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That the favoured industry (or company) is doing well isn't necessarily a sign that the policy is overall good for the country's economy.

As an analogy: weapons manufacturers do well when there's a war on, too, but that doesn't mean war is good for prosperity.




> That the favoured industry (or company) is doing well isn't necessarily a sign that the policy is overall good for the country's economy.

You are answering specifics with generalities.

If Taiwan didn't support and nurture TSMC so that today it's a national champion that prints money, what development path do you think they could have taken that would've brought at least the same economic success? Please be specific.


There's plenty of other companies in Taiwan already today, and that's without the counterfactual of leaving more money in people's hands.

I can't predict specifically what other things would have happened. If people could do these kinds of predictions well, maybe central planning would actually work?


You are saying planning never works without even the ability to point to any specific cases. Why do you swallow your own ideology so uncritically?

Does Soviet-style central planning work? It didn't seem to work well in the few societies that really tried it.

Dos all planning fail? Seems unlikely, given the amount of fairly centralized planning that went on (and still goes on today) in East Asian countries, countries that are the rare "success stories" of developmental economics.

In fact the original East Asian success story was Meiji-era Japan, basically the only society outside of the West that managed to industrialize itself during the 19th century. And if one sits down to read a history book one quickly realizes that what the Meiji government did was highly top-down and planned with the explicit goal to catch up to the European colonial powers. It did not resemble classical laissez-faire economics.


Huh? Where did I say that planning _never_ works? Please read more carefully, lest you argue against strawmen.

I said that planning and forecasting is _hard_, and that _I_ can't tell you on the spot what counterfactually would have replaced TSMC. Many different options are possible. Or perhaps TSMC would have still happened, but in a different way.

> In fact the original East Asian success story was Meiji-era Japan, basically the only society outside of the West that managed to industrialize itself during the 19th century. And if one sits down to read a history book one quickly realizes that what the Meiji government did was highly top-down and planned with the explicit goal to catch up to the European colonial powers. It did not resemble classical laissez-faire economics.

If I have an ailment and go to a chiropractor to fix that ailment, and later my ailment goes away, that doesn't necessarily mean that the chiropractor helped. In fact, those guys are dangerous and more likely to make things worse.

For another Japanese example, see how eg Sony had to fight and dodge the much vaunted MITI more often than not, especially in the beginning. (Sorry, I'm not up to date on all the Meiji-era stuff. It's a fascinating period of history, though!)

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Just to be clear, central planning can 'work' up to a point; it doesn't necessarily lead to famine. Eg seen on its own East Germany was the most successful socialist economy ever. Out of the ashes of war torn quarter-country they rebuilt a reasonably high standard of living---the highest among all socialist countries, and pretty decent by global standards---all while paying enormous war reparations to the Soviet Union. (I was born in East Germany.)

Their system had many aspect of Soviet-style central planning. But over most of its life the regime wasn't nearly as totalitarian as Stalin's Soviet Union.

It's just that East Germany pales compared to more market oriented West Germany. (And West Germany pales compared to even more market oriented Switzerland.)




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