Via David Wolf's Peking Review, an interesting article from the Boston Globe analyzing China's current quality and regulatory problems and comparing them to what the US went through in the late 19th and early 20th centuries. It's a few days old, but I just discovered it. There have been several articles like this recently, but this one, written by historian Stephen Mihm, gets beyond some of the more facile comparisons and looks quite evenly at how China's situation reflects a transition that has been made by other economies. Importantly, in comparing this to America's historical problems, the article looks not only at how China's situation parallels the United States, but how it does not:

Piracy, fraud, and counterfeiting, whether of currency, commodities, or brand-name electronics, flourishes at a particular moment in a capitalist society: the regulatory interregnum that emerges in the wake of fast-paced capitalist change. This period is one in which technology has improved, often dramatically, and markets have burst their older boundaries. Yet the country still relies on obsolete ways of controlling commerce. Until there's something to replace them, counterfeiters and other flim-flam operators flourish, pushing new means of making money to their logical, if unethical, conclusion.

Indeed, the ease with which counterfeiters and corner-cutters operate in China today can be attributed to many of the same failings that plagued the United States 150 years ago: a weak, outdated regulatory regime ill-suited to handling the complexities of modern commerce; limited incentives for the state to police and eliminate fraud; and, perhaps most important of all, a blurring of the lines between legitimate and fraudulent means of making money.

All of these are typical of capitalism in its early, exuberant phase of development. The United States may have been the worst offender, but early industrial Britain had significant problems with food adulteration and counterfeiting, and Russia from the 1990s onward has been the scene of some of the worst capitalist excesses in recent memory. And in all likelihood China's recklessness is just that: a phase that will eventually pass when the nation's regulatory institutions catch up with its economic ambition.

None of this is to suggest that we should exonerate China for shipping poisonous pet food and lead-impregnated toys, nor that we can count on China merely to follow in our footsteps. There are, obviously, enormous differences between modern China and the United States of 150 years ago. China is not a democracy; however angry its citizens may be, they have limited capacity to translate their rage into legislation aimed at putting the brakes on the economic free-for-all. And there's no equivalent of the muckraking American journalists who thrust these issues into the public spotlight. Just as bad, many of the worst excesses are being conducted under the auspices of the state.

David summarizes some of the key points in his own post. Rather than restate them I'll just point you at what he wrote:

Mihm's point is simple: such behavior, manifest in England in the 18th Century, America in the 19th, and now China in the 21st, is a natural outgrowth of capitalism in its adolescence rather than the result of some sort of fundamental flaw in the national character.

Mihm refuses to allow this parallel to morph into an excuse for China's bad behavior. On the contrary, Mihm suggests, it is a clear indicator that China can and should, and must - become an honest actor on the world stage. It will not do so on its own, he reminds us. China will need to be continuously and appropriately pressed, and business - not politics - is the best lever.

Have a read.