Friday, June 27, 2014

Tombtone Epitaph Being Written For Capitalism

Yang Jisheng's book Tombsonte has been a tough read, but essential for anyone interested in China.  I'll do a systemic review later, but after reading the account of how a very few people in 1958-1962 caused the starvation of 36 million (give or take) of the very people who produced the food (peasants were starved to keep the cities and industrialization programs going) with the central committee largely unaware of the problem.  How did the communists fix the problem when the crisis was revealed to them?  They instituted reforms that did nothing but make for a hands off policy...
These reforms revived rural markets (referred to in some localities as "free markets"), and by 1962 it was possible again to buy fresh gingerroot, lily buds, lotus root, water chestnuts, and arrowheads not seen for years. When the village markets started operating, their prices were at least double the state prices.  High prices stimulated production, which in turn brought prices down, and by June of 1962, privately raised produce cost only a fraction more than state produce.  These free markets were still considered capitalistic, and party members were not allowed to buy produce from them.  (Page 440)
When economic policies go bad?  Revert to free markets.  When Berlin was faced with starvation in 1946, they reverted to free markets.  How to get goods flowing again?  Allow "gouging."  What happens when you allow gouging?  Money moves from those hoarding it to producers who use it to expand production, which in turn lowers cost.  Survivors from this era returned to this lesson in 1979 in China.  In adapting free markets, the communists buried the West in any claims as to the benefits of Capitalism.  By going "hands off" never in the history of mankind have so many people been lifted from poverty so quickly and has the world so benefitted.

One thing the communist party seems to have that is lacking in the West is people who are willing to stand by their convictions and suffer the consequences.  Liu Shaoqi opposed Mao along with Deng, and did not survive, and Deng did.  Bo Yibo went down three times, like Deng.  Bo Xilai, Bo's son, is currently in prison for his troubles.  In the west, no matter how criminal the leader, there are never consequences.  See Cheney/Rumsfled, etc.

The point free market food "cost only a fraction more than state produce" is unfortunate because more accurate description would be state produce actually cost far more than free market food, it was priced a fraction below.  The free market folk took a profit on what they sold at the prices they sold, the State took a loss, when counting in all the costs of State involvement.  Think USA autos and the cost vs the price, USA "affordable care" and the cost vs the price, etc.

We like to think of China from a racial or cultural perspective, that is "O, well, that is the Chinese" and as if their lessons do not apply to us.  Their lessons certainly do apply across all race and culture, and as I finish reading Tombstone, there is not a single action or attitude that I cannot find its mirror in USA headlines today.  And this is under "capitalism."  Repeat after me: capitalism and free markets are not the same thing.

You cannot read Tombstone about 1960 China without seeing USA Today. Check it out...



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3 comments:

Anonymous said...

Hello John

I read your other blogs as well on writing and about your ski sweater project.

Apologies if this post is misplaced, but I'm unable to comment on your ski sweater blog and wanted to ask you some questions.

Just curious how you are doing when it comes to customers. I see you have created a prototype and would be interested to know what sort of feedback you've got from customers on your design and quality. Like you say, design is the most important aspect but I'm curious what price it will retail for. What will be the next step with the prototype and when can we except to be able to buy it? Given the amount of work you've put into finding a good supplier etc. I'd like to buy one.

Have you been doing any other fashion projects of this sort?

Also, I would like to ask you what has been the three hardest challenges in getting to a prototype i.e. finding the Alpaca farmers in New Zealand etc.

Thanks,
Ben

John Wiley Spiers said...

On this project we are sampling against feedback to the plan A idea. So no attempt to gain customers yet.

We cannot know the price until we work out all of the details, And that is after more feedback from our target group. But we'll keep progress reports coming.

Anonymous said...

Thanks John for your reply.

I enjoyed reading your books because they are filled with useful and applicable knowledge that you've acquired as a professional and from your own experience as an importer and writer.

That being said, I wish you had more books on the topic of producing a product/getting to the prototype stage/importing the product. Perhaps with case studies such as you ski sweater.

Regarding this, do you have any books to recommend to me?

Thanks,
Ben