In an article in the Daily Finance there was some information about the infrastuctural situation in China. In the article it tells us how the government is not selling the land but leasing it to the builders and foreign investors. It wants to say that it does not want to ruin the structures created in the past. The central bank is trying to increase the prices of the land. The government has borrowed trillions of dollars from the banks to develope the infrastructure.
Milton Friedmen here would think that the central government should not lease the land but to sell it. Here we see what Milton Friedmen would see seperating political freedom from economic freedom. Here the government is interfearing by not letting the developers buy the land but letting them lease it. Friedmen here would say that the government should act as umpire and only stepping in when there is something wrong. But here they are limiting the amount of development by not selling the land. This way they are controlling development. He would say that the government is controlling the selling. If the govenment will allow the to buy the land, it will be properly utilized and the real prices of the land will be seen. He further adds that if the government will sell the land, the money received can be utilized for many other productive things for the people and also help to reduce the debt of the government.
I totally agree with Friedmen on this. The government should be liberal about the selling of the land. This will indeed help the development of land. The land is expensive as the government is trying to hype the prices by controlling it. The real thing is that the prices are fake. The buildings are empty and there is no one to buy as it is expensive. Here the government is trying to think about the long term effect. I think if they become liberal about the selling of land. There will be an increase in the total cost and the real value will be known by the people. Here friedmen argues in freedom and freedom is to success. If the land is kept in the openmarket there will be competiton which will show the true picture of the product. If the government is the only lender of the land then there will be the situation of monoploy. So I think that if the government allows to sell the land it will help for the betterment of the people.
I agree with you. If the government sold the land it would become private which is what Friedman advocates for. Also, the government's power would be decreased by not having control over that land anymore which is limiting the government and that is what Friedman thinks should be done. The government should only be used to ensure the freedom of the people and controlling this land is not doing that.
ReplyDeleteI am totally agree with you on this. Friedman would definitely think that government selling the land would help better develope the land because Friedman clamims best keep it private. By keeping it private, it would be maintained and response to the market better. The government should sell the land and only umpire on this, which is set up the rules to foster the game.
ReplyDeleteI agree with you on this too. Friedman would say that the government's assistance here would help the development of the land.The real value of the land would definitely be known by the people then. Everyone would definitely be much better off with the government intervening in this instance.
ReplyDeleteI totally agree with Bridjesh and Friedamn. The government should only regulate the game on economics not interfere with it. The government of China is taking the money and opportunities from the citizens creating a technical monopoly. Here we also have to have in mind that the Chinese government is driven by communism which is the total opposite of what Milton Friendman is talking about.
ReplyDeleteBridjesh, I like your Article. I agree with you that the government should only help in in the development.The government should not take total control over it but should only help regulate it.If the land is sold then it will definitely become privatized and that is what Friedman prefers and would like that the government should only be limited.
ReplyDeleteI also agree with what you are saying here. The goverment should totally sell the land...people obviously have an interest in it or else they would not be leasing it from the government. There are thousands of things that could be done with this land and the goverment is holding it hostage to obtain a certain image of "value" that the property probably, most likely doesn't even have. They should place the building on the market and as Friedman said what ever interest the citizens have for this property it will most likely be taken care off.
ReplyDeleteI agree with you. I'm no expert on world politics but this seems like a typical move China would make. They are limiting economic freedom by renting this land. Any moron knows that when you rent something you are getting taken for your money, you have no return on your investment when your lease is up. This is just a way for China to extort money from these companies in the long term. I agree with you when you quote Friedman by saying that government should be the umpire of the game, here they are trying to control it too much.
ReplyDeleteI agree with you in this article. Friedman would think that the government by selling the land would help develop the land. He believes in keeping everything private with the least government interaction. In my opinion in some industries we are better off having some things private but not all.
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