It’s impossible to run control experiments in economics.  Unlike clinical trials of drugs you cannot assemble two nearly identical populations and then test different economic theories on each to see which performs better. Right after World War II, though, we came about as close as possible to a control experiment in comparative economic systems.  

On the one hand you had the United States, a reasonable facsimile of free market capitalism operating in an environment of private ownership of the means of production.  On the other hand, you had the Soviet Union, an excellent example of a centrally planned economy of state-owned enterprises.  The two countries were roughly the same size in terms of natural resources, with a slight edge to the Soviets, and fairly similar in population.

These two competed for roughly 45 years, right up to the collapse of the Soviet Union.  The country that emerged, the Russian Federation, is frequently described as a gas station masquerading as a country.  Hardly a world-class industrial powerhouse.

Despite what would appear to most objective observers as fairly conclusive evidence of the superiority of free market capitalism, there are those who persist in arguing for the alternative, or some approximation thereof.  There are still some rump communist parties in Europe, the Labor Party in Great Britain, and even the kooky left wing of the Democratic Party in the USA.

Bernie Sanders would deny he’s a communist, despite his honeymoon in the Soviet Union, but his policies of extreme taxation and regulation get him awfully close to full ownership in everything but name.

For Bernie and his soulmate, Senator Warren, it isn’t enough to control the activities of private companies; they still want the ownership.  Outright confiscation is politically a bridge too far.  So instead, they propose an annual wealth tax, or confiscation on the installment plan.  Clever.

It’s hard to understand their motivation: uncontrollable lust for power, unbearable envy?  As our live experiment has shown, it certainly isn’t a quest for a better economic outcome.

The man who appreciated free market capitalism more than most who live it turns out to have been Deng Xiaoping, who led Communist China between 1978 and 1992.  Deng had had a ringside seat for observing the economic performance of the Soviet Union, and the China that Deng inherited from Mao was an economic basket case.

Mao’s policies had led to starvation, economic stagnation, and by some accounts, the death of up to 70 million Chinese.  It is fair to say if Mao were still running China it would be a threat to no one except perhaps its own population.  

Deng must have been flabbergasted at the condition of the Chinese economy (not to mention the Chinese people).  In a country where the unofficial national anthem is “The End Justifies the Means,” how was it possible to have such a terrible economic outcome?  

After all, every policy imaginable, untethered by morality or rule of law, was available to the economic mandarins of the communist state. The free play of the Soviet model of a centrally planned, wholly-owned, economy was limited only by the creativity of the central planners.

So the only conclusion that Deng could draw was that the wholly justifiable means had failed.  Deng is supposed to have said: “It doesn’t matter if the cat is black or white as long as it catches mice.”  Clearly the Chinese mouse trap of the Mao years was an embarrassing underperformer.  Despite the unlimited freedom to choose, the means chosen had failed.

Deng took a look at the economic lessons of recent history, went to Shenzhen, and famously said: “It’s glorious to be rich,” and unleashed a free market, entrepreneurial, capitalist revolution in China. In a short time, China was producing more billionaires than any country other than the USA, its new role model.

The standard of living for the average Chinese soared. Note, Deng shrewdly removed the hyphen from “democratic-capitalism,” having concluded that democracy, rather than being an enabler, was sometimes an impediment to free-ranging capitalism.

The Deng revolution, the ultimate rebuttal to the Cultural Revolution and the Great Leap, marked an extraordinary turning point in the history of China and the world.  One might say it validated the loosely controlled clinical trial comparing the success of the Soviet economy to the United States.

In China, while not temporally side-by-side, central planning Mao-style could now be compared to free markets under Deng and successors.  Again, while not scientifically precise, the triumph of free market capitalism is glaringly obvious.

Now, under President Xi, there has been some retrenchment.  Like whatever happened to Jack Ma?  Cynics say China’s rulers simply saw free market capitalism as a means to catch up.  They had absorbed the lesson of the grand economic experiment and effectively exploited it, but without any ideological commitment.

It was a tool.  Having served its purpose it could be “modified,” even abandoned. It turns out to be just another verse in the enduring Communist anthem of ends and means.

If that is the case, it is probably good news for America in its long-term competition with China.  Our system of free market capitalism should prevail if, as Ben Franklin warned, we can keep it.  As for China, those who forget history…