Tye123

@Prakhar81420407 Sri Lanka is much cleaner, I think culture also plays a part.

Both these problems will get solved once 🇮🇳 crosses $20k PcGDP PPP. A big reason for lack of cleanliness & lack of respect is poverty. Low resources don't allow adequate budget for cleanliness & education while at same time as citizens are poor, bureaucracy doesn't respect them.

@RishiJoeSanu India didn't focus on export discipline and making products globally competitive.

India's industrial policy was not too different what South Korea did in the 1970s but nobody bothers to ask why it didn't succeed in India. It's cherry picking all the way down. Same phenomenon when lefties equate all forms of social democracy to Scandinavia.

@the_transit_guy It's not economical for such a low density country like US. Local metros and buses are more important.

I’ll just never understand how a majority of our elected officials don’t look at this and feel embarrassed.

@orikron Lol, which country is going to keep importing from them? Definitely not the west, so they will have to rely on exporting to poorer countries.

The most shocking trend of the next 10 years will be China becoming an economy based on high-complexity manufacturing *while* retaining strong exports *and* appreciating exchange rate that will skyrocket its nominal GDP. Most western economists won't be able to explain this.

@JesusFerna7026 But are wages genuinely lower than other similar countries ? Isn't the US doing industrial policy right now ? I just don't see why focusing on manufacturing has to reduce wages.

Labor repression is a term of art in economic history: it means wages below what would have been otherwise. You can argue that you do not think it is a good choice of term of art, but it is the common one used in the profession, and terms of art exist to facilitate communication. So I am not going to change it. Park's argument was yours: yes, I am going to repress wages because it is better to get 50% of 2 after 40 years of fast growth than 60% of 1 after 40 years of slow growth. But, today, not in 40 years, workers are not going to like it. So if you opt for that policy of fast growth, be aware you will need to send the police and beat some trade unionists up, jail a few, and have an efficient political police closing down opposition newspapers, and that, therefore, it will be hard for you to call yourself "leftist." That is all I am saying. Do not read more into my words.

Yesterday I argued that labor repression is a necessary (but not sufficient) condition for industrial policy to work. This simple statement helps us to understand why many attempts at industrial policy in Latin America (and other regions) failed: they were promoted by governments who wanted to increase the wages of manufacturing workers. The best example that comes to mind is Argentina under Perón. On October 21, 1946, Perón presented a five-year plan of fast industrialization oriented toward the internal market: cdi.mecon.gob.ar/greenstone/col… The plan incorporated all the standard elements at the time: 1. Nationalization of the central bank, railroads, utilities, airlines, telecommunications, harbor and navigation companies, and reinsurance. 2. Break with the old export interests. 3. The creation of the Instituto Argentino de Promoción del Intercambio and the introduction of exchange controls. 4. Expansionary fiscal and monetary policy. 5. Price controls (e.g., rent control, electricity, gasoline). 6. Financial repression. But it did not include labor repression because the political base of Peronismo was urban workers. At its very core, the political-economic project of Peronismo was a logical contradiction. The result? After a few years of fast growth, the economy peaked in 1949, reached a balance of payments crisis, and the dreams of fast industrialization went nowhere (I am summarizing here a complex set of events). Also, inflation became a chronic problem in Argentina. You can have a market-oriented growth model, or you can have an East Asian-style growth model. Which of the two would work better for the region is an empirical question, which also depends on your values (is it ok to have an authoritarian government in exchange for faster growth? I would say no, but your answer can be different; I am an economist, not an ethicist). But what you cannot have is an industrial policy-style growth without labor repression: that does not belong to the set of feasible alternatives. At their very core, a huge chunk of Latin America’s left and nationalist economic thinking was deeply confused. Their inner contradictions left them without a framework to analyze their situation and forced them to embrace infantile dependency theories à la Galeano of “we are poor, the fault is theirs.”

@JesusFerna7026 It's unclear if it's 'repressed' if it keeps rapidly growing. The bigger advantage of industrial policy is it allows you to focus on technology upgrading - and there is no other method to allow you to catch up . That's where Latin America failed compared to East Asia.

Look at Argentina's experience, it did not work that well for them! More seriously, if you need to repress labor, you probably need an authoritarian government (democracies have a very hard time pulling that off). If you prefer more growth in an authoritarian environment than less growth in a democracy, I cannot fight your preferences.

@JesusFerna7026 Which ones? Mexico? China is already the largest consumer of so many things while being the second largest economy, what specifically indicates low income?

@Tyeankk467 Yes. The wage income share in China is much lower than in comparable countries.

A post of mine on industrial policy from last July is having a second life, so let me rewrite it more clearly now that I have more experience with X. Can industrial policy work? Yes. The East Asian experience shows it can, at least partially. But its success rests on a key condition: labor control. Japan, South Korea, and Taiwan industrialized rapidly under authoritarian (e.g., Park’s South Korea) or semi-authoritarian regimes (e.g., Japan). Wages and labor rights were systematically repressed to favor capital accumulation and export competitiveness. This was especially stark in South Korea during the 1980s and 1990s, when unions clashed with the state and big business. China’s recent experience basically follows the same pattern. Authoritarianism in East Asia was not incidental to the success of industrial policy. It was functional. No labor repression, no successful industrial policy. Let me be careful about what I am NOT claiming: 1) I am not claiming labor repression is sufficient for industrial policy to succeed. You need many other ingredients. Best counterexample? Brazil under import substitution: labor repression, but without the other key pieces, such as aggressive export orientation. Labor repression is a necessary condition. If you do not get the difference between necessary and sufficient, you have more important priorities than reading about industrial policy. 2) I am not claiming the only path to growth is industrial policy. Many countries have grown without it, or with pretty lousy and ineffectual versions of it. Best example? Spain. 3) I am not saying labor repression means wages do not grow. It means they grow less than they otherwise would have. Think counterfactuals. 4) I am not saying democracies cannot repress labor. They sometimes do. It just happens far less often, and often less effectively. Continental Western Europe after WWII was not an example of industrial policy. France and, to some degree, Italy used some, but the mainstream view is that postwar growth was not driven by it. What many of these countries used was a form of “coordinated capitalism,” in which unions accepted slower wage growth in exchange for higher investment and faster growth. That has a flavor similar to my argument. As far as I can tell, there is no clean example of large-scale industrial policy that has succeeded without labor repression. Why so many people on the left are in love with industrial policy is a mystery to me. More generally, why so many people on the left admire China, given that its economic policy is 100% contrary to what they support (low taxes, little industrial regulation, little concern for the environment, labor repression, as little economic and political power to women and minorities as possible) is even more of a mystery except for some infantile contrarian positioning (“since this is not what The Economist like, I support it”) Alexander Gerschenkron made this point better than anyone. But it was also Marx’s point about “primitive accumulation,” and Stalin’s logic in the five-year plans, which were all about repressing labor (mostly agricultural, but to a lesser degree in manufacturing too). I am not going to praise Stalin in public, but he understood economics better than the average poster on X. Read Gerschenkron. Seriously. The original post: x.com/JesusFerna7026…

@policytensor Lol no , Iran had to get their entire leadership assasinated to show a spine, meanwhile India doesn't need to do anything but keep growing until it's so big it becomes unstopable.

This is why Iran is a great power and India is not.

@SipOfKoKo Either way,liberalism failed as it had to resort to illiberal means to survive which is self defeating.

Why did the communist sphere need the capitalist sphere but not vice versa? The communists had the Soviet Union, half of Europe, and literally the most populated nation on Earth. It also had plenty of non-aligned nations who were happy to trade. Why the excuses for failure?

@TwinkRegimer Liberalism is not globally successful, and it's biggest succeses are ironically due to fear of communism which caused illiberal actions thus being self defeating.

My ideology is so smart and sophisticated, that's why it has never succeeded anywhere on Earth, while your globally successful ideology is actually naive and incoherent. That makes perfect sense to me.

@SpartanParty @mformorphine They keep predicting China needs to reform but it really doesn't , and can't admit there is really no correlation .

@Tyeankk467 @mformorphine Thats not true, they identify China's growth as the result of extractive institutions. India is a strange case for Acemoglu alone but other liberal theories make sense of it easily - notably, Leviathan.

must be so blissful being a lib, no ideological framework for why things happen, no coherent understanding of history or economics, just individual issues that you interpret solely based on vibes

@Handre Japan private companies work very closely with the gov, there is no big gap .

The Japanese railway privatization of 1987 stands as one of the most devastating defeats ever dealt to statist transportation mythology. The government split the bloated Japan National Railways into seven regional companies, sold them off, and watched private ownership transform a bankruptcy-bound disaster into the world's most efficient rail system. JNR hemorrhaged money for decades before privatization. By 1987, the state railway carried debt equivalent to $200 billion in today's money while delivering mediocre service plagued by strikes and inefficiency. Politicians treated it as a jobs program rather than a transportation service. The predictable result: chronic losses, deteriorating infrastructure, and customer service that reflected government monopoly arrogance. Private ownership changed everything overnight. The new JR companies slashed operating costs by 40% within five years while dramatically improving service quality. JR East alone now generates annual profits exceeding $3 billion. These companies invest billions in cutting-edge technology, maintain punctuality rates above 99%, and operate the world's most advanced high-speed rail networks. They achieved this without a single yen of operational subsidies. The transformation reveals a core dynamic of transportation infrastructure: private companies must satisfy customers to survive, while government monopolies need only satisfy politicians. JR companies diversified into real estate, retail, and hospitality around their stations, creating integrated profit centers that cross-subsidize rail operations. Government railways never innovate this way because bureaucrats face no market pressure to generate returns. Meanwhile, Amtrak burns through $2 billion in annual subsidies while delivering third-world service across most routes, and European state railways require massive taxpayer bailouts every few years to stay solvent.

@SpartanParty @mformorphine Why nations fail literally admits it doesn't know how to explain India and China the two most populated countries that's how worthless it is .

@mformorphine You need to read more liberal theory. Your ignorance is showing. More in the replies.

@yhdistyminen Why nations fail literally ignored India and China the two most populated countries that's how worthless it is .

read theory, sweatie

@StatisticUrban Liberalism has no real answer for how to stop those with wealth getting more power and becoming an oligarchy, and the only solution to that is becoming more authoritarian and stronger state power. So liberalism has already lost.

Where do communists get this utter intellectual arrogance from? Have their ideas led them to success? Have they overthrown capitalism in the West through revolution? No. Have they won mass democratic support in free and fair, if bourgeois, elections, where all they have to do is convince people? Also no. And where they did seize power, did they build paradise? No. The Soviet sphere fell in less than one lifetime after decades of shortages, brutal repression, and economic dysfunction, outcompeted by liberal democracy on every front. Where communism persisted, as in China, it had to become capitalist to survive.

@GlennLuk The copium is crazy, it's fine to admit China is not as rich as Western countries. If they reach their level of income I'd be surprised if the tap water isn't potable, thus it's not a cultural thing.

Hongshen's very valid point here is that universally potable tap water is largely a function of societal/policy/cultural choice on economic resource allocation, not underlying capability. One cognitive dissonance I often see are those who view both (i) water potability as a direct function of China's backwardness and (ii) can still ho on about how China is overinvesting because it has run out of things to invest in. Yes, the Chinese economy sometimes makes different resource allocation choices vs. Western ones! Kneejerk reactions where one extrapolates one's own standard as universal is just another instance of main character syndrome. And yes, the Chinese economy is not fully developed. Perhaps one day it will reach U.S. levels of tapwater potability but perhaps policymakers seem to place higher priority on many other areas for catch-up. Pretty sure that China will catch up the U.S. on per capita residential energy usage sooner than it does on tapwater potability (if ever).

@phl43 Wumaos are delusional, they don't live in reality.

I constantly criticize China Derangement Syndrome, so you can hardly accuse me of being into China-bashing, but the replies to this are insane. It's just people who either pretend that the same thing is true in the West or claim that it's no big deal if you can't drink tap water.

@BaldingsWorld What specifically does China buy less of to say they lack in consumption? Cars, phones, food all are greater than or equal to the US in line with their economy?

I understand the questions about my continually pointing why things won't work or as it is termed "relentless negative" commentary about the pundit class notes on China. Let me explain why. First, most of the ideas that are printed in polite East Coast or London outlets are great text book ideas. They are cookie cutter ideas from the policy maker handbook. Cutting payroll tax is a great textbook about how to stimulate consumption. It will never happen and is dead on arrival but sounds to most people like a great idea. Second, the reason the ideas won't work (even if they are great ideas and from a purely economic view point I'm fine with a payroll tax reduction for instance) is that people simply don't know or understand China in an empirical or theoretical way. Even if we leave aside the social welfare programs that depend on those tax receipts are effectively bankrupt, we haven't even discussed the larger world view problems that Beijing does not prioritize consumer welfare. If a textbook idea is dead on arrival for a list of reasons, what is the actual purpose of the idea? Shouldn't a good idea require some standard for feasibility or plausibility? Third, there is a larger quantum problem that even if people grasp the second problem, almost no one understands the quantum problem of Chinese policy making. Let's use the exchange rate problem: the Chinese RMB is both over and undervalued. What? How can that be? If we assume the RMB is fixed or quasi fixed (as it currently is) the RMB is undervalued. If we assume an actual free market including free movement of currency in the RMB, the RMB is wildly overvalued. So apply this quantum state thinking to the consumption or rebalancing problem: the policy ideas that would be acceptable to Beijing by definition will not materially address the consumption or rebalancing problem. Therefore, you can propose problems that are acceptable to Beijing and solve nothing, or you can propose ideas that actually solve the problem but will never be accepted by Beijing. The problem with the consumption tax reduction proposal is that it, like many related ideas, is the worst of both worlds: it is unacceptable to Beijing and will do nothing to actually solve the problem. I am not defending Beijing, the Chinese tax system, or anything on that side. I am pointing out that these ideas will neither solve the problems they claim to address and have no chance of becoming reality