Pudong is prosperous in just this way. An article in The Asian Wall Street Journal said of the government officials in charge of Pudong: “Harking back to their authoritarian instincts . . . they are deploying every tactic to fill the cavernous neighborhoods they’re building.” The article said that foreign banks are told they must have headquarters in Pudong if they want to do domestic- currency business, and that the International School had been moved there in hopes of luring foreign executives to the empty apartment houses. Of Shanghai in general, The Asian Wall Street Journal said, “The city was, quite literally, ordered to be great.” The Chinese Communists are attempting to build capitalism from the top down, as if the ancient Egyptians had constructed the Pyramid of Khufu by saying, “Thutnefer, you hold up this two-ton pointy piece while the rest of the slaves go get 2,300,000 blocks of stone.” A few months after I took my tour of Pudong, a famous economic crisis developed in Asia. And I had been staring out my bus window at the cause of it. Pudong-like senselessness had been going on all over the continent. Instead of money being invested where that money would make as much more money as possible, money was invested in strange, showy stuff. Some of these bad investments were made due to “national industrial policies,” some because of corruption, some out of local pride, and some for murky political reasons. From Thailand to Japan, bad credit had been extended, bad equities had been sold, and bad ventures had been subsidized—all in the hope that success could be had by some method other than succeeding. Of course, if I’d been able to see this disaster coming with the fore - rather than the hind - type of sight, I’d be too rich to be writing a book. But I’d have been wrong about the Asian economic crisis anyway. Since Pudong is the worst example of Pudong-style misallocation of capital, I would have expected the business failures to have started in China. But China has no floating currency rate to sink. And its securities market is not free to go into free fall. And the ordinary people of China live in desperate poverty. So when a depression comes . . . they live in desperate poverty. On my last day in Shanghai, I went to an open-air antiques market—junk market, really—with flimsy booths containing a few old vases and bracelets, and lots and lots of Mao buttons. I found a poster from the Cultural Revolution
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