President Ma Ying-jeou (馬英九) has appointed Vice President Vincent Siew (蕭萬長) as convener of a new panel to advise the Presidential Office on financial and economic affairs. But does Siew really have any bold economic vision? Nothing he has said goes beyond the usual free-market mechanisms, relaxation of laws and regulations, a complete free rein for Taiwanese companies to “go west” and forming a common market with China.
Siew’s policies comply with the fashionable pillars of globalization — deregulation, denationalization and minimizing the role of government. That is as far as his vision goes. Can such a vision really get Taiwan through the current economic troubles?
An article in Thursday’s New York Times asks if the US is any longer the global beacon of unfettered free-market capitalism. In bailing out Bear Stearns, Fannie Mae and Freddie Mac and American International Group (AIG), the US has not just broken the cardinal principles of the free market, but also undermined the US’ authority in any future efforts to sell the idea of economic globalization to other countries.
In the Times article, US financial historian Ron Chernow said the Bush administration, which stands for free market economy, is now doing things even countries that advocate state intervention would not dare to do. These actions will provide excellent ammunition for opponents of the free market.
Whenever the IMF offers to help countries, it always demands that the country receiving aid implement what the IMF calls “structural adjustments,” including deregulation, market liberalization, unfettered exploitation of natural resources, privatization of public assets and state enterprises, reduced tariffs, social spending cuts, and so on.
For example, during the 1997 Asian Financial Crisis, when the IMF pledged South Korea US$20 billion to help it weather the storm, one of the “structural adjustments” it demanded as a condition for the loan was that the Seoul government not prop up troubled banks and companies, but rather allow them to be eliminated according to the workings of the free market. The IMF pushed South Korea to open up its domestic market and thoroughly liberalize its economy.
Now that the US is facing its own financial crisis, however, the US government has transgressed the free-market dogma it has been imposing on other countries by resorting to state intervention on a massive scale. Is the nationalization of giant investment and insurance firms not tantamount to what the French call “economic patriotism?” The Times article was highly critical of the US government’s actions.
If the US government finds itself compelled in the final analysis to act counter to the fundamental principles of its own free-market capitalist creed, what authority is left for the idea of economic globalization, which has been in vogue for the past three decades? Even Republican presidential candidate Senator John McCain declared that he and Alaska Governor Sarah Palin, if elected, “are going to put an end to the reckless conduct, corruption and unbridled greed that have caused a crisis on Wall Street,” while another Times article pointed out that you can’t trumpet the virtues of the free market on the one hand while attempting to protect investors by using state powers to clean up after the greedy gamblers of Wall Street on the other.
As to Ma and Siew — where is their vision? If interventionist policies are necessary for the US government, it proves that an unbridled free-market system cannot work. The Ma government’s policy of economic integration with China is a free-market strategy. Ma and Siew’s real purpose would seem to be political convergence, even if it comes packaged in the guise of economic integration.
Allen Houng is a professor at National Yang Ming University.
TRANSLATED BY JULIAN CLEGG
Why is Chinese President Xi Jinping (習近平) not a “happy camper” these days regarding Taiwan? Taiwanese have not become more “CCP friendly” in response to the Chinese Communist Party’s (CCP) use of spies and graft by the United Front Work Department, intimidation conducted by the People’s Liberation Army (PLA) and the Armed Police/Coast Guard, and endless subversive political warfare measures, including cyber-attacks, economic coercion, and diplomatic isolation. The percentage of Taiwanese that prefer the status quo or prefer moving towards independence continues to rise — 76 percent as of December last year. According to National Chengchi University (NCCU) polling, the Taiwanese
It would be absurd to claim to see a silver lining behind every US President Donald Trump cloud. Those clouds are too many, too dark and too dangerous. All the same, viewed from a domestic political perspective, there is a clear emerging UK upside to Trump’s efforts at crashing the post-Cold War order. It might even get a boost from Thursday’s Washington visit by British Prime Minister Keir Starmer. In July last year, when Starmer became prime minister, the Labour Party was rigidly on the defensive about Europe. Brexit was seen as an electorally unstable issue for a party whose priority
US President Donald Trump is systematically dismantling the network of multilateral institutions, organizations and agreements that have helped prevent a third world war for more than 70 years. Yet many governments are twisting themselves into knots trying to downplay his actions, insisting that things are not as they seem and that even if they are, confronting the menace in the White House simply is not an option. Disagreement must be carefully disguised to avoid provoking his wrath. For the British political establishment, the convenient excuse is the need to preserve the UK’s “special relationship” with the US. Following their White House
US President Donald Trump’s return to the White House has brought renewed scrutiny to the Taiwan-US semiconductor relationship with his claim that Taiwan “stole” the US chip business and threats of 100 percent tariffs on foreign-made processors. For Taiwanese and industry leaders, understanding those developments in their full context is crucial while maintaining a clear vision of Taiwan’s role in the global technology ecosystem. The assertion that Taiwan “stole” the US’ semiconductor industry fundamentally misunderstands the evolution of global technology manufacturing. Over the past four decades, Taiwan’s semiconductor industry, led by Taiwan Semiconductor Manufacturing Co (TSMC), has grown through legitimate means
RSS