Posts Tagged China

You Can’t Plan a Market: Transforming Culture from the Bottom-Up

The White Man's Burden by William EasterlyWhy has post-Soviet Russia not panned out to be the bustling, prosperous economy that the freedom folks predicted it would be? Is this the fault of the free market, or is there something deeper at work?

This week at AEI’s Values and Capitalism, I examine the question, channeling economist William Easterly to make the case that “you can’t plan a market.”

Although many Western tinkerers wrongly ignore the structural limitations in improving developing economies, many on the opposite side make the mistake of pretending that the structural stuff is a cinch.

I argue that it isn’t:

In our modern, polished system (with the wear-and-tear steadily increasing), we are tempted to look at other countries and think their problems are simple enough to be fixed by scribbling a couple solutions on paper and circulating it through the right hands. Even for free-market types, there is a rash assumption that all it takes is a magical structural concoction and a semi-functional government to get a poor country in motion.

Forget the individual habits and beliefs of the people on the ground. Forget the spiritual and cultural factors that limit or propel that society forward. Forget the psychological damage caused by previous (or current) totalitarian rule. “Just give them a market,” we say, “and let them be.”

As I say in the piece, “spontaneous order is not spontaneous order unless it is spontaneous.” Even in America, lest we forget, our thriving economic system did not come from the wave of a magical capitalism wand. Look no further than the 19th century to behold the painful and chaotic emergence of what we know today (and appreciate it).

To demonstrate this lesson, Easterly’s book points to several key market components that are difficult to “invent,” particularly from the top down: trust, property rights, social relationships/unity, peace, etc.

Such features — what Nick Schulz and Arnold Kling call “intangible assets” — must originate from Read the rest of this entry »

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Zhang Xin on China: We Are Only Allowed to Make Money

Last Sunday, I caught an interesting interview with Zhang Xin, the billionaire Chinese developer and CEO of SOHO China.

In the interview, Fareed Zakaria asks a lot of important questions, but what is most striking are Zhang’s opinions about what the Chinese system lacks.

Watch the interview here:

Zhang had very humble beginnings, spending much of her late childhood working in shoe and electronics factories trying to save money for her education. She eventually met her goals.

Here’s a brief bio from Bloomberg:

Zhang, 44, personifies the explosive rise of China, from the poverty of Mao Zedong’s communist rule to the riches of state-controlled capitalism in the world’s third-biggest economy. At age 30, armed with a master’s degree from the University of Cambridge in England and connections from working at Goldman Sachs Group Inc. in New York and Hong Kong, Zhang founded Soho China with Read the rest of this entry »

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Spontaneous Order and the Gospel: Avoiding the Chicken-McNugget Church

TED Talks recently posted a lecture on the origins of Chinese food by reporter Jennifer 8. Lee.

In the video, Lee explores how Chinese food has emerged across the world, from America to Italy to Japan. In each case, Chinese food has been altered according to the local tastes of the given culture.

Watch the video here:

I came across the video from a post by Jeffrey Tucker, who offered his reaction with this simple headline: “The Spontaneous Order of ‘Chinese Food.’”

Tucker is referring to the Hayekian notion of spontaneous order, which proposes that human ingenuity and creativity — when left alone by centralized forces — will lead to a much more efficient and specialized economy than any central planner could imagine.

Although Hayek is not mentioned explicitly in the video, it’s easy to see where Tucker sees the connection.

As Lee says in the video:

We [can] think of McDonald’s as sort of the Microsoft of the culinary dining experience. We can think of Chinese restaurants perhaps as Linux — sort of an open-source thing…where ideas from one person can be copied and propagate across an entire system. Where there can be specialized versions of Chinese food depending on the region.

As an example, Lee compares McDonald’s Chicken McNuggets with General Tso’s Chicken. Where Chicken McNuggets were centrally planned, researched, and rolled out to consumers nationwide, General Tso’s Chicken spread across Read the rest of this entry »

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