Monday, October 20, 2014

Communist or Capitalist - What's in a Name?

Support for Free Market System

This year's Pew survey on global attitudes towards future wealth is full of intriguing questions and results (is Life Success out of one's control? Will the next generation have a better future than yours? Is Inequality a major challenge? How important is education and hard work to success?). Not surprisingly, there is a strong correlation between a nation's economic growth and its people's overall levels of optimism.

Among the polling results, the question posed in the graphic above produced a particularly curious paradox: Vietnam and China, two of the world' s last remaining so-called Communist countries, are among the staunchest disciples of the free market economy. This result may be causing Karl Marx to stir yet again in his grave. More likely, however, he is remaining stock-still, having long ago abandoned delusions that his collectivistic prescriptions are still being followed anywhere.

Hope, mixed together with industriousness and dashes of ingenuity, is a powerful tonic for getting people off their butts in the quest to make money and improve their lots. In underdeveloped markets, people generally seem to believe that there is nowhere to go but up, so why not go for it. Meanwhile, the emerging markets of Asia have had a taste of growth and its people seem hell-bent on continuing to chase their fair share of it. Ironically, perhaps, it's the "old world' countries of Europe (and surprisingly Japan) that seem to have gotten lost in their belief in free enterprise and prefer to paw through what goodies there might be for doling around by the welfare state.

Another intriguing driver of hope lies in views towards wealth disparity, as laid out in the table below. Here also, Vietnam and China - two countries that have whoppingly wide wealth gaps and high Gini-coefficients, seem least concerned about the notion that there is a thin, dense layer of cream at the top of their economic cakes. These people might have chosen to take their pitchforks and protest banners out into the streets and seek to topple their lords and masters. Instead, the people of these countries simply want to keep their noses against the millstone and grind out more money and better lives for themselves. Good on 'em.          

Inequality Seen as Major Challenge

One final note: the communistic North Koreans were not included in this survey. Had they been, there is little doubt that, given the importance over the past few years of the free-trade and black market for goods in keeping the citizens alive at even a subsistence level, they too would have also given the wild and wooly practice of capitalism a big thumbs-up. 

Friday, October 10, 2014

Hong Kong - Cronyland

At the risk of adding yet more blah-blah-blah to the global debate about Hong Kong's Umbrella Movement, the table above speaks volumes. Therefore, little else needs to be said. The table from The Economist was initially posted on this website in March of this year (for full report, read Asia One Percent: Crony Nations). Some of the consequences of this level of economic disparity are now on full display in Hong Kong. Repression of economic, political and social opportunities in an advanced, educated society simply leads to baaaaad things.

Thursday, October 9, 2014

Robbing the Baron

Hey, seen a maid sporting a Rolex?
No one should feel amused to hear that someone has been burgled. However, if that victim happens to be Hong Kong's Cecil Chao - the property billionaire who has made a second career of openly serial bachelorhood, and who has famously offered HK$500 million to any bachelor who can set his lovely lesbian daughter Gigi back onto the path of heterogamy - perhaps a little schadenfreude might be excused. As reported in the SCMP, he is the latest of several burglaries in Hong Kong of tycoons.
In Mr. Chao's case, the storyline is that someone approached his 20,000 square foot mansion (modeled after Frank Lloyd Wright's Falling Water house) late at night, climbed in through Mr. Chao's latest girlfriend's bedroom window, made their way into a bathroom which contained a safe, pried it open, and then took off with six antiques, five watches and twenty items of jewelry worth HK$10 million (c. US$1.2 million). This incident happened when the property's CCTV happened to be shut down for repairs.
A few questions of curiosity immediately spring to mind:
  • Is it coincidence that the burglaries were made while much of Hong Kong's police force was preoccupied with the Umbrella Movement?
  • How can this not be an inside job, since the thief was probably aware of the wonky CCTV system as well as able to negotiate the labyrinth of Villa Cecil to find the safe?
  • Why is there a safe in a bathroom anyway? Has Mr. Chao cornered the local market on Viagra and rhino horn powder? 
  • Why does his girlfriend have or need her own bedroom? Is Stud-man Cecil only half the man he once was? Or maybe this is the modern-day version of Raise the Red Lantern, where the rich Chinese tycoon chooses between his many wives each night by hanging a red lantern outside her bed chamber.
While authorities are investigating, Mr. Chao is not commenting. That's unfortunate, because it would be good to know if the HK$500 million reward for the lucky winning he-man is still on offer, or whether it will be revised. To, say, HK$490 million.