[Market Economy Guide] The Market Is the Answer

“Ho Chi Minh and Mao Zedong Drove Their People into Poverty… Prosperity Is Created Not by Individual Leaders but by the Economic System”

In the mid-19th century, Vietnam fell into becoming a French colony. During that dark and chaotic period, Ho Chi Minh, known as the father of Vietnamese independence, was born. He later came to be revered as a hero of Vietnam. The main reason is that he lived a frugal and modest life devoted solely to his country. He never sought personal gain and has been regarded as an honest and moral leader. Ho Chi Minh devoted his entire life to his country and its people. But what did the Vietnam he led actually look like?

The Poverty of Vietnam Under the Austere Ho Chi Minh

The economy of Vietnam under Ho Chi Minh was utterly devastating. Ho Chi Minh carried out bold land reform and diplomatic efforts. He confiscated landlords’ land and strengthened ties with China and the Soviet Union. But the economy did not improve. Through communist ideology, Ho Chi Minh wanted all Vietnamese people to live well, but things did not go as he intended. As the nickname “Uncle Ho” suggests, he was a leader who felt close to the Vietnamese people and enjoyed their absolute support, yet he was unable to achieve economic prosperity until the day he died. In 2011, Vietnam ranked only 151st in the world economy. This shows that a leader’s integrity alone is not a sufficient condition for reviving an economy.

Ho Chi Minh took no personal benefit from power. He spent his life together with his homeland. So what, exactly, did he do wrong? In Ho Chi Minh’s childhood, the neighboring village was home to Phan Boi Chau, a famous Vietnamese scholar and independence activist. Phan Boi Chau advised the Vietnam-history-loving Ho Chi Minh to study modernized Japan. But Ho Chi Minh refused, considering it disgraceful to rely on Japan. Had Ho Chi Minh accepted Phan Boi Chau’s proposal, Vietnam might today have followed a completely different path in history.

Mao Zedong, Who Starved 25 Million to Death

Mao Zedong is revered and respected within China as an absolute figure. He was so austere that the pajamas he wore for 20 years had been patched with rags in as many as 73 places. He was also so exceptionally talented that he rose to the highest ranks in revolution, politics, the military, theory, history, philosophy, strategy, thought, poetry, and calligraphy, and even while carrying out numerous political campaigns, he never carelessly killed his political rivals.

Yet there are hardly any Chinese people who want to return to the era led by this much-revered leader Mao Zedong. The reason is very simple: they lived amid extreme poverty and chaos. Mao Zedong pushed forward the Great Leap Forward, which plunged the Chinese economy into darkness. The Great Leap Forward, an economic revival policy intended to dramatically raise productivity in agriculture and industry, produced a horrific result: more than 25 million people starved to death for lack of food.

Mao Zedong also launched the Cultural Revolution in order to preserve the socialist regime. The Cultural Revolution threw China into great turmoil, and countless people died. It was the worst outcome produced by Mao Zedong’s obsession with rejecting capitalism and defending socialism. Mao Zedong, who had led the communist revolution to success, tried to turn China into a modern communist society, but his efforts brought only catastrophic results. In particular, China’s economy collapsed into extreme poverty.

Vietnam and China Awaken to the Market Economy

By contrast, there was also a leader who chose a different path from Mao Zedong and placed China on the cornerstone of economic prosperity: Deng Xiaoping. Deng Xiaoping is called the architect of China’s second founding because he laid the foundation for its economic prosperity. If Mao Zedong was the founding father who created China, Deng Xiaoping was the leader who enabled it to grow into the world’s second-largest economic power. Deng Xiaoping introduced the market economy and free trade into China’s tightly closed system. His reform and opening up gave new life to the Chinese economy, which had stagnated under communism’s closed economic system. And the shift toward an open capitalist system ushered China into a new era of growth.

As the cases of Ho Chi Minh, Mao Zedong, and Deng Xiaoping show, a leader’s personal qualities and frugality alone can never solve a country’s economic problems. Only choosing market economy-friendly policies can brighten the future of a national economy.

■ Food for Thought

South Korea and North Korea share the same culture, the same language, the same ancestors, and similar intellectual capacity. Yet the economic power of the two Koreas differs by as much as 46 times. What explains such a gap across the armistice line? It shows that a nation’s destiny changes not because of differences in people, but depending on what institutions and value systems it adopts.

Sung-no Choi, President, Center for Free Enterprise (CFE)

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Original title: [시장경제 길라잡이] 시장이 곧 답이다

Author: Sung-no Choi

Date: 2018-12-31

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=column&pn=15&idx=11342