Mao Zedung

From Going Full Retard on Communism to Full Retard on Keynesian Money Printing – Why China is About to Have an Epic Collapse

rafifarber Economics, The Jewish Libertarian Blog , , , , ,

I have almost finished reading Professor Frank Dikotter’s “Mao’s Great Famine”. It is a history of Mao Zedong’s Great Leap Forward from 1958 to 1962. I had to get through it quickly because it is so fantastically horrific that lingering over the book and reading it slowly will be bad for my mental health. There were parts where I became nauseous and could not continue reading without a break.

Those 4 years in China encompassed the absolute worst assault on human liberty ever, resulting in the most disgusting and grotesque man-made catastrophe in all of human history. Worse than Stalin, worse than Hitler. By far.

Here is Professor Dikotter discussing his book. (Take a look at the book on the right of Dikotter, shoulder level shelf.)

What basically happened, in a nutshell, is full blown and complete communism for 4 years. Mao decided on a Great Leap Forward for China. He was going to implement communism, fully and completely, across the entire country encompassing some 600 million Chinese people. The state was going to control absolutely everything. Plan and run the entire economy, abolish all private property. The results were complete and utter chaos and destruction, resulting in the worst misallocation of resources imaginable.

The delicate balance of supply and demand, which tells entrepreneurs what to produce and how much of it to produce through the price system, was totally destroyed. With the state in charge of production and distribution and all private property confiscated and abolished, almost nothing got to where it needed to go. The environmental catastrophe resulting from intensely exploitative farming methods and irresponsible coal mining and timber felling was absolutely mindboggling.

For example, at the beginning of the Great leap Forward, Mao had this insane idea that China had to surpass Great Britain in steel production. So he had all labor move to the steel industry. To meet quotas, the Chinese burnt capital in backyard furnaces, including farming tools, door knobs, pots and pans, anything, just to increase output so Mao could boast that China produces more steel. The result was that no farming tools were left, nobody had any pots and pans or metal window frames, and not enough people were farming, with the predictable result of not enough food for the population.

Humongous irrigation systems were conceived up by idiotic central planners trying to impress the regime. The results were almost always waste, the reservoirs being useless from shoddy workmanship, and as the rainy season came on, inundated the cities because the new trenches destroyed the ability of the land to soak up rainwater.

Hundreds of thousands of tons of food rotted at government train stations because there were not enough trains to transport resources to where they were needed.

At the worst of the famine in 1960 and 1961, families traded their young children between them to slaughter and eat them. Bodies were exhumed from cemeteries and eaten for lack of food.

The brutality in many of the collectivized communes was intense and almost indescribable.

As I read this book, I look at everything the government controls in Israel. All the misallocation going on here because they care nothing about the money they spend. In everything, every road (more people die on the government roads every year than in wars and “terrorism” combined), every public school, every government institution I see the potential for the sort of absolute insanity. It was as if China was put in the hands of a group of 5 year olds who had absolute power and cared nothing for the consequences of their actions. Anywhere from 45 to 55 million people died.

I could write on and on about this, but here’s the point. China hasn’t changed much, in terms of its economic mentality and faith in political leadership. Interview Chinese who went through the Great Leap Forward and they still have no clue what happened or why. A statue of Mao still stands in the Beijing. He’s still the father of the country.

Mao went full retard on communism for four years. One more year and the death toll could have doubled to 100 million, but his cronies eventually came to their senses and shut down the communes, giving back the right to privately own land and farm it.

I go on and on about the evils of Keynesian money printing. Keynesianism is a toned down version of communism that says that the government should only intervene when the market “fails”. Since there is no such thing as a market failure, that means that practically, Keynesianism says that the government should intervene in the market whenever it feels like it. That is not conceptually very far from full blown communism at all.

The cornerstone of Keynesianism is manipulation of a government monopoly of the money supply. As much as I hate the Fed, they are ultra conservative compared with the People’s Bank of China. Here’s what I mean.

Here’s the US money supply since 1996.

united-states-money-supply-m2

It’s gone from just under $4 trillion (say $3.8T eyeballing it) to $12.453 trillion as of last week. That’s an increase by a factor of 3.3. That’s going to cause a big crash, much worse than 2008 when it stops, and it will stop when the dollar begins to hyperinflate. It’s going to be bad, but probably not result in mass starvation in the United States unless Trump is president and decides to cut of all trade with everybody to “save American jobs” and then use his Great Wall of Trump to keep all the starving masses inside the country from running to Mexico for food.

Now here’s China’s money supply since 1996.

china-money-supply-m2

It has increased from CNY5.84 trillion in 1996 to (!) CNY137.4 trillion. That’s an increase of a factor of 23.5! When the printing stops, China’s economy is going to be so misallocated and whacked out that the devastation will be intense. Not as intense as the Great Leap Forward hopefully, unless Beijing decides to lock everyone down in their jobs and save factories from going bankrupt by bailing everything out and freezing the economy in place. Then yes, mass starvation will again result.

Chinese leadership tends to go full retard on a lot things. It’s a repeating pattern. The Great Wall of China, the Great Leap Forward, and now the Keynesian insanity. When the Chinese crash really starts to take effect this time, watch what Beijing does. One billion lives will depend on it. If I were Chinese, I’d take my money and run the heck out of there now. Same with Venezuela by the way.

 

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Rabbi Shmuly Yanklowitz vs Rabbi Barry Freundel, who is worse? A lesson in inverted Tzedaka from the Rambam

rafifarber Foreign Policy, The Jewish Libertarian Blog , , , ,

Here I go again, looking for trouble. Something tells me I’m going to get it. Before everyone gets all “what in blank’s name are you talking about Captain Ahab?” on me, let me set up the comparison first. I know I said I’d lay off him after he thankfully advocated organ sales, but the hypocrisy just boiled over the surface of the pot again and I can’t take it.

A spate of articles came out recently about Barry “Tom” Freundel the “Peeperer Rov” Shlitah (everyone rise). One article was published in the Washingtonian on January 3rd, brought to my attention by my wife, that brought to light even worse aspects of the case than we knew about previously. Apparently, Barry set up hidden cameras in a vacant apartment he had set up for a Haredi woman as a safe shelter who was fleeing from her abusive husband. The woman had gotten in touch with him for help and he took advantage of the opportunity to see her naked.

The schadenfreude instinct in all of us loves to squirm at the thought of something like that and denounce Barry for being even more heartless than we thought. It certainly is quite gross. From his perspective though, there wasn’t any difference between that and spying on women in the mikveh. In both cases he assumes he will never get caught, nobody will ever know, and therefore no harm will be done because none of the women will ever find out.

So practically it doesn’t matter if he’s peeping on an abused woman he himself is helping shelter from an abusive husband, or converts dunking in the mikveh or whatever. There’s no nafkah minah (practical difference) assuming he is never caught, and all criminals assume they will never be caught or they would never commit their crimes.

The Eight Levels of Tzadaka, The Eight Levels of Harm

But let’s consider harm in levels parallel to Rambam’s 8 levels of Tzadaka, or charity. Rambam, Zra’im, Hilchos Matanos Ani’im 10:7 says that the highest form of charity is giving someone a loan or a gift (notice Rambam does not differentiate between loan and gift) or a job so that he does not have to rely on charity any longer. This level is higher than the ever-praised level of giving anonymously to people who not even the giver knows the identity of, which is only the second level, and called a Mitzva Lishma, a Mitzva for its own sake, by the Rambam. The third is knowing who you give charity to but them not knowing who gave it.The lowest level is giving tzedaka grudgingly, publicly with a sour resentful face.

Conceptually, this means that employing someone at $10 an hour who needs a job is considered better than  dumping a million bucks on the same needy person who will simply consume it and continue to live off charity. Hiring someone, whether to help him (Lishma) or make money off him (Lo Lishma), is a higher level than anonymous giving. According to the Rambam then, the highest form of charity is not even charity, since it could even be a loan or employment. The highest level is to lessen the need for charity in the first place.

Before we even flip that around, it’s amazing to consider that hiring labor at any wage or extending a loan for someone to start a business (which could include buying shares in an IPO or buying corporate bonds, setting aside the issue of interest) is a greater level of charity than giving a billion dollars anonymously to anonymous people. In today’s world though, those who give away $1 billion anonymously are considered gracious selfless philanthropic saints. A business owner who hires a worker at $10 an hour, which is a higher level than giving $1 billion anonymously to charity, is considered a cheap selfish misanthropic schmuck.

Now let’s invert that. If the highest level of charity is turning unproductive people into productive people, then the highest level of harming a person or people is turning productive people into unproductive people, necessitating that they live off charity, or worse, taxpayer money. Harming anonymous people anonymously, say by being a sadist for fun and setting a bear trap for random people on a sidewalk you will never see and just reveling in the thought that someone you will never know got seriously hurt, well that would only be the second worst way to harm someone. That would be harm for the sake of harming people, “harm Lishma”, paralleling Rambam’s description of anonymous charity to anonymous people as a Mitzva Lishma, but still only second level.

The third worst way to harm someone would be to harm people anonymously, they no knowing you but you knowing who they are. The least bad way to harm someone would be to harm him grudgingly, he knowing you and you knowing him, but not really wanting to harm him at all, and the victim knowing that you don’t really want to harm him.

Barry is on level three in terms of the harm he inflicted. He inflicted it anonymously against people he knew about. He wasn’t as bad as harming anonymous people for its own sake. He wanted to see them naked. He didn’t want them to be harmed Lishma. If he did, he would have uploaded the videos so everyone could see them. Had he taken videos of anonymous women, never watched them or knew who he was videotaping, and simply uploaded them to the internet just to cause harm, that would be harm Lishma, only the second level.

Still not as bad as turning productive people into unproductive people.

But let’s face it. Had Barry recorded women in the mikveh, not knowing who they were, never watching the tapes, and uploading all of it to the internet just to harm them for fun but not watching because מסתכלין בעריות (watching pornography) is assur and he’s too frum, we would consider that even sicker than what he actually did. We would consider that really incredibly sick and bizarre. But it’s still only level 2.

That incredibly bizarre sickness of harming anonymous people only for the sake of harming them, is not nearly as bad as turning productive people into unproductive people living off charity or taxpayer money, according to the Rambam-1.

It is fascinating how the Rambam’s top level of charity is not even considered charity in the popular sense. Employing a worker or giving a loan is not generally seen as charitable, though it is, and the highest level of it. By the very same token, turning productive people into unproductive people is generally not seen as all that harmful, but it is. It is an even higher level of harm than hurting anonymous people for its own sake.

And how does one turn productive people into people dependent on charity?

Let’s take one example from the Social Justice Rav’s Facebook page. He hasn’t blocked me from seeing the page yet, even though after this post he might. (I dare him.)

I mentioned that the reason Rav Shmuly “unfriended” me years ago was that I yelled at him publicly for supporting American intervention in Syria. He was busy thwacking about trying to get politicians to send lethal weapons and training to “the Rebels” to unseat Assad. These weapons and training ultimately ended up in the hands of ISIS, and led to the civil war that caused the Syrian refugee crisis.

And now, Rav Shmuly Yanklowitz, who advocated for the very cause of the Syrian refugee crisis in the first place, is scoring even more social justice publicity points by diarrheaing about how he has personally invited Syrian refugees to his home for Thanksgiving and New Year’s and Whatever.

So not only is the Social Justice Rav advocating for turning productive people (former Syrian citizens) into unproductive people (current Syrian refugees) by rooting and lobbying for war in their former country. He now wants US taxpayers to support these people with free immigration, free healthcare, free education, food stamps and whatnot. And to add even more insult to that injury, he gets all the publicity for helping them out.

Disclaimer: Helping out refugees is a great thing. But not in this case, where he was the one who was rooting the refugee status on in the first place, and he now wants others to pay for it. In this case his hachnasas orchim (taking in guests) is manipulative self-righteous BS, which seems to be the essence of nearly every single one of Rav Shmuly’s initiatives. I support the actual act of taking in refugees, but cannot refrain from calling hypocrisy on the people who help cause the problem to begin with.

This is just the one thing that set me off this time. Shmuly tries to turn productive people into unproductive people by advocating for minimum wage laws, equal-work-equal-pay laws, and boycotting products made in third-world sweatshops. Minimum wage laws prevent the least productive workers from working at all. Equal-work-equal-pay laws prevent women from being productive. Boycotting sweatshops unemploys destitute third world kids from earning enough money so they don’t have to choose between starving to death and performing sexual favors for a piece of bread.

Shmuly spends a lot of his time advocating that unproductive people remain unproductive with labor legislation. He spends the rest of his time demanding that taxpayers support these unproductive people by force.

And then he takes the fruits of his anti labor (Syrian refugees) and manipulates the whole situation to make it look like he’s the good guy.

The harm Rabbi Shmuly “Social Justice” Yanklowitz causes is much worse than the harm that Barry “Tom” Freundel ever caused. Yes, Shmuly has good intentions, and some of his initiatives are good, like this one. and Barry’s intentions were neutral to bad. He never tried to actively harm anyone, but he did cause harm. I’m sure Barry also had some good initiatives over his career as well. They don’t count for much now, at least not in the public consciousness.

But Mao Zedong, the biggest murderer in world history who killed 45 million people in 4 years in an attempt to create a socialist utopia, was filled with good intentions just as well. Good intentions count for nothing. Zero. The only thing that matters is whether you support liberty, or control over other people’s lives. Ultimately, life and death comes down to that single question. This is reality folks, and as Ayn Rand liked to say, “Existence exists.”

If you advocate for a war in a distant country, don’t be surprised if there is a refugee problem. And when there is, don’t you dare ask that other people pay for it.

Reading Mao’s Great Famine, but Not Sure I can handle it

rafifarber Economics, The Jewish Libertarian Blog , , ,

I bought Frank Dikötter’s “Mao’s Great Famine” on Black Friday. It just arrived. It took over a month because the State controls the post office. That seems rather benign, but this book shows how scary even that is. Dikötter got special permission to peruse over 1,000 documents in previously restricted Chinese communist archives.

I am four pages into the preface of the book, and already, my eyes are welling with tears. I don’t know if I can handle reading this thing. I was both excited and scared to read it. Now I’m more scared than excited. But I’m going to try hard to get through it without losing my mind.

Here is a taste.

A vision of promised abundance not only motivated one of the most deadly mass killings of human history, but also inflicted unprecedented damage on agriculture, trade, industry and transportation. Pots, pans, and tools were thrown into backyard furnaces to increase the country’s steel output, which was seen as one of the magic markers of progress. Livestock declined precipitously, not only because animals were slaughtered for the export market but also because they succumbed en masse to disease and hunger – despite extravagant schemes for giant piggeries that would bring meat to every table. Waste developed because raw resources and supplies were poorly allocated, and because factory bosses deliberately bent the rules to increase output. As everyone cut corners in the relentless pursuit of higher output, factories spewed out inferior goods that accumulated uncollected by railway sidings. Corruption seeped into the fabric of life, tainting everything from soy sauce to hydraulic dams. The transportation system creaked to a halt before collapsing altogether, unable to cope with the demands created by a command economy. Goods worth hundreds of millions of yuan accumulated in canteens, dormitories and even on the streets, a lot of the stock simply rotting or rusting away. It would have been difficult to design a more wasteful system, one in which rain was left uncollected by dusty roads in the countryside as people foraged for roots or ate mud.

The book also documents how the attempt to leap into communism resulted in the greatest demolition of property in human history – by far outstripping any of the Second World War bombing campaigns. Up to 40 per cent of all housing was turned into rubble, as homes were pulled down to create fertiliser, to build canteens, to relocate villagers, to straighten roads, to make room for a better future or simply to punish their occupants. The natural world did not escape unscathed either. We will never know the full extent of forest coverage lost during the Great Leap Forward, but a prolonged and intense attack on nature claimed up to half of all trees in some provinces. The rivers and waterways suffered too: throughout the country dams and canals, built by hundreds of millions of farmers at great human and economic cost, were for the greatest part rendered useless or even dangerous, resulting in landslides, river silting, soil salinisation and devastating inundations…

Any attempt to understand what happened in communist China must start by placing the Great Leap Forward squrely at the very centre of the entire Maoist period. In a far more general way, as the modern world struggles to find a balance between freedom and regulation, the catastrophe unleashed at the time stands as a reminder of how profoundly misplaced is the idea of state planning as an antidote to chaos.

What is so disturbing to me is this one sentence:

Countless people were killed indirectly through neglect, as local cadres were under pressure to focus on figures rather than on people, making sure they fulfilled the targets they were handed by the top planners.

Focus on figures rather than on people. This is what governments do. This is the argument behind every single regulation. Figures rather than people. I see echoes of the Great Leap Forward in every GDP calculation, every figure-based argument for minimum wage or drug law, every attempt to increase exports by manipulating the money supply. It’s all the same evil. It’s just a question of degree.

Mao took statism to its penultimate conclusion, and 45 million people were murdered. Not even Stalin took it that far.

Why does nobody know or care? Why does everyone know that 6 million Jews were murdered in a race war, but not that 45 million Chinese were murdered in an economic war? Many reasons, but my wife had some wise words. Jews have a cultural memory. We are perhaps the tightest knit group of people on the planet. Kill us, and we can mobilize to the point that everyone will be hearing about it forever.

But most people are just individual people. Nobody will mobilize for them. But I will do my best to remember those 45 million faceless Chinese who are remembered by nobody, as statues of Mao still stand in Beijing and China is about to undergo another gigantic crash fueled by insane money printing that has expanded the Yuan supply by a factor of 23.5 since 1996.

It won’t be as bad as the Great Leap Forward of course, but it will be quite bad.