How Chinese Distrust of Government and Homogenous Culture Makes Them More Successful In the Long Run

[From Casey Research: International Man]

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I can give you a dozen credible scenarios describing what might happen in China over the next couple of decades. But the trend that seems certain to continue is the rapid rate of wealth increase there. I don't credit official figures with any great accuracy, but if we take them as being approximately right, then the U.S. economy is growing at 2%, and China's at about 7%—but with a base of about four times the population. What this means is that the largest economy on the planet will soon no longer be America's—but China's.

Take an American and a Chinese, each with a dollar. Say both are equally smart and hardworking, and each is able to double his dollar every year—2, 4, 8, 16… The only difference is that the American pays 35% in taxes and the Chinese pays nothing. Actually the American is paying close to 50% and the Chinese is paying something, but the difference is about the same. With only that differential, by the time the American has one million dollars, how much does the Chinese have? The answer is that by the time the American has a million dollars in 28 years, the Chinese has 268 million.

Actually the situation is even grimmer. The Chinese will probably work harder. He’s in an environment where, if only because of minimal regulation, he’ll make his capital grow faster. If Herrnstein and Murray are right in their book The Bell Curve, the Chinese guy is smarter (105 v. 100 average IQ for Europeans). And then, when the American dies, the government will take half of his piddling million dollars for estate taxes, so his kids start with no meaningful financial capital. And probably minimal intellectual capital, if the obvious dumbing down of American schools has anything to do with it. Meanwhile, the scions of the Chinese will have an untaxed $268 million, and probably a much better education and stronger work ethic to help them deploy it.

The average American has been so brainwashed that he thinks he has a moral obligation to give the government whatever it asks for; he thinks he’s being dishonest and cheating if he puts his own and his family’s welfare above the demands of the State. At the same time, he thinks the State has a moral obligation to provide for his health, education, welfare, and retirement.

The average Chinese, however, recognizes the government as his adversary and feels no moral obligation at all towards it, only to his family. He knows the guy calling himself “the government” is just a successful warlord, and a successful warlord is just a major league criminal. He considers it his duty to deny resources to the State because he knows he can’t feed the beast and his family with the same grain of rice. And he has no concept of the State taking care of him; that’s something his family does. [Read the Full Article]

I wrote an article around tax time about our blind acceptance that somehow 25% tax is A-Okay. In fact, some people say we should pay more! Meanwhile, other nations and other people are focusing on themselves and their family instead of blindly trusting the Guberment. Living in Alaska, it strikes me particularly odd that there is so much faith and such a close relationship to the Feds, when there is little to nothing to show for it.

What has the Federal Government and the Alaskan Government shown you for all the taxes that you give? Perhaps if you give more taxes you'll get that great reward one day....