sensitive territory. Chinese TV has been filled with scenes of death and devastation, of Chinese soldiers wading through mud and gore to help the victims. Every conversation is prefaced with concern about the victims. I sent an e-mail message to the class apologizing for the “wrong-headed” example...

A student wrote back saying, “It is not a wrong-headed example; we just have clear and strong identification.” That seems to go to the heart of what went wrong. It’s perfectly natural to care about people closer to home, especially in times of disaster. ...

I've wondered about this - how much to care about people inside the US versus people in the rest of the world - when it comes to monetary and fiscal policy. Say, for example, the US is about to go into a recession and it can save itself, but in doing so it will make life much more difficult for developing countries. Should policymakers do what's best for the US even if it impacts other countries negatively, or do monetary and fiscal authorities have an obligation to consider the interests of other people in the world when they are making policy decisions? Shouldn't policymakers always do what's best for the US?

Yes, but policymakers are supposed to represent our interests, and if we care, on average, a lot about how our actions impact other people in the world, then policymakers should reflect that in their policy choices - that's what's best for us. Conversely, if we mostly care about ourselves, and the rest of the world matters little, then policymakers should reflect those preferences too and show little regard for the potential negative impact of domestic economic policy on other people in the world (except to the extent there are negative feedbacks effects).

But I'm less comfortable with that position. What's the argument against it, i.e. what's the argument for internalizing the negative economic externalities that hit other countries because of our policy choices even if we don't care very much about those countries?

    Posted by on Wednesday, May 21, 2008 at 03:42 AM in China, Economics | Permalink  TrackBack (0)  Comments (107)

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