Words of wisdom

Source: World Magazine

Written by Alex Tokarev

June 8, 2010

Last week Paul McCartney received the Gershwin Prize for songwriting. During the event at the White House, the former Beatle sang “Michelle” to the first lady, a silly little love song with a sexy-sounding verse in French. At a time when American leadership keeps pushing us toward statism, Sir Paul’s “words of wisdom” from another song would have been more appropriate – “Let It Be” or, if you prefer its French translation, “Laissez Faire!”

If we want to get out of this recession with a more resilient economy, we can learn a lesson from the way the Chinese have recovered when they faced a much worse disaster in the late 1970s. Was their miracle actively engineered from the top? It is doubtful that without Deng Xiaoping’s reforms, China would have achieved anything remotely close to its current global status. However, it is not what the government did; it is what it stopped doing in the last 30 years, which made the crucial difference. The death of Mao Zedong brought to power leaders who were disillusioned with the idea that the politics should be running the economy. They were able to recognize the fact that various mixtures of prevalent state ownership and bureaucratic regulation of private enterprise were multiplying misery in neighboring India, Vietnam, Laos, Cambodia, and North Korea as well as in their own country.

Deng Xiaoping and his collaborators and successors had seen markets work miracles after WWII in Japan, Hong Kong, Singapore, Taiwan, and South Korea. They were bold enough to give up their failed ideas and give the invisible hand a try. China has rekindled the spirit of capitalism and its spectacular success in creating better opportunities for the poor should give our “progressive” social engineers pause in their systematic attempts to control our private lives from Washington. Even Raul Castro is starting to get it. So instead of taking cheap shots at the former President Bush, McCartney could have given the current resident of the White House friendly advice to consult his Cuban colleague on the virtues of free enterprise before the political and economic reforms in our countries reverse the unsanctioned boat traffic between Florida and Cuba.