Is Taiwan still a Free Market Economy?

Is Taiwan still a Free Market Economy?
United Daily News editorial
translated by Bevin Chu
June 11, 2007

Comment: The DPP has never been a champion of the free market. Free market activity across the Taiwan Straits is the most potent force for China's eventual reunification.

The DPP's core value has always been tribal solidarity within the context of an artificially concocted "Taiwanese, not Chinese" ethnic and national identity.

Free market processes undermine the DPP's attempts to impose its artificially concocted tribal solidarity on the Chinese people of Taiwan.

To imagine that they would ever champion "free minds and free markets" is to misunderstand them completely.

Is Taiwan still a Free Market Economy?
United Daily News editorial
translated by Bevin Chu
June 11, 2007

Amidst rising prices, TAIYEN (Formosa Salt Company), which has controlled the price of salt for twenty years, announced a price increase. No sooner had the rumor of a price increase spread, than it came to the attention of Executive Yuan Secretary General Chen Ching-chun. A single telephone call from Chen forced Chairman of the Board Chang Lin-ching to retract his statement and guarantee that salt prices would not increase.

Chen Ching-chun said that since salt prices have not risen in several decades, he "could not understand" why they had to rise "at this time." Newly appointed former legislator Chen Ching-chun has a keen nose for politics. He knows that with two elections looming, the ruling DPP cannot afford to suffer electoral losses because he raised salt prices "at this time." The problem is, TAIYEN has been privatized. If we're still living in a world in which a single phone call can veto corporate policy, then aren't all these years of privatization a fraud?

Ironically, on the same day, the Executive Yuan aggressively raised the minimum wage, and ordered a 10 NT Dollar subsidy to businesses. The justification was that "wages had not increased in 10 years." Let's look at the Chang cabinet's logic. The minimum wage has not increased in 10 years, therefore an increase is long overdue. But salt prices have not increased in 20 years, therefore there is no reason why it should be increased now. The logic behind these two policy decisions is flagrantly self-contradictory.

Taiwan's economic growth has been sluggish in recent years. Besides the ruling party's Closed Door ideology, countless other contradictions in the ruling party's logic and deficiencies in the ruling party's thinking, are responsible for throttling Taiwan's economic freedom and economic vitality. When a single phone call from a high official can reverse a major corporation's policy, where is that corporation's independence and sovereignty? When government bureaucrats have the temerity to promote ill-considered "wage subsidies," besides revealing their arrogance of power, they reveal their ignorance about the workings of a free economy.

If the "Invisible Hand" behind the free market is replaced by the "Visible Hand" of sundry bureaucrats, how can Taiwan's economy not be derailed and separated from the free market economy? How can it not depart farther and farther from the international track?

Take intervention in salt prices as an example. Chen Ching-chun's ignorances dwarfs his understanding. First, prices in a free market system are determined by the private judgments of market participants. Chen Ching-chun apparently thinks the government trumps the marketplace, and has the temerity to intervene. Second, when the government meddles in private enterprise, not only does it hinder company operations, it also violates the rights of individual shareholders. Lin Ching's submissive behavior is an obvious dereliction of duty. Third, even assuming the government feels justified in imposing price controls, it ought to submit its proposed intervention to public scrutiny, and refrain from issuing imperial decrees via secret phone calls. Chen Ching-chun should not allow himself to become a secretary general who casually usurps authority.

The hourly wage subsidies are even more brazen. Within a free economy "subsidies" is a dirty word. Only a regime that is both ignorant about economics and arrogant about power would dare to regard subsidies as "government benevolence" that they can claim credit for. They are taking the blood and sweat of taxpayers, doling it out to wealthy cronies, and touting it as an achievement of the ruling regime. This is nothing more than disguised exploitation. Yet the Executive Yuan acts pleased with itself. When a cabinet lacks any shred of honor, what point is there in discussing professional ethics?

If the Executive Yuan's price controls on water, electricity, sugar, salt, and other goods stemmed from heartfelt concern for the public welfare, that would be one thing. In fact they stem from the ruling party's selfish interests. In other words, their current intervention is merely a delaying tactic. As soon as the elections are over, they will allow prices to rise, and public suffering will be more unbearable than ever. The Democratic Progressive Party exchanges long term public suffering for near term party advantage, then spins its behavior as generosity and compassion. Crocodile tears are more real than this.

In the eyes of the Chen regime there is no such thing as a free economy. This is clear from seven years of government intervention predicated upon its Closed Door Policy. Nefarious, behind the scenes manipulation of the economy by newly installed goons Chang Chun-hsiung and Chen Ching-chun has lost its power to shock. We would like to remind the Chang cabinet that if it wants to create a "good guy" image, merely controlling salt prices and increasing the minimum wage is not going to be enough. Three gasoline price increases in a single month has made the public furious. That's the real source of public discontent over consumer prices. If Chen Ching-chun can stop the rise in gasoline prices with a single phone call, then he might be able to deliver the vote.

Chen Ching-chun might claim that oil prices and international oil prices are coordinated by means of an established formula, therefore intervention is impossible. If that's the case, isn't this the answer they've been seeking? The government shouldn't artificially manage oil price fluctuations, shouldn't arbitrarily forbid salt price increases, and shouldn't randomly subsidize wage increases. The reason is the same in every case. Wages and prices should be determined by the marketplace, not by behind the scenes manipulations by government officials!

Make no mistake about it. A political authority may be able to manipulate the market, but it will never be able to outsmart the market. Do we need further evidence, other than the dismal results of the Chen regime's seven years of meddling in the economy?

Original Chinese below:

鹽價禁漲 工資補貼──台灣還是自由經濟嗎？
【聯合報╱社論】
2007.06.11 02:22 am

在一片物價漲聲中，憋了廿年的台鹽也計畫要漲價；沒想到，風聲才傳出，立刻遭到行政院祕書長陳景峻的嚴重關切。一通電話，讓董事長林靖收回成命，並保證不漲。

陳景峻說，鹽幾十年都沒漲，他「沒辦法理解」，為什麼要在「這時候」漲。甫由立委轉任新官的陳景峻嗅覺敏銳，知道兩項大選在即，此刻絕不能因鹽價落人口實。問題是，民營化的台鹽，如果還活在官員一通電話即決定一切的年代，這麼多年的民營化豈不擺明是搞假的嗎？

諷刺的是，就在同一天，行政院強度關山調高基本工資，並以每小時「補貼十元」的方式幫企業支付時薪工，理由是工資已「十年未調」。請看張內閣的邏輯：基本工資十年未調，因而現在非漲不可；但鹽價廿年沒動，卻無調漲的自由。兩項決策，就像用右手的刀砍左手的劍，根本自相矛盾。

台灣近幾年經濟發展遲滯，除了執政黨以意識形態鎖國，肇因於這類主政者的邏輯矛盾和理念貧乏者，更是不計其數；這都是扼殺經濟自由和活力的禍首。官員一通電話即左右企業決策，那是視公司主權如無物；而政府敢率爾推出「薪資補貼」的決策，除可窺知官僚們「權力最大」的傲慢，更反映了掌權者對自由經濟一無所知。

試想，推動市場力量的那隻「看不見的手」，如今卻被眾多官員「看得見的手」所掌控，台灣經濟如何不脫離自由經濟的軌道？又如何不與國際軌道漸行漸遠？

以對鹽價的干預為例，陳景峻所不理解的事可能比他想像的還多許多。第一，在自由經濟體制，價格取決於經營者對市場的判斷，陳景峻卻以為權力高於市場，竟敢公然伸手干預。第二，政府插手民營企業，不僅妨礙公司營運，也侵害股東權益，林靖的屈從亦顯然失職。第三，政府縱有必要對某些物價進行干預，也應有適當的決策討論，不容許私自以電話授受。陳景峻把自己變成擅權的祕書長猶不自知。

再看時薪補貼的決策，更是大膽而厚顏。在自由經濟中，「補貼」幾已成見不得陽光的字眼。唯有既對經濟懵懂無知、又對權力肆無忌憚的政府，才敢將補貼當成「德政」自我宣揚。事實上，取納稅人之血汗，挹注資本家，卻自認是積執政黨之功德；這根本是對人民的變相壓榨，行政院兀自洋洋得意。這樣的內閣，連廉恥都不遑顧及，還談什麼專業良知？

最近行政院對水電糖鹽等公共物資價格的壓制，若是出於對民生的關懷，也就罷了；事實上，卻無非是為一黨之私算計。亦即，目前的干預只是拖延戰術，俟選舉結束政府鬆手，屆時百物齊漲，人民將更難承受。民進黨用自己的近利交換人民的遠憂，還作出「施恩施仁」狀；就是鱷魚的眼淚，也比這個真實吧！

扁政府眼中沒有自由經濟，從七年的干預鎖國，已一目了然；張俊雄、陳景峻新官上任即大伸黑手，已不足為奇。值得提醒的是：張內閣若想塑造「大善人」形象，光壓鹽價、漲工資是不夠的；更讓人民反感的，是一月三漲的油價，那才是物價煽風點火的根源。陳景峻若能發揮他去電叫停的威力，制止中油漲價，大概才真能招來些選票。

陳景峻也許會說，油價與國際油價連動，且已建立調整公式，所以不便干預。那麼，這不就是答案嗎？油價不該干預，和鹽價不能亂禁、工資不該亂補貼，原是一樣的道理，應取決於市場的律動，而不是官員的黑手！

沒錯，權力可以左右市場，但權力絕不可能比市場高明。扁政府七年干預經濟運作的劣績昭彰，還需要新的佐證嗎？