We keep hearing about pre-fabricated cities designed for millions of people popping up all over China. With the hundreds of millions of people arriving into cities from the countryside, this might be a simple solution to an overcrowding problem. Besides the clear impression that China hasn’t learned much from New Urbanism, there’s also the problem of these planned cities failing. China is trying to plan these things en masse, and not letting them grow organically. Perhaps twenty years down the line they will be a useful, though crumbling, investment. Until then, there will be the few residents wandering like post-apocalyptic zombies through a landscape of empty skyscrapers and the shells of extravagant museums.
This essay by Krugman on Asian development was being posted everywhere for a while. Everyone was trying to predict things about China with it, which is of course silly, but it is very useful as a bit of economic history. When writing about pretty much anything, people forget what they had learned in the past and pretend like everything is new. Or they just don’t learn about the past, which is just as bad.
…The leaders of those nations did not share our faith in free markets or unlimited civil liberties. They asserted with increasing self confidence that their system was superior: societies that accepted strong, even authoritarian governments and were willing to limit individual liberties in the interest of the common good, take charge of their economics, and sacrifice short-run consumer interests for the sake of long-run growth would eventually outperform the increasingly chaotic societies of the West. And a growing minority of Western intellectuals agreed.
The gap between Western and Eastern economic performance eventually became a political issue. The Democrats recaptured the White House under the leadership of a young, energetic new president who pledged to “get the country moving again”–a pledge that, to him and his closest advisers, meant accelerating America’s economic growth to meet the Eastern challenge.
The time, of course, was the early 1960s. The dynamic young president was John F. Kennedy. The technological feats that so alarmed the West were the launch of Sputnik and the early Soviet lead in space. And the rapidly growing Eastern economies were those of the Soviet Union and its satellite nations.
…We all do a primitive form of growth accounting every time we talk about labor productivity; in so doing we are implicitly distinguishing between the part of overall national growth due to the growth in the supply of labor and the part due to an increase in the value of goods produced by the average worker. Increases in labor productivity, however, are not always caused by the increased efficiency of workers. Labor is only one of a number of inputs; workers may produce more, not because they are better managed or have more technological knowledge, but simply because they have better machinery. A man with a bulldozer can dig a ditch faster than one with only a shovel, but he is not more efficient; he just has more capital to work with. The aim of growth accounting is to produce an index that combines all measurable inputs and to measure the rate of growth of national income relative to that index–to estimate what is known as “total factor productivity.”
…When economists began to study the growth of the Soviet economy, they did so using the tools of growth accounting. Of course, Soviet data posed some problems. Not only was it hard to piece together usable estimates of output and input (Raymond Powell, a Yale professor, wrote that the job “in may ways resembled an archaeological dig”), but there were philosophical difficulties as well. In a socialist economy one could hardly measure capital input using market returns, so researchers were forced to impute returns based on those in market economies at similar levels of development. Still, when efforts began, researchers were pretty sure about what they would find. Just as capitalist growth had been based on growth in both inputs and efficiency, with efficiency the main source of rising per capita income, they expected to find that rapid Soviet growth reflected both rapid input growth and rapid growth in efficiency.
But what they actually found was that Soviet growth was based on rapid growth inputs–end of story. The rate of efficiency growth was not only unspectacular, it was well below the rates achieved in Western economies. Indeed, by some estimates, it was virtually nonexistent.
It goes on to discuss Singapore, Japan, and China. It is shocking to realize how much improvements in accounting were important to economic analysis. One note to this article: Singapore now has a higher GDP per capita than the USA in PPP terms but not nominal terms.
Well it’s that time of the year again – time to predict the decline of America. The two currently making the rounds are in The Atlantic and Foreign Policy. Everyone’s worrying about how China’s going to eclipse the USA soon, and the other members of BIC aren’t far behind. Of course, what should really matter is GDP per capita, where we’re realistically doing pretty darn well – though I still think these statistics are misleading (maybe a better calculation is here?). But in terms of world power, we’re unerringly headed down a much more multipolar path – especially if Europe can ever get its act together.
But as the Atlantic article points out, in a lot of ways we’re already doing pretty poorly. Take infrastructure, for instance; driving in San Diego often feels like you’re in a warzone with all the potholes, and the rest of California isn’t doing much better. Of course, part of this has to do with the time they were built. Go look at China’s shiny new highways in sixty years! But that’s also the problem – our infrastructure is old, and we’re not doing enough about it. And everything we need to do – improve education, stop discouraging immigration, improve our transit system – is being held back by conservative fears. Sometimes people have a hard time realizing they’re not as great as they think they are.
But nothing ever stays the same; everyone likes to talk about how people said the same things about Japan twenty years ago, and look how that turned out. Of course, they’re assuming that we’re not going to be the ones making the mistake this time, but on the broader point they’re right. The future is never how you predict it will be. There’s one thing that will remake the world in ways that we can’t imagine, and no one’s thinking about the consequences of it: artificial intelligence.
No, I’m not talking about the talking robot, super-intelligent type of AI. I’m talking about the kind we have now. The boring kind. The kind that can beat grandmasters at chess, clean your carpets, and find answers to your questions. How many people are really aware of how large of a paradigm shift this will be? What happens when we can automate intelligent work? Plenty of financial services are already done by computer – and can dominate slower, human-based stock investing techniques. There’s plenty of chatter about news aggregators that can read clips of information on the internet and actually write news stories – so long news journalists. People will still clearly be employed in the future, my point is that things are going to change so dramatically, how can we begin to predict what will be happening in the world in the next fifty years?
The Guardian has an in-person account of who weakened the Copenhagen accords and how they did it – with his finger pointing at China. It aligns with what I’ve heard whispers of in the blogosphere since late in the talks, which either means people had assigned blame ahead of time or there’s some truth to it. I’m somewhat dubious of the idea that the intention was to humiliate Obama, and I’m also unsure how much of this is a misunderstanding of internal values (ie, trust, face, etc). But what is most important about the article is the perception of China, and who is in their ring of influence. The article specifically mentions Sudan as a China-puppet, but I’ve heard elsewhere that a lot of the G77 talking points seemed directed by China (again, we’re look at the perception rather than the truthfulness here). I’m also interested that India manages to escape blame despite supporting China on a lot of the maneuvering.
And then you have China’s reputation in its local neighborhood. Unsurprisingly, their neighbors – even their good friends like Vietnam – are becoming a little edgy. And I’m talking about a mix of the citizens and the governments. It was really a matter of time, especially with all the history between these countries, before this happened. The question is whether it will force China to modify their current cheap-labor, cheap-product export model sooner rather than later?
The other area that’s been getting a lot of press is the China-Africa relationship. In particular, China and Chinese companies are praised for their efforts at building infrastructure (roads, highways, etc.), as well as their interest-free loans and such. Of course, a lot of the loans have to be used to buy Chinese goods. And the Chinese companies dump Chinese goods that undercut local African products and drive them out of business. But the perception is that they’re doing great things there. I tried to find numbers on Western investment vs. Chinese, and couldn’t, so I can’t tell how different it really is – after all, Westerners have built schools, infrastructure, etc, but it could be small compared to what China has done. Anyway, for obvious reasons African governments and African citizens like them; one gets free a human rights pass, and the other gets cheap goods. Most importantly, China comes from a different historical position – one of mutual respect and not Western condescension. I’d be interested in a study in 5-10 years as to the effects of Chinese FDI in Africa.
Anyway, that’s where I place all this: China has strong influence in the G77, particularly with autocratic African countries. It’s starting to lose moral standing with developing Asian countries. And the West perceives Chinese companies as being more righteous than Western companies – which I predict will change within a couple of years.
Oh, and does anyone else find it interesting where India and Brazil are being cast in all this? Obama breaks into the meeting with the, uh, BICs; of the three, India is seen quietly supporting China while Brazil quietly disagrees?
Turns out the new battle for honor in East Asia is women’s tug of war. It’s pretty intense:
In Italy last year, the Chinese team protested loudly at the flag display, and then turned the flag around, according to Taiwan’s team.
Then came the political trash-talking.
“They would say, ‘you are a part of us,'” recalled Chen Li-hui, 26, a veteran of Taiwan’s national team since 2000.
Big mistake. Taiwan’s ladies didn’t take kindly to such provocation.
“We could have beat them very quickly,” said Chen. “But instead, we tortured them slowly before making them lose.”
I have always found people’s need for a “national language” quite strange. And this whole complaining that people don’t speak “our” language. Why do people care? I know, I know, it is tied up with other factors, but still. The idea that there should be a national language is fairly new, as is, I suppose, the concept of a nation in general. But here are some excerpts from a book talking explicitly about this phenomenon, and some of the disastrous (and ridiculous) irredentist consequences of it.
We still have this problem in multilingual states. Wales sometimes seems almost as secessionist as Scotland. Quebec has the persistent Bloc Qebecuois. China has Tibetan/Uighur troubles. Belgium is being torn apart. I guess Switzerland and India are the exceptions. Any ideas on why this is? Anyway, I liked this take on the issue:
Although there is more to nationalism than just language, the idea of identifying a political state with a single language is a central idea of nationalism. When you contemplate why it is that today we expect any state to have a single language and think of Canada or Belgium as “weird” (and don’t forget Switzerland), what you’re really contemplating is why the nation-state has become dominant in the modern world.
Among those who study such things, the standard and mainstream thesis is that there is a fundamental incompatibility between a multinational state and a modern state.
But as they say, a language is a dialect with an army and a navy.
Motivated by a fascinating travel photo, I’ve been digging into the world of cormorant fishing. Evidently, cormorant fishing arose independently across several regions in the world, which I suppose is a win for, um, convergent cultural evolution. It’s a fascinating look at the way people and animals interact.
See, what these fishermen do is catch cormorants and start training them to fish in a domestic fashion. They will tie a small band around the neck so that the bird cannot swallow large fish, though it can still gulp down the small ones. The fisherman and bird then work at night, crawling across the river on a boat with a bright light attached to attract the fish. The birds then mechanically hunt for the fish and bring it back to be spat out in a basket as you can see here.
This form of fishing arose in Japan, China, Europe, and Peru independently. There were regional variations; European cormorant hunting was more related to falconry, while the Chinese method actually domesticated the cormorants rather than using wild birds. The oldest record of this form of hunting is in Peru in the fifth century AD, and then a century later in Japan. At one point, a single cormorant was enough to feed a family. Now, however, the practice has devolved into little more than a tourist attraction.
The Economist has a series of articles pondering whether the economic crisis will lead to instability across Europe. The answer, inevitably, is yes. It has been well reported that Greece has already been rocked by riots. But did you know Iceland has been the site of large protests against the government, too? Perhaps the next place we should worry about is China. Already home to hundreds of protests against economic and political conditions every year, the Chinese economy has slowed below the target that the government believes is required for stability. In fact, some observers think that on a seasonally adjusted basis, there was no growth in the fourth quarter.
What may become difficult is disentangling which protests are fundamentally about economic conditions and which have other causes. Does a riot about overzealous police really have its root in economic factors? Do bad economic conditions lower the threshold required before a protest becomes appealing? Which of these would happen without the economy the way it is?
Update: Iceland loses.
Update the second: Eastern Europe losing.