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Day 66 – It’s Vietnamese for Capitalism

May 8, 2010

Dateline: Ho Chi Minh City (Saigon), Vietnam – Saturday, May 8, 2010

Vietnam is a communist country. There is no freedom of the press. There are no elections. The country is bathed in mother Russia red, yellow stars, and the cold war hammer and sickle. There is but one political party and it is socialist. The government controls the means of production. The government, however, does not command the army—the communist party does. When I checked into the Ha Vy Hotel here in HCMC, the hotel submitted my name, passport number, and visa information (and the information of all the other guests) to the local police. I am being monitored by the authorities.

In addition to the command and control credentials, the country has a less than stellar reputation amongst travelers. More than one person on the road has warned me that I need to check with multiple proprietors for prices of tours, buses, or rooms. Some tourists have paid $25 for tours that cost another person only $4. Cab drivers will sometimes quote you prices ten times the typical rate for trips across town. In Vietnam, if you’re going to pay the lowest price, you’re going to have to keep your head on swivel and be willing to bargain.

Westerners often complain that they’re being cheated. If the moto driver is willing to take 15,000 dong ($.85) for a trip to the War Museum, why would he try to get me to pay 150,000 dong ($8.50)? If I can buy the bus ticket directly from the bus company for $5, why would the tour company charge me $20? To many tourists, it seems like everyone around is running game. It’s a giant hustle. The locals are all cons and we Westerners are their marks.

And here, my friends, lies a great irony: the Western travelers are complaining that the local communists are being too capitalist. The citizens of ostensibly free market nations can’t handle themselves in their own economic system. They don’t want to be “cheated” they want the “real price.”

Think about it, though. What is “price”? It’s an Economics 101 question. Isn’t price really just what a seller and buyer agree is a fair amount for the service or good in question?

You see it all the time. Some baseball memorabilia collectors are will pay $1 million dollars for a rare baseball card. Fashionistas will fork over $50,000 for a custom made designer dress that they’ll wear only once. The health conscious will pay $50/hour for instruction from a yogi or personal trainer. Believers will give 10% of their income for the services rendered by their local church, mosque, or temple.

How much are all these things worth, anyway? When it comes down to it’s just cardboard with a ballplayer’s picture on it; it’s pieces of colored cloth stitched together by illegal immigrants; it’s professional physical abuse; it’s the maintenance of one’s eternal soul. These goods and services are valuable to some, worthless to others. Some will pay; some will not.

The reality is that there is no universal “price.” We each have to decide how much something is worth. Don’t think the Picasso is worth $5 million dollars? Then don’t pay the seller for the painting. Think $60/hour is too much to pay for that pierced, tattooed babysitter? Don’t take his offer. Instead, call around and see if someone’s willing to take less.

A price is really just what a customer agrees to pay and a proprietor is willing to accept. That’s the heart of capitalism. People have the freedom to choose. They have the freedom to make “mistakes” or reap “windfalls.” The foolish pay too much to the savvy. The inept sell for too little and go broke. It’s nothing personal; it’s just business.

The only place where there is a “real price”—a price that exists outside the relationship between buyer and seller—is a command and control economy. A top-down system where a central power determines what a seller should sell for and what a buyer must pay. In other words, a communist system.

The beauty is that it’s here, in one of the world’s few communist regimes, the locals are engaged in the highest forms of capitalism and market freedom. The traveling masseuse riding around on the bicycle shaking a rattle; the lady with a stack of books propped on her hip; the driver asking, “You need moto?”; the tour operator working on commission; the girl hauling around a drawer full of gum, toys, lighters, razors, and toothpaste–they’re all going to try to figure out how much you’re willing to pay then they’re going to charge you that amount. If you purchase, it’s because you were willing. If the price were really too high, you would have forgone the good or service. Or, you’d have tried to buy it from someone else.

So suck it up Western travelers. We’ve grown soft living in countries where everyone’s rich and willing to pay roughly the same amount for a good or service. We’ve lived too long in a world where market information flows freely—a market where there are few inefficiencies.

The people here are poor. They’re hungry. They will work market inefficiencies to their advantage. It’s our fault that we don’t know the market; that we don’t know that just around the corner we could pay half. These people are cousins to Wall Street’s cutthroat bond traders and hedge fund managers. Like their more respected brethren, they’ll sell at whatever price the market (we) will bear to get that last dollar.

Don’t hate. It’s all in the capitalist game.

Photo “Gallery”

4 Comments leave one →
  1. May 12, 2010 10:41 am

    TOO right, brother!!

    Preach it!


    • May 13, 2010 4:36 am

      Strange how capitalism seems to be going stronger in communist Vietnam than it does in the U.S. I suspect Vietnam even has fewer tariff laws and more free trade. Wouldn’t that be the irony of ironies–Vietnam being more economically open than the father country of capitalism.

  2. sally permalink
    May 12, 2010 11:14 am

    oh, thank god for our privileged middle-class liberal arts education. otherwise, we would never be able to make such erudite observations.

    • May 13, 2010 4:40 am

      Neither would we know how to use the word “erudite” in a sentence. Perhaps all that debt wasn’t for naught.

      I think I noticed the phenomenon also because I’m more libertarian and free market than most other Westerners. I like and accept the benefits of chaos.

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