News & opinion on Greater China and the even Greater Beyond: by Biff Cappuccino.

Friday, September 24, 2004

Letter to Asia Times online: In John Steppling's letter of September 23 he writes: "Those countries in [Eric Koo Peng Kuan's] region who (sic) have developed rapidly did it through state involvement - including Singapore. The free market is a bit of a myth, I am afraid." Taiwan's economy developed rapidly over the past 50 years of US hegemony as this kept Mao and the Great Leap Forward at bay across the Taiwan Strait. But the making of money by the overwhelming majority of the people of Taiwan was not the result of any states' involvement; indeed, it was despite state involvement (as was also the pattern during the Ching Dynasty and under Japanese rule; and which is also the pattern with the Chinese diaspora despite being slaughtered in country after country, century after century). The Kuomintang (the political party of Chiang Kai-shek) established a whole host of state monopolies in Taiwan after it arrived in the late 1940's, thus restricting the operation of the free market. Almost every government agency was corrupt to the hilt and it required a bribe to get anything done in this country until ten years ago. For example, customs and immigration up at Keelung (just north of Taipei) used to print brand-new customs declaration forms every month and required all shipping agencies to use the new forms. The customs people, i.e. the state, had a kickback scheme going with a local publisher. At one point, all of Northern Taiwan's shipping agents refused to process any shipping through Keelung Harbor. This one-day embargo was national news but neither the city nor national government did anything to change the kickback scheme. Another way in which the national government assisted local business was by skimming 5% off all foreign currency coming into or exiting the country and this only ended when Lee Teng-hui became president of the country in 1988. As it stands, Taiwan's Kuomintang party remains the richest political party in the world. Today the Taipei Times is reporting that the KMT is trying to get it's grubby hands back onto another US$1 billion worth of what should be public assets (state operated television stations, etc.). The state used to be so corrupt here that during Taiwan's economic boom of the early to mid-1990's, something like 50% of the private sector was completely under the table. In short, the state did nothing to help the private sector. For that matter, states seldom ever do. States are in the business of helping themselves, just like everyone else is. But while business folk are always hunting for a fresh opportunity to make a deal and a profit, bureaucrats occupy themselves primarily with snoozing or kickbacks. And as to whether or not "the free market is a bit of a myth" I have experience exporting umbrellas and commemorative pins. Basically, all you need to set up a business in Taiwan is a three-day loan to fool the government into thinking you have financial assets. Following this, all you need is some real cash in your pocket, a taxi to take you to several vendors, a bank to assist you with writing up letters of credit, a shipping agent, and a bank account in which to stuff your profits. Does this sound difficult? Business was so easy that even a moron could make money in the 1990s; in fact, many morons still do. One in every 125 Americans is now a millionaire. I have several friends who are self-made millionaires. None of them, I regret to say, shows any particular talent for the business of making money. They just work hard. Personally, I can't be bothered anymore. But I don't cry for the state to save me from myself.

Biff Cappuccino

1 comment:

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