What’s Really Driving China’s Growth
A fat guy on a donkey. Really. That’s what’s driving China’s growth.
It sure as heck isn’t China’s government.
Economic growth and prosperity stands on the shoulders of countless people making self interested choices that will benefit themselves without initiating violence against others.
Savings is Fueling China’s Growth
What is the choice that really drives significant growth?Â Savings. For what are savings, if not the choice to consume (destroy or degrade) later, and not today?
Saving is the only way to fuel economic growth and capital formation, and is done by individuals, not by government.
In China, people save a lot. And that fuels enormous growth. That along with putting to good use all of the knowledge available in today’s world.
But without the first (savings), the second (implementation of already developed knowledge, such as technology) would not be possible. There just wouldn’t be the resources to do so.
What Government is Good For
The only thing the government can do to help economic growth, besides getting out of the way, is protect the life and property of others.Â Almost anything else that it does is harmful, generally to the overall economic health of a country, specifically to those who are sacrificed for the ‘benefit’ of others.
It was only through China’s government doing less harm that growth was made possible. It is true that whenever governments do too much harm, it is not possible to save much of anything or create much of value. See China’s past for examples.
But it does not follow that government choice is the driver of growth and prosperity. That’s like saying that bully in the schoolyard helped you grow and develop as a person because he decided to steal from you or beat you up a little less every year.
No, economic growth is fueled by the choices of individuals, separate from government.
That brings us back to the fat guy on the donkey. It’s a crass metaphor, but you could say the fat guy is anyone that chooses to save, and the donkey the workers who put those savings to good work. Thrift and industry, in the traditional sense.
Where’s the government in this picture? Exactly – nowhere to be seen.