grudging praise for dictatorships ?
I’m seeing more and more grudging praise for the efficiency of the Chinese dictatorship these days.
It tends to go something like this:
Sure, sure, they’re horrible, and democracy is better, but if they decide that they need to put in { more mass transit | a factory | a new canal | an Olympic village }, they just tell everyone in the village “move!”, and the job gets done.
Markets are not perfect.
They are even less perfect when transaction costs are artificially ballooned by government regulations, and non market actors, like NIMBY, environmentalist, and organized labor groups that try to exert ownership-like control over property with out actually, you know, going to the trouble of owning it first.
…but even imperfect markets are usually much much better than top-down control.
What is the value of an Olympic village being located in location X?
No one knows.
What is the value of 1,000 villagers continuing to live their lives where they want to, in the houses they build for themselves?
No one knows.
With out the process of price discovery being kicked off by offer and counter-offer, these prices remain unknown, and thus – charitably – 50% of all trades are value destroying (in fact, I think the rate of value destroying trades is much higher – probably around 95%!).
Heinlein said “when folks ask ‘why don’t they…?’ the answer is usually ‘money’”.
Replace “money” with the word “value” or “utility”:
“when folks ask ‘why don’t they…?’ the answer is usually ‘it would destroy value’”.
Then, to the first line of the syllogism add “let’s do X anyway”:
1) “when folks ask ‘why don’t they…?’ the answer is usually ‘it would destroy value’”.
2) “let’s do X anyway”:
and the third step follows:
3) “let’s destroy value”
July 5th, 2008 at 12:36 pm
Just shows that all those socialist really want is absolute power with which to re-order society…just not in their backyard.
July 5th, 2008 at 9:03 pm
An example, in which I detected a bit of wistfulness:
“Pollution worries have also led more than 20 countries to move their pre-Olympic training to Japan. But nobody knows quite what to expect in August. At worst, droves of athletes could make an eleventh-hour exodus on account of not being able to breathe. At the very least, the thick air could make the 200 meters feel like the steeplechase. So far, though, reports out of China point to vastly improving air quality. Beijing’s radical anti-pollution measures—shutting down all chemical plants, freezing construction projects, ordering half of the cars off the road—point out what’s possible when you have tight state control”
http://www.slate.com/id/2194608/