Anthony Kitchener's letter (29/8) suggests economic theory is irrelevant in explaining economic success. He argues that Singapore's success is due to its favorable geographic position. While that would have been a factor, Burma's nice location has not helped it succeed, and Hong Kong and Korea have flourished in spite of starting their economic success at the end of the line.
Mr Kitchener also fails to understand the Economist cover story, the major point of which was that Keynesian economics textbooks contributed to many countries' failure. They did so by focusing on areas where the market fails to give the best outcome, while overlooking the prospect of government decision-makers getting it wrong. As a result they advocated winner-picking, public ownership and demand management (themes that remain in vogue in this newspaper).
Those who rail against laissez-faire economic policies have a touching faith in politicians' and bureaucrats' far-sightedness and ability to withstand lobbying. The political system is far inferior to the marketplace at finding out what customers want and how to provide those wants at the quality required and at the cheapest price. Political interference with these decisions is as likely to frustrate them rather than advance them. Moreover, favours to one sector are necessarily at the expense of other sectors, and this may cause profitable opportunties to evaporate.
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