Kristoffer Trolle Posted August 24, 2014 Posted August 24, 2014 Hi, a thing I never understood is how american and european economies still seems pretty strong compared to the asian economies (or the populations purchasing power). Especially here in Europe, most of the population is paid of by the government to either do nothing or perform useless tasks, and the few that do perform a helpful job in the free'ish market are hold down by regulation and taxes, and prices are pushed up by tons of government interventions. When I travel in asia I don't see the same insane level of government at all, but still the living standard don't seem to beat the american or european yet. Sure their economies are young, a lot of houses, infrastructure etc. needs to be build up, but it still doesn't add up. More people are productive and they work longer and harder, they should be better of than us, right? I often hear austrian economists mention that the american and european central banks are holding down the asian economies? I just don't understand how. The asian governments collects taxes and uses that to buy debt from western countries (bonds)? Or is it something else? Hope someone can help me understand :-)
Sal9000 Posted August 24, 2014 Posted August 24, 2014 You can find the answers in history. The last three centuries were remarkable because for most of the time, China was the most powerful country on earth, be it economically or matters of military. Around the time of Alexander there was a major civil war going on. If you compare Alexander's army to those of Qin you will find that the one in China was almost 10 as big. In addition, they mass manifuctured weapons in factories. China was well ahead until the government decided to shut down innovation and to prohibit any research. For a few centuries China was isolated but still ahead in terms of living conditions. Things began to change when Major Western Powers traded with China. They imported Tea and Chinaware but could not expert anything from Western Europe. This caused a lot of problems since Precious Metals left Europe for China. This trade deficit caused a major silver shortage for some time. To solve this problem, Great Britian and France opened the Chinese Market by force and made the Chinese Opium as an alternative for Precious Metals. This is one of many examples where you can see how governments all over the world ruin a region.
Tree Frog Posted August 24, 2014 Posted August 24, 2014 I think the best way to answer this question is take a specific Asian country and do research on its history. Asia has been a stronghold for Marxist ideology for the past century. It makes sense that years of mass starvation, genocide and central planning do not create wealth or infrastructure. However, nations such as Taiwan, Japan, and South Korea have great infrastructure and a high quality of life. Why? Because they have maintained mostly free market economies. To put this in perspective, the small island of Taiwan, home of the "Chinese Nationalists", have built the 19th Largest Economy and have a higher standard of living than their Chinese counterparts, on the principles of the free market.
Ace Posted August 26, 2014 Posted August 26, 2014 Well, China's entire economic development has been almost purely based on having cheap labour to manufacture goods for Western consumers. Can you think of any Chinese designed and produced products that are sold in the West? It's mostly all just outsourced manufacturing for Western companies. They don't sell Chinese cars, computers, airplanes, etc. in Western countries. What makes you think there is less government intervention in places like China? I mean they don't have very many enforced rules when it comes to workers, but so much of the economy is directly state owned, private Chinese companies are constantly getting bailed out by government etc.. China has a massive credit bubble just like the West, maybe even worse. But the Asian countries that have economies based on actual development of goods and services, not just cheap manufacturing - like South Korea, Taiwan, and Japan - have standards of living on par with or very close to Western countries.
Kristoffer Trolle Posted August 27, 2014 Author Posted August 27, 2014 Sorry I didn't specify it, but I was thinking about places like South Korea, Hong Kong, Singapore, shouldn't they be wealthier than US and Europe, they still seem to still be below. I'm thinking of the huge amounts of misallocations in the west and still "we" have the highest living standarts, why?
Ace Posted August 27, 2014 Posted August 27, 2014 Sorry I didn't specify it, but I was thinking about places like South Korea, Hong Kong, Singapore, shouldn't they be wealthier than US and Europe, they still seem to still be below. I'm thinking of the huge amounts of misallocations in the west and still "we" have the highest living standarts, why?Hong Kong and Singapore have higher GDP per capita than just about any other developed country in the world.I think probably a big difference that appears as a lower standard of living is just because these are such densely populated small countries that a much larger proportion of peoples' income goes towards things like housing. Where are person making X per year in the USA or Canada could get a nice suburban home with a big backyard and two cars, a person making the same in Hong Kong can afford a small apartment and has to use public transportation. The cost of living is just so much higher on average.South Korea suffers permanently from a lower credit rating than its finances would justify otherwise due to the situation with North Korea. So that costs a huge amount of extra money.But I'd like to know what leads you to think that there is less government intervention and economic manipulation in these countries vs. the west? I don't think that's true. It's focused in different areas but they do the same thing. South Korea exports millions and millions of cars but has very tight restrictions on the import of cars from foreign manufacturers. So that's a subsidy to Hyundai, Kia, etc. It says on Wikipedia that rice costs upwards of 4 times what it would if purchased on the international market in South Korea because they have a lot of protectionist policies for their agricultural sector. And something like half of the people in Hong Kong live in government subsidized housing!I really don't think it's a western conspiracy to keep them down.
QueechoFeecho Posted August 28, 2014 Posted August 28, 2014 I think the countries you are referring to skipped over capitalism, and therefore couldn't reach "crony capitalism", but instead have something you might just call "cronyism".
FreedomPhilosophy Posted August 30, 2014 Posted August 30, 2014 The asian countries are full of cronyism and corruption. It's no different from the West, maybe worse. The asian countries are full of cronyism and corruption. It's no different from the West, maybe worse.
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