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Saturday, March 12, 2011

Free Markets and Sustainable Economic Growth

Francis Fukuyama in today's WSJ, "Is China Next”, discusses the chaotic state of affairs in the Arab world and what may or may not be on tap for China. As you can read in the following quotes from Fukuyama’s article, revolutions begin when leaders continually abuse the rights of their citizenry. When the rule of law is obliterated, economic growth will eventually stagnate, whether authorities want to metaphorically “put their foot on the neck” of BP or actually “put their foot on the neck” of Tunisian vegetable cart peddler, Mohamed Bouazizi.

I recently finished reading the book, Everyman Dies Alone, which is a fictional account, set in Hitler’s Germany, of an actual and very ordinary Berlin couple who took on the regime in a very simplistic manner. They distributed postcards throughout Berlin, on which they printed messages excoriating Hitler and his henchmen. I wondered, as I read this book, how the protagonists, Otto and Anna Quangel, would have changed history if they had access to Facebook and Twitter.

Because today's "rebels" are adept at using social media, eventually the time will come when oppressed vegetable cart peddlers like Bouazizi, living under authoritarian regimes, will be free to grow their businesses into customer centric grocery stores and eventually into highly efficient grocery chains employing thousands of people and serving their customers within the safe harbor of a free-market.

Here are three excerpts from Fukuyama’s article that I really like. If you want to read the entire article, click here.

“The incident that triggered the Tunisian uprising was the self-immolation of Mohamed Bouazizi, who had his vegetable cart repeatedly confiscated by the authorities and who was slapped and insulted by the police when he went to complain. This issue dogs all regimes that have neither the rule of law nor public accountability: The authorities routinely fail to respect the dignity of ordinary citizens and run roughshod over their rights. There is no culture in which this sort of behavior is not strongly resented.”

“The Chinese government is also more clever and ruthless in its approach to repression. Sensing a clear threat, the authorities never let Western social media spread in the first place. Facebook and Twitter are banned and content on websites and on China-based social media is screened by an army of censors. It is possible, of course, for word of government misdeeds to get out in the time between its first posting by a micro-blogger and its removal by a censor, but this cat-and-mouse game makes it hard for a unified social space to emerge.”

“The hardest thing for any political observer to predict is the moral element. All social revolutions are driven by intense anger over injured dignity, an anger that is sometimes crystallized by a single incident or image that mobilizes previously disorganized individuals and binds them into a community. We can quote statistics on education or job growth, or dig into our knowledge of a society's history and culture, and yet completely miss the way that social consciousness is swiftly evolving through a myriad of text messages, shared videos or simple conversations.”

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