by John Tamny
The American Institute for Economic Research
Prices are how a market economy organizes itself. Without real prices arrived at by freely operating individuals, you have chaos. As P.J. O’Rourke long ago quipped, tragically designed Bulgarian blue jeans brought down communism. Under communism, all the wrong information is transmitted to producers.
What doesn’t work in total most certainly doesn’t work in limited fashion. This is why all the worrying about the CCP’s subsidy of Chinese industry is so overdone. These subsidies, these allegedly easy loans, blind their recipients to market realities. They slow their progress. They weaken them.
We have U.S.-based evidence to support this claim. Consider Canadian technology company RIM Blackberry.