Currently, China’s market order is relatively awful, but I believe everyone should also be full of hope. We Chinese throughout history have valued reputation. Looking back on history, many years ago we had contractual relationships. A piece of bamboo split in half, with each person having one end for comparison, was a contract. I previously mentioned Shanxi Remittance Firms. About two hundred years ago they issued what we today call a traveler’s check. They had branches in Saint Petersburg and Kobe. There were no central banks to examine and approve banks, anyone could start one, but there was no fraud. Why do we today have more and more controls, but fraud is also more common? This is an issue that deserves our consideration.
This quote is from Professor Zhang Weiying zhu in his book Shenme Gaibian Zhongguo (CITIC Press, 2012), page 177 (source Mao Money Mao Problems)
Some may see this as a post hoc argument. And it also seems an exaggeration to say there has been ‘no’ fraud, but perhaps, the fraud has been minimal.
Yet regardless of the moral justifications, every interventionism, which signifies as the use of organized or institutional violence, upsets the balance of nature to favor one party over another. Such political inequality provides motivation for repressed parties to resort to restoring the original balance through unorthodox or ‘illegitimated’ measures where fraud and corruption becomes part of the equation. This is the reason why informal or shadow economies exist and why political corruption thrives.
Generally, political controls encourage fraud, corruption and other (what media sees as) immoral acts.
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