China' Potemkin Cities and Malls

Here are two videos showing China's obsession towards Keynesian GDP spending which has resulted, so far, to 64 million vacant apartments from China's building of 10 new cities every year. (pointer to Israel Curtis, Mises Blog)

This obsession towards achieving statistical GDP from central planning reminds me of two John Maynard Keynes quotes,

The right remedy for the trade cycle is not to be found in abolishing booms and thus keeping us permanently in a semi-slump; but in abolishing slumps and thus keeping us permanently in a quasi boom.

If the Treasury were to fill old bottles with bank-notes, bury them at suitable depths in disused coal-mines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of repercussions, the real income of the community, and its capital wealth, would probably become a good deal greater than it actually is.

The obvious result has been an ongoing quasi-boom (as Keynes has predicted) but which ultimately will be faced with the restrains from natural the law of economics which equates to a prospective bust (from the Austrian perspective).

The desire to uphold the Keynesian unemployment goals will backfire and result to China's version of today's MENA political crisis.

First video is from Dateline


Second video from AlJazeerah

To quote the great Ludwig von Mises,(bold highlights mine)

There are still teachers who tell their students that “an economy can lift itself by its own bootstraps” and that “we can spend our way into prosperity.” But the Keynesian miracle fails to materialize; the stones do not turn into bread. The panegyrics of the learned authors who cooperated in the production of the present volume merely confirm the editor’s introductory statement that “Keynes could awaken in his disciples an almost religious fervor for his economics, which could be affectively harnessed for the dissemination of the new economics.” And Professor Harris goes on to say, “Keynes indeed had the Revelation.”

There is no use in arguing with people who are driven by “an almost religious fervor” and believe that their master “had the Revelation.” It is one of the tasks of economics to analyze carefully each of the inflationist plans, those of Keynes and Gesell no less than those of their innumerable predecessors from John Law down to Major Douglas. Yet, no one should expect that any logical argument or any experience could ever shake the almost religious fervor of those who believe in salvation through spending and credit expansion.