Mr. Liu Dake | “Middle Income Trap” is actually “Failure of Political Reform”

@Mr. Liu Dake:

Many people think that the “middle-income trap” refers to the technological development of backward countries being blocked and unable to upgrade their industries.

This is not the case.

The so-called “middle-income trap” is actually “political reform failure”.

Because technological progress requires large-scale changes in the allocation of social resources.

If a place wants to build a computer chip research and production line, the social resources needed are completely different from those needed to build a jeans production line, and the work the government must do is also vastly different.

This also means that technological progress requires large-scale changes in the allocation of social power. The bureaucratic group must hand over a large amount of financial decision-making power and personnel appointment power to technical experts.

Then the question arises: In the past low- and middle-income stages, the bureaucratic group that emerged from the previous round of power struggles has already degenerated into vested interests, enjoying the demographic dividend to the fullest and becoming complacent. Now, any changes made by technical experts in finance and personnel are cutting into their “private land”.

So at this moment, how much willingness do the vested interests in the bureaucracy have to spit out the fat meat they have swallowed for the future of the nation and the well-being of the people?

The answer is very clear: no willingness.

Moreover, facing a common enemy, the vested interests in the bureaucracy will form a powerful power alliance, blocking the political activity space of technical experts and preventing precious social resources from flowing into the “scientific and technological research and development” black hole.

Even if a few hundred million are swindled by academic swindlers, as long as the swindler is still one of their own, it’s like the meat is still in the pot, not a loss; but if they really pay the graduate students, buy equipment for the professors, and build facilities for the universities, then it’s really a waste of money.

In this regard, an extreme example is, why do the underworld gangs around the world, no matter how much territory they occupy, only engage in the dirty business of pornography, gambling, and drugs, and are unwilling to build a factory to make a living?

Because building a factory requires a lot of money and people, and these money and people must be handed over to technical experts to manage. How can the heads of the underworld possibly hand over these vital powers?

So if you look through the historical books, you will find that those countries that have jumped out of the middle-income trap have all experienced a bloody storm at that time.

However, in the era when they jumped out, even the electric light had not yet been invented, and the resources touched by industrial upgrading were really limited.

And what kind of picture should today’s industrial upgrading have in relation to all social interests?