Innovation in China

For a long time the West though that it was safe because although we were shipping manual jobs to China, knowledge work would be what kept us 'ahead'. When knowledge jobs were moved abroad the narrative was "we have a monopoly on innovation" - at least that's the current story in the US. Chinese schools and universities train students to memorise and they develop no critical thinking or innovation related skills.

Here's why that's nonsense.  First, as Herb Simon noted, you have to be able to remember stuff to innovate. Second, and perhaps more importantly the most compelling evidence for China's ability to innovate effectively is staring us in the face and we simply haven't recognised.  For the last 20 or so years, China has been reinventing government and the idea of what state capitalism means.

What they are developing looks nothing like anything we've seen before (perhaps it does I'm not a historian so I'll come back to that). It's not the European model of state owned and controlled enterprises; it's not the US market based government free for all; and it's clearly not Communism at least not that Marx or Lenin would recognise. It's something completely different. That's innovation on a grand scale. 

Historians might complain that state intervention to steer business isn't new. It's what Alexander Hamilton did in the late 18th and early 19th century. Does that make China unimaginative and uncreative? Not at all: you have to be creative to reproduce that kind of system in a different context and against the backdrop of a very different (and often path dependant) history. 

So if in the West we're not better (and therefore more highly paid) for our labour, or our knowledge or our innovativeness, what justifies the gap in per capita GDP other than the overhang of history?