TomEaston

The Chinese economy functions because of a vibrant semi-legal market built around companies that do not pay taxes or follow national laws. At a certain point of maturity, they come under the system and lose their vitality. This is becoming sort of true in America as well, in as much as even though companies follow laws, the laws themselves are Orwellian - all equal, but more equal for some entities then others. Ones falling into this category include the various branches of private equity companies, master limited partnerships, real estate investment trusts, and business development companies. They largely avoid paying taxes on a corporate level, and are growing components of the American economy. When they get extremely large (and perhaps they are nearing this point), pressure will lead to change (maybe). The good part of this facet of America is that allows economic dynamism. The bad part is that it is extremely unfair. That is just like what occurs in China.

it is possible that by then, people will cease to regard GDP as a relevant measure. China's statistics are horribly inaccurate - famously the provincial numbers don't add up to the national numbers but the process is far worse the closer one looks. Not particularly confident in America's numbers either, but even if they are accurate, it isn't clear that theoretical models for gdp are built to capture accurately economic activity. This will become a much bigger, deeper, discussion in the years to come.

The Economist is an unusual publication because it often settles on a single line and there is pressure to conform to this line. This isn't necessarily a bad thing. We were founded in the 19th century to support free trade and oppose the death penalty and have remained largely true to this. If you disagree, you probably should not be part of the Economist. That said, there are lots of other issues that are debated internally. Sometimes I prevail - we were more positive about financial regulation in America before I returned from Asia. Sometimes I lose - I am against legislators or bureaucrats setting minimum wage. And just to reduce this argument to what I consider to be its essential element, it should rest entirely on whether it helps or hurts those who are poor. For reasons that many have articulated better than I possibly could, I think it has damaging short and long-term consequences for the most vulnerable people in our society.

The single biggest danger is that there is no consensus, and perhaps no understanding, on underpins a viable economic system. In America, I think we are at a point where there is no agreement - and again maybe no understanding - of what defines the structure of a company, the role of the state, illegal activity, and even ownership. People often refer to the "american system" but whatever this may be is currently in great flux. That is a huge challenge to the rule of law - meaning clear demarcations of what is right and just, and what constitutes appropriate activity. The result is that there a movement toward cronyism - success is tied to who you know and the friends that can be purchased. The good news is that I believe many in America are aware of this, and it is not illegal to discuss it (untrue in much of the world) and consequently, I anticipate the emergence of better ideas and conditions.

There is nothing more important for a person to be than a committed, informed, high school teacher. If that isn't the official position of the Economist, it should be.