Li Zhao Schoolland
Li Zhao Schoolland, who lives in Honolulu, Hawaii, is an independent educator, writer, translator and event organiser. She is also the Founder of TFT Events, and represents Acton Institute in Asia and Pacific countries. Schoolland was in Nepal recently for the Liberty Camp that was organised in Bandipur. While speaking to Business 360, Schoolland spoke about how she survived 26 years through the horrors of Mao’s regime in China and how that motivated her to a lifetime of promoting freedom and liberty globally through the organisation of Austrian economics and entrepreneurship conferences and summer camps over two decades in Eastern Europe, Asia-Pacific, and North Africa. She also arranges translation and publication of libertarian literature in China, and coaches parents in raising liberty-minded youth.
There has been a lot written about your hardships while growing up in China. Could you share a little of this journey with our readers?
I was born in China in 1958 around the time when the Communist Party started the Great Leap forward. That particular movement was very bad for economic development and brought the country to the ground. This was followed by three years of famine and millions of people died during that period. Then in 1966, China started the cultural revolution where more people died. Since my family was educated and were entrepreneurs and capitalists, we were punished by the communist regime. We lived in a very terrible situation.
The communists first took everything we had – our land, houses, businesses – and then my father was put in prison. In 1969 they sent my family from the city to a very remote countryside where we did not have running water or electricity. It took us three days to get there and we were ordered to live in that region for nine years, and finally, in 1979 we were able to return to the city and I was able to go to university.
During that period, the government had divided the population into two groups – one was red – the communists, and others like us were classified as black people. The blacks were people who had education, property, and those who did not agree with communism. The society was basically segregated. Since we were categorised as blacks we were not allowed to participate in extracurricular activities like painting, music, dance and sports. Even the train stations had two gates – one for reds and another for blacks. We had so-called leaders who did not even know how to read and write and had no property. The entire society was turned upside down. The communists had told the masses that they would give them equality, that they would help the poor to get property, and that they would punish the rich. What they actually did was to take what the people were producing and gave it not to the poor, but kept it for themselves. And at the end, the result was that everybody was poor, nobody was producing anything, anymore. We were equal in terms of poverty. But politically we were not equal because they had divided people into different groups.
The communists wanted educated people to be re-educated by the workers, just to make us do labour work. So, I am very surprised that people in Nepal still embrace the communists and the Maoists because I think people here haven’t experienced that horror. I am a survivor, and I know that when the communists succeed what kind of equality they provide and I am quite worried about what China is doing in Nepal. I am worried that Nepal could be the next Sri Lanka; very worried.
Even when you look at the present situation in China, people are trying their hardest to leave the country. I have a lot of friends who are professors, engineers and doctors and they would rather go to the United States as a poor person and live on government welfare than be a doctor or professor in China. This tells you that the communist agenda is not for the benefit of the people, it is for power. All they want to do is hold on to the power and rule over people. This is visible from how they are currently handling the Covid pandemic. The world is managing and living with the pandemic, but China is trying to control the pandemic. Now some Chinese people are saying that the government could not and cannot control the pandemic but they are only successfully controlling the people.
It is quite scary because when the communists controlled everything when I was growing up, they decided where we could live, who we could marry, what job we could have, what salary we got, and what and how much we could eat. For example, only Muslims were allowed to eat mutton. You could have a shower once a week and a haircut once a month. They gave us a certain amount of food, meat, cooking oil. Fabric for clothes was also provided. Everything was decided for us. Literally, everything was decided by the government. The result was that we were constantly hungry. The government put in three more families in the house we were living in. That’s the type of equality they provide. Even as a woman you had no choice to stay home with children and cook for the family. You had to go to work because men and women were equal. They didn’t believe in family. They put children in boarding schools.
The communists are not what they say they are. You have to know what they will do to you. I lived in China for 26 years; I experienced the ordeal from 1958 to 1984. And I also experienced reform and openness. They later opened up the market like how it is here in Nepal and people could sell things on the sidewalks. But 10 years down the road, the government said it was too chaotic; there were too many people doing too many things so they closed that too and took back control. Now with the pandemic, the Chinese economy is going downhill so fast, they are considering opening the sidewalks and allowing people to have some freedom to sell things to survive on their own. They know the power of markets but they don’t want people to have it because control is all they want. So, I hope more people in Nepal will realise these dangers and say no to communism.
I left China in 1984 but I have been going back quite often. I work with the people in China who are free market economists, and people who don’t like communism.
When does a free-market economy entail?
A free-market economy basically means having economic freedom, and when there is very little or no government regulations. Also, in a free-market economy the taxes are low and there are sound monetary systems in place so that the currency is stable. It is not about printing money as we want. It is also about open trade; not only domestic but international too. People should be allowed to trade freely. For instance, if I have apples, I should be allowed to give them to you for the fish that you have in exchange.
In a free-market economy, we have open trade between people, provinces and also internationally. When there is an open policy, it means you allow any country, be it India or China or any European nation, to sell whatever they want to sell to you provided they are legal commodities and hopefully they will have the same policy that allows you to sell things from Nepal in their country. But even if they do not open their market to your products you shouldn’t say, “If you don’t let me sell my things in your country, I will also not let you sell your things in my country.” That would be wrong. Hong Kong is a very good example of a free-market economy. They don’t care whether you buy their products or not. Anybody can come and sell their products, open offices, open banks, can do businesses. That’s why Hong Kong grew so fast even without having natural resources as such. It is so dense with so many people and it is one of the richest cities in the world. Now China has taken back Hong Kong and it wants to control things.
For a free-market economy, rule of law and property rights are also very important. For example, China doesn’t have rule of law or property rights. Their capitalist market economy is actually state capitalism. The government owns nearly all the businesses so people don’t really benefit from it. And when a government owns businesses, it is so easy to control and get things done. However, they are very wasteful because people who make decisions are not the owners. If you are the owner of a business, you are responsible for the returns on your investment, your profit, and also the longevity of your business. But state-owned businesses don’t care. You are fundamentally just working for the government. Also, you keep changing jobs and the decision you make is not something for the best outcome of the enterprise. Hence, there is always huge waste in state-owned enterprises. I am sure Nepal has government owned companies that are literally loss-making ventures. Another example I could give is about China where there are ghost cities because they were built but nobody lives there. And just recently, the owners of apartments in those ghost cities have refused to pay the mortgage. People are not living there because there are no hospitals or schools or supermarkets; people cannot live there. The owners are saying they have no jobs due to the lockdown hence they cannot pay. So, that’s not a true market economy. It looks good for the short term and the government did make a lot of money. The government is very rich in China but the people aren’t.
Sometimes people say China is the second largest economy but it is only the government that is rich and not the people. That is why China has so much money to put into the One Belt, One Road initiative. That is basically just dumping money to buy influence. I think there is so much potential in Nepal because you have rule of law and also property rights. We need to help the people become wealthy and not the government. You need to prioritise people, open trade and not print money. And just use Hong Kong or New Zealand as examples. In Nepal it is not that difficult for the country to prosper.
You said that the Belt and Road Initiative was launched by China basically to buy influence. Do you imply that Nepal should not be a part of it?
I would advise Nepal to stay away from it because the Chinese government’s intention is to export their products and have political influence. If you look closely, you will realise that none of the Chinese projects have really benefited the local people or the local market. The Chinese government gives you money firstly at a very high interest and they make you use that money to hire a Chinese company to build the project, be it roads or bridges or anything. It actually damages the local economy. I would advise the Nepali government to welcome market investment and not government money. There are many American, German, Japanese and Korean companies which are very good at investing that you could invite. These companies tend to use local materials like cement manufactured in Nepal and hire local people which means there are job opportunities. You should welcome such investments and not Chinese style investment.
The interest rate on the money provided by China is very high because they don’t ask you questions. It is pretty easy to avail funds – you ask and they give. However, people don’t know what’s behind it, about the strings attached. I was recently in Africa and there too many people have started realising the fact that they have to say no to Chinese investment. India, for instance, has refused to be a part of the BRI because they know what it actually is. The Chinese government wants your political leaders to favour them when required at the United Nations. They also want to make the Chinese currency a global currency. However, a currency without the rule of law behind it cannot be relied upon. They could sign a contract with you today and walk out tomorrow; how can you trust that. When there is no rule of law or no property rights then there is no responsibility and when there is no responsibility, it is very dangerous.
In what ways can Nepal build sustainable economic development?
I think the one thing you do well is that you allow your people to go to other countries and they send money home. Some might not agree but that is very good. You should always open your country – let your people go abroad and allow foreigners to come to start businesses. You should open trade and not put-up trade barriers. Free trade is very essential. People should be allowed to sell things and there should not be many government regulations. I really don’t know how easy or difficult it is for you to do business here. For example, if I want to start another magazine then how easy or difficult is it do so? I have seen many hotels in Nepal so I guess it must be easy to open hotels. The process to do business must be easy. There should not be a lengthy licensing procedure and taxes also have to be as low as possible. People should have the incentive to work. Taxes should not be a burden – if taxes are low people will be willing to pay them and consequently government will have more revenue.
I would also recommend the government stop subsidies. I am not aware whether you have subsidies for farmers here but I would suggest you to stop if you do have. Farmers know how to grow crops and sell them. You just need to create an enabling environment. In the long run, subsidies actually hurt the economy. I have noticed during my stay that the roads are a very big problem here. You should allow private players to build the roads and charge a certain amount for you to use the road or may be railroads for that matter. In Japan, it is the private players who build all the railroads and it has solved their transportation problems. The reason why I have emphasised transportation is because it is probably the most important thing for any country to develop.
When the government stops having hands in all sectors, things will change for the better and it is not difficult to do so. The government just needs to make a decision like in New Zealand. When New Zealand stopped growing and became the poorest among the industrialised nations, they stopped all the subsidies and privatised a lot of things. They even did away with the rule of having to renew one’s driving licence every few years citing that the more you drive, the better you become. It basically cut out such government spending and stopped all regulations and subsidies and economic growth was so fast they became one of the richest. You don’t need money or something to do all of these. There are so many political parties in Nepal and I hope someone will have some common sense and do something to that effect.
The other day I had gone to the market and I saw so many people selling various goods along the roads. They weren’t many people buying but I am sure those selling the goods are definitely making a living. That is a very good sight to behold as it shows market activities are taking place. However, the road was really bad. I think the people are waiting for the government to fix it. If they don’t wait for the government and just fix the part in front of their house or shop you could have a beautiful road. The government says it will fix the road and everybody sits back and waits for things to happen. And they wait year after year and nothing happens. I was in Nepal ten years ago and I see it is the same. Probably if the government said it will not build the roads, then everybody will, the businesses will. It is not much money – just the road in front of your shop. And people can come easily to the market. So, these are what we call the invisible hands. The businesses will cooperate and do things together because it is for their own benefit.
What are the core values of liberty?
The core values of liberty are rule of law, property rights, and freedom with responsibility. Freedom is not whatever you want to do. It means the freedom to say no to coercion, to dictatorship. My freedom should be on the foundation of not violating your freedom. It is about respect and if my freedom violates your freedom then that’s not freedom. That aspect is very important.
Freedom means I should not be able to coerce or force you to do things for me. For instance, if I want your watch, you should have the choice to say no. But if I take it then that’s wrong. It’s wrong for me to do it to you and it is also wrong for me to ask the government to do it for me. Most people these days ask the government to do things on their behalf. So, what is happening these days is that the government takes your money and gives it to me through taxation. You earn the money and the government takes a portion and gives it to me because I say I don’t have any, that I want a free school, free housing, free medical care. The government does not produce so where does it get the money – it is from you and then they redistribute. The more I ask from the government, the more the government will take from you. People should stop asking the government to do things. Moreover, the more we ask the government will have more power too.
Freedom or liberty is fundamentally my right to be able to say, for instance, that I don’t have the money to send my child to school so I will teach them at home. If the government says I can’t do that and sends them to school, then who is paying for it? It is from you through taxes. So, the basic principle is if there are things I cannot do to others, then I cannot ask the government to do it for me.
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