Thursday, February 24, 2011

China Growth Indication

China plans to build at least 45 new airports, spending $230 billion on expanding air travel.

But the question that needs to be asked is: Is this an attempt to meet market demand  or is this about local government officials who need an airport to raise their status at regional and national conferences? Life would be so much easier if all these decisions were made via free markets.


  1. A Liberal in LakeviewFebruary 24, 2011 at 3:56 PM

    This story should be filed under "Crony Commerce In China: The Growing Market for Business as Usual".

    Sure, it would be easier if laissez faire were practiced. But when has a go-getter ever been averse, on principle, to communistic ownership of producers' goods like airports?

    Building airports means more work for construction companies, more space for aircraft built by Boeing, Airbus, etc., more business for suppliers of aircraft parts, more business for oil firms, and so on.

    Communistic ownership of producers' goods means more profits for those who own them, just as it did in the USSR, where, contrary to popular prejudice, there really was private property in producers' goods. The key detail, however, is that only a minority of people were allowed to own such property. Sure enough, the property owners of the USSR lived well, at least in comparison to the herds of dupes.

    So, the answer to my question is simple: Never. Not on one single day have go-getters been averse to communism per se.

    Businesspeople routinely strive to communize their costs, and the airport and aircraft rackets are merely one example. Commerce works the same way everywhere, and it hardly matters whether one is talking about the many new airports the Chinese are planning, or railroads in 19th c. America, or investment banks nowadays in NYC, or Wrigely Field in Chicago. (The owners of Wrigely Field want government to underwrite the debt to finance renovation of their stadium.)

    Now, the remark "local government officials" is a misleading halftruth that does double duty as a red herring. Sure, the LGOs may be necessary to make the crony commerce work, and a few of them are likely to gain in the short term, but the motive power here is the greed and pervisity of businesspeople. For example, some people will make a mint building and operating convention centers near those new Chinese airports, and, of course, the restauranteurs and hotel operators, too, will be gung ho for the project. The trinket sellers will favor it. The lawyers will favor it, and, in fact, orchestrate it.

    I still see the enemies of laissez faire, and it's still true that they are, in the main, businesspeople AND their shills. So, let's file this story under "Crony Commerce In China: The Growing Market for Business as Usual".

    Btw, one day the Earth will be covered with infrastructure that cannot be supported but by communistic means. Goons with Tasers will keep dissent in check, and a few businesspeople and investors will live in luxury.

    But this world will be a dungeon all the same.

  2. Who will be flying into these airports? China's long-term demographic trend is downward. Their population is not growing. It has been well below replacement levels for close to 30 years.

    China is already experiencing labor unrest. There is a labor shortage in the in the crucial 15-25 age group that many factories rely on most.