Vietnam is one of those countries where the benefits of capitalism can be seen in action. The Socialist Republic of Vietnam was formally created in 1975 and is one of only five countries in the world that still declares to be communist. Between 1975 and up to 1986 the economy of Vietnam was planned and directed the communist way right into oblivion. Beginning in 1986 a new-and-improved reform called the Đổi Mới brought "socialist-oriented market economic reforms"… OK… whatever makes spin doctors and propaganda ministers happy. Basically, Vietnam surrendered to capitalism in 1986. Since then the economy of Vietnam has grown about 6 - 7% per year in real terms and high tech, oil and manufacturing industries form a large portion of its economy. Its unemployment rate is about 4.5%. Which other so-called capitalist country can say the same?
Deep poverty has declined significantly attributed to "equitable economic policies" aiming at preventing the rise of inequality and improving living standards.
All of this was supposedly been "achieved" by the magic of "socialism-oriented-capitalism", which is akin to say a "dieting-oriented-fattening-program". In other words, communists had 11 years of wonderful economic planning and not only they did not achieve anything but actually managed to lower wealth and the standards of living for al Vietnamese people but hey!... at least they managed to increase extreme poverty and overall mystery… oh… wait…that's not good. I think we can see your point.
It is ridiculous to believe that an economic system which proved itself to be a dismal failure for 11 years has now metamorphosed magically into this juggernaut. Not only that, but all the "social" benefits achieved since the "fine-tuning" of communism can be ascribed to communist "socialist initiatives". Yet, however ridiculous this seems to be, this is exactly what the Vietnamese government claims.
Look, this is not complicated. Communism couldn't redistribute anything because it did not produce anything in sufficient quantities or quality. Once they switched to capitalism, this system delivered thus there were surpluses to plunder and redistribute forcefully. This is not a mystery to ponder about. The only mystery is when will the people of Vietnam evolve politically.
A few days back the newspaper Vientiane Times - Vietnam published an article titled " Xaysomboun embraces private investment in tourism". Basically, the province of Xaysomboun aspires to become a tourism magnet. For this purpose the "tourism authorities" of the province (yes, Vietname is still a communist country and as such the bureaucracy rules supreme) built half (yes half) a road to the Phou Bia mountain which is hoped to become the centerpiece of the regional attractions.
But now the authorities in their infinite wisdom are calling for the private sector to develop tourism infrastructure on and around the mountain. This is so because the area is considered to be plentiful in nature, wildlife and rivers.
So far, so good. A call for private investors. But then they add that private investors will be required to:
- Maintain natural surroundings
- Maintain forests
- Maintain lookouts along the way
- Be "responsible" to maintain the province's "natural beauty"
- Build a cable car to the mountain
In return for all these duties, the province will be "willing to allow them to invest" but only if they "met set criteria".
We believe that they missed adding the requirement for having permanent synthetic rainbows, trained monkey servants and to accept payment in coconuts. What the heck! Under communism anything is possible!
Thank you oh mighty deciders of economic faiths. Thank you for allowing these humble servants of the Vietnamese people to sink endless amounts of wealth in this worthy cause. Thank you for giving us the opportunity to go broke. We would not have been able to do it without your help.
Let's get real. This is a classic half-assed communist/socialist point of view. A bunch of apparatchiks in a committee decided that to increase tourism in that area is a good idea. Obviously the state cannot do it because the budget is limited and other apparatchiks in other areas are sucking it dry for their own purposes. So these apparatchiks decide to show "good will" and build half a road. That's right. Half. Not the entire road, just half.
Then, these clueless bureaucrats have the arrogance to believe that private capital will come flocking to their province, drooling and salivating for the opportunity to make vast profits which will never materialize. Say again?
Take a look at the proposal. There is no economic calculation whatsoever. On top of that, these apparatchiks toss all kinds of "obligations" onto private investors; obligations that look impressive in communist brochures but that will ensure that the project is a dismal failure from the beginning.
Let's be clear. All those obligations are nice "desirable" points but they are not economically viable. Capitalism is not a make-believe system such as communism. The whole point of capitalism is the efficient utilization of resources. It is clear that investing as they want is not efficient because the same investment money can be used to satisfy other, more pressing needs elsewhere. We know this because investing as they pretend would create loses. Which means that resources will be wasted. Resources that could be used to invest elsewhere in producing goods or services that more people will want. And we know this because these "other" investments will be profitable.
The supreme ignorance of these communist apparatchiks is shown in their complete disregard for profits. Profits are not a dirty word, but the strongest, most reliable indicator of people's needs and wants. Nothing, no other statistical system or divination process comes close. Profits allow for economic calculations which in turn allow for the clear determination of people's preferences.
The province of Xaysomboun may want to become a tourist attraction and they may want to become wealthier. That's fine. The problem is that there is no free lunch. Investors want the same. In a free market (and even in managed markets) agreements or contracts are win-win processes. In this case what apparatchiks are proposing is a win-lose scenario. They win, investors lose.
We wanted to present you with this little known article not because it is big news (it is not) but precisely because it highlights the power of capitalism in action and the idiocy of communism. These contrasts are much clearly seen in action in countries which are far more to the left than other so-called "capitalists" ones. We did not select Vietnam because it is in the backyard of the world, but because Austrian Economic and Capitalist principles apply everywhere regardless of what apparatchiks believe. The point of Capitalism is that it allows the quantification of people's wants as opposed to guesses based on theories founded in flawed logic and hypothetical and failed scenarios. Capitalism is not a matter of belief; it is a matter that can be quantified and as such it delivers quantifiable benefits. Communism/Socialism on the other hand, it is purely a matter of belief and as such it delivers exactly that: beliefs.
You may choose to believe in either Communism or Capitalism, but only under Capitalism you can actually count your wealth. But that's all right. You may be the type that abhors wealth and wishes to share extreme poverty with your fellow world inhabitants. That's your choice. Just one thing, when you are hungry, naked and shelterless, just remember that we gave you the opportunity to improve your life and you chose not to do so. Lack of meaningful effort and obviously stupid decisions on your part does not constitute an obligation on ours. F&P The full blame is on you and only on you.
Note: please see the Glossary if you are unfamiliar with certain words.