Saturday, July 16, 2005

Why You Must Also Read Alex Singleton at

Why you must read also Alex Singleton at

The piece below is verbatim from his web site. It is perfectly correct and absolutely in no need of amendment. Read it, and his web site, and be cheered up - there is hope still in the world that we will pull through current little difficulties.

So many commentators are wildly wrong in their analyses, whether it be globalistation, climate change, Chinese low priced exports, which raise living standards and the real wages of employees in importing countries; the surplus released they spend on other products, or save, both making them better off, that there is a danger that the anti-Chinese lobby captures the political agenda and imposes policies holding back the creation of wealth. Always remember that Adam Smith's concept of wealth is the net addition to annual product, or what is the same thing, to what annual revenue purchases.

Alex Singleton is right on target:

"Why we should favour the economic rise of China
By Alex Singleton 16 July 2005

In the run-up to the Iraq war, some anti-war campaigners made the argument that capitalism and war go hand-in-hand. Because we are running out of resources, they said, the ever-increasing quest for oil and other raw materials would lead to more conflict.

In fact, nothing could be further from the truth. Firstly, we are not running out of resources. This is a counter-intuitive argument, but scarcity of resources, as measured by price, is decreasing. New resources are being found, new technology means that resources are used more efficiently. Higher prices for resources lead to investment in technology or new thinking about how to accomplish end products - leading to less scarcity. While oak furniture is often real wood, my sturdy Ikea bookcases are only Beech veneer because that's the way to make them cost-effectively. Cars of the future will run on hydrogen - not because we run out of oil but because they will be cheaper.

Secondly, while war may be in the interests of defence companies, it is not in the interests of business in general. War gets in the way of commercial interests. It leads to greater uncertainty and higher taxes. In The World Is Flat, Thomas Friedman formulates the Dell Theory: "The Dell Theory stipulates: no two countries that are both part of a major global supply chain, such as Dell's, will ever fight a war against each other as long as they are both part of the same global supply chain, because people embedded in major global supply chains don't want to fight old-time wars any more."

So why should we support the economic rise of China? It is partly because it will make us better off. China is already helping us to benefit from lower-cost products. But we should also favour China's increasing interaction in international trade because trade is the best way to promote liberal democracy around the world.

Some conservatives in the US think people should boycott China - either Chinese products or the China Olympics - because of human rights abuses. That would be a mistake. Countries without middle classes are the easiest for governments to control. Conversely, countries where trade has created a large middle class are difficult for government to control. If we want to help China become a free society, trade is the best answer."

Thanks to Alex Singleton for a lot of sense in a few score words.


Post a Comment

<< Home