Avoiding the Fall Quotes

“well-functioning market requires all three types of investors for socially beneficial projects to have access to cheap capital. Value investors allocate capital to its most productive use. Speculators, because they trade frequently, provide the liquidity and trading volume that allows value investors and relative value traders to execute their trades cheaply. They also ensure that information is disseminated quickly.”
― Michael Pettis, Avoiding the Fall: China's Economic Restructuring

“Unfortunately, predictions of this sort are notoriously unreliable, and economists seem to be especially bad at predicting turning points. Karl Marx once noted that when the train of history hits a curve, intellectuals tend to fall off the train. Intellectual inertia keeps them moving in the same direction, even though the train is no longer going there. Earlier predictions, Marx suggests, are pretty useless in a debate about whether we are at a turning point.”
― Michael Pettis, Avoiding the Fall: China's Economic Restructuring

“This is where the debate must focus. Or to cite John Mills in his 1867 paper, “On Credit Cycles and the Origin of Commercial Panics”: “Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works.”
― Michael Pettis, Avoiding the Fall: China's Economic Restructuring

“In addition, the single most important player in the market, the government, is able—and very likely—to behave in ways that are not subject to economic analysis.”
― Michael Pettis, Avoiding the Fall: China's Economic Restructuring

“The important thing to remember from the growth model perspective is that, whatever the reason, lagging wage growth in China represented a transfer of wealth from workers to employers. An increasing share of whatever workers produced, in other words, accrued to employers, and this effective subsidy allowed employers to generate excess profit or cover losses. The fact that productivity grew much faster than wages acted like a growing tax on workers’ wages,”
― Michael Pettis, Avoiding the Fall: China's Economic Restructuring

“Houng Lee, Murtaza Syed, and Liu Xueyan, argued that there is strong evidence that China is significantly overinvesting.”
― Michael Pettis, Avoiding the Fall: China's Economic Restructuring