Hong Kong Vs Cuba. Capitalism Vs Socialism.

Cuba 1

hongkong_panorama_victoria_peak_2011

Let’s get started with a quick recap:

Capitalism. Under this system an organisation can only survive in the market by looking after the customer. By delivering goods or services of the right quality at the right time at the right price. Otherwise they go bust.

Socialism. Under this system the state directs what goods and services will be delivered, what their quality will be and also the price. This cannot possibly exist in a market because competition would kill it, so monopolies are essential for it to function. Such organisations exist for the benefit of the state, not the customers. They cannot go bust because they can fix prices and rely on the state for subsidies of taxpayers money.

Cuba 3

Now let’s look at what assets and strengths Cuba has to enrich their people with:

  • Its people. 11 million very well educated people. Their literacy and numeracy rate is better than Britain’s. Number 5 in the UN Education index.
  • Incredibly verdant and productive agriculture. Rich soil and a tropical climate combine to allow several crops per year.
  • Nickel and Cobalt. There are 5.5 million tons of Nickel waiting to be mined, 7% of the world total.
  • Oil. Cuba is an oil producer and known reserves of 20 billion barrels, one of the top 20 reserves in the world.
  • Tourism. Cuba is an idyllic tropical paradise with amazing beaches.

Hong Kong_Central_Statue_Square_Legislative_Council_Building_n_Neoclassicism_n_Lippo_Centre

Contrast and compare with what Hong Kong has to offer:

  • Seven million educated people. Number 87 in the UN Education index.
  • A great harbour.
  • Nothing else.

As you can see Cuba has Hong Kong well beaten.

Cuba was capitalist until 1959, when Castro took over. So let’s have look at how things were then.

  • 80% of the landmass was under cultivation or used for grazing. Cuba was second only to Brazil in exporting agricultural products to USA.
  • Cuba’s real per capita income was $378, fourth in Latin America. Spain ($324) and Portugal ($212), were both lower.
  • The share of national income paid to workers was 65 percent, only Great Britain, the United States, and Canada. were higher.

Now lets look how Hong Kong was doing (the then colony deliberately didn’t gather data and statistics!):

  • After WW2 HK had a population of just 600,000, during the 1950s there was a immense influx of refugees from China. 100,000 a month came till the population exceeded 3 million. Many lived in shanty towns.
  • With nothing for all these people to do the British colonial masters started manufacturing projects to make simple, low cost items like buttons, plastic items, umbrellas, artificial flowers etc.

Once again you can see Cuba has Hong Kong well beaten.

From this basis the two economies took different courses. Socialist Cuba couldn’t produce sugar competitively against world prices. They were rescued by the Soviet Union who bought the entire sugar crop at subsidised prices so as to keep Cuba afloat. When the Soviet Union imploded this stopped and 100,000 sugar workers lost their jobs. Visit Cuba today and great swathes of fertile farmland lie unused. Much else in the economy was also trashed as huge socialist inefficiencies stopped anything working properly. There was very little investment in buildings or infrastructure. Cuba now is mostly frozen in a 1959 timewarp, but in a state of decay and disrepair.

In 1961 a Britain, John James Cowperthwaite, became financial secretary of Hong Kong, which was still a very poor. He invented and implemented “positive non interventionism” a highly libertarian management of the economy. This worked like magic and between 1961 and 1997 Hong Kong’s gross domestic product grew to be 180 times bigger. Everyone who lived in Hong Kong was free to do anything they wanted. There was minimum tax and minimum government. Enterprise, investment, risk taking, entrepreneurship were everywhere. Success was rewarded. Hong Kong became the most dynamic economy in the world.

Hong_Kong_Skyline_viewed_from_Victoria_Peak

So how are things today in Hong Kong:

Cuba 2

And in Cuba:

So there you have the irrefutable facts. Socialism is utterly disgusting and immoral, it damages the lives of everyone it touches except those at the very top who become enormously rich. Capitalism, unfettered. delivers incredible results. It enable anyone to become very rich who wants to. All they have to do is provide customers with what they want. This is by far the most moral form of human organisation.

Critics say that Hong Kong is small and that such measures cannot be applied to a big economy. They are wrong. China looked at what Hong Kong was doing and it was copied there by Deng Xiaoping in the 1980s. We have all seen the meteoric growth in the Chinese economy since then.

Other critics say that Cuba’s economy was held back by being embargoed by its regional superpower, the USA. They forget that Hong Kong was also embargoed by its regional superpower, China.

The system of having minimum government is called a Night Watchman State, economist advocates call it minarchism. It allows maximum human freedom, people can build their lives undisturbed by government extortion, they take responsibility for themselves. It also ensure the maximum competition when you spend your money as a customer. So you get better goods and services at better prices. Everyone in society wins.

Given the evidence it is amazing that every country has not done this. It is also utterly beyond belief that anyone can be stupid enough to vote for a socialist government. Socialism is our enemy.

Cuba 4

To conclude. One country, embargoed by its superpower neighbour embraced capitalism and libertarianism and so went from being one of the poorest nations on earth to being one of the richest. Another country, also embargoed by its superpower neighbour, with bountiful natural resources, was blighted by state control of everything in a socialist dystopia, so went from being relatively rich to being very poor indeed.

Remember. Capitalism pays for all the other -isms!

 

 

 

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13 Comments


  1. Fantastic! The evidence is hard to ignore…

    Reply

      1. ray mchale, You should try reading the article. Cuba suffered a trade embargo from its neighbouring superpower. So did Hong Kong.

        Reply

        1. You are stuck on undergraduate economics, and use outdated ideology. You have many factual errors on Cuba, as well as Hong Kong.; In basic terms your article is only quarter truth because you forgot to include a global political economy perspective in your analysis. Again, why you are outdated and using undergraduate theories in erroneous ways.

          Reply

          1. Hey rationalrepublicofzimbabwe

            Amazing debating skills there.
            However you are unable to refute a single point I make.
            Which puts you pretty close to the bottom of the pyramid of intellect:


    1. In Cuba the misery is uniform. And there is no way out.
      In Hong Kong some people fail. But 99% are far better off than everyone in Cuba except for the ruling elite.

      Reply

      1. “Enable anyone to become very rich who wants to” I bet some of those people want to be very rich, don’t you think Bruce? Making statements like that, which are clearly idiotic and naive, really undercuts your point. It’s one thing to say “this is a better way for an economy to run”, it’s entirely different to say “Everyone can be rich! It’s like magic! It will make gold bars rains from the sky! Everyone in the country could live in a mansion if they really wanted it!”. Poverty hurts, minimalizing the struggles of these people by saying “anyone to become very rich who wants to” is insane, you sound like a snake oil salesman.

        Reply

        1. Ken,

          Isn’t it funny how people wanting socialism mostly don’t contribute much to society?

          Reply

      2. Funny, 20% of HK is poor, and the poorest 10% of HK is living with less than $4000 HKD monthly. So not 99%, good try with assumptions tho. Plus your evidence are all too basic for an arguement, both for HK and Cuba. Nonetheless it was reasonable to a certain extent, but more thorough research should be done before you draw any conclusions.

        Reply

        1. Fool,

          There will always be poor people everywhere in the word.
          The indolent, the feckless, the lazy, the stupid.
          The huge problem with socialism is that it robs money from the achievers, punishing success, and gives it to the underachievers, rewarding failure.
          So with socialism you end up with everyone being poor, as in Cuba and Venezuela.

          Reply

  2. Wow just wow in regards to the comments defending socialism. I think snowflakes need a crash course on how socialism is the first step to communism and when it (praying daily is doesn’t) hits that communist step all the flakes who fought for their utopian life styles will be crying UNCLE. You snowflakes will then realize how government works under these two forms because YOU will be slaves to the few elite that brainwashed your impressionable minds to help create the Hunger Game districts you will be living in. Nope, you will not be in the higher districts, sorry to pop your rainbow candied bubbles but truth hurts combined with reality. The sooner you realize this the less emotionally hurt and shocked you will be. So the crash course should be dropping them off in, let’s say Cuba or N Korea, penniless with only the clothes they wear. Next, try and find them in a year (if they are still alive) and ask if their social common utopia is everything they cried for so long to force onto the world countries they violently terrorized. How about it snowflakes, will you accept the challenge? If yes, will you actually do it or run and hide away at mommy’s house hugging your teddy bear in tears? You wanted a social experiment, so it would be only fair that it is you.

    Reply

  3. I’m new to your blog so I just read this. I’m American but my parents were born in Cuba. They left in October 1960 when they realized where things were going. Even though they didn’t bring any money with them, my father, an Engineer began to quickly prosper in the US. I’m grateful he had the courage to leave.
    At the time of my writing this ,April 2017, you have another example in Venezuela, sitting on one of the world’s biggest oil reserves, it’s falling into a state of total chaos.

    Reply

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