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Markets in everything China fact of the day
Mr. Yu’s daughter had died in a cascade of concrete and bricks, one of at least 240 students at a high school here who lost their lives in the May 12 earthquake. Mr. Yu became a leader of grieving parents demanding to know if the school, like so many others, had crumbled because of poor construction.
The contract had been thrust in Mr. Yu’s face during a long police interrogation the day before. In exchange for his silence and for affirming that the ruling Communist Party “mobilized society to help us,” he would get a cash payment and a pension.
...Officials have come knocking on parents’ doors day and night. They are so intent on getting parents to comply that in one case, a mayor offered to pay the airfare of a mother who left the province so she could return to sign the contract, the mother said.
The payment amounts vary by school but are roughly the same. Parents in Hanwang, a river town at the foot of mist-shrouded mountains, said they were being offered the equivalent of $8,800 in cash and a per-parent pension of nearly $5,600.
Here is the full story.
Posted by Tyler Cowen on July 24, 2008 at 02:58 PM in Current Affairs | Permalink
Comments
milton friedman must be smiling in his grave now. what would coase say?
Posted by: sa at Jul 24, 2008 3:40:38 PM
What China needs is a Willie Stark!
Posted by: VC at Jul 24, 2008 3:45:48 PM
Sounds a bit like the payoffs that the families of victims of 9/11 got. Get cash in exchange for signing a 'do not sue' contract.
Posted by: Gary at Jul 24, 2008 3:46:35 PM
Typical holier than thou NY Times ethical masturb*****. Of course, the US never pays hush money to civilian victims in Iraq...spare me the bull sh**!
Posted by: camello at Jul 24, 2008 3:49:27 PM
Hey, I'm optimistic. At least their government is promoting the concept of contract. Ours seems to do everything to undermine it, when they acknowledge it at all.
Posted by: Andrew at Jul 24, 2008 4:52:58 PM
Hey, I'm optimistic. At least their government is promoting the concept of contract. Ours seems to do everything to undermine it, when they acknowledge it at all.
Posted by: Andrew at Jul 24, 2008 4:53:23 PM
China has come a long way since the days of Mao. Glad grieving, dissenting parents aren't getting shot or imprisoned!
Posted by: James at Jul 24, 2008 5:32:17 PM
China has come a long way since the days of Mao. Glad grieving, dissenting parents aren't getting shot or imprisoned!
Posted by: James at Jul 24, 2008 5:32:38 PM
It probably would have been a lot cheaper to built safer buildings in the first place than compensate these families, and that's ignoring the enormous waste of life.
Posted by: OneEyedMan at Jul 24, 2008 5:36:50 PM
I wonder what effect this will have on that region, since it seems like a large number of the current generation of children were killed or injured, and for many families under the one child policy they may not be able to have another kid. Would this create a sort of lacuna or gap in that generation? I wonder how this will play out over 20 years.
Posted by: Erik at Jul 24, 2008 6:37:22 PM
I didn't think of the children... On one hand, China has a large population, so life is cheap, but on the other hand, Erik is onto something. I was just curious how the money is converted to US$? Does that number take into account cost of living and PPP? Here, 5000$ would be enough to cover the funeral. Thats a lot lower than what the 911 victims (family's) received.
Posted by: brainwarped at Jul 24, 2008 8:06:52 PM
Look at the title: "Markets in everything China fact of the Day""---what market???? A proposed bilateral exchange made in cirmumstances where coercion is present does not a market make.
Posted by: Brian Pratt at Jul 24, 2008 8:27:43 PM
I wonder what effect this will have on that region, since it seems like a large number of the current generation of children were killed or injured, and for many families under the one child policy they may not be able to have another kid.
I recall hearing that the government of China was planning on making an exception for those who lost an only-child in the earthquake. I don't know whether this actually happened or will happen but there was some kind of announcement to this effect earlier.
Posted by: Ricardo at Jul 24, 2008 9:20:25 PM
You know, I'm all for economic thinking and all, but jeez - humanitarian decency has to make a showing somewhere. The market just put a price of 5 grand on an innocent child.
Posted by: Dave at Jul 24, 2008 9:59:40 PM
Erik,
The Chinese government is making an exception to it's child policy for earthquake victims. How generous of them.
Dave,
Just reading the summary, this clearly is not a free market, but more like a coerced settlement foisted on parents. The contract portion is more of a paperwork formality. As others pointed out, this is an improvement from just being imprisoned or shot.
Posted by: Real Andrew at Jul 24, 2008 10:44:24 PM
Its been the official policy that when parents lost a child, they may have another child without being fined. That's been the policy, even before the earthquake. The earthquake is no exception to this policy.
Posted by: tcxxxxxx at Jul 25, 2008 1:30:33 AM
I'm with Dave in spirit, but the simple truth is that judges/juries put prices on humans every day.
I'm less incensed about this than I was with 9/11 payments.
Posted by: meter at Jul 25, 2008 9:56:52 AM
Given the state-sanctioned physical and verbal intimidation and continuous harrassment brought to light by the article, I guess Tyler deserves credit for not passing this off as an example of a free market.
Posted by: RW Rogers at Jul 25, 2008 11:18:09 PM
Government pays hush money to citizens in response to collapse...but enough about the banks.
Posted by: Andrew at Jul 27, 2008 3:54:18 AM
