Comments and observations on social and political trends and events.

Thursday, August 2, 2012

Elizabeth Warren and China

This article in Reason does a nice job analyzing the flaws in Elizabeth Warren’s comparison of how much China spends on their infrastructure versus ours. There are a couple links below showing an example of a Chinese ghost city, an entire city that was built by the Chinese government which is unoccupied and likely to stay that way. Just what we need here, right?

Actually she does us a favor in showing how government can build an infrastructure -- which she says businesses need in order to exist – that no one uses. This is the reverse of Frederic Bastiat’s analysis of the broken window fallacy in which he refutes the claim that destroying things actually is good because it creates work for those who can rebuild what was destroyed. See more here: My point is the opposite: The Chinese government built entire cities for which there was no need. As a result the resources spent on these projects are not available for other projects for which there might be a legitimate need. As Bastiat noted we focus on what can be seen – the brand spanking new but empty city – and not what can’t be seen – the lost opportunities to meet the real needs and wants of people as well as the wasted resources.

This brings me back to Warren’s and Obama’s rant about businesses being unable to do their thing without a strong infrastructure. What strikes me is the indignation both of them exuded. Maybe I missed something but I don’t recall seeing business owners running around claiming they built their enterprises without any assistance. To me both Warren and Obama set up a straw man to advance their case for higher taxes and reveal their deep seated antipathy for business and capitalism.

In China we have examples in these ghost cities of infrastructure being provided that no one is willing or able to use. More importantly it reveals what happens in a country that with a government that doesn’t recognize or protect individual rights. It says a lot that Warren proudly holds up China as an example to which we’re supposed to emulate.

No comments: