Gerth ’88 chit chats about China, Environment and the New World Order

Dr. Karl Gerth ’88, a Grinnell alum and current professor at Merton College, came to speak at Grinnell on Thursday as part of the Scholars’ Convocations program. His talk addressed several key questions regarding China’s explosive economic and cultural growth, rise to international prominence, and most importantly, what all of this means for the future.

Dr. Karl Gerth '88 asks the question: Can China Save the World? Photograph by Emma SInai-Yunker.

Dr. Gerth graduated from Grinnell, then went on to earn his Ph.D. From Harvard in 2000. Until he moved to Oxford to take up a teaching position there, he taught at the University of South Carolina. He has conducted research in China and Japan for over twenty-five years, and his books on China have been sold around the world and translated into several different languages.

Do you see the intellectual property laws in China changing any time soon?

We make a lot of assumptions of the world based on the U.S. America’s up here with its wonderful democracy, human rights, and all that other stuff, and the rest of the world is down here, ever so slowly inching its way towards American norms. Some day, maybe if they work hard enough, they’ll get there. Whether it’s intellectual property rights, or it’s respecting artists, or all these other things we magically think that we have here and they don’t have there. I see convergence somewhere in between.

It takes a powerful state, the one the Republicans are having us dismantle, to enforce intellectual property rights. We already have these idiotic border guards, security my ass, they’re checking to see whether I’m bringing in bootlegs of Family Guy from China, or whatever it is. All of that takes money, so it’s going to be harder to protect here, it already is. Chinese bootleggers are compromising our economy. There may not be when China comes up to our standards, but it may be how to figure out how to operate in a world where the value added on brands is not important.

When China has more IPR to protect, they’ll do a better job protecting it … and China’s trying to have more intellectual property. In other words, they want to create more Sonys and Disneys and all of that. All of this suggests they have a vested interest, which is why you will see them go through the motions, at least at the top level they will. But where this analysis is lacking is the assumption that whatever Bejing wants, the rest of the provinces will do. There are parts of China in Chujon, for example, where the entire local economies are based on creating counterfeits for the national market. And unless you’re prepared to call in the People’s Liberation Army and have them start shooting over this issue, you get in a sort of state in which it’s rationalized for the top level to seemingly move in this direction, but on the other hand they don’t have this centralized state that can work all this IPR protection in.

So does Bejing really has that little control over everything?

That’s a standard byline left over from the Cold War. A lot of people are ignorant of China and imagine this evil Communist Party deciding this, and not the other thing and having its will all the way down. Much more, my opinion, and I think the consensus of people who study this stuff is to look at how much it collapses and how many unintended consequences it produces along the way.

The housing bubble is a good example of that: underfunding the local administration means that the local administration has to raise enough money on its own. How is it doing that, property speculation: facilitating stealing land from poor people and creating housing complexes and selling it to developers that are politically connected and getting kickbacks, and funding their local government based on that. It’s a best practice, and it’s an old practice in China.

I don’t know if you guys read The Magistrate’s Tale in your class, but it’s a book about the Chinese central government trying to solve the exact same problem: local governments are incredibly corrupt. So the solution is to pay them more, and control them more centrally. Problem with that, it requires a lot of revenue to the state to do it. It’s why I look at what’s happening in America, and shake my head, because it’s like, they look at other countries’ experiments with government lite, and usually that means you have exactly what you see unfolding in the United States: incredibly high local fees to do everything, bureaucrats who are either indifferent or aren’t very good at what they do. Or, you know, they essentially pay to be a bureaucrat so they can have a fiefdom to make money locally. I’m not saying that’s what’s going to happen, but it’s a good cautionary tale.

Economically, where is China headed?

One of the premises of the book … is why the Chinese are interested in creating their own middle class. Western Europe and the Americas have been top dog for awhile … and while China has the growth to suit their needs, it’s also the growth to suit our needs. The American way is highly leveraged.

We’re kind of looking at the Chinese without looking in the mirror first. Looking in the mirror first is very humbling when it comes to diagnosing other peoples’ problems. What about Chinese artists, what about democracy there, what about their military buildups? I’m not saying that… their regime is so great, and I wish they would take over the United States.

Do you see them changing to a democracy?

When people go on about democracy is I say … it’s a great way of deflecting responsibility We see that in the United States today, with the Republicans and the Democrats both … right now, the buck stops with the Chinese Communist Party for everything, and isn’t that convenient?

“That’s probably left over from my Grinnell days, and I believe as a professional academic that my only useful academic function is to be idealistic. I mean … if my politics were the same as my representative who has to make compromise … what would be the use?”

How about environmentalism? Why is China taking action?

If you agree what the problem is, that is, if you agree with the overwhelming number of scientists, you start to do what the Western Europeans and indeed what the Chinese are doing, which is saying we can’t wait for the Americans: we have to act anyway because it’s the right thing to do.

So is this a new trend?

They’ve had environmental practices infinitely more rigorous than ours for a lot longer. When Saint Obama got elected, he finally passed emissions controls that will only take place by 2020, and will gradually ratchet up, which will still be behind where China was 10 years ago in terms of emissions standards! They’re already planning on implementing a carbon trading network, because they also know, instead of the bogus line of how it’s going to kill our economy and all that, they realize that the future is creating the infrastructure to make them competitive in those areas. And the way you make people competitive is you don’t let the market work its magic, you rig the damn market so that you create competitive industries in those areas you want to dominate.

And that’s not a prediction of the future, that’s a description of what’s unfolding now. I get these cute kooky accusations that I’m a fortune teller, and I always say my book is describing what’s happening now, and where those trend lines are going, not ten years from now, but six months.

So are these movements stemmed from a sense of responsibility or from a profit motive?

It’s all of the above. There’s a very outspoken Chinese official who’s only outspoken because he’s politically connected, who said all of China’s GDP growth in the last 20 years has come because they’ve trashed their environment. When you have zero environmental controls, not surprisingly your factories are a little more efficient.

Lastly, what kind of an impact did Grinnell have on your beliefs?

I thought the culture here, especially in South Campus, perhaps even to an extreme, gets you to question a lot of your assumptions about the world … I still myself as pretty open to change, and I think a lot of that comes from being in that kind of environment.