The Singapore Model?

[silverhandorder]

Hi. I'm the economic calculation problem. What's up?

A group of 12 men decides what direction their economy should go in, and then they go that way. So far its been working.

But a basic reading of Mises tell us that this always ends in failure. I do not know why I have to defend Mises 101 to you people.

Also, some other problems the Chinese have that people don't talk about:

1) Their education system is terrible. Its copy-paste, doesn't encourage any creativity, and there are reports that Chinese educated PhDs are less trained than our basic bachelor's holders.

2) Their demographics--what people like to consistently tout--are actually working against them. Because of their one child only policy, their population is rapidly aging and will be old before their economy reaches its full potential. Japan, Europe, and now the US have consistently demonstrated that an aging population leads to a stagnate economy.

3) Going off of 2, they are mutating their populace into one that has many more men than women. As a former bar manager, I can tell you that this a recipe for disaster. I expect widespread civil unrest because of it.

Honestly, in the long run, India is in a much better spot to challenge the US for economic superiority, and they are not close to being ready. US economic hegemony is here for two or three more decades at the least. The US economy might collapse, but the Chinese will not be in a position to fill that void.

What you said is new to me.

Let me play the devils advocate here.

1. Can't argue there if this is true.
2.One can also say that demographic problems are not going to be apparent in the next couple of decades. In which case they would be well suited to step into any void US leaves.
3. One could also see far less liability when work force of not burdened with children and wives. Whores are cheap enough.

I do think that one can not centrally plan an economy. However one can tell which centrally planned economy is planned better. Chinese have big savings rate which allows them to waste money on these bubbles they make. So when they crash they do not crash as hard as us.

 

[Roy L]

We ought to remember that in most US jurisdictions we don't own land either.

There is a recognition that as land titles violate people's rights, they are issued and enforced by government as a way to reduce conflict. Land of course can't be genuine private property the way a product of labor can.

The moment we stop ponying up the yearly rent to the county, they kick us out and find a new renter.

No, in most cases grace periods of years are given. The system would certainly work a lot better if the government charged the full rent of the land instead of just a small fraction, and didn't tax the improvements.

 

[silverhandorder]

There is a recognition that as land titles violate people's rights, they are issued and enforced by government as a way to reduce conflict. Land of course can't be genuine private property the way a product of labor can.

No, in most cases grace periods of years are given. The system would certainly work a lot better if the government charged the full rent of the land instead of just a small fraction, and didn't tax the improvements.

Why can't land be property?

 

[Becker]

Some land in Singapore is privately owned. In HK none is. There can never be a free market where land is privately owned, as landowning inherently requires a welfare subsidy giveaway to the landowner, and subsidies are not compatible with free markets.

wait what? why does landowning require welfare subsidy? what is the result of not giving subsidy to landowning?

 

[Keith and stuff]

Roy L is a georgist or something. Don't worry about it. The main points are that their is more economic liberty in Hong Kong and Singapore than anywhere else and people tend to live better there than most places. The same is true for the US. NH is the freest place in the US and not surprisingly both the lowest poverty rate and the highest median household income are in NH (when comparing US state.) Liberty works, but especially economic liberty.

 

[Becker]

Roy L is a georgist or something. Don't worry about it. The main points are that their is more economic liberty in Hong Kong and Singapore than anywhere else and people tend to live better there than most places. The same is true for the US. NH is the freest place in the US and not surprisingly both the lowest poverty rate and the highest median household income are in NH (when comparing US state.) Liberty works, but especially economic liberty.

really? NH is the freest place with lowest poverty and highest median income?
Let's see!
This chart says while NH is above CA, and above US average, it's not #1
http://www.cpec.ca.gov/FiscalData/50StateEconGraph.asp?Type=Income
This chart shows tax rates by state. (Mississippi has lower tax than California, what's wrong with this picture?)
http://www.taxadmin.org/fta/rate/ind_inc.pdf

Are you gonna tell me that income tax is only one part of it, we didn't count property tax, sales tax, vat, fuel tax..etc?

 

[Keith and stuff]

really? NH is the freest place with lowest poverty and highest median income?
Let's see!
This chart says while NH is above CA, and above US average, it's not #1
http://www.cpec.ca.gov/FiscalData/50StateEconGraph.asp?Type=Income
This chart shows tax rates by state. (Mississippi has lower tax than California, what's wrong with this picture?)
http://www.taxadmin.org/fta/rate/ind_inc.pdf

Are you gonna tell me that income tax is only one part of it, we didn't count property tax, sales tax, vat, fuel tax..etc?

I am not going to tell you that. NH doesn't have a person income tax, a general sales tax, has low specific excise taxes (like on alcohol and gas) and doesn't have a vat tax. I am not going to tell you any of that. I'm just giving examples of how the freest places tend to have better income and better economies (for example, NH has the lowest unemployment in the eastern US and the 4th lowest in the nation) than average.

Here is the 2009 index, http://mercatus.org/sites/default/files/publication/Freedom_in_the_50_States.pdf
Needless to say, NH wins

Here is the 2011 index, http://mercatus.org/freedom-50-states-2011
Needless to say, NH wins

Lowest poverty rate, http://www.concordmonitor.com/article/279749/census-nh-has-lowest-poverty-rate

Highest median household income, http://money.cnn.com/2010/09/16/news/economy/Americas_wealthiest_states/index.htm

 

[Becker]

Here is the 2009 index, http://mercatus.org/sites/default/files/publication/Freedom_in_the_50_States.pdf
Needless to say, NH wins

Here is the 2011 index, http://mercatus.org/freedom-50-states-2011
Needless to say, NH wins

Lowest poverty rate, http://www.concordmonitor.com/article/279749/census-nh-has-lowest-poverty-rate

Highest median household income, http://money.cnn.com/2010/09/16/news/economy/Americas_wealthiest_states/index.htm

Wealthiest states
http://money.cnn.com/2010/09/16/news/economy/Americas_wealthiest_states/index.htm
NH. NJ, CT.
According to http://mercatus.org/freedom-50-states-2011, NJ and CT are quite low on "freedom".
I couldn't find the official census stats on poverty comparisons.

 

[Keith and stuff]

Wealthiest states
http://money.cnn.com/2010/09/16/news/economy/Americas_wealthiest_states/index.htm
NH. NJ, CT.
According to http://mercatus.org/freedom-50-states-2011, NJ and CT are quite low on "freedom".
I couldn't find the official census stats on poverty comparisons.

I agree, overall freedom is quite low in both NJ and CT (especially NJ) and yet median household income is high in those states.

Here is one source about poverty rates, http://abcnews.go.com/blogs/business/2011/09/u-s-census-richest-and-poorest-states/

However, none of this goes against the extremely well known premise. Places that are more free (especially economically) tend to be more prosperous than places that are less free. Hong Kong, Singapore and New Hampshire all show this very well. Look at the US and Russia. Look at North Korea and South Korea. Look at Cuba and Costa Rica. Look at the Republic of China and the Peoples Republic of China. Look at Hong Kong and China. Look at the US and Cuba.

I don't know anyone that disagrees with this stuff.

 

[Becker]

I agree, overall freedom is quite low in both NJ and CT (especially NJ) and yet median household income is high in those states.

Here is one source about poverty rates, http://abcnews.go.com/blogs/business/2011/09/u-s-census-richest-and-poorest-states/

Ok, fair enough.
Alaska and Maryland are in the 40's for "freedom" according to your original links on mercatus.
Mississippi, with the highest poverty rate, and the lowest income median, is only half way on the mercatus scale.
What point will you admit you don't have correlation?

However, none of this goes against the extremely well known premise. Places that are more free (especially economically) tend to be more prosperous than places that are less free.

It's not well know and it's not true.
What index of prosperity are you using?

Hong Kong, Singapore and New Hampshire all show this very well.

As somebody just pointed out, HK & Singapore has no land ownership. Singapore has very strict criminal laws.

Look at the US and Russia.

Russia didn't print money like we did.

Look at North Korea and South Korea.

Fair enough, one comparison. This is the exception, where all other things being equal ,which is never the case if you compared any other 2 countries.

Look at Cuba and Costa Rica.

I don't know enough about Costa Rica, but again Cuba is a rare case of an isolationist country.

Look at the Republic of China and the Peoples Republic of China. Look at Hong Kong and China. Look at the US and Cuba.

Different sizes and population, can't compare.

I don't know anyone that disagrees with this stuff.

maybe because you only talk to people who agree with you.

 

[Keith and stuff]

What index of prosperity are you using?

http://www.heritage.org/index/ranking

As somebody just pointed out, HK & Singapore has no land ownership. Singapore has very strict criminal laws.

OK, sure. Overall, they are by far the most free economically free places in the world.

Russia didn't print money like we did.

I didn't print any money. Nevertheless, I don't know anyone that considers Russia to be more economically free than the US.

I don't know enough about Costa Rica, but again Cuba is a rare case of an isolationist country.

Cuba isn't an isolationist county, what are you talking about?

maybe because you only talk to people who agree with you.

Sorry, I've never found a Democrat or a Republican that agrees that more freedom equals less pay and more poverty.

 

[Becker]

http://www.heritage.org/index/ranking

Which is not based on GDP, PPP, Legatum Prosperity Index, what is their definition of "prosperity"?

OK, sure. Overall, they are by far the most free economically free places in the world.

glad I learned today, that no land ownership is compatible with free market. Contrary to what I hear in these forums that lands and roads should all be privatized and there should be no public borders, public defenses.

I didn't print anymore. Nevertheless, I don't know anyone that considers Russia to be more economically free than the US.

I didn't say Russia was freer, I said US is richer because we printed more money.

Cuba isn't an isolationist county, what are you talking about?

really? what do they export, what do they import? who do they trade with?

Sorry, I've never found a Democrat or a Republican that agrees that more freedom equals less pay and more poverty.

that's not what I said.

 

[Keith and stuff]

Which is not based on GDP, PPP, Legatum Prosperity Index, what is their definition of "prosperity"?

I'm just talking about the most free places on earth.

glad I learned today, that no land ownership is compatible with free market. Contrary to what I hear in these forums that lands and roads should all be privatized and there should be no public borders, public defenses.

I am not talking about completely free places or even free markets. There is no free market in the world. I'm just talking about the overall most free places in the world, economically when dealing with nations and overall when dealing with New Hampshire.

really? what do they export, what do they import? who do they trade with?

Seriously? I've never heard anyone even hint that Cuba was an isolationist nation. Honestly, I have no idea what you are talking about. I know the US government refuses to do most trade with Cuba.

 

[ronpaulnh2012]

Places that are more free (especially economically) tend to be more prosperous than places that are less free. Hong Kong, Singapore and New Hampshire all show this very well. Look at the US and Russia. Look at North Korea and South Korea. Look at Cuba and Costa Rica. Look at the Republic of China and the Peoples Republic of China. Look at Hong Kong and China. Look at the US and Cuba.

Well said. The existence of counterexamples does not negate the trend. New Hampshire really is an excellent example, if you look at all of the statistics listed here you will see that New Hampshire is both very free (relative to other states) and very prosperous. Not just things like the highest median income, low unemployment, and low poverty, but other secondary indicators like lowest crime, high % of high tech jobs, and high health care quality confirm it.

Does that prove anything? No, it doesn't, correlation does not imply causation and possibly it is a complete coincidence that NH is both free and prosperous. However, if you subscribe to the Austrian economic theory, as Ron Paul does, then you will see that prosperity is consistent with how free markets behave.

 

[Becker]

Well said. The existence of counterexamples does not negate the trend.

I don't agree there is a trend, so no need to use counterexamples when there isn't even a trend.

New Hampshire really is an excellent example, if you look at all of the statistics listed here you will see that New Hampshire is both very free (relative to other states) and very prosperous. Not just things like the highest median income, low unemployment, and low poverty, but other secondary indicators like lowest crime, high % of high tech jobs, and high health care quality confirm it.

Does that prove anything? No, it doesn't, correlation does not imply causation and possibly it is a complete coincidence that NH is both free and prosperous. However, if you subscribe to the Austrian economic theory, as Ron Paul does, then you will see that prosperity is consistent with how free markets behave.

its not a coincidence for NH, there may just be many other causes. As there are for other places.

 

[Roy L]

Why can't land be property?

As others would otherwise be at liberty to use it, appropriating it as property violates their rights to liberty without just compensation. The only difference between landowning and slavery is that owning a slave violates all of one person's rights, while owning land violates one of all persons' rights. The more of the good and useful land is owned as property, the less right to liberty you have. That is why in countries where land is privately owned, but government does not make provision for the landless through minimum wage laws, welfare, publicly funded education, pensions and health care, union monopolies, etc. the condition of the landless is indistinguishable from the condition of slaves:

"During the war I served in a Kentucky
regiment in the Federal army. When the war
broke out, my father owned sixty slaves.
I had not been back to my old Kentucky
home for years until a short time ago, when
I was met by one of my father's old
negroes, who said to me: 'Master George, you
say you set us free; but before God,
I'm worse off than when I belonged to your father.'
The planters, on the other hand, are contented
with the change. They say, ' How foolish it was in
us to go to war for slavery. We get labor cheaper
now than when we owned the slaves.' How do
they get it cheaper? Why, in the shape of rents
they take more of the labor of the negro than they
could under slavery, for then they were compelled
to return him sufficient food, clothing and medical
attendance to keep him well, and were
compelled by conscience and public opinion, as
well as by law, to keep him when he
could no longer work. Now their interest and
responsibility cease when they have
got all the work out of him they can."

From a letter by George M. Jackson, St. Louis.
Dated August 15, 1885.
Reprinted in "Social Problems," by Henry George.

 

[Roy L]

wait what? why does landowning require welfare subsidy?

Land rent (which is capitalized as exchange value) comes from the economic advantage created by government spending on services and infrastructure, as well as the opportunities and amenities the community provides and the physical qualities nature provides. As the landowner does not provide any of those things, land value is identically equal to the minimum value of what the landowner expects to take from society and not repay in taxes. Legally enabling that taking from society is inherently a welfare subsidy to the landowner.

what is the result of not giving subsidy to landowning?

If land is owned, there are only two ways to not subsidize it: recover the publicly created value of land for public purposes and benefit (which is the way to liberty, justice and prosperity, as explained in the "land value tax" thread); or remove the economic advantage of using the land by eliminating government services and publicly provided infrastructure (i.e., abolishing government, which is the way to feudalism).

 

[Roy L]

Roy L is a georgist or something. Don't worry about it.

I.e., don't reconsider your views merely on account of having seen them proved false.

NH is the freest place in the US and not surprisingly both the lowest poverty rate and the highest median household income are in NH (when comparing US state.) Liberty works, but especially economic liberty.

NH has the highest property tax rates of any state as measured by net revenue per dollar of aggregate market value, and the smallest government as measured by total taxes per dollar of GDP. Coincidence?

 

[eworthington]

As others would otherwise be at liberty to use it, appropriating it as property violates their rights to liberty without just compensation. The only difference between landowning and slavery is that owning a slave violates all of one person's rights, while owning land violates one of all persons' rights. The more of the good and useful land is owned as property, the less right to liberty you have. That is why in countries where land is privately owned, but government does not make provision for the landless through minimum wage laws, welfare, publicly funded education, pensions and health care, union monopolies, etc. the condition of the landless is indistinguishable from the condition of slaves:

"During the war I served in a Kentucky
regiment in the Federal army. When the war
broke out, my father owned sixty slaves.
I had not been back to my old Kentucky
home for years until a short time ago, when
I was met by one of my father's old
negroes, who said to me: 'Master George, you
say you set us free; but before God,
I'm worse off than when I belonged to your father.'
The planters, on the other hand, are contented
with the change. They say, ' How foolish it was in
us to go to war for slavery. We get labor cheaper
now than when we owned the slaves.' How do
they get it cheaper? Why, in the shape of rents
they take more of the labor of the negro than they
could under slavery, for then they were compelled
to return him sufficient food, clothing and medical
attendance to keep him well, and were
compelled by conscience and public opinion, as
well as by law, to keep him when he
could no longer work. Now their interest and
responsibility cease when they have
got all the work out of him they can."

From a letter by George M. Jackson, St. Louis.
Dated August 15, 1885.
Reprinted in "Social Problems," by Henry George.

I'm not sure how much I agree with George's assertions; I haven't studied them enough, but I think what he was getting at, and this could explain the relative prosperity of Singapore and Hong Kong, is that if the government collects the rent on land, that eliminates a landlord class whose economic role is to essentially capture the rental value on land. The thought is that people would be left to collect all of the income on improvements they made on the land; for instance, the developer might pay the state 100% of the value on the unimproved land, but he would be entitled to all of the profit, untaxed, on the improvements made on the land he for which he pays the government.

I'm not sure how it would work out in a large country, but I believe part of Pittsburgh's revival (relative to other Rust Belt cities) was due to them changing the tilt in property taxation towards land values and away from land improvements.

 

[Roy L]

As somebody just pointed out, HK & Singapore has no land ownership.

There is some private landowning in Singapore (about 1/4 IIRC), none in HK.

Cuba is a rare case of an isolationist country.

??? Cuba is far from isolationist. It is just blockaded by the US; most other countries trade with Cuba, have diplomatic relations, etc. North Korea is isolationist.