Despite an incredible economic transformation, China today is poised at the top of a long, slippery slope that Britain, the United States, and many other countries have descended. To inaugurate involuntary transfers to its “less fortunate” from its “more fortunate” will be a repetition of the collectivist tragedy that one might hope China’s still-recent experience could enable it to reject. Fortunately, the government does not face quite the temptation that democratically elected regimes face to buy votes with government handouts. [Full Article]
Source link: http://archive.mises.org/2967/discovering-the-indigent-in-developing-economies/
Discovering the Indigent in Developing Economies
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The government has no right to steal capital from people who earn it. That’s immoral.
On the other hand the Chinese government originally stole property and capital on ‘behalf of the people’. The communist dictatorship then created a corrupt wealthy ruling class to maintain its booty.
Why now do you complain at the prospect of the government stealing stolen property from its rich thugs, and immorally giving to others?
My libertarian values make me respect not the wealthy, but the rightful owners of property. You however seem to repect wealth for wealth sake. How else could you say something as outrageous and illogical as:
“Fortunately, the government does not face quite the temptation that democratically elected regimes face to buy votes with government handouts.”
I sincerely hope you don’t believe that repression and forced economic ‘justice
are preferable to the follies of a free electorate.
Jon
To add to Jon’s comment, the intimation that it is right and proper for government to establish a “social safety net” further damaged an otherwise good article.
Public Choice theory tells us that the powerful in government will not generally allow only completely voluntary social programs to exist, because by doing so they do not increase their power. Taxation also serves to limit the number of “wealthy” people and decreases the quantity of capital available to the “wealthy” to spend on charity.
It’s easy to say, “Just get out of the way, and the Chinese people will do it themselves”, but bureaucrats just don’t think that way.
Notice that the Chinese community is quite wealthy everywhere they are to be found, except in China.
Mr. Potts’ addressing of the fact that these otherwise starved-to-death beggars are actually gainfully employed by their “managers” is an astounding perspective, one which does Mr. Potts and Prof. Mises great credit in pointing out.
What I do not expect is to see that perspective printed in any of the mainstream press. After all, we’ve been taught since childhood that pimps are utterly, irredeemably evil.
Democracy, socialism, totalitarianism, communism…they are all subsidiaries of the same evil business that is government……I think H.L. Mencken said it best….
Having actually been to Guangzhou, I’ve seen first-hand the kind of prosperity resulting from economic freedom in the Special Economic Zones.
I did only see one beggar that I remember, however, with a horrifically burned face. At the time it hadn’t occurred to me that he’d be earning a decent living. It’s a shame I had no way of talking to him.
In some ways, it’s a funny place. A friend of mine said that all invoices have to go through the government – a rather totalitarian measure. There seem to be far too many people in certain jobs – like malls. You can’t move without bumping into enthusiastically helpful girls waiting to demonstrate umbrellas. It appears that the government is “encouraging” the employment of excess people in some cases, where they could be more useful elsewhere. You wander about and find clusters of tiny shops selling locks, or bathroom fittings – more than seems sensible.
I could be wrong, but I suspect subsidy.
I suppose the ultimate point is that there is nothing wrong with begging as a voluntary occupation. It’s not the best kind of job, but it is of course wrong to employ government to get them off the street. It rather reminds people that the unfortunate need voluntary help, rather than trying to cart them all off to an “institution” which is probably more dehumanizing in the long run, and just relocating the problem.
“I sincerely hope you don’t believe that repression and forced economic ‘justice’ are preferable to the follies of a free electorate.”
Well, hasn’t everyone at the Mises institute been saying for years that governments end up with “repression and economic ‘justice’”. It’s just a different brand. The only thing that’s worse is the increased possibility of being carted off as a “dissident”. Foreign wars and PATRIOT acts pave the way for the same repression as that which exists in China, surely?
I didn’t mean to intimate that it is right for any taxing authority to erect any “social safety net.” Rather, I meant to deplore most real instances of this.
China had rich people before economic liberalizations, and it has rich people afterwards. It now has more rich people, and richer ones (not that the average Chinese is rich, yet). Before economic liberalizations (1989 and after), ALL rich in China were (government and party) thieves. Today, many still are thieves, government, party, and other. But now there’s something new: rich ENTREPRENEURS – people who made their money in a way a libertarian can respect. It’s the rights of THESE (often difficult to distinguish from the other rich) that concern me. There will be many more of these “respectable rich” if the government doesn’t intervene. And much respectable wealth.
Good point Joe. However, this is really a case of free markets compared to statist economic policy. The Chinese government operates free market zones up and down its eastern sea board, this has brought great economic prosperity to the inhabitants of these areas, but in the interior of China, the government has kept in place most of the pre-1989 economic policies. This has meant increasing wealth for the people of the Chinese eastern seaboard and greater poverty for the interior (as no one wants to buy crap goods from state-owned factories anymore). If the Chinese government would allow the same economic policies in the rest of the country as they do in Guangzhou, then there would be a influx of beggars to its eastern cities (for all of it’s totalitarian muscle China has been unable to control population movement from the west to the east), as the poor subsistence farmers would become industrial workers (producing higher value goods) and would be able to afford to care for disable there own disabled children. However, this is unlikely to happen, since the status-quo works well for the party elites in China, they get a rich eastern half to fill their pocket and show foreigners and a subjugated and obedient western half. Also, China could provide the capital need for further industrialization, if it would close down its state-owned enterprises and tell the state ran banks to issue credit on market terms. With the yuan pegged to the dollar there is a great inflationary bubble in China, the majority of the money is being lent for consumer consumption (as the business sector is filled with political corruption and red tape) and unlike their brothers in Hong Kong, Singapore, and Taiwan; China’s eastern city-dwellers have not learned the value (and virtue) of saving.
Lastly, I would like to say that democratic government is incompatible with industrial development; any government that is elected and chooses to make the necessary reforms for development will quickly be booted out office. I will spare everyone an analytical discussion of the policies used during western development to keep the political power in the hands of the top elites and the draining effect of the landed aristocracy on development. I will simply say, can anyone name a non-European nation since the end of World War Two that has developed into a first world nation, that did not start the process (and in some cases complete it) under an Authoritarian regime. That is not say authoritarianism equals economic growth, but authoritarianism (the kind that is of maximum economic freedom, and limited political freedom) is a prerequisite for rapid industrialization. Before anyone names Hong Kong or Japan, Hong Kong was a British colony and during its most rapid growth in the 1970s it was ruled by an appointed governor who had little supervision from London and no accountability to the local population. In fact, as late as 1991, Hong Kong only had a locally elected “advisory” board as a check on the governor’s powers (and the courts). As for Japan, it was already industrialized before WW2 and if you are familiar with the policies of Meiji-era Japan (the time of its industrialization) it was clearly authoritarian (but with a god –the emperor- as the center of power, in name only), democracy (of any real consequence) did not come to Japan until 1920 (the industrialization process started 1860).
“While Oliver Twist was able-bodied and Xu was born with spina bifida that rendered her unable to walk or control her bladder and bowels, Xu was born into an intact family whose male head is alive to this day, while Twist was orphaned from birth. Thus, they may both be considered seriously disabled in the human world, particularly as children.”
Or, they could be considered as disparate as apples & oranges.
Or is it the fact that one is fictitious and the other real that makes this comparison foolish? Better, I think, to stick with just the Mises quotes as they apply to Qian’s situation than to try “proving” something about Dickensian England. The rest of the article contains good opinions, so if the prose gets cleaned up all will be ducky.
For a more contemporary fictional interpretation of enterprise vs. collectivism and how such dialectics affect individual lives, try “A Fine Balance” by Rohinton Mistry (takes place in India).
Mr. Potts, many thanks for the clarification. I’m sure it’s just semantics that caused your mentioning that “every developed nationcreates a social safety net” sound like you were saying China should also do so in order to join the ranks of developed nations.
Mr. Faulksmen, you have rediscovered the benefits of Benevolent Dictatorship. It is the most efficient form of government, from thestandpoint of minimizing bureaucracy and maximizing individual liberty. Benevolent Dictatorship has been held up as an ideal since Plato, embodied (so the historians tell us) in the Roman Emperor Trajan, the Greeks Solon and Pisistratus, Peter the Great, Queen Elizabeth 1, Cecil John Rhodes, etc.
I believe your Japanese example may prove your point, as the Emperor Meiji was a powerless figurehead. Japan was certainly authoritarian, but run by a coalition of powerful families and individuals who understood that the only way they would remain in power was to modernize, rather than one personality.
Yet we find that these have one thing in common, they don’t last. Even if the form remains, there is always some egotist, bureaucrat, or just nasty person to step into the shoes of “X the Great” when they pass. Two “Great” titles back to back I have never seen.
Mr. Howland,
If we stick purely to Authoritarian regimes that are focused on industrial development and complete the process after or before their leader has departed, very few degenerate into one man autocracies (any greater then what they where before). If we take Meiji-era Japan, it slowly developed into a democracy and later into a militarized state. In1889, the Emperor (or those acting on his behalf) presented a constitution based on the Prussian model as a “gift” to the people; the Meiji oligarchy viewed this as mere cosmetic reform, as the constitution gave the Diet (parliament) the right to approve the budget, but if an agreement between the Diet and the Privy council could not be reach, last years budget would be reinstated.
They held on to control for a while, but slowly political parties where formed (and banned and reformed) and took control of the Diet. Moreover, as time went on the continued roll over of the previous years budget became impractical, thus by 1920 Japan became a functioning Democracy, however, we all no that was not to last. The Japanese people where taught to obey the Emperor and all those who spoke for him, this was fine when they where pursuing industrial development, but disastrous when seeking other goals. As political parties where formed, the military began to exert its power (they where unable to do this under the Meiji oligarchy as they themselves where from military backgrounds and would not be moved by nationalist ideology that did not fit their worldviews, we all no what happened after that. As for the role of the Emperor during this whole process, no one truly knows. The Meiji oligarchy did view the Emperor as a god, despite there modern outlook this view was central to both their Japanese identity and their political power, so it is unclear which where his decisions and which where his advisers. All writings and correspondents have been kept by the Japanese Imperial family.
For modern examples we must look to Singapore, South Korea, and Taiwan and for the most part they where ran be one single personality. First Singapore, Lee the Great (Lee Kuan Yew) is not dead, but has stepped down as Prime Minister. Because Singapore is an authoritarian state with the veneer of democracy, little has changed even though it long ago entered into the ranks of first world nations. The government has removed the ban on homosexuals in the civil service, although homosexual activity is still a crime. In fact, Singapore is more a kin to Saudi Arabia when it comes to morality laws then to any western nation, maybe a better fit is Victorian England.
South Korea has done well; it continued the process of economic after the assassination of Park Chung Hee in 1979. Sadly, they have become a democracy (of sorts) and there are already signs of turmoil, savings rate have dropped to near nothing and consumer indebtedness (and bankruptcies) has skyrocketed.
As for Taiwan, Chang Kai-Shek died early on in it industrial process and a military dictatorship was continued until industrialization was nearly complete. To be frank, nothing much has changed in Taiwan sine the last days of the military dictatorship.
As for two greats in a row, there was Julius Creaser followed by Augustus, but in a true free market economy (example- Hong Kong) you don’t need those types of leaders, since the market (and market participants) governors most day to day issues.
Lastly, I would not included Cecil Rhodes in the list of great leader, his main drive was to expand British imperialism and seize millions of acres of individually tenured land held by native African to redistribute to settlers. Even among the settler his main drive was to consolidate his own power. I recommend ” The Anglo-American Establishment”, by Carroll Quigley.
Please excuse the use of “no” for know in my last posting.
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