Communist Vietnam is more capitalist that the West

I am on holiday in Vietnam and yesterday went to Ho Chi Minh's tomb in Hanoi. The Vietnamese Communist regime has developed all the trappings of a Leninist persnality cult around their former leader, right down to his carefully preserved corpse on display in a glass sarcophagus in a monolithic tomb. But it is apparent that Ho Chi Minh was a modest man. Near to the tomb and the immense French-colonial Presidential Palace that his Party cadres wanted him to occupy, is Ho Chi Minh's house, a modest bungalow on stilts in the style of traditional houses of the Vietnamese Northwest. The house suggests a self-effacing man who wanted none of the trappings of leadership.

Today, Vietnam is like a mini-China. Still ruled by a Communist Party that does not tolerate direct political challenge, nevertheless it is in practice a booming, dynamic place that in many ways seems more free than New Zealand. It is in everything but name a capitalist society, where most urban people run small businesses and rural people private farms, and the state interferes little with their lives. There is no free health or education, other than for the families of Party apparatchiks and former soldiers, and no welfare system. Indeed, if the anarchy of the traffic on the streets of Hanoi is anything to go by, the Vietnamese state seems to consider its citizens are perfectly capable of managing their own lives and ordering their affairs with little help from the government.

Whenever I visit a place like Vietnam, it becomes apparent that the future belongs to the people in such booming, unconstrained economies. In the West, we have become profligate and coddled by our governments, with the result that are increasingly unable to compete. It started with manufacturing, initally of unsophisticated product such as toys and clothing, and more recently of electronics and other high-technology goods. In places like India and the Phillipines, they have moved on and now lead the world in services such as call centres and software development. The West still leads in the development of intellectual property-based services such as design and entertainment, but there is no reason to doubt the Chinese and Indians, and eventually, the Vietnamese, will crack those industries too.

It is ironic that we in the West like to style ourselves capitalist societies. There is no doubt that Communist Vietnam is more capitalist in pretty much every way than any Western economy. Perhaps the only advantage we have is our lack of corruption and our rule of law, but it is no coincidence that these are the areas to which Chinese president Xi Jinping has turned his attention. It is apparent from the palatial houses and flash cars in the area of Hanoi where government officials tend to live that Vietnam also has a long way to go in this regard. But my guess is that, like China, this will become a necessary focus of the Vietnamese leadership as they strive to deliver economic growth and a standard of living to match our own. 

In the race to economic superiority, I know who I would put my money on.