Planned vs. Self-Emergent (cntd.) Prof. Lin Yifu's economic theories provide another perspective on why self-emergence is a better way of development than planning (though he didn't use the word "self-emergent"). He has demonstrated clearly that healthy and sustainable fast growth of an economy can only be achieved by developing products and industries that match its endowment structure at any given time. The planned economies of the Former Soviet Union and China failed because they tried to build up capital-intensive heavy industries when their endowment structures were labor rich and capital scarce, in an attempt to quickly catch up western economies which had already reached the development stage of capital-intensive heavy industries then. A planned economy and all the distortions in prices and resource allocations were rational choices that followed their goals and strategies: it was simply impossible for those capital-intensive heavy industries they had created to survive by themselves on free markets. On the contrary, the economies of the four Small Dragons in East Asia (Singapore, Korea, Taiwan and Hong Kong) have flourished from beginning with labor-intensive products and industries and then upgrading to more capital-intensive products and industries, and this has been achieved in a self-emergent manner with no clear vision of fast future growth: not that they didn't want to develop heavy industries then, but their limited natural resources made them realize soon that they could not afford such a distorted economy and abandoned it soon. I would like to think that capitalism has been doing better also has to do with self-emergence. And those indigenous societies are more resilient facing climatic changes because, without modern technology to change natural environments, their economies have grown in a self-emergent way that suits (not defies) the natural environments. It is not hard to see this applies to personal development as well. Doesn't a person perform better when what he does matches his talents/inherent traits? And doesn't his effort be further sustained by his curiosity and fondness of what he does? To discover his talents or internal traits and develop accordingly, is there a better way than following his instincts (through self-emergence)? Hasn't Prof. Lin convinced us how an economy suffers even with a clear goal and a rational plan if the plan doesn't match the inherent endowment characteristics and how easily a rational plan can ignore or fail to detect the inherent endowment characteristics?
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