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What is a socialist market economy? The question comes up every now and then and mostly I can avoid giving an answer. This afternoon I discovered a nice illustration after my return to Shanghai and saw the socialist market economy in action.
The most convenient way to leave my current residence is bus number 620, at least, it was bus number 620 when I left late last year. The bus was always packed and the ten-minute trip would cost one Renminbi.
I just returned from the US and there even having a public bus is already pretty socialist. It is not as bad as having weapons of mass destruction, but it is close. People who use a bus, do not buy a car and that is structurally bad for the market.
China is still developing that feeling. For the time being they just make busses very hard to find, just like weapons of mass destruction, so they have at least something in common.
Bus no 620 did not show up today. What did show up was bus number 970 that carried a sign saying “the old 620”. The bus itself was new and so was the fee: two full Renminbi! Double what I paid last year! I let the first bus pass and asked other victims of the socialist market economy whether the old 620 was still around. They confirmed my worst worries: bus 620 is no more.
In a socialist society you cannot just double the bus fees. The government has realized that and raising the bus fees is a matter only the central government can decide. The interests of the poor have to be safeguarded.
In a market economy such a bus system would not survive. A city cannot buy new buses to show off during the Worldexpo 2010 when people pay only one Renminbi for a trip, even when large numbers pay that price. So what happens is that an old line is cancelled and a new bus line shows up, of course with a different number. It takes the same route, stops at the same bus stops and asks double the fee. Since it is a new bus line, the central government has no say over it.
That is a socialist market economy. Very simple, basically
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