Electrifying the railroad, a miracle, a Taiwan miracle

In 1949, with a communist regime in mainland China, and a capitalist regime in Taiwan. It was an economic race to show which system worked the best in a Chinese context. We will explore how the outcome was a Taiwan miracle.  So slip on your smoking jacket, fill your pipe, take your first sip of your adult beverage and sit back in your most comfortable chair. Welcome to todays offering from The Philatelist.

The stamp today was made by the time it was clear that the Taiwan economic system was working better than the communist system was on the mainland. It was also the time when Taiwan was turning inward having been ejected from the UN. So a set of stamps showing construction projects around Taiwan is instead designed for bulk domestic postage rather than preaching success far and wide.

Todays stamp is issue A365, a $2 stamp issued by the Republic of China in 1976. It shows a project to electrify railroads. It built on an earlier set of stamps from 1974 that showed other infrastructure construction projects around Taiwan. The later issues are identifiable by the denomination being in outline numerals instead of solid ones. According to the Scott catalog, the stamp is worth 25 cents whether it is mint or used. This is true for most of the stamps in this large issue over several years.

The capitalist versus communist struggle between the Chinas had several advantages in the favor of Taiwan. The leadership around the long term leader Chiang Kai-shek had managed to take with them the gold supply and the foreign currency reserves of China. China was not overly endowed with such reserves but now it was for a country of 20 million people instead of 600 million. It was enough to establish a solid fully backed local currency.

The second advantage was that many of the business and intellectual leaders of China came to Taiwan with Chiang. There was also the fact of fairly free flowing aid from the USA, not all of which went to Taiwan’s military. It allowed for a land reform in Taiwan similar to what was done in Japan that got the farmland  from absentee landlords and to the peasants that actually worked the fields. The results were big increases in output and a freeing up of much labor toward industrialization.

This industrialization was fast and successful. Free trade areas were set up that allowed Japanese firms to relocate electronics production to Taiwan to take advantage of low salaries and lax environmental laws. These were then allowed into the USA under favored nation trade status. What turned out even more important were the small factories set up privately within families with private money. By the time of this stamp, the average citizen of Taiwan was living a lifestyle comparable with developed nations, 20 times the average mainland Chinese. A Taiwan miracle.

Taiwan was still a one party state so not completely free. It was also suffering from the effects of the international exclusion and being separated on a personal level from their cousins on the mainland. The rising lifestyle also lead some of the manufacturing to seek even cheaper sources of labor.

Well my drink is empty so I will open the discussion in the below comment section. Come again tomorrow for another story that can be learned from stamp collecting.

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