Globally, the number of people living in extreme poverty ($1.25 a day) is shrinking. The global poor are not getting poorer. The world population grew from 4.5 billion people in 1981, to 6.9 billion in 2010, - a 60% increase. The percentage of people living in extreme poverty in developing nations dropped from over 50% to 21%. (From about 1.95 bil to 1.2 bil - and estimates are now well below 1 bil in 2015.)
That doesn't mean life just above the extreme poverty line is desirable. That doesn't mean there isn't a great deal more to do. But let's be honest about the trajectory. And let's also be honest that central to the decline in extreme poverty has been inclusion of the poor in networks of productivity and exchange - that is to say, they embraced some form of market capitalism. Unqualified dismal of "capitalism" (almost never defined by critics), as some religious leaders are prone to do, should be challenged.
The rapid spread of Christianity is forcing an official rethink on religion. ...
... In April one of Wenzhou’s largest churches was completely demolished. Officials are untroubled by the clash between the city’s famously freewheeling capitalism and the Communist Party’s ideology, yet still see religion and its symbols as affronts to the party’s atheism. ...
... Christianity is hard to control in China, and getting harder all the time. It is spreading rapidly, and infiltrating the party’s own ranks. The line is blurring between house churches and official ones, and Christians are starting to emerge from hiding to play a more active part in society. The Communist Party has to find a new way to deal with all this. There is even talk that the party, the world’s largest explicitly atheist organisation, might follow its sister parties in Vietnam and Cuba and allow members to embrace a dogma other than—even higher than—that of Marx.
Any shift in official thinking on religion could have big ramifications for the way China handles a host of domestic challenges, from separatist unrest among Tibetan Buddhists and Muslim Uighurs in the country’s west to the growth of NGOs and “civil society”—grassroots organisations, often with a religious colouring, which the party treats with suspicion, but which are also spreading fast. ...
... Buddhism, much longer established in China than Christianity, is surging too, as is folk religion; many more Han are making pilgrimages to Buddhist shrines in search of spiritual comfort. All this worries many officials, for whom religion is not only Marx’s “opium of the people” but also, they believe, a dangerous perverter of loyalty away from the party and the state. Christianity, in particular, is associated with 19th-century Western imperial encroachment; and thus the party’s treatment of Christians offers a sharp insight into the way its attitudes are changing.
It is hard even to guess at the number of Christians in China. Official surveys seek to play down the figures, ignoring the large number who worship in house churches. By contrast, overseas Christian groups often inflate them. There were perhaps 3m Catholics and 1m Protestants when the party came to power in 1949. Officials now say there are between 23m and 40m, all told. In 2010 the Pew Research Centre, an American polling organisation, estimated there were 58m Protestants and 9m Catholics. Many experts, foreign and Chinese, now accept that there are probably more Christians than there are members of the 87m-strong Communist Party. Most are evangelical Protestants.
Predicting Christianity’s growth is even harder. Yang Fenggang of Purdue University, in Indiana, says the Christian church in China has grown by an average of 10% a year since 1980. He reckons that on current trends there will be 250m Christians by around 2030, making China’s Christian population the largest in the world. Mr Yang says this speed of growth is similar to that seen in fourth-century Rome just before the conversion of Constantine, which paved the way for Christianity to become the religion of his empire. ...
... A new breed of educated, urban Christians has emerged. Gerda Wielander of the University of Westminster, in her book “Christian Values in Communist China”, says that many Chinese are attracted to Christianity because, now that belief in Marxism is declining, it offers a complete moral system with a transcendental source. ...
... Some Chinese also discern in Christianity the roots of Western strength. They see it as the force behind the development of social justice, civil society and rule of law, all things they hope to see in China. ...
... The paradox, as they all know, is that religious freedom, if it ever takes hold, might harm the Christian church in two ways. The church might become institutionalised, wealthy and hence corrupt, as happened in Rome in the high Middle Ages, and is already happening a little in the businessmen’s churches of Wenzhou. Alternatively the church, long strengthened by repression, may become a feebler part of society in a climate of toleration. As one Beijing house-church elder declared, with a nod to the erosion of Christian faith in western Europe: “If we get full religious freedom, then the church is finished.
This short video gives a wonderful presentation of declining fertility rates over the past fifty years and explains what falling fertility rates mean for the world. Go to the website here: The Baby Bust
... In this infographic we trace
the iPhone supply and manufacturing chain. We’re providing snippets of
information on both of the existing flagship model plus early breaking
rumors for the next-gen iPhones. Did you know, for example, that 90% of
all the rare-earth minerals used on an iPhone 5’s circuitry, screen,
speakers, and glass cover are mined in China and Inner Mongolia? And did
you know that Foxconn might soon be overtaken by Pegatron as Apple’s
biggest manufacturing partner in China?
What does the rest of the world contribute to the making of the iPhone? Let’s find out!
The past century has been a competition between two metanarratives: communism vs. democracy and markets. Is it possible that there are other viable ways of organizing human societies? Eric Li offers a fascinating window into Chinese culture and suggests that there may indeed be viable alternatives. The Chinese model may not be viable in other cultures but that is his point. The future may be a variety of societal structures, not evolution toward one common mode of governance.
1. The United States had its financial bubble. Europe is having one too. Is China next? If it is, it could reshape the global economy and radically reshape Chinese government. Here is an interesting piece about China's real estate bubble.
... I like the idea of a breaking the Industrial Revolution into stages,
but I would define them in more fundamental terms. The first Industrial
Revolution was the harnessing of large-scale man-made power, which began
with the steam engine. The internal combustion engine, electric power,
and other sources of energy are just further refinements of this basic
idea. The second Industrial Revolution would be the development of
interchangeable parts and the assembly line, which made possible
inexpensive mass production with relatively unskilled labor. The Third
Industrial Revolution would not be computers, the Internet, or mobile
phones, because up to now these have not been industrial tools;
they have been used for moving information, not for making things.
Instead, the rise of computers and the Internet is just a warm-up for
the real Third Industrial Revolution, which is the full integration of information technology with industrial production.
The effect of the Third Industrial Revolution will be to collapse the
distance between the design of a product and its physical manufacture,
in much the same way that the Internet has eliminated the distance
between the origination of a new idea and its communication to an
audience. ...
... Eventually all of the creative ferment of the industrial revolution pays
off in a big “whoosh,” but it takes many decades, depending on where
you draw the starting line of course. A look at the early 19th century
is sobering, or should be, for anyone doing fiscal budgeting today. But
it is also optimistic in terms of the larger picture facing humanity
over the longer run.
5. What are the contours of income inequality in the United States? This 40 minute video by Emmanuel Saez offers some important insights.
6. Futurist Ray Kurzweil is a little too sensationalist for my taste but this vid offers interesting food for thought about nanotechnology and the future sports. We will even be able to have meaningful sports competition?
The recovered wealth - most of it from higher stock prices - has been
flowing mainly to richer Americans. By contrast, middle class wealth is
mostly in the form of home equity, which has risen much less.
Issue 104 examines the impact of automation on Europe and America and the varying responses of the church to the problems that developed. Topics examined are mission work, the rise of the Social Gospel, the impact of papal pronouncements, the Methodist phenomenon, Christian capitalists, attempts at communal living and much more.
"Despite the tough economy, many of the nation’s largest churches are
thriving, with increased offerings and plans to hire more staff, a new
survey shows.
Just 3 percent of churches with 2,000 or more attendance
surveyed by Leadership Network, a Dallas-based church think tank, said
they were affected “very negatively” by the economy in recent years.
Close to half — 47 percent — said they were affected “somewhat
negatively,” but one-third said they were not affected at all. ..."
... It's not surprising that younger entrepreneurial firms are considered more innovative. After all, they are born from a new idea, and survive by finding creative ways to make that idea commercially viable. Larger, well-rooted companies however have just as much motivation to be innovative — and, as Scott Anthony has argued, they have even more resources to invest in new ventures. So why doesn't innovation thrive in mature organizations? ...
... First, he says, the focus of an established firm is to execute an existing business model — to make sure it operates efficiently and satisfies customers. In contrast, the main job of a start-up is to search for a workable business model, to find the right match between customer needs and what the company can profitably offer. In other words in a start-up, innovation is not just about implementing a creative idea, but rather the search for a way to turn some aspect of that idea into something that customers are willing to pay for. ...
... discovering a new business model is inherently risky, and is far more likely to fail than to succeed ...
... Finally, Blank notes that the people who are best suited to search for new business models and conduct iterative experiments usually are not the same managers who succeed at running existing business units. ...
5. A fascinating, if sobering, look at the conflict over islands off the coast of East Asia. Trouble at sea
"President Barack Obama's proposed tilt of U.S. priorities toward the Pacific – and away from the historical link to Europe – represents one of the most encouraging aspects of his foreign policy. Although welcome, we should recognize that this shift comes about three decades too late and that it may miss the rising geopolitical centrality of sub-Saharan Africa and Latin America. The emergence of these longtime historically impoverished backwaters has been largely missed as American policy-makers and businesses are now obsessed with the challenges and opportunities posed by the emergence of China and, to a lesser extent, India. Sub-Saharan Africa, for example, over the past decade has produced six of the world's 10 fastest-growing economies. Through 2011-15, according to the International Monetary Fund, seven of the fastest-growing countries will be African, and Africa as a whole will surpass the slowing growth rates in Asia, particularly China.
This growth has caused the region's poverty rates, still unacceptably high, to fall from 56.5 percent in 1990 to 47 percent today. Further growth will likely push poverty levels down further."
8. New Geography also asks, Is the Family Finished? Some interesting thoughts about the impact of declining birthrates in the U.S.
Pew Research Center has compiled key findings from a new analysis of the
nation’s foreign-born population, based on U.S. Census Bureau’s 2011
American Community Survey.
With more than half the population of many U.S. cities who are
multicultural and Hispanics comprising more and more of the
U.S. population, when does it become meaningless and redundant to
execute marketing strategy that is directed to a general market and a
Latino market perceived to be homogenous?
11. Committee on Economic Development has an interesting piece looking at both the ideological and economic aspects underlying the debate about the minimum wage. Raising the Minimum Wage: “Which Side Are You On?”
"It is an easy call if you are either (a) a strict libertarian or (b) an
enthusiastic advocate of the less fortunate with limited concern about
the scarcity of resources. (If you belong to both of those groups,
there is little advice that I can offer.) However, in between those
poles of opinion, things become rather murky, rather quickly."
... Comparing the Democrat and Republican participants turned up differences in two brain regions: the right amygdala and the left posterior insula. Republicans showed more activity than Democrats in the right amygdala when making a risky decision. This brain region is important for processing fear, risk and reward.
Meanwhile, Democrats showed more activity in the left posterior insula, a portion of the brain responsible for processing emotions, particularly visceral emotional cues from the body. The particular region of the insula that showed the heightened activity has also been linked with "theory of mind," or the ability to understand what others might be thinking. ...
... The functional differences did mesh well with political beliefs,
however. The researchers were able to predict a person's political
party by looking at their brain function 82.9 percent of the time. In
comparison, knowing the structure of these regions predicts party
correctly 71 percent of the time, and knowing someone's parents'
political affiliation can tell you theirs 69.5 percent of the time, the
researchers wrote. ...
STERLING, Va. - Perched by a computer monitor wedged between shelves of cough drops and the pharmacy in a bustling Walmart, Mohamed Khader taps out answers to questions such as how often he eats vegetables, whether anyone in his family has diabetes and his age.
He tests his eyesight, weighs himself and checks his blood pressure as a middle-aged couple watches at the blue-and-white SoloHealth station advertising "free health screenings." ...
... As Americans gain coverage under the federal health law, putting increased demand on primary care doctors and spurring interest in cheaper, more convenient care, unmanned kiosks like these may be part of what their manufacturer bills as a "self-service healthcare revolution." ...
Recent developments in the field of nanotechnology might give new
meaning to the phrase “nothing gold can stay.” Atoms and bonds developed
not by Mother Nature, but by scientists, are gaining momentum as the
building blocks for cutting-edge materials.
Using nanoparticles as “atoms” and DNA as “bonds,” Chad Mirkin, the
director of Northwestern University’s International Institute for
Nanotechnology, is constructing his very own periodic table. So far Mirkin has built more than 200 distinct crystal structures with 17 different particle arrangements. ...
... Nonetheless, China has been transformed from the inside out over the past 35 years. This transformation is the story of our time. The struggle of China, in other words, is the struggle of the world. ...
Conclusion
Given our account of how China became capitalist, what can we say about
the form of capitalism that has emerged in China? A persisting feature
of China’s market transition is the lack of political liberalization.
This is not to say that the Chinese political system has stood still
over the past 35 years. The Party has distanced itself from radical
ideology; it is no longer communist except in name. In recent years, the
internet has increasingly empowered the Chinese to exercise their
political voice. Nonetheless, China remains ruled by a single political
party.
This continuity hides a fundamental change in China’s political
reality. With the death of Deng Xiaoping, “strongman” politics was
brought to a closure. Under Jiang Zemin and Hu Jintao, China is no
longer ruled by a charismatic leader. In that sense, Chinese politics
today is qualitatively different from the time of Mao and Deng. But the
Chinese government has not come to terms with this political change on
the ground; there have been few efforts at institution-building to
prepare China for the new political reality.
The combination of rapid economic liberalization and seemingly
unchanged politics has led many to characterize China’s market economy
as state-led, authoritarian capitalism, which many people have rightly
recognized as fragile and unsustainable. When and how China will embrace
democracy, and whether the Party will survive democratization, are the
main questions asked about China’s political future. In our book, a
different perspective is offered. It provides a different diagnosis of
the main flaw of the Chinese market economy: China has developed a
robust market for goods, but it still lacks a free market for ideas.
The market for ideas points to an alternative way of thinking about
China’s political future. Our reasoning is mainly based on the following
two considerations. First, multiparty competition does not work unless
it is cultivated and disciplined by a free market for ideas, without
which democracy can be easily hijacked by interest groups and undermined
by the tyranny of the majority. The performance of democracy critically
depends on the market for ideas, just like privatization depends on the
market for capital assets. Second, multi- party competition had
virtually no precedent in Chinese history. Indeed, the Chinese word for
the “party” (党) has a strong negative connotation in traditional Chinese
political thinking. “Forming a party and pursuing self-interest” (结党营私)
has been consistently denounced as undermining the political ideal,
which is “what is under heaven is for all” (天下为公). In contrast, the
market for ideas has a deep and revered root in traditional Chinese
thinking; “let one hundred schools of thought contend” has been
respected as a political ideal since the time of Confucius. In our view,
the market for ideas promises a more gradual and viable approach to
rebuilding Chinese politics on the principles of tolerance, justice, and
humility.
Over the past 35 years, China has embraced capitalism not just in the economy. The Theory of Moral Sentiments
has more than a dozen Chinese translations; the book has won the heart
and mind of premier Wen Jiabao. The message of Adam Smith resonates
strongly with the Chinese, not least because of its striking affinity
with the traditional Chinese thinking on economy and society. A
surprising outcome of China’s transition to capitalism is that China has
found a way back to its own cultural roots. ...
The Chinese are running away with thorium energy, sharpening a global race for the prize of clean, cheap, and safe nuclear power. Good luck to them. They may do us all a favour.
... The aim is to break free of the archaic pressurized-water reactors fueled by
uranium -- originally designed for US submarines in the 1950s -- opting
instead for new generation of thorium reactors that produce far less toxic
waste and cannot blow their top like Fukushima. ...
... The thorium story is by now well-known. Enthusiasts think it could be the
transforming technology needed to drive the industrial revolutions of Asia
-- and to avoid an almighty energy crunch as an extra two billion people
climb the ladder to western lifestyles.
At the least, it could do for nuclear power what shale fracking has done for
natural gas -- but on a bigger scale, for much longer, perhaps more cheaply,
and with near zero CO2 emissions. ...
... The beauty of thorium is that you cannot have a Fukushima disaster. Professor
Robert Cywinksi from Huddersfield University, who anchor's the UK's thorium
research network ThorEA, said the metal must be bombarded with neutrons to
drive the process. "There is no chain reaction. Fission dies the moment
you switch off the photon beam," he said. ...
... Yet it leaves far less toxic residue. Most of the mineral is used up in the
fission process, while uranium reactors use up just 0.7pc. It can even burn
up existing stockpiles of plutonium and hazardous waste.
Cambridge scientists published a tantalising study in the Annals of Nuclear
Energy in February showing that it is possible to "achieve near
complete transuranic waste incineration" by throwing the old residue
into the reactor with thorium.
In other words, it can help clean up the mess left by a half a century of
nuclear weapons and uranium reactors, instead of transporting it at great
cost to be encased in concrete and buried for milennia. It is why some
`greens' such as Baroness Worthington -- a former Friends of the Earth
activist -- are embracing thorium. Though there are other reasons.
The thorium molten salt process takes place at atmospheric pressures. It does
not require the vast domes of conventional reactors, so costly, and such an
eyesore.
You could build pint-size plants largely below ground, less obtrusive than a
shopping mall, powering a small town the size of Tunbridge Wells or
Colchester. There would be shorter transmission lines, less leakage, and
less risk of black-outs. The elegance is irresistible....
"... Although the number of evangelical churches in the United States
declined for many years, the trend reversed in 2006, with more new
churches opening each year since, according to the Leadership Network’s
most recent surveys. This wave of “church planting” has been highest
among nondenominational pastors, free to experiment outside traditional
hierarchies.
“I hear a lot of pastors say, ‘I’m not just trying to be creative and
avant-garde, I think this is maybe the last chance for me,’ ” said Doug Pagitt, the founder of Solomon’s Porch in Minneapolis.
Mr. Pagitt has written several books on church innovations, many of which were first developed in the “emergent” church movement of the last decade or among “missional” churches whose practices focus on life outside the church.
Many of their innovations are being adopted by an increasing number of pastors in the mainstream.
... But in March, unbeknown to Ms. Pu, a critical meeting had occurred between Foxconn’s top executives and a high-ranking Apple official. The companies had committed themselves to a series of wide-ranging reforms. Foxconn, China’s largest private employer, pledged to sharply curtail workers’ hours and significantly increase wages — reforms that, if fully carried out next year as planned, could create a ripple effect that benefits tens of millions of workers across the electronics industry, employment experts say.
Other reforms were more personal. Protective foam sprouted on low stairwell ceilings inside factories. Automatic shut-off devices appeared on whirring machines. Ms. Pu got her chair. This autumn, she even heard that some workers had received cushioned seats.
The changes also extend to California, where Apple is based. Apple, the electronics industry’s behemoth, in the last year has tripled its corporate social responsibility staff, has re-evaluated how it works with manufacturers, has asked competitors to help curb excessive overtime in China and has reached out to advocacy groups it once rebuffed.
Executives at companies like Hewlett-Packard and Intel say those shifts have convinced many electronics companies that they must also overhaul how they interact with foreign plants and workers — often at a cost to their bottom lines, though, analysts say, probably not so much as to affect consumer prices. As Apple and Foxconn became fodder for “Saturday Night Live” and questions during presidential debates, device designers and manufacturers concluded the industry’s reputation was at risk. ...
"...Launched in July, the Seattle-based Egraphs' business model is simple, but pretty clever. Fans can peruse the company website to see if their favorite athlete has partnered up with Egraphs. Each player's section has a number of professionally shot action photographs included, typically priced between $25 and $50. The fan pays and sends the athlete a message through the website, including some personal details or memories.
The athlete then receives that message on his custom iPad app, using the the information provided to write a personalized note and electronic autograph on the selected photo. The photo is then sent electronically to the fan, who can save it digitally, share it on social media or order a physical print. Revenue is split between company and athlete. ..."
8. This month is the 40th anniversary of the Roe v. Wade ruling, legalizing abortion across the country. Time magazine has a feature article about the Pro-Choice movement this week that suggests 1973 may have been the high-water mark for the movement. Unfortunately, the article is behind a pay wall. Here is a short clip summarizing their take.
"...Academic Publishers will tell you that creating modern textbooks is an expensive, labor-intensive process that demands charging high prices. But as Kevin Carey noted in a recent Slate piece, the industry also shares some of the dysfunctions that help drive up the cost of healthcare spending. Just as doctors prescribe prescription drugs they'll never have to pay for, college professors often assign titles with little consideration of cost. Students, like patients worried about their health, don't have much choice to pay up, lest they risk their grades. Meanwhile, Carey illustrates how publishers have done just about everything within their power to prop up their profits, from bundling textbooks with software that forces students to buy new editions instead of cheaper used copies, to suing a low-cost textbook start-ups over flimsy copyright claims. ..."
12. Baseball Pitchers like Phil Niekro, Tim Wakefield, and now, R. A. Dickey did their magic throwing a knuckleball. Pitchers who master usually do very well and it puts less stress on the arm. So why don't more pitchers throw it? Why the Knuckleball Isn’t Thrown by More Pitchers in Major League Baseball
A group of Chinese intellectuals has called on the government to
implement urgent political reforms and respect human rights or risk
"violent revolution".
In an open letter 71 top academics warned that growing economic
imbalances were fuelling social unrest and an uprising could erupt if
reforms were not implemented immediately, Hu Xingdou, one of the
signatories, told AFP Monday.
"If urgent systematic reforms needed by Chinese society continue to
suffer setbacks and stagnate, then official corruption and social
dissatisfaction will boil up to a crisis point," said the letter, posted
on the Internet last week.
"China will once again miss the opportunity for peaceful reform, and slip into the turbulence and chaos of violent revolution." ...
... While the latest call for reform steered away from Charter 08's advocacy
of western-style democracy, it called on the Communist Party fully to
implement the freedoms of speech, press and association that are
protected by the constitution but routinely ignored by the authorities
and police. ...
"... The first kind of Christianity avoids reactionary authoritarianism
but is often a therapeutic or vanilla mush that fails to ask anything of
anybody out of fear of giving offense. The second kind of Christianity
offers stern, clear moral directives that attract people seeking the
“specific instruction, even confrontation that calls us to grow in
discipleship” (p. 6), but disastrously embraces right-wing ideology and
baptizes that as the content of Christianity.
Both of these versions of Christianity are so deeply flawed, says
Stassen, that both are contributing to the alarming spread of secularism
in the U.S. The first version of Christianity is so thin as to lack any
particular reason why one would want to get out of bed on Sunday and go
to church; the second is so reactionary as to drive thoughtful people
into an anti-religious posture if they conclude that religion equals
right-wing authoritarianism.
I believe this is a stark but actually quite accurate depiction of
the primary problems afflicting the Protestantisms of the left and of
the right in the current U.S. setting. ..."
"While not exclusive to Latin America, the culture of family, support,
and living a life to spend time with your family, I think, is an
important part of Latin American culture that keeps people positive.
Being with those close to you and finding other friends and partners
that value that way of life is a key part of Latin American culture.
That might be the main reason why people remain positive: they are never
truly alone. Interestingly, many discussions and documentaries about
immigrant groups in the United States
show an internal conflict among many who move to the US and who do not
wish to lose their support systems in a new culture rooted in
individualism. While being motivated and entrepreneurial is valued, a
life being with your family, where you are never truly alone, is the
basis for many cultures in many parts of the world. Many new Americans
frown on the thought that children can detach themselves from their
family at 18 years of age. They believe people can only truly thrive as a
family."
"A Pew Internet Research Center survey released Thursday found that the
percentage of Americans aged 16 and older who read an e-book grew from
16 percent in 2011 to 23 percent this year. Readers of traditional books
dropped from 72 percent to 67 percent. Overall, those reading books of
any kind dropped from 78 percent to 75 percent, a shift Pew called
statistically insignificant."
Puerto Rico, Vermont, and Rhode Island are the only states (and territory) that saw a net decrease in population over the year.
The fastest growing region was the South (1.06% population growth) followed by the West (1.03% population growth).
North Dakota and the District of Columbia had the highest population growth, with 2.5% and 2.3% population growth, respectively. Texas, Wyoming, and Utah also saw major growth.
West Virginia and Maine are the only two states where people are dying faster than they are being born, with 0.93 and 0.99 births for each death.
Utah (3.44) and Alaska (3.33) had the highest birth to death ratio in 2012. That means 3.44 babies were born for each death in Utah.
Domestic migration determines the rate that people leave and enter states to and from other states. Per capita, more natives left New York, Illinois, New Jersey, Connecticut and Rhode Island to move somewhere else than any other states.
On the other hand, people flocked to North Dakota, D.C., Wyoming and South Carolina.
The states that had the highest rates of international migration — that is, the rate of immigrants coming in — were Hawaii, New Jersey, Florida, New York and D.C.
Puerto Rico is seeing a massive exodus — 1% of their population left last year.
15. When we think of transportation in the United States, few of us think about river and costal water transportation. Yet a great many goods and commodities are shipped on our rivers. The Midwest drought is having an impact on a major artery of that transportation network. The Mississippi River's Water Levels Are Dropping, And Could Shut Down Trade Next Week
"In other words, Americans are increasingly likely to have to purchase
and replace these goods some time soon as they get more and more worn
out. That's bullish for spending, jobs, and the economy as a whole."
"... Yet a few differences between the sexes do seem to hold up to scrutiny. One is spatial abilities. If men look at an object, for example, they are slightly faster at guessing what it would look like if it were rotated 180 degrees. There are plenty of women who do better than individual men. But overall there’s a stasticially significant difference in their average performance. This kind of difference carries over from one culture to another. It’s even detectable in babies. ...
... Whenever we reflect on human evolution, it pays to compare our species to other animals. And in the case of spatial abilities, the comparison is fascinating. Almost a century ago, the psychologist Helen Hubbet found that male rats could get through a maze faster than females. The difference can also be found in a number of other species. ...
... Clint and his colleagues propose a different explanation: male spatial ability is not an adaptation so much as a side effect. Males produce testosterone as they develop, and the hormone has a clear benefit in terms of reproduction, increasing male fertility. But testosterone also happens to produce a lot of side effects, including male pattern baldness and an increased chance of developing acne. It would be absurd to say acne was an adaptation favored by natural selection. The same goes for the male edge in spatial ability, Clint and his colleagues argue. They note that when male rats are castrated, they do worse at navigating a maze; when they are given shots of testosterone, they regain their skill. ..."
... The Times articles, part of a larger series,
are well written and informative and no doubt they have prodded some
changes at certain companies. China, however, is a very big place and
the real story of better working conditions is a story of supply and
demand.
Wages in Chinese factories have been low because wages in China’s
agricultural interior were even lower and the great migration from the
country to the city, one of the largest migrations in human history,
meant that there was a ready supply of workers desperate for work and
the more work the better. Even today many workers want longer hours:
In March, when Foxconn announced that workers’ hours
would be reduced to China’s legal limits, employees began complaining.
“Absolutely I’d like to do overtime to work more than 60 hours, but now
there’s a ceiling on it,” said Ma Changqiao, a 23-year-old at Foxconn’s
Chongqing factory.
As the great migration leveled off, however, wages began to rise. At
first, workers wanted all of the increase in wages in money but as the
more basic needs of workers and their families have been met the demand
for better working conditions and more leisure has increased and this
has made it profitable for firms to supply better working conditions.
Thus, the real story of better working conditions is not a spate of
negative publicity, a mere blip in the face of much larger forces, but
rising wages with a touch of Maslow’s hierarchy. ...
In short, economic development happened. Given relatively stable social institutions, this is what happen with expanded trade and improvement in productivity.
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1. Pray for Egypt Today!
More than 50 million Egyptians are voting today on a constitution that would be a giant step backward for Egypt and much of the Middle East, marginalizing women and religious minorities. A nation that has historically been a voice of moderation, the largest Muslim nation in the region, will likely move toward becoming an Islamist state. Remember to pray for Egypt. (See the Economist'sThe Founding Brothers)
2. Our prayers are with families of the victims at the Sandy Hook elementary school. Grace and peace to the entire community.
Traffic deaths in the USA continued their historic decline last year,
falling to the lowest level since 1949, the government announced
Monday.
A total of 32,367 motorists, bicyclists and pedestrians died in 2011,
a 1.9% decrease from 2010. Last year’s toll represents a 26% decline
from 2005, the National Highway Traffic Safety Administration (NHTSA)
said. ...
... The trend has emerged in big cities like New York and Los Angeles, as
well as smaller places like Anchorage, Alaska, and Kearney, Neb. The
state of Mississippi has also registered a drop, but only among white
students.
“It’s been nothing but bad news for 30 years, so the fact that we have
any good news is a big story,” said Dr. Thomas Farley, the health
commissioner in New York City, which reported a 5.5 percent decline in
the number of obese schoolchildren from 2007 to 2011....
....The experiment, in April, used a disabled form of the virus that causes AIDS to reprogram Emma’s immune system genetically to kill cancer cells. ...
... The research is still in its early stages, and many questions remain.
The researchers are not entirely sure why the treatment works, or why it
sometimes fails. One patient had a remission after being treated only
twice, and even then the reaction was so delayed that it took the
researchers by surprise. For the patients who had no response
whatsoever, the team suspects a flawed batch of T-cells. The child who
had a temporary remission apparently relapsed because not all of her
leukemic cells had the marker that was targeted by the altered T-cells. ...
....In 2011, 1.4 million chlamydia infections were reported to the CDC.
The rate of cases per 100,000 people increased 8%, to 457.6 in 2011 from
423.6 in 2010.
The CDC reported 321,849 gonorrhea infections. The
rate increased 4% to 104.2 cases per 100,000 in 2011 from 100.2 in
2010. Like chlamydia, gonorrhea can lead to pelvic inflammatory disease,
a major cause of infertility in women.
Last year, 13,970 primary and secondary syphilis cases were reported. The rate of 4.5 cases per 100,000 was unchanged from 2010. ...
7. You may be bilingual but can you write in two languages, one with each hand, at the same time?!
10. Kevin Drum of Mother Jones speculates on why liberals have more exaggerated perceptions of political differences. We Are More Alike Than We Think
11. A surprising "right to work" bill was signed into law in Michigan, of all places. That has spurred a lot of debate about unions and the right to work. Michael Kinsley wrote a thoughtful piece opposing RTW, The Liberal Case Against Right-to-Work Laws. David Henderson has piece in support of RTW, The Economics of "Right to Work".
12. Slate has a piece about The Great Schism in the Environmental Movement.
Keith Kloor opines on the division between mondernist environmentalists
(or eco-pragmatists) and conservation traditionalists.
...
Modernist greens don't dispute the ecological tumult associated with the
Anthropocene. But this is the world as it is, they say, so we might as
well reconcile the needs of people with the needs of nature. To this
end, Kareiva advises conservationists to craft "a new vision of a planet
in which nature—forests, wetlands, diverse species, and other ancient
ecosystems—exists amid a wide variety of modern, human landscapes."
This
shift in thinking is already under way. For example, ecologists
increasingly appreciate (and study) the diversity of species and
importance of ecosystem services in cities, giving rise to the
discipline of urban ecology. That was unthinkable at the dawn of the
modern environmental movement 50 years ago, when greens loathed cities
as the antithesis of wilderness. ...
13. One of the creepiest Twilight Zone episodes I remember from my
childhood was when this woman ends up trapped in a department store at
night. The mannequins begin calling to her. She discovers she is actually a mannequin who
has over stayed her time out in the world and it is time for the next
mannequin to spend some time outside the store. This story confirms my worst nightmares: In Some Stores, the Mannequins Are Watching You
15. One of the biggest concerns about fracking technology is the enormous amount of water it uses. A company has figured out how to recycle water so that far less water is used in the fracking process. Solving fracking's biggest problem
... 3D printing represents the latest version of what industry experts call
"additive manufacturing" — a way to turn practically any computer
designs into real objects by building them up layer-by-layer using
plastics, metals or other materials. The technology could end up
affecting every major industry — aerospace, defense, medicine, transportation, food, fashion — and have an even bigger impact on U.S. manufacturing than the robot revolution. ...
20. Michael Cheshire has a great piece in Leadership Journal on "What I learned about grace and redemption through my friendship with a Christian pariah." Going To Hell with Ted Haggard
".... A while back I was having a business lunch at a sports bar in the
Denver area with a close atheist friend. He's a great guy and a very
deep thinker. During lunch, he pointed at the large TV screen on the
wall. It was set to a channel recapping Ted's fall. He pointed his
finger at the HD and said, "That is the reason I will not become a
Christian. Many of the things you say make sense, Mike, but that's what
keeps me away."
It was well after the story had died down, so I had to study the screen
to see what my friend was talking about. I assumed he was referring to
Ted's hypocrisy. "Hey man, not all of us do things like that," I
responded. He laughed and said, "Michael, you just proved my point. See,
that guy said sorry a long time ago. Even his wife and kids stayed and
forgave him, but all you Christians still seem to hate him. You guys
can't forgive him and let him back into your good graces. Every time you
talk to me about God, you explain that he will take me as I am. You say
he forgives all my failures and will restore my hope, and as long as I
stay outside the church, you say God wants to forgive me. But that guy
failed while he was one of you, and most of you are still vicious to
him." Then he uttered words that left me reeling: "You Christians eat
your own. Always have. Always will."
He was running late for a meeting and had to take off. I, however, could
barely move. I studied the TV and read the caption as a well-known
religious leader kept shoveling dirt on a man who had admitted he was
unclean. And at that moment, my heart started to change. I began to
distance myself from my previously harsh statements and tried to
understand what Ted and his family must have been through. When I
brought up the topic to other men and women I love and respect, the very
mention of Haggard's name made our conversations toxic. Their reactions
were visceral."
21. Leonardo Bonucci got a yellow card for faking collision during a
soccer game. It should have been a red card. No one deserves to be a professional soccer player with acting skills
this bad!
AP has a story summarizing Global Trends 2030, a report put out by the U.S. Intelligence community.
... The study said that in
a best-case scenario, Americans, together with nearly two-thirds of the
world's population, will be middle class, mostly living in cities,
connected by advanced technology, protected by advanced health care and
linked by countries that work together, perhaps with the United States
and China cooperating to lead the way.
Violent
acts of terrorism will also be less frequent as the U.S. drawdown in
troops from Iraq and Afghanistan robs extremist ideologies of a rallying
cry to spur attacks. But that will likely be replaced by acts like
cyber-terrorism, wreaking havoc on an economy with a keystroke, the
study's authors say.
In countries where there are declining birth rates and an aging population like the U.S., economic growth may slow.
"Aging
countries will face an uphill battle in maintaining living standards,"
Kojm said. "So too will China, because its median age will be higher
than the U.S. by 2030."
The rising populations
of disenfranchised youth in places like Nigeria and Pakistan may lead
to conflict over water and food, with "nearly half of the world's
population ... experiencing severe water stress," the report said.
Africa and the Middle East will be most at risk, but China and India are
also vulnerable.
That instability could lead
to conflict and contribute to global economic collapse, especially if
combined with rapid climate change that could make it harder for
governments to feed global populations, the authors warn.
That's
the grimmest among the "Potential Worlds" the report sketches for 2030.
Under the heading "Stalled Engines," in the "most plausible worst-case
scenario, the risks of interstate conflict increase," the report said.
"The U.S. draws inward and globalization stalls." ...
Here is the overview from the report:
Over the next two decades, the relative power of major international
actors will shift markedly. Around 2030, after nearly a century as the
preeminent global economic power, the United States will be surpassed
by China as the world’s largest economy. With its trade in goods
expected to nearly double that of the U.S. and Europe, China’s
international economic clout will reach new heights. By 2030, India
will become the world’s most populous country and third-largest economy,
while Brazil’s economy will rank fourth in size. India and Brazil will
join China at the high table of 21st century international
politics alongside the United States, even as the relative weight of
Russia and Japan diminishes. The European economy will remain in the
top tier, but it is not clear whether Europe will be able to act with
common purpose to leverage this source of strength.
With its enhanced economic base, Beijing could rival Washington in
overall military spending, even as a slowing Chinese economy and
internal political conflict complicate China’s ability to lead
internationally. The United States will remain primus inter pares
in light of its continued advantages across the full spectrum of
national power and the legacy benefits of its leadership. It will,
however, be operating in a post-Western world in which the bulk of
global economic power is held by countries whose per capita incomes are
far below those of the traditional great powers. This reality will
leave China, India, Brazil, and other players focused on internal
development and domestic challenges, torn between their desire to be
global powers and their interest in free-riding on Western management of
the international system.
How will the rise of the rest impact the international system? The National Intelligence Council’s draft Global Trends 2030: Alternative Worlds maps out three broad scenarios:
Reverse Engines. Under this scenario, the
international system would consist of several powerful countries — but
no single state or bloc of states would have the political or economic
leverage to drive the international community toward collective action.
Such a world, characterized by a global vacuum of power, assumes that
the United States will no longer be willing or capable of sustaining the
predominant leadership role it has assumed since 1945. With no other
country able to step in to replace the U.S. as a global leader, the
resulting divergence of interests would lead to fragmentation and the
inability of great powers to work cooperatively to solve global issues.
Mercantilism and protectionism could lead economic globalization to go
into reverse, constraining technological breakthroughs required to
manage scarce global resources. Conflict and disorder would follow.
Great Power Convergence. An alternative scenario is
what the NIC calls a “fusion” world, in which major powers work
together to adopt and enforce a set of globally accepted rules and
norms. As U.S. predominance over the international system recedes, other
emerging powers would step in to assume greater responsibility for the
management of international affairs commensurate with their swelling
economic might. Emerging powers emerge as full stakeholders in a global
order that is transformed by power shifts but remains liberal and
pluralistic. Great power concert (perhaps enabled by democratization in
China) to meet global challenges increases the stability of the
international system even as power is diffused within it. U.S.
resilience enables it to create enduring partnerships with rising powers
to sustain the basis of liberal order. Technological advances create
new possibilities for joint management of key global challenges,
rewarding positive-sum behavior by the great powers.
Multipolar Divergence—U.S. Primacy. A third
scenario, one the NIC calls “fragmentation,” involves a multipolar
system characterized by a divergence of views among great powers that
challenges global governance. The United States would continue to
maintain disproportionate global influence and leverage that influence
to address global challenges by working through coalitions of
like-minded states. A multispeed global economy accelerates the
diffusion of power but an alternative coalition to the West does not
form, with developing giants consumed by their domestic challenges –
even as the global middle class explodes in ways that transform politics
within the rising powers. With inclusive global institutions
effectively stalemated, the United States instead turns to its old and
new allies in Europe and Asia, who would continue to see Washington as
their partner of choice in advancing the norms and rules of a liberal
order. The risk of conflict increases with the continued rise of new
powers like China and the rapid pace of technological change.
One key conclusion of the NIC study is that the future role of the
United States in the international system is a decisive variable in
determining what kind of “alternative world” will exist in 2030. The
choices U.S. leaders make – about how to marshal (and preserve) domestic
resources, how vigorously to assert U.S. military and economic
leadership overseas, and how much to invest in alliances old and new –
will be central to determining which of the above pathways the
international system will follow over the coming 20 years. To a certain
extent, the answer to the question of how the “rise of the rest”
impacts the U.S.-led international system is that it is not up to them…
so much as it is up to us.
(Reuters) - China's outgoing leader and his likely successor are pushing the ruling Communist Party to adopt a more democratic process this month for choosing a new leadership, sources said, in an attempt to boost its flagging legitimacy in the eyes of the public.
The extent of the reform would be unprecedented in communist China
where elections for the highest tiers of the party, held every five
years, have been mainly exercises in rubber-stamping candidates already
agreed upon by party power-brokers.
The
Communist Party, which has held unbroken power since 1949, is
struggling to maintain its popular legitimacy in the face of rising
inequality, corruption and environmental degradation, even as the economy continues to bound ahead.
President
Hu Jintao and his heir, Xi Jinping, have proposed that the party's 18th
Congress, which opens on Thursday, should hold elections for the elite
Politburo where for the first time there would be more candidates than
available seats, said three sources with ties to the party leadership. ...
One theory of economic development is that as long as the masses are poor,
there is little incentive to develop sound economic and governmental
institutions. As prosperity begins to emerge, those who have benefited have
more to lose through arbitrary and ineffective institutions. The presence of a
rising middle class creates a hope among the poor that they too can prosper.
Citizens begin to press for better institutions and greater accountability.
Better institutions and accountability leads to more prosperity. And on the
cycle goes.
Jobs going to other countries in China's 'great industry transfer'
Rising wages and shrinking export demand are forcing manufacturers to relocate to neighboring Southeast Asian nations and many that remain are seriously considering moving, a foreign trade official from the Ministry of Commerce said.
The official, who declined to be named, said that "nearly one-third of Chinese manufacturers of textiles, garments, shoes and hats" are now working "under growing pressure" and have moved all, or part, of their production outside China in what he called the great industry transfer.
Favored destinations are usually members of the Association of Southeast Asian Nations, especially Vietnam, Indonesia and Malaysia.
And in all likelihood, "the trend will continue" with more traditional labor-intensive manufacturers transferring production, he told China Daily. ...
... China's labor costs have surged recently by 15 to 20 percent annually, squeezing margins and driving some companies to bankruptcy.
According to the Ministry of Human Resources and Social Security, from January to June the minimum wage was raised, on average, by 20 percent in 16 provinces.
The minimum wage in Shenzhen now stands at 1,500 yuan ($238) per month, setting the highest standard for the whole Chinese mainland.
Many developing countries in Southeast Asia have lower labor costs.
The monthly wage for manufacturing jobs in Vietnam was, on average, 600 yuan in 2011, equivalent to the level of 10 years ago in Dongguan, an industrial town in South China's Pearl River Delta....
...But lower costs in other countries could soon change, some said.
"The advantage (of labor and production costs) in Southeast Asian countries will only last for a few years," said Chen Jian, a general manager of a garment company headquartered in Foshan, on the Pearl River Delta.
"The trend is just like what happened some 10 years ago when many manufacturing industries in Hong Kong and Taiwan moved to the Pearl River Delta to chase cheap labor. But now you can see how much our labor costs have gone up."
... Grocery stores that found success on the internet are instead returning
to the physical world with a hybrid business model: the "virtual"
supermarket, a shop for smartphone users that carries photographs and
bar codes instead of food. After the success of locations in mass
transit stations from Seoul to Philadelphia, the virtual supermarket is about to hit the city above ground. Chinese supermarket giant Yihaodian announced this week it is opening 1,000 brick-and-mortar locations. ...
... Grocery stores want to reach time-starved commuters, but they also seem
to be capitalizing on consumers' desire to browse. It's one of the
reasons why many people at least claim to still prefer physical
bookstores, even as the monstrous success of websites like Amazon seem
to negate that notion.
If you can't beat 'em, join 'em. Yihaodian has also experimented with
subway stores, but the announcement this week marks a big move back into
physical space. No longer will "virtual supermarkets" be only in mass
transit stations. They'll occupy actual retail space in the city.
GUANGZHOU, China — After three decades of torrid growth, China is
encountering an unfamiliar problem with its newly struggling economy: a
huge buildup of unsold goods that is cluttering shop floors, clogging
car dealerships and filling factory warehouses.
The glut of everything from steel and household appliances to cars and
apartments is hampering China’s efforts to emerge from a sharp economic
slowdown. It has also produced a series of price wars and has led
manufacturers to redouble efforts to export what they cannot sell at
home.
The severity of China’s inventory overhang has been carefully masked by
the blocking or adjusting of economic data by the Chinese government —
all part of an effort to prop up confidence in the economy among
business managers and investors. ...
... China is the world’s second-largest economy and has been the largest
engine of economic growth since the global financial crisis began in
2008. Economic weakness means that China is likely to buy fewer goods
and services from abroad when the sovereign debt crisis in Europe
is already hurting demand, raising the prospect of a global glut of
goods and falling prices and weak production around the world.
Corporate hiring has slowed, and jobs are becoming less plentiful.
Chinese exports, a mainstay of the economy for the last three decades,
have almost stopped growing. Imports have also stalled, particularly for
raw materials like iron ore for steel making, as industrialists have
lost confidence that they will be able to sell if they keep factories
running. Real estate prices have slid, although there have been hints
that they might have bottomed out in July, and money has been leaving
the country through legal and illegal channels. ...
WASHINGTON — A World Bank report shows a broad reduction in extreme poverty — and indicates that the global recession, contrary to economists’ expectations, did not increase poverty in the developing world.
The report shows that for the first time the proportion of people living in extreme poverty — on less than $1.25 a day — fell in every developing region from 2005 to 2008. And the biggest recession since the Great Depression seems not to have thrown that trend off course, preliminary data from 2010 indicate.
The progress is so drastic that the world has met the United Nations’ Millennium Development Goals to cut extreme poverty in half five years before its 2015 deadline. ...
... The report contained a raft of statistics showing broad declines in poverty throughout the 2000s. For the first time since the World Bank started keeping statistics in 1981, poverty fell in every region of the world on a three-year timeframe. In sub-Saharan Africa, the proportion of the population living in extreme poverty fell below 50 percent for the first time. And between 1981 and 2008, poverty fell to just less than a quarter of the developing world’s population from more than half .
Much of the story was about China, which moved nearly 700 million people out of poverty between 1981 and 2008, with the proportion of its population living in extreme poverty falling to 13 percent from 84 percent during that period. The country’s annual pace of economic growth never dipped below 9 percent, even in 2009, when the world’s economy contracted.
But perhaps the most surprising success story is sub-Saharan Africa, where the proportion of people living in extreme poverty actually increased through the 1990s, before declining in the 2000s.
“People used to worry, ‘Is Africa going to be poor forever?’ ” said Mr. Kenny of the Center for Global Development. “Well, it doesn’t really look like it, does it?”
Extreme poverty in the Middle East and North Africa fell to just 2.7 percent in 2008 from 4.2 percent in 2002. And extreme poverty in sub-Saharan Africa fell to 47.5 percent in 2008 from 55.7 percent in 2002. ...
Making the United States an even more attractive location for factories and investments is critical for the health of our nation. More domestic factories would help create more balanced trade flows and a more stable global economy. But company decisions on what and where to place production facilities, while influenced by many factors, ultimately depend on the math.
Thankfully, the math these days is starting to work in America's favor again.
Our research last year suggested to us that changing conditions in China would bring home some of the manufacturing work that migrated overseas during the past decade. We originally saw this "insourcing" phenomenon, as the White House now refers to it, starting around 2015.
We were deliberately conservative in our estimates and made clear that the coming manufacturing renaissance would benefit some industries more than others, with seven sectors benefitting the most: vehicles and auto parts, appliances and electrical equipment, furniture, plastic and rubber products, machinery, fabricated metal products, and computers and electronics. These seven sectors currently account for nearly two-thirds of the more than $325 billion the U.S. imports from China.
We noted that several factors had combined to push these sectors toward a tipping point, when U.S. manufacturing becomes an attractive alternative to China. These factors include China's rapidly rising labor costs, which we discussed in an earlier HBR blog; the increased value of the yuan; the challenge of managing long-distance supply chains; the quality control concerns that continue to haunt many manufacturers that have offshored production; and the significantly higher productivity of U.S. workers. ...
THE past four years have seen an economic crisis coincide with a food-price spike. That must surely have boosted the number of the world’s poor (especially since food inflation hits the poor hardest)—right? Wrong. New estimates of the numbers of the world’s poor by the World Bank’s Development Research Group show that for the first time ever, poverty—defined as the number and share of people living below $1.25 a day (at 2005 prices)—fell in every region of the world in 2005-08. Half the long-term decline is attributable to China, which has taken 660m people out of poverty since the early 1980s. But the main contribution to the recent turnaround is Africa. Its poverty headcount rose at every three-year interval between 1981 and 2005, the only continent where this happened. But in 2008, it fell by 12m, or five percentage points to 47%—the first time less than half of Africans have been below the poverty line. The bank also has partial estimates for 2010. These show global poverty that year was half its 1990 level, implying the long-term rate of poverty reduction—slightly over one percentage point a year—continued unabated in 2008-10, despite the dual crisis.
The rapid rate of development in China manifests itself most clearly in its cities. With some populations rising into the tens of millions, China’s cities are the economic powerhouses of the country, and are helping to create a whole new era of financial prosperity. For some observers, this translates into 1.3 billion people who now have the money to afford the sort of commercial goods many of the country’s factories had previously been producing for the affluent populations of other countries. China is seeing its own affluence rise, and some surmise that this will translate into a Western-style nation of relatively well-off consumers; that, as this report from the McKinsey Global Institute suggests, China’s middle class is emerging to help propel the country’s economic success even higher.
The only problem is that this middle class doesn’t actually exist. And unless decades-old rules change, it won't.
In a recent paper published in the journal Eurasian Geography and Economics, geographer and University of Washington professor Kam Wing Chan argues that all of the country’s urban growth and prosperity is not actually filtering down to the majority of the rising urban population. The reason is that the majority of the urban population is prevented from fully participating in the booming urban economy because of a Mao-era rule that draws a harsh line between those from urban areas and those from rural ones.
Established in 1958, hukou establishes a two-tiered population structure of rural and urban citizens. Urban citizens are given access to social services and welfare programs, including public education and affordable housing. Rural residents are not. Status is hereditary, meaning that once a family is in one tier it will always remain in that tier. This has been a problem for many rural residents who want to leave their agricultural lifestyles to earn the higher wages in cities working in factories or construction, but who are faced with slum-like living conditions and an effective low ceiling over their social and economic mobility. ...
... More tellingly, the broadcast showed 3,000 young Chinese workers lining up at the gates for Foxconn’s Monday morning recruiting session.
Now, these workers know about the 2010 Foxconn suicides. They know that the starting salary is $2 an hour (plus benefits, and no payroll taxes). They know they’ll have 12-hour shifts, with two hourlong breaks. They know that workers sleep in a tiny dorm (six or eight to a room) for $17 a month.
And yet here they are, lining up to work! Apparently, even those conditions, so abhorrent to us, are actually better than these workers’ alternatives: backbreaking rural farm work that doesn’t prepare them to move up the work force food chain.
Many observers are shocked at the child labor reported at Foxconn. Not only do these Chinese factories employ a lot of young people — the legal working age is 16 — but from what we saw on the ABC broadcast, all of these employees are young.
That’s also what a former Apple executive told me this week: that Foxconn is not a career. You don’t see 30- and 40-year-old heads of households on the assembly lines. The young Chinese see it as “something like a first summer job,” he told me — a way to make some bucks for a few months before heading home, or to get some work experience before moving up.
The second enlightening twist, for me, was a note sent to me from a young man, born in China and now attending an American university.
My aunt worked several years in what Americans call “sweat shops.” It was hard work. Long hours, “small” wage, “poor” working conditions. Do you know what my aunt did before she worked in one of these factories? She was a prostitute.
Circumstances of birth are unfortunately random, and she was born in a very rural region. Most jobs were agricultural and family owned, and most of the jobs were held by men. Women and young girls, because of lack of educational and economic opportunities, had to find other “employment.”
The idea of working in a “sweat shop” compared to that old lifestyle is an improvement, in my opinion. I know that my aunt would rather be “exploited” by an evil capitalist boss for a couple of dollars than have her body be exploited by several men for pennies.
That is why I am upset by many Americans’ thinking. We do not have the same opportunities as the West. Our governmental infrastructure is different. The country is different.
Yes, factory is hard labor. Could it be better? Yes, but only when you compare such to American jobs.
If Americans truly care about Asian welfare, they would know that shutting down “sweat shops” would force many of us to return to rural regions and return to truly despicable “jobs.” And I fear that forcing factories to pay higher wages would mean they hire FEWER workers, not more.
Anyway, now my aunt has been living in New York for one year after saving up money for a plane ticket and visa, and she is wonderfully happy to have escaped Asia and reunited with our family. None of this would be possible if it wasn’t for that “sweat shop.” ...
... In other words, the lessons of this controversy have more to do with China than with Apple. This is only marginally a technology story — I imagine we could find low-wage, tiring jobs at every factory in China, making everything that China makes. Every toy, every houseware, every garment. You could do a year’s worth of exposés.
Still, we should be happy that in this corner of the Chinese landscape, things are getting better. On ABC’s show, a Fair Labor Association inspector, Ines Kaempfer, called the last month a “Nike moment” for Apple. In the 1990s, Nike’s sweatshops weren’t the worst in the business, but they’re the ones that got the negative publicity. In response, it cleaned up its act, and thereby lifted the bar for the entire industry.
Clearly, the recent spotlight on conditions at Foxconn has performed a similar service for the electronics industry. Better wages are good. More careful monitoring is good. Transparency — like letting TV cameras into your assembly lines — is good.
... But while China’s industrial subsidies, trade policies, undervalued currency and lack of enforcement for intellectual property rights all remain sticking points for the United States, there is at least one area in which the playing field seems to be slowly leveling: the cheap labor that has made China’s factories nearly unbeatable is not so cheap anymore.
China has experienced sporadic labor shortages, which in turn have driven up its once rock-bottom labor costs. This trend is particularly evident in the weeks following China’s Spring Festival, or New Year, when more than 100 million rural migrants return to the countryside to spend the year’s biggest holiday with family. Coaxing those same migrants back into the urban work force has proven increasingly difficult. ...
... Numerous factors underlie China’s mounting labor woes. Until now the country has been able to achieve its stunning economic growth by shifting large numbers of farmers into nonagricultural jobs. Over the past several years economists have warned that China may be reaching the so-called Lewis Turning Point — the stage at which the rural surplus labor pool effectively runs dry and wages begin to rapidly increase.
At the same time, China’s population has been steadily aging, and by 2020 the nation will have more than 200 million people over age 60. Furthermore, rising living costs in urban China coupled with markedly improved conditions in rural areas are encouraging many would-be migrant workers to look for opportunities closer to home.
In addition to a shortage in the sheer number of available workers, China’s labor problems are further exacerbated by a shift in the quality and character of its work force. For the older generation, there is very little that a factory or foreman can dish out that seems too difficult to deal with, given that they witnessed, or grew up with parents who had witnessed, the nation’s rocky ride through the Communist Revolution, collectivization, the disastrous Great Leap Forward and the Cultural Revolution. These are the people who pioneered the model of migrant labor on which Chinese manufacturing has come to depend: long hours in substandard conditions, all for a fraction of what United States workers earn.
As illustrated by the recent headlines over working conditions at Foxconn, which makes components for Apple, there are plenty of migrant workers still living and working under that model. But by and large China’s younger generation is no longer willing to endure hardship without clear expectations that it is a temporary means to a more comfortable end.
According to the government report, a full 70 percent of rural migrants are now under 30. That means they are members of the so-called after-’80s generation — a euphemistic Chinese term to describe those who grew up during the nation’s economic revival and have thus never experienced real deprivation or acquired a taste for the chiku (“eating bitterness”) work ethic championed by previous generations.
In the past, China’s migrant workers were just thankful not to go hungry; today they are savvy and secure enough to start being choosy. Higher salaries, basic benefits, better working conditions and less physically taxing jobs are only the beginning of their demands, and for many factories, these are already too costly to be tenable. ...
China illustrates the common economic development experience. Starting factories in pre-industrial societies leads to disruptions. What appear to us as "sweatshops" are frequently viewed as great opportunties by the people who choose them. That is how bad their daily existence is. And yes, those with governmental and economic power will often abuse the workers brought into industrial jobs.
But as more workers work longer at jobs, they become more proficient. They find themselves able to demand higher wages. As wages increase, they end up with more property. With more property, they have more at stake in having just governmental and economic systems. As they demand more just systems, producitivity increases leading to the creation of more business and more jobs. And upward the spiral goes.
I'm not saying we shouldn't be working against slave labor and that we shouldn't be pressuring corporations to behave in ethical ways. But too many activists see businesses in the these economies in purely static terms, believing that wages and conditions fixed unless someone strategizes to change them. It think it is often more helpful to see these firms on a trajetory of change, looking for ways to faciliate next steps toward a more just and prosperous society.
... We Americans tend to believe that democracy is an intrinsic part of good governance and that more democracy means better quality government. ...
... I have no doubt that more democratic accountability will improve governance in many poor countries in Africa, Latin America, and the Middle East. East Asia is different, however, insofar as it has a very long tradition of relatively high-quality centralized bureaucratic government. This begins with Shang Yang’s reforms in the early state of Qin, and continues to this day in the extraordinary record of the Chinese Communist Party in bringing China through one of the most complex economic transformations one can imagine. Many East Asians today wonder whether rapid democratization will in fact help or hurt the quality of governance there. What they don’t have is either democratic accountability or rule of law.
Conversely, I would argue that the quality of governance in the US tends to be low precisely because of a continuing tradition of Jacksonian populism. Americans with their democratic roots generally do not trust elite bureaucrats to the extent that the French, Germans, British, or Japanese have in years past. This distrust leads to micromanagement by Congress through proliferating rules and complex, self-contradictory legislative mandates which make poor quality governance a self-fulfilling prophecy. The US is thus caught in a low-level equilibrium trap, in which a hobbled bureaucracy validates everyone’s view that the government can’t do anything competently. The origins of this, as Martin Shefter pointed out many years ago, is due to the fact that democracy preceded bureaucratic consolidation in contrast to European democracies that arose out of aristocratic regimes.
This is not to say that I think the quality of governance is better in China than in the US. ...
This article illustrates well why calls for democracy as a pancea for what is troubling every struggling country is misguided. The issues are much more complex.
Women overseas are reaching new heights professionally. Here's what we can learn from our emerging market counterpart.
The mention of women in emerging economies often evokes a picture of oppressed and poverty-stricken victims, relegated to the sidelines of male-dominated cultures. That’s the usual narrative, exemplified by the best-selling Half the Sky by Nicholas Kristof and Sheryl Wu Dunn. Yes, these problems are real and of critical importance. But educated women in Brazil, Russia, India and China — the BRIC economies which represent the four largest emerging markets — and the United Arab Emirates, are telling a different tale: one of agency and power.
Just as in the U.S. — where female college graduates now outnumber men — BRIC women are flooding into universities and graduate schools. They represent 65% of college graduates in the UAE, 60% in Brazil and 57% in Russia. These figures represent more than just a tiny elite: Between 15 and 25% of young women in the BRICs/UAE are now college-educated — a substantial number. And they’re not just earning degrees: They are bursting with the desire to use them.
Highly educated women the world over are ambitious, but ambition and aspiration among BRIC/UAE women is off the charts. New data from the Center for Work-Life Policy show that 85% of female college graduates in India and 92% in the UAE consider themselves very ambitious, compared to a paltry 36% in the U.S. In India, 86% of college-educated women are shooting for the top job, closely followed by their counterparts in Brazil (80%) and China (76%).
And turbo-charged ambition is paying off. In Brazil, 14% of the CEOs of large companies are female; in India, the figure is 11%. Meanwhile, the number of women who head up Fortune 500 corporations in the United States and FTSE 100 firms in the United Kingdom is stuck at less than 5%. What’s behind these startling numbers? Our study — which is based on rich, new data — describes opportunities and obstacles, which are surprisingly different from those in the West. ...
Goods and services from China accounted for only 2.7% of U.S. personal consumption expenditures in 2010, of which less than half reflected the actual costs of Chinese imports. The rest went to U.S. businesses and workers transporting, selling, and marketing goods carrying the "Made in China" label. Although the fraction is higher when the imported content of goods made in the United States is considered, Chinese imports still make up only a small share of total U.S. consumer spending. This suggests that Chinese inflation will have little direct effect on U.S. consumer prices.
Article
The United States is running a record trade deficit with China. This is no surprise, given the wide array of items in stores labeled “Made in China.” This Economic Letter examines what fraction of U.S. consumer spending goes for Chinese goods and what part of that fraction reflects the actual cost of imports from China. We perform a similar exercise to determine the foreign and domestic content of all U.S. imports.
In our analysis, we combine data from several sources: Census Bureau 2011 U.S. International Trade Data; the Bureau of Labor Statistics 2010 input-output matrix; and personal consumption expenditures (PCE) by category from the U.S. national accounts of the Commerce Department’s Bureau of Economic Analysis. We use the combined data to answer three questions:
• What fraction of U.S. consumer spending goes for goods labeled “Made in China” and what fraction is spent on goods “Made in the USA”?
• What part of the cost of goods “Made in China” is actually due to the cost of these imports and what part reflects the value added by U.S. transportation, wholesale, and retail activities? That is, what is the U.S. content of “Made in China”?
• What part of U.S. consumer spending can be traced to the cost of goods imported from China, taking into account not only goods sold directly to consumers, but also goods used as inputs in intermediate stages of production in the United States?
Answers?
Although globalization is widely recognized these days, the U.S. economy actually remains relatively closed. The vast majority of goods and services sold in the United States is produced here. In 2010, imports were about 16% of U.S. GDP. Imports from China amounted to 2.5% of GDP. ...
... Obviously, if a pair of sneakers made in China costs $70 in the United States, not all of that retail price goes to the Chinese manufacturer. In fact, the bulk of the retail price pays for transportation of the sneakers in the United States, rent for the store where they are sold, profits for shareholders of the U.S. retailer, and the cost of marketing the sneakers. These costs include the salaries, wages, and benefits paid to the U.S. workers and managers who staff these operations. ...
... This U.S. fraction is much higher for imports from China. Whereas goods labeled “Made in China” make up 2.7% of U.S. consumer spending, only 1.2% actually reflects the cost of the imported goods. Thus, on average, of every dollar spent on an item labeled “Made in China,” 55 cents go for services produced in the United States. In other words, the U.S. content of “Made in China” is about 55%. The fact that the U.S. content of Chinese goods is much higher than for imports as a whole is mainly due to higher retail and wholesale margins on consumer electronics and clothing than on most other goods and services. ...
Conclusion
Figure 2 shows the share of U.S. PCE [personal consumption expenditures] based on where goods were produced, taking into account intermediate goods production, and the domestic and foreign content of imports. Of the 2.7% of U.S. consumer purchases going to goods labeled “Made in China,” only 1.2% actually represents China-produced content. If we take into account imported intermediate goods, about 13.9% of U.S. consumer spending is attributable to imports, including 1.9% imported from China.
Since the share of PCE attributable to imports from China is less than 2% and some of this can be traced to production in other countries, it is unlikely that recent increases in labor costs and inflation in China will generate broad-based inflationary pressures in the United States.
... These are the sort of people whose historical equivalents in 18th- and 19th-century Europe developed political ambitions to match their economic status and fueled the rise of democracy.
Mr. Liu laughs at the suggestion that the same thing might happen in 21st-century China. "Undeniably, the people in power hope the country will develop and people will have a better life," he says. "But the bottom line is that the people should not challenge their power. We have given up hope of changing the government." ...
... Money, he believes, is the only possible passport to some sort of personal autonomy in the absence of political freedom. ...
... "In theory, the Constitution gives everyone the right to vote; but in reality, the law is not enforced," adds her husband. "Nobody has ever asked me to vote, and I've never even seen a ballot paper. Even my class monitor in elementary school was not elected." ...
The dwindling allure of building factories offshore.
“WHEN clients are considering opening another manufacturing plant in China, I’ve started to urge them to consider alternative locations,” says Hal Sirkin of the Boston Consulting Group (BCG). “Have they thought about Vietnam, say? Or maybe [they could] even try Made in USA?” When clients are American firms looking to build factories to serve American customers, Mr Sirkin is increasingly likely to suggest they stay at home, not for patriotic reasons but because the economics of globalisation are changing fast.
Labour arbitrage—taking advantage of lower wages abroad, especially in poor countries—has never been the only force pushing multinationals to locate offshore, but it has certainly played a big part. Now, however, as emerging economies boom, wages there are rising. Pay for factory workers in China, for example, soared by 69% between 2005 and 2010. So the gains from labour arbitrage are starting to shrink, in some cases to the point of irrelevance, according to a new study by BCG.
“Sometime around 2015, manufacturers will be indifferent between locating in America or China for production for consumption in America,” says Mr Sirkin. That calculation assumes that wage growth will continue at around 17% a year in China but remain relatively slow in America, and that productivity growth will continue on current trends in both countries. It also assumes a modest appreciation of the yuan against the dollar. ...
... Many multinationals will continue to build most of their new factories in emerging markets, not to export stuff back home but because that is where demand is growing fastest. And companies from other rich countries will probably continue to enjoy the opportunity for labour arbitrage for longer than American ones, says Mr Sirkin. Their labour costs are higher than America’s and will remain so unless the euro falls sharply against the yuan. ...
An absolutely brilliant article. I've excerpted at length because it is such a long article but I would higly recommend reading the whole thing. It highligts well the challenge of applying simplistic models (whether "more aid" or "more markets") of economic devolopment .
But what if the experts are wrong?
… But what if the poor are not, in general, eating too little food? What if, instead, they are eating the wrong kinds of food, depriving them of nutrients needed to be successful, healthy adults? What if the poor aren't starving, but choosing to spend their money on other priorities? Development experts and policymakers would have to completely reimagine the way they think about hunger. And governments and aid agencies would need to stop pouring money into failed programs and focus instead on finding new ways to truly improve the lives of the world's poorest.
Consider India, one of the great puzzles in this age of food crises. The standard media story about the country, at least when it comes to food, is about the rapid rise of obesity and diabetes as the urban upper-middle class gets richer. Yet the real story of nutrition in India over the last quarter-century, as Princeton professor Angus Deaton and Jean Drèze, a professor at Allahabad University and a special advisor to the Indian government, have shown, is not that Indians are becoming fatter: It is that they are in fact eating less and less. Despite the country's rapid economic growth, per capita calorie consumption in India has declined; moreover, the consumption of all other nutrients except fat also appears to have gone down among all groups, even the poorest. Today, more than three-quarters of the population live in households whose per capita calorie consumption is less than 2,100 calories in urban areas and 2,400 in rural areas -- numbers that are often cited as "minimum requirements" in India for those engaged in manual labor. Richer people still eat more than poorer people. But at all levels of income, the share of the budget devoted to food has declined and people consume fewer calories.
What is going on? The change is not driven by declining incomes; by all accounts, Indians are making more money than ever before. Nor is it because of rising food prices -- between the early 1980s and 2005, food prices declined relative to the prices of other things, both in rural and urban India. Although food prices have increased again since 2005, Indians began eating less precisely when the price of food was going down.
So the poor, even those whom the FAO would classify as hungry on the basis of what they eat, do not seem to want to eat much more even when they can. Indeed, they seem to be eating less. What could explain this? Well, to start, let's assume that the poor know what they are doing. After all, they are the ones who eat and work. If they could be tremendously more productive and earn much more by eating more, then they probably would. So could it be that eating more doesn't actually make us particularly more productive, and as a result, there is no nutrition-based poverty trap?
One reason the poverty trap might not exist is that most people have enough to eat. We live in a world today that is theoretically capable of feeding every person on the planet. In 1996, the FAO estimated that world food production was enough to provide at least 2,700 calories per person per day. Starvation still exists, but only as a result of the way food gets shared among us. There is no absolute scarcity. Using price data from the Philippines, we calculated the cost of the cheapest diet sufficient to give 2,400 calories. It would cost only about 21 cents a day, very affordable even for the very poor (the worldwide poverty line is set at roughly a dollar per day). The catch is, it would involve eating only bananas and eggs, something no one would like to do day in, day out. But so long as people are prepared to eat bananas and eggs when they need to, we should find very few people stuck in poverty because they do not get enough to eat. Indian surveys bear this out: The percentage of people who say they do not have enough food has dropped dramatically over time, from 17 percent in 1983 to 2 percent in 2004. So, perhaps people eat less because they are less hungry.
And perhaps they are really less hungry, despite eating fewer calories. It could be that because of improvements in water and sanitation, they are leaking fewer calories in bouts of diarrhea and other ailments. Or maybe they are less hungry because of the decline of heavy physical work. With the availability of drinking water in villages, women do not need to carry heavy loads for long distances; improvements in transportation have reduced the need to travel on foot; in even the poorest villages, flour is now milled using a motorized mill, instead of women grinding it by hand. Using the average calorie requirements calculated by the Indian Council of Medical Research, Deaton and Drèze note that the decline in calorie consumption over the last quarter-century could be entirely explained by a modest decrease in the number of people engaged in heavy physical work.
Beyond India, one hidden assumption in our description of the poverty trap is that the poor eat as much as they can. …
… In Udaipur, India, for example, we find that the typical poor household could spend up to 30 percent more on food, if it completely cut expenditures on alcohol, tobacco, and festivals. The poor seem to have many choices, and they don't choose to spend as much as they can on food. Equally remarkable is that even the money that people do spend on food is not spent to maximize the intake of calories or micronutrients. Studies have shown that when very poor people get a chance to spend a little bit more on food, they don't put everything into getting more calories. Instead, they buy better-tasting, more expensive calories. …
… All told, many poor people might eat fewer calories than we -- or the FAO -- think is appropriate. But this does not seem to be because they have no other choice; rather, they are not hungry enough to seize every opportunity to eat more. So perhaps there aren't a billion "hungry" people in the world after all.
… Should we let it rest there, then? Can we assume that the poor, though they may be eating little, do eat as much as they need to?
That also does not seem plausible. While Indians may prefer to buy things other than food as they get richer, they and their children are certainly not well nourished by any objective standard. Anemia is rampant; body-mass indices are some of the lowest in the world; almost half of children under 5 are much too short for their age, and one-fifth are so skinny that they are considered to be "wasted."
And this is not without consequences. …
… The poor often resist the wonderful plans we think up for them because they do not share our faith that those plans work, or work as well as we claim. We shouldn't forget, too, that other things may be more important in their lives than food. Poor people in the developing world spend large amounts on weddings, dowries, and christenings. Part of the reason is probably that they don't want to lose face, when the social custom is to spend a lot on those occasions. In South Africa, poor families often spend so lavishly on funerals that they skimp on food for months afterward.
And don't underestimate the power of factors like boredom. Life can be quite dull in a village. There is no movie theater, no concert hall. And not a lot of work, either. In rural Morocco, Oucha Mbarbk and his two neighbors told us they had worked about 70 days in agriculture and about 30 days in construction that year. Otherwise, they took care of their cattle and waited for jobs to materialize. All three men lived in small houses without water or sanitation. They struggled to find enough money to give their children a good education. But they each had a television, a parabolic antenna, a DVD player, and a cell phone. …
… We often see the world of the poor as a land of missed opportunities and wonder why they don't invest in what would really make their lives better. But the poor may well be more skeptical about supposed opportunities and the possibility of any radical change in their lives. They often behave as if they think that any change that is significant enough to be worth sacrificing for will simply take too long. This could explain why they focus on the here and now, on living their lives as pleasantly as possible and celebrating when occasion demands it. …
SHANGHAI — America’s huge trade deficit with China has raised concerns about American competitiveness and jobs moving overseas. But a new study offers a glimmer of hope to Americans: Last year, American exports to China soared 32 percent to a record $91.9 billion.
A study by a trade group called the U.S.- China Business Council says China is now the world’s fastest-growing destination for American exports. ...
THE argument sounds familiar. The disruptive reforms that have so changed the private sector should now be let loose on the public sector. The relationship between government and civil society has been that between master and servant; instead, it should be a partnership, with the state creating the right environment for companies and charities to do more of its work. The conclusion: “We are in a transition from a big state to a small state, and from a small society to a big society.”
A Republican presidential candidate in America? David Cameron rallying Britain’s Tories? Neither: the speaker is supposedly China’s most highly regarded bureaucrat. Last year Ma Hong won the country’s national award for government innovation—a great coup for her department, which is trying to get more non-governmental organisations (NGOs) to take over parts of welfare, health and education services in the city of Shenzhen, just across the border from Hong Kong.
The award partly reflects the whirl of activity that is Ms Ma. She has dismantled most of the controls on local NGOs: rather than be sponsored by some government department, all they have to do is register with her. She began in 2004 with industrial associations, but has extended the net to include independent charities. Almost 4,000 “social groups” are now registered—nearly double the number in 2002, when they were all tied to the state. ...
... It is not hard to poke holes in China’s version of the Big Society, as we shall see later in this special report. But there is plainly a drive to make government work a little more like the private sector. “Just as a human has two legs, China has a very long economic one and a very short social one,” observes Ms Ma. “They should be of equal length.” ...
Very interesting article. Just starting in on the other articles that are part of the special report.
With exports from low-wage countries like China on the rise, the question of what this means for trade and jobs in developed countries is a furious war of words. This column, using firm-level data for France between 1995 and 2005, shows that competition from low-wage markets actually boosts the sales of high-quality goods – but it concedes the benefits are not universal. ...
Consequences
Our results show that, over 1995-2005, a period characterised by the surge of low-wage countries in international markets,
France has specialised in the production of higher quality goods.
This specialisation has had a positive impact on France’s export performances, dampening the fall of its market share in foreign markets.
Beyond the effect on aggregate trade, such adjustments in specialisation patterns are likely to have important macroeconomic consequences. Hausmann et al. (2007), for example, discuss how countries that specialise in higher quality goods can enjoy better growth performances in the long run. However, changes in the structure of production can also have important transitory effects. In particular, if the relative content of production in skilled and unskilled labour is not the same depending on the produced quality, a reallocation of production in favour of high quality goods is likely to modify labour-market equilibria (see Verhoogen 2008).
This may be part of the story when it comes to explaining the rising wage premium and employment inequalities between skilled and unskilled workers observed over the last 20 years in most developed countries.
... For US firms, the decision to manufacture overseas has long seemed a no-brainer. Labor costs in China and other developing nations have been so cheap that as recently as two or three years ago, anyone who refused to offshore was viewed as a dinosaur, certain to go extinct as bolder companies built the future in Asia. But stamping out products in Guangdong Province is no longer the bargain it once was, and US manufacturing is no longer as expensive. As the labor equation has balanced out, companies—particularly the small to medium-size businesses that make up the innovative guts of America’s technology industry—are taking a long, hard look at the downsides of extending their supply chains to the other side of the planet. ...
TOKYO — Japan’s economy contracted in the fourth quarter when compared with the previous three months, though analysts are optimistic about the country’s prospects for the rest of the year.
Japan’s gross domestic product fell 0.3 percent in the October-December quarter as the end of generous government incentives on environmentally friendly cars resulted in a temporary decline in spending. At an annualized rate, Japan’s economy shrank 1.1 percent from the previous quarter.
The contraction, the first in five quarters, brought Japan’s economy for 2010 to $5.47 trillion, the Japanese Cabinet Office said. That compared with a $5.88 trillion economy for fast-growing China. The latest numbers were further evidence of China’s rapid ascent as an economic superpower, as China surpassed Japan last summer after the half-year gross domestic product numbers were released. Just five years ago, China’s gross domestic product was around $2.3 trillion, about half Japan’s.
Japan’s economy has stagnated over the last two decades, reflecting its continued decline in economic and political clout.
The country had the world’s second-largest economy after the United States for much of the last four decades. In the 1980s, its rapid growth even led to talk of the Japanese economy’s overtaking that of the United States. ...
THE Food & Agriculture Organisation, a UN body, estimates that the world's forests covered 4.03 billion hectares in 2010. Although the world as a whole continues to lose forests, the annual rate of deforestation in the past decade has fallen to 5.2m hectares, compared with 8.3m hectares a year between 1990 and 2000. Some large countries, including China and India, increased their forest cover between 2000 and 2010. China’s increased at an average annual rate of 1.6%, while India’s went up by 0.5% a year. Norway and Sweden have also added forests over the past decade. With forests covering nearly 70% of its area in 2010, Sweden is one of the world’s most sylvan countries. Nigeria, by contrast, has been chopping its forests down at a rate of 3.7% a year. By last year only one-tenth of its land remained forested.
US manufacturing still tops China’s by nearly 46 percent
... A recent Heartland Monitor survey finds “clear anxiety about the decades-long employment shift away from manufacturing to service jobs,’’ National Journal’s Ron Brownstein reported in December. The “decline of US manufacturing’’ is giving Americans a “sense of economic precariousness’’ — only one in five believe that the United States has the world’s strongest economy, versus nearly half who think China is in the lead. “Near the root of the unease for many of those polled is the worry that the United States no longer makes enough stuff.’’ When asked why US manufacturing jobs have declined, 58 percent cite off-shoring by American companies to take advantage of lower labor costs.
There’s just one problem with all the gloom and doom about American manufacturing. It’s wrong.
Americans make more “stuff’’ than any other nation on earth, and by a wide margin. According to the United Nations’ comprehensive database of international economic data, America’s manufacturing output in 2009 (expressed in constant 2005 dollars) was $2.15 trillion. That surpassed China’s output of $1.48 trillion by nearly 46 percent. China’s industries may be booming, but the United States still accounted for 20 percent of the world’s manufacturing output in 2009 — only a hair below its 1990 share of 21 percent. ...
... So why do so many Americans fear that the Chinese are eating our lunch?
Part of the reason is that fewer Americans work in factories. Millions of industrial jobs have vanished in recent decades, and there is no denying the hardship and stress that has meant for many families. But factory employment has declined because factory productivity has so dramatically skyrocketed: Revolutions in technology enable an American worker today to produce far more than his counterpart did a generation ago. Consequently, even as America’s manufacturing sector out-produces every other country on earth, millions of young Americans can aspire to become not factory hands or assembly workers, but doctors and lawyers, architects and engineers.
Perceptions also feed the gloom and doom. In its story on Americans’ economic anxiety, National Journal quotes a Florida teacher who says, “It seems like everything I pick up says ‘Made in China’ on it.’’ To someone shopping for toys, shoes, or sporting equipment, it often can seem that way. But that’s because Chinese factories tend to specialize in low-tech, labor-intensive goods — items that typically don’t require the more advanced and sophisticated manufacturing capabilities of modern American plants.
A vast amount of “stuff’’ is still made in the USA, albeit not the inexpensive consumer goods that fill the shelves in Target or Walgreens. American factories make fighter jets and air conditioners, automobiles and pharmaceuticals, industrial lathes and semiconductors. Not the sort of things on your weekly shopping list? Maybe not. But that doesn’t change economic reality. They may have “clos[ed] down the textile mill across the railroad tracks.’’ But America’s manufacturing glory is far from a thing of the past.
Although today is the dawn of the Chinese New Year, most people are unaware that Chinese Christians are gearing up to be the world's most potent missionary force.
China? Christians? Sure enough. For decades now they've had plans to evangelize the Muslim world that lies along the old Silk Road route. This could be one of the most ambitious missionary enterprises in 2,000 years of Christianity. No national church has amazed the world as much as that of the Chinese. From 1 million at the time of the Communist takeover in 1949, it's grown to 100 million followers, a breathtaking growth in 60 years.
Evangelical Chinese Christians have come up with a way to evangelize a large portion of the world that will never see a western missionary. These are countries with large Muslim, Buddhist and Hindu populations, most of them located somewhere along a 7,000-mile route stretching from Xian in central China to the cities of Jerusalem, Antioch and Istanbul in the Middle East. Those were the ancient terminuses of the famous Silk Road.
Mission experts estimate there are some 2 billion people in these countries who've never heard of Christianity. And what nationality has businesses and enterprises in every nation on the Earth? And which is the most populous country with the fastest-growing church? Starting several decades ago, Chinese Christians began to strategize how to secretly plant churches along this Silk Road through an initiative called the Back to Jerusalem movement. The idea was to start businesses in countries from India to Iran that would never suspect that the Chinese grocer or restaurant owner down the street would like to convert them.
In the past 20 years, preparations to send teams to these countries has ramped up considerably. ...
This really is a fascinating chart but it is kind of like one of those pictures with all the dots. You look at it long enough and a dolphin appears.
Across the horizontal axis are ventiles (and no, they aren't related to gentiles.) Each ventile is 1/20, or 5%, of the population ranked from least to most income. The verticle axis is percentile of the world income distribution (All income is in inflation adjusted international dollars.)
So, the poorest ventile in the USA still recieves more than 68% of the rest of the world. Brazil has a wide disparity of income with the bottom ventile at the bottom of the world distribution and the top ventile nearly on a par with the USA top ventile. India's top ventile doesn't event make it the level of the lowest ventile in the USA.
Among other things we can see how much greater is the income inequality in emerging giants but their lines are very likely to mirror the USA line in coming years.
Speaking at a TED Salon in London, economist Martin Jacques asks: How do we in the West make sense of China and its phenomenal rise? The author of "When China Rules the World," he examines why the West often puzzles over the growing power of the Chinese economy, and offers three building blocks for understanding what China is and will become.
... How many poor people are there in the world and how many Are there likely to be in 2015?
To calculate the number of people in the world living in extreme poverty, we update the World Bank’s official $1.25 a day poverty estimates for 119 countries, which together account for 95 percent of the population of the developing world. To do this, we take the most recent household survey data for each country, and generate poverty estimates for the years 2005 to 2015 using historical and forecast estimates of per capita consumption growth, making the simplifying assumption that the income distribution in each country remains unchanged.
Global poverty figures are then calculated by adding together the number of poor from each country. (See the Appendix for a full account of our methodology.) Our results indicate that the world has seen a dramatic decrease in global poverty over the past six years, and that this trend is set to continue in the four years ahead. We estimate that between 2005 and 2010, the total number of poor people around the world fell by nearly half a billion people, from over 1.3 billion in 2005 to under 900 million in 2010. Looking ahead to 2015, extreme poverty could fall to under 600 million people—less than half the number regularly cited in describing the number of poor people in the world today. Poverty reduction of this magnitude is unparalleled in history: never before have so many people been lifted out of poverty over such a brief period of time.
When measured as a share of population, progress remains impressive, but is more in line with past trends. In the early 1980s, more than half of all people in developing countries lived in extreme poverty. By 2005, this was down to a quarter. According to our estimates, as of 2010 less than 16 percent remained in poverty, and fewer than 10 percent will likely be poor by 2015.
The first Millennium Development Goal defines a target (MDG1a) of halving the rate of global poverty by 2015 from its 1990 level. In an official report prepared for the U.N. MDG conference this past September, the World Bank stated that we are 80 percent of the way toward this target and are on track to meet it by 2015, though the Bank warned that “the economic crisis adds new risks to prospects for reaching the goal.”3
Our assessment is considerably more upbeat. We believe that the MDG1a target has already been met—approximately three years ago.4 Furthermore, by 2015, we will not only have halved the global poverty rate, as per MDG1a, but will have halved it again.
Over the past half century, the developing world, including many of the world’s poorest countries, have seen dramatic improvements in virtually all non-income measures of well-being: since 1960, global infant mortality has dropped by more than 50 percent, for example, and the share of the world’s children enrolled in primary school increased from less than half to nearly 90 percent between 1950 and today.5 Likewise there have been impressive gains in gender equality, access to justice and civil and political rights. Yet, through most of this period, the incomes of rich and poor countries diverged, and income poverty has proven a more persistent challenge than other measures of wellbeing.6 The rapid decline in global poverty now underway—and the early achievement of the MDG1a target—marks a break from these trends, and could come to be seen as a turning point in the history of global development. ...
Here are some interesting charts and graphs:
I particularly liked this graph:
Nigeria will soon have more poor people than India.
China has been one of the world’s most dynamic economies in recent decades, but how did it fall so far behind? This column argues that the industrial revolution occurred in Europe rather than China because European entrepreneurs were eager to adopt machines to cut down on high labour costs. China didn’t “miss” the industrial revolution – it didn’t need it.
One of the big debates in economics is about the causes of the arguably most dramatic change in development trajectory in (recent) world history, the industrial revolution.
Before about 1800, growth did occur, but it was mainly “extensive”, leading to more people but almost no growth in income per capita.
After about 1800 this changed, and growth became (increasingly) “intensive”, focused on an almost continuous growth of GDP per head.
There is consensus about the fact that this change in growth pattern started in northwestern Europe, and gradually spread to large parts of the western and, after a lag, eastern and southern world.
Why this happened, and where it happened are topics of heated debate among historians. The recent “Chinese miracle” – fabulous growth since about 2000 – has had an important impact on this debate.
How could the Chinese economy, which is clearly capable of dramatic economic change (in view of what happened since 1979), manage to “miss” the industrial revolution of the 19th century?
How developed was China in the 18th century, when it was (under the Qing) experiencing a long period of economic stability and development? ...
... Mixed modernity
This detailed comparison results in a very mixed picture of Chinese economic modernity compared with that of Western Europe. Yes, the Yangzi delta had a relatively advanced economy, with high levels of agricultural productivity and urbanisation and a high degree of structural transformation; we can accept this part of Pomeranz’s thesis. But this did not imply that it was “ready” for an industrial revolution.
The industrial revolution was a process of mechanisation in which expensive labour was substituted for by machines driven by coal – as Bob Allen (2009) has demonstrated. Chinese factor costs were not at all conducive to such a change.
Whereas entrepreneurs in Europe were very eager to develop new technologies that increased labour productivity via the capital-labour ratio, Chinese businesses barely had any incentive to do so. That the industrial revolution emerged in England was therefore not accidental or the result of luck, but the long-run effect of its fundamentally different factor prices, reflecting its different economic and institutional trajectory.
...Meanwhile, the perception is that American children live a relatively easy life and coast their way through school. They don't do any more homework than they have to; they spend an extraordinary amount of time playing games, socializing on the Internet, text-messaging each other; they work part time to pay for their schooling and social habits. And they party. A lot. These stereotypes worry many Americans. They believe the American education system puts the country at a great disadvantage. But this is far from true.
The independence and social skills American children develop give them a huge advantage when they join the workforce. They learn to experiment, challenge norms, and take risks. They can think for themselves, and they can innovate. This is why America remains the world leader in innovation; why Chinese and Indians invest their life savings to send their children to expensive U.S. schools when they can. India and China are changing, and as the next generations of students become like American ones, they too are beginning to innovate. So far, their education systems have held them back.
My research team at Duke looked in depth at the engineering education of China and India. We documented that these countries now graduate four to seven times as many engineers as does the U.S.The quality of these engineers, however, is so poor that most are not fit to work as engineers; their system of rote learning handicaps those who do get jobs, so it takes two to three years for them to achieve the same productivity as fresh American graduates.As a result, significant proportions of China's engineering graduates end up working on factory floors and Indian industry has to spend large sums of money retraining its employees. After four or five years in the workforce, Indians do become innovative and produce, overall, at the same quality as Americans, but they lose a valuable two to three years in their retraining. ...
