Toms Shoes Philanthropy vs China

Blake Mycoskie had an interesting idea by selling shoes and donating a pair of shoes to poor kids in South America for each one sold. And later on he responded to criticism by moving 40% of his manufacturing to 3rd world countries. Creating jobs in poor areas is great.

But if you want to make a really huge impact and create massive amounts of jobs I would recommend doing what China did after Mao died.

  • The result was not creating jobs and lifting 100,000s of thousands out or poverty.

  • Nor did it lift 10 millions people out of poverty.

  • Rather, it lifted 100s of millions of people out of poverty. More than any philanthrophic gift or any other force. See the video here to see how many were lifted out of poverty.

Ronald Coase and Ning Wang explain more in depth how it happened:

There is no doubt that the post-Mao Chinese government pursued a series of reforms. But today, with the benefit of hindsight, we know that the economic forces that were really transforming the Chinese economy in the first decade of reform were private farming, township and village enterprises, private business in cities, and the Special Economic Zones. None of them was initiated from Beijing. They were marginal players operating outside the boundary of socialism. For these marginal forces, the Chinese government was happy to leave them alone as long as they did not threaten the state sector or challenge the Party’s political power. This created a room for what we called the “marginal revolutions” that brought entrepreneurship and market forces back to China during the first decade of reform.

Read more here: https://www.cato.org/policy-report/januaryfebruary-2013/how-china-became-capitalist

Listen to Blake Mycoskies's talk on the podcast "How I Built this".

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