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China Communism RidiculousThe three worst man-made accidents on the mainland this year all took place in its largest cities, where planners struggle to accommodate an expanding middle class and waves of migrant workers. This is how the article "After Shenzhen landslide, residents of China’s big cities wonder when disaster will strike next" that appeared yesterday in the South China Morning Post begins. So don't tell us that we are exaggerating!

And why are we interested in this "story"? Are we into the story-telling business? Nope. We are into the eye-opening business. However, this time, we will let you reach some of the conclusions. Or, more precisely, we will lead you to them. Let's review a few facts.

This year in China:

  • Human stampede in Shanghai arises due to overcrowding and lack of safety measures: 36 dead.
  • Explosive materials in Tianjin ignite and blow-up due to contravention of safety regulations: 170 dead.
  • Construction-waste dumpling site collapsed in Shenzhen: 76 people presumed dead.

And also:

  • Shenzhen is declared a "Special Economic Zone" in 1980.
  • Shanghai and Tianjin are opened to overseas investment in 1984.
  • Economic policies in special economic areas:
  1. Tax incentives for foreign investment.
  2. Higher international trade independence.
  3. Products are primarily export-oriented.
  4. Economic activities are driven by market forces.

A map showing economically privileged zones:

China Special Economic Areas

Do you begin to see the correlation? The causality? No? Allow us to help you.

CHINA, A RECENT HISTORY

China becomes communist. Economy is decimated. Nixon goes to China. Chinese communists get rid of ancient bureaucrats who are replaced by modern bureaucrats. Chinese market-economy driven improvements begin.

And now take yet another look at the map. Can you tell us what is so striking? Yes. Most of the map is gray. And what does gray mean? A communist so-called economy.

Now let's assume for a second that you are a peasant living in the gray zone. You cultivate the land you are told to cultivate with the seeds you are told to seed, using the tools you are given… when you are given tools. What is your priority?

To get the hell out of that place.

And where would you go?

You got it! Where the money is.

And where can we find money?

In the Special Economic Zones, of course!

Do you now begin to see the pattern? Chinese newspapers are far more critical than western ones with regards to man-made disasters in highly populated areas. They are right to point at the disregard of safety standards as root cause… more or less.

We know that those three man-made disasters occurred because of rapid economic growth. But we also know that the high human toll was due to a high density of population in those areas. Should density population had been smaller, the disaster would not have been so large.

And now we have to ask. Why was the population density so high to begin with? Because people moved en-masse from the hopelessly impoverished areas to wealthier areas.

And what caused those impoverished areas in the first place?

You got it! Communism.

COMMUNISM IN CHINA, A RECENT STORY

Now consider this. Communism takes over China. Communism decimates Chinese economy. Nixon travels to China. Old apparatchiks are deposed allowing for market-oriented reforms in minute areas. Desperate people moves from economically decimated areas into newer wealthier areas. Disasters happen.

See the pattern?

And now a question for you. Who or what is the actual root cause of these disasters?

You got it! Communism.

Look, this is simple. If communism would not have decimated China, what would have happened is that industries (i.e. entrepreneurs) would have progressively migrated inside of China thus achieving two things:

Higher standards of living throughout China.

A geographically-dispersed industrial base.

In these conditions, there is little incentive for people to migrate, and when they do, the population density tends to remain moderate to low. Why is this so? Because nobody chooses to live in concrete hamster cages 30 to 40 floors above ground unless they absolutely need to do so.

THE REAL TRAGEDY

The real tragedy within the Chinese tragedies is not the human-nature of the disasters. These disasters could have occurred equally in market-driven economies. As a matter of fact, the places where they occurred were in the midst of market-driven economies. No. The real tragedy within the Chinese tragedies is in the communist nature of the disasters. Without a previous communist history, the number of dead people would have been smaller… much, much smaller.

Why?

On one hand because migration would have been much more subdued. But also because when there isn't that much population where to pick workers from, each worker represents a higher investment. Which means that workers are better cared for with better salaries. It is not a good business to mistreat your workers or to provide unhealthy and/or dangerous working conditions because if you do so, workers will simply walk away. And then you are screwed because you won't be able to get more workers of they will demand higher salaries. Either way, it is not in your best interest to do so. Therefore, standards of safety rise.

CONCLUSION

The point we are trying to make is that messing around with market forces creates all kinds of problems because markets are optimized systems. Any change made to them de-optimizes them. Some of the consequences are quite visible and direct: poverty, misery and famine. Some of the consequences are not so visible and indirect: the man-made disasters described in this article. However, what both scenarios have in common is that communism is at their roots and that they do happen. Allow us to remind you that this is not political or economic science fiction; this is reality.

But then again, perhaps you prefer reality shows instead where politicians and economists keep telling us how wonderful the future will be as soon as this wonderful communist or socialist political system what we "enjoy" begins to bear fruits. Any time now. For sure. Just bear with us a few more years. We swear…

Note: please see the Glossary if you are unfamiliar with certain words.

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