Economics

"How we 'won' in Vietnam, but are losing at home": Glenn Reynolds

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What is it that America's number-one psycho Vietnam vet, John Rambo, said in First Blood? "Nothing is over!"

Glenn Reynolds, the Instapundit, revisits America's engagement with Vietnam and comes away thinking we lost the war, though not in the way you think:

According to the Pew Global Poll, 95% of people in Vietnam agree that most people are better off under capitalism, even if there is inequality.

By contrast, only 70% of Americans believe the same thing. (America is out-performed by such other less developed countries as Nigeria, China, Turkey, Malaysia, the Philippines and India). Maybe, quipped an Internet commenter, the Vietnamese should send us some advisers….

In his book, The Rise and Decline of Nations, economist Mancur Olson argues that established economies develop a web of special interests that gradually chokes off economic growth. Vietnam's advantage is that its own parasites haven't had a chance to start spinning much of a web yet. Ours, on the other hand, have been at it for decades.

Olson wrote that — as with the German and Japanese booms after World War II — it takes a major calamity, such as a war or a revolution, to cut through that web and allow economic growth to take off again. I've argued in the past that massive democratic change — a "wave" election — might accomplish the same end.

Read the whole thing.

I'm not sanguine that this midterm will be a wave election. It may well get a bunch of Republicans elected but it's far from clear that they are dedicated to free markets in any meaningful way (and we know they tend to like "free minds" not at all). But the country certainly needs to understand that it can't take innovation and rising living standards for granted. And if that's a lesson we need to learn from Vietnam, I got no problem with that as long as we learn it and learn it fast.

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  1. People say that the social welfare state is better than wars because we are at least spending the money at home. The problem with that theory is that the social welfare state has lasting effects on the country that surpass that of even the worst war. Spending the money on wars is spending it to make war on other people. Spending it on social welfare programs at home is spending it to make war on ourselves.

    1. Indeed, and while wars may last years, social programs seem to last forever.

  2. My prediction: Republicans will generally win over democrats in next week’s election. Republicans will see this as a mandate and go right back to doing the same crap that got them tossed out of office last time.

    1. They won’t really be able to do anything other than investigate him (and the investigations will continue to be a sham) and block his extreme radical nominees (which is practically all of them).

      And regardless of whether the republicans take control of the Senate or not, Obama is going to go into full dictator mode right afterwards either way. Get ready for the most brazen two years of executive rule in American history.

      1. I expect that, too, but I expect it to backfire. Obama will tick off so many voters that Democrats will have a similarly hard time in 2016.

    2. They will do nothing that will jeopardize (in their puny minds) the 2016 election.

  3. We could look at Italy and try to avoid that outcome, but I’m not optimistic.

    1. Wow, great article.

      The musicians at the opera house ? the ‘professori’ ? work a 28-hour week (nearly half taken up with ‘study’) and get paid 16 months’ salary a year, plus absurd perks such as double pay for performing in the open air because it is humid and therefore a health risk. […] The youth unemployment rate here is 43 per cent ? the highest on record. […] Italy’s economy has been stagnant since 2000. Indeed, over the past five years it has shrunk by 9.1 per cent. […] Sicily, for instance, employs 28,000 forestry police ? more than Canada ? and has 950 ambulance drivers who have no ambulances to drive.

  4. You can have economic booms without wars. The mid to late 90s comes to mind. We could be on the cusp of another one thanks to natural gas. I’d speculate that what you really need to cut through the web of special interests is something disruptive.

  5. 95% of people in Vietnam agree that most people are better off under capitalism, even if there is inequality.

    I don’t understand this statement. Did the Pew keep elbow-nudging their respondents about inequality while asking them about capitalism? Did each Vietnamese respondent volunteer the tagline about inequality? Why aren’t the obvious inequalities under Communism and Socialism never discussed?

  6. Vietnam’s advantage is that its own parasites haven’t had a chance to start spinning much of a web yet.

    Hopefully the Vietnamese won’t put in the mechanisms for this to happen, like we have.

  7. I think the emerging competitive world-of which Vietnam is emblematic-will make it harder and harder to maintain the web of parasitism. Take the corporate tax inversions as an example. And then there’s the various emergent disruptive technologies. Uber is destroying tax cartelism without a war-at least a shooting war.

  8. Nick, this is not ‘Nam. This is America. There are rules.

  9. I wonder conclusions can be drawn from the really poor result in Mexico? Have all the pro-capitalists already moved North?

  10. Another insight: what is Vietnam’s education system like? I imagine there’s some indoctrination, but somehow I think that 1) there’s a lot of kids not in school and 2) the indoctrination is tinny ‘everyone love the party’ propaganda rather than the more insidious PC-indoctrination often seen in public schools.

    1. But Uber is only able to do that if the Taxi cartels don’t get the government to stop them. And that is the problem, intrenched interests prevent technology from doing the job of creative destruction.

      1. Uber is dealing with that problem by defying those governments. They’re winning.

  11. Being generous I count 8 members of congress who would be for cutting through the “web” choking the economy. My hope is some state (WY, AK, WV?) makes a legit attempt at secession. Even if not successful, and it won’t be, that might, just might shake things up enough.

  12. So poor societies find it more expensive to indulge stupid ideas? Color me surprised.

    1. It’s funny how no one talks about how the wealth effect keeps us neck deep in stuff like this.

  13. So my takeaway is that Argentina is irredeemable and South Korea has weird alignment of belief in luck and in capitalism

  14. “The U.S. ranks #20 (three spots better than last year) on the World Economic Forum’s Gender Gap Index.”

    Dunno about you, but I’ve been waiting all year to hear these results!
    Yes, I have.

  15. Glenn Reynolds and Nick Gillespie are click traders. Click on Nick, click on Glenn, and visa versa.

    Glenn and Nick are notably at odds on the ‘Camp of Saints’ problem.

    1. Click traders!? This is exactly the kind of major calamity that Olson was talking about! Let’s cut through the web! Viva la revolucion!

  16. The bit about Vietnamese being more pro-capitalist than the Americans is a bitter laugh, but it makes some sense. In my experience, nobody, but nobody, is more anti-communist than people who have actually had to live under a communist regime and have seen what it actually does. Meanwhile, capitalism empowers people to sit around in airconditioned rooms drinking half-caf venti soy lattes and use their tablets to post on the internet about how awful capitalism is.

  17. and we know they tend to like “free minds” not at all

    Hence the TEAM RED inspired campus speech codes, indoctrinating PC teacher union backing, hate speech laws and…wait, what?

    1. Tell me about it. And let’s not forget their push for getting rid of due process protections.

    2. Not only is Gillespie fighting the culture wars, he’s fighting the culture wares from 50 years ago.

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