Wednesday, March 25, 2009
Spectacles of State Capitalism: Big Government Low Welfare
I just had a revelation: one secret of China's economic miracle is the unique model of "big government and low welfare". Because of the low welfare, people tend to save more for rainy days. So the government can always use the high saving in government-owned banks for investment. Also because of the low welfare, people have to work hard to earn a living. That's how you get high investment and cheap hard-working labor at the same time. Can the high welfare Europe or the over-consuming America beat that?