Lessons for the west from Asian capitalism

[Danascot]

Asian elites have always looked at the world differently from western elites. And after this crisis is over, the gap in perspectives will widen. Asians will naturally view with caution any western advice on economics, particularly because most Asians believe that the crisis has only vindicated the Asian approach to capitalism.

To be accurate, there is more than one Asian approach. China’s economy is managed differently from India’s. Yet neither China nor India has lost faith in capitalism, because both have elites who well remember living with the alternatives. The Chinese well remember the disasters that followed from the Maoist centrally planned economy. The Indians well remember the slow “Hindu rate of growth” under Nehruvian socialism.

The benefits of the free market to Asia have been enormous: increased labour productivity, efficient use and deployment of national resources, a tremendous increase in economic wealth and, most importantly, hundreds of millions have been lifted out of absolute poverty. Just look at Chinese history through Chinese eyes. From 1842 to 1979, the Chinese experienced foreign occupation, civil wars, a Japanese invasion, a cultural revolution. But after Deng Xiaoping gradually instituted free market reforms, the Chinese people experienced the fastest increase so far in their standard of living.

The desire for an orderly society is deeply ingrained in the psyche of all Asians, which helps explain why virtually all Asian states hesitated to copy America in deregulating their financial markets. Instinctively, they felt government supervision remained critical. This was equally true in India’s democratic system and in China’s Communist party system. It is telling that, while Y.V. Reddy, India’s former central bank governor, was occasionally vilified by his country’s media for holding back on deregulation, he has now become a national hero. His stance saved India from the worst effects of this crisis. China was equally wary of deregulation. Indeed the Chinese leaders may have understood earlier than most that America was building a house of cards with its reckless creation of derivatives. Gao Xiqing, an adviser to Zhu Rongji, then Chinese premier, said in 2000 that “if you look at every one of these products, they make sense. But in aggregate, they are bullshit. They are crap. They serve to cheat people.” Mr Gao said all this while Alan Greenspan, as chairman of the US Federal Reserve, was waxing eloquent about the economic value of derivatives.

...more...

http://www.ft.com/cms/s/0/a9c335e4-13f8-11de-9e32-0000779fd2ac.html

[Deja Q]

1. Does the link also provide hip-high boots and a shovel?

efficient use and deployment of national resources

'nuff said.

[OhioChick]

2. .......

:rofl:

[Deja Q]

3. LOL, thanks!

:)

While there is some truth to that article, the obvious lies don't begin to save it from going into the fireplace, under the birdcage, flushed, et cetera... if it was printed on paper, of course...