September 5, 2015

THE RACE TO MEDIOCRITY:

China's Market Crash Means Chinese Supergrowth Could Have Only 5 More Years to Run (Brad DeLong, 08/28/2015, Huffington Post)

A great deal of China supergrowth always seemed to me to be just catch-up to the norm one would expect, given East Asian societal-organizational capabilities. China had been far depressed below that norm by the misgovernment of the Qing, the civil wars of the first half of the twentieth century, the Japanese conquest and the manifold disasters of rule by the paranoid Mao Zedong. Take convergence to that East Asian societal-capability norm, the wisdom of Deng Xiaoping and then Jiang Zemin in applying the standard Hamiltonian gaining-manufacturing-technological-capability-through-light-manufacturing-exports development strategy (albeit on a world-historical scale) and a modicum of good luck, and China seemed understandable. There thus seemed to me to be no secret Chinese institutional or developmental sauce.

Given that, I focused on how China lacked the good-and-honest government, the societal trust and the societal openness factors that appear to have made for full convergence to the U.S. frontier in countries such as Japan. One of the few historical patterns to repeat itself with regularity over the past three centuries has been that, wherever governments are unable to make the allocation of property and contract rights stick, industrialization never reaches North Atlantic levels of productivity.

Prepare yourselves: The Great Migration will be with us for decades (Fraser Nelson7:26PM BST 03 Sep 2015, )

This Great Migration was not expected because, for years, politicians believed that there would be less of it as poor countries became richer. Give aid, not shelter, ran the argument. "As the benefits of economic growth are spread in Mexico," Bill Clinton once assured Americans, "there will be less illegal immigration because more Mexicans will be able to support their children by staying home." When José Manuel Barroso led the European Commission, he made the same argument: third world development will tackle the "root causes" of the problem. In fact, the reverse is true.

Never has there been less hardship; since Clinton's day, the share of the population in extreme poverty (surviving on less than $1.25 a day) has halved. Never has there been less violence: the Syrian conflict is an exception in a period of history where war has waned. It might not feel like it, but the world is more prosperous and peaceful than at any time in human history - yet the number of emigrants stands at a record high. But there is no paradox. As more people have the money to move, more are doing so - and at extraordinary personal risk.

So the Great Migration is a side-effect of perhaps the greatest success of our times: the collapse in global poverty. The Washington-based Center for Global Development recently set this out, in a study drawing on more than a thousand national censuses over five decades.

When a poor country becomes richer, its emigration rate rises until it becomes as wealthy as Albania or Armenia are today. This process usually takes decades, and only afterwards does wealth subdue emigration. War is a catalyst. If conflict strikes, and the country isn't quite as poor as it once was, more of those affected now have the means to cross the world. The digital age means they also have the information.

Posted by at September 5, 2015 7:38 AM
  

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