Sunday, May 15, 2016

Keynes belittled famous Chinese economist

Many of you have read my article about how Keynes belittled Jean Baptiste Say and Market Economics. Keynes built his reputation by dismissing his rivals. Keynes also belittled the most famous Chinese economist, Fan Li, the first scholar to engage in economic analysis. Keynes when asked if he knew about Fan Li's theory stated he did, "Buy low, sell high." Keynes was ahead of his time. He twice misstated a rival's economic views to belittle them and by inference advance his own theory. This is precisely the technique employed by today's media economists to promote their viewpoints.

Let's spend a few moments looking at some of Fan Li's ideas and see if he deserves to be dismissed. We should use his proper Chinese name, Tao Zhu Gong, in this discussion. First, we should acknowledge that Tao Zhu Gong's ideas are still studied and applied in China and Chinatowns throughout the world with great outcomes. Whether it is Singapore, Mumbai, Dubai, New York, London, Paris or San Francisco, Chinese business people are highly admired for their expertise. This expertise is founded on principles first expressed by Tao Zhu Gong. His ideas stressed that an entrepreneur should be decisive, but cautious in borrowing, never procrastinate, but be flexible and accommodate change.

Many of Tao Zhu Gong's business principles seem very modern. He emphasized being sensitive to customer wants and needs. In the 1980s Michael Porter's five forces theory was seen as the basic tool of business management. The idea was that a firm's survival rested upon defending against competitive forces. One of those forces was the power of customers to switch loyalties. It took companies like Walmart and Costco to deliver customer's desires for quality and low price to reveal the flaws in Michael Porter's model and support the basic ideas of Tao Zhu Gong. Walmart and Costco became the model for "customer-oriented" product offerings and "single-minded" in their determination to control costs (Tao Zhu Gong ideas in quotes). Apple is another company that followed the path Tao Zhu Gong set out, "Be captivating in your sales promotion." Their TV advertisements sticking it to the IBM machine followed this Tao Zhu Gong dictum. Amazon is another company that achieved great success by following another Tao Zhu Gong's dictums, "Be selective to recruit only the best." Amazon is well known for seeking the best people.

The loyal followers of Keynes and Marx spend all their time trying to justify why their leaders economic pronouncements did not meet with success when implemented. On the other hand, followers of Tao Zhu Gong and Jean Baptiste Say can list thousands of examples of real world success and draw a straight line from a modern example to one of the principles of the Tao Zhu Gong.

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