The long, slow death of global development(americanaffairsjournal.org)
americanaffairsjournal.org
The long, slow death of global development
https://americanaffairsjournal.org/2022/11/the-long-slow-death-of-global-development/
81 comments
As the article points out, PPP adjustment is misleading. Since GDP is disproportionately contributed to by higher income / higher COL urban areas, but PPP adjustment is made based on the average COL (thus mostly weighted based on rural areas), such PPP based calculations are grossly misleading.
India certainly has had a substantial rise in GDP per capita, but the absolute prosperity is nowhere near $6800 GDP per capita.
India certainly has had a substantial rise in GDP per capita, but the absolute prosperity is nowhere near $6800 GDP per capita.
The rise in Indian nominal GDP per capita is even higher than that at PPP.
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location...
In the year 2000 it was $US 442. It is now $2256 . A five fold increase.
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location...
In the year 2000 it was $US 442. It is now $2256 . A five fold increase.
More specifically ~2.5 when adjusted for inflation: https://data.worldbank.org/indicator/NY.GDP.PCAP.KD?location...
But yes, the rise in nominal GDP per capita has indeed been very substantial (and in relative terms higher than that in PPP). It just shows a long way to go to achieve middle income status though.
But yes, the rise in nominal GDP per capita has indeed been very substantial (and in relative terms higher than that in PPP). It just shows a long way to go to achieve middle income status though.
And extreme poverty has plummeted from 40% in 2004 to 10% in 2019.
https://ourworldindata.org/grapher/share-of-population-in-ex...
https://ourworldindata.org/grapher/share-of-population-in-ex...
Earth overshoot day is at july now.
https://www.overshootday.org/
So we got another 40 years, till it reaches zero.
So we got another 40 years, till it reaches zero.
Seems a bit questionable.
That's an increase of about 5% per year over 12 years. Average inflation is typically 3%. So on average adjusting for inflation, India grew by 2% per year. This small number does not seem like something worthy of a headline.
GDP numbers are always supposed to be reported in inflation adjusted terms.
Well, unless you are talking specifically about nominal GDP, which is also very important in economics.
Should be noted that the previous governor of the Reserve Bank of India who was before that Chief Economist at the IMF is now going around criticizing the Indian government's nascent attempts to kickstart manufacturing instead of following the services-led growth model that he advocates.
We went through two decades where many in the global intellectual class actively campaigned against industrialization, and with degrowth strategies for managing CO2 emissions being in vogue now, there is a risk that such counterproductive advocacy will continue, just as industrialization becomes increasingly harder for the reasons mentioned in the article.
We went through two decades where many in the global intellectual class actively campaigned against industrialization, and with degrowth strategies for managing CO2 emissions being in vogue now, there is a risk that such counterproductive advocacy will continue, just as industrialization becomes increasingly harder for the reasons mentioned in the article.
I'm a layperson in these topics, but I've begun to suspect that degrowth is the new expression for what used to be called the "white man's burden", with global warming replacing classical Malthusian overpopulation fears. Particularly as it's applied by first world economies toward developing ones.
I have no problem as a libertarian locking in first mover advantage, but doing it by accusing others of what you yourself are guilty of is disgustingly hypocritical. I've even come to miss the kind of hypocrisy that knows what it's saying and doing, as opposed to the kind that simply takes the status quo for granted as if it had existed forever.
I have no problem as a libertarian locking in first mover advantage, but doing it by accusing others of what you yourself are guilty of is disgustingly hypocritical. I've even come to miss the kind of hypocrisy that knows what it's saying and doing, as opposed to the kind that simply takes the status quo for granted as if it had existed forever.
>locking in first mover advantage, but doing it by accusing others of what you yourself are guilty of is disgustingly hypocritical
If we don't get degrowth going now it's going to be too late for the world.
It's hypocritical, but also if the world is industrialized completely it won't be livable anymore.
In either case, it's the tragedy of the commons and we're all f-ed.
If we don't get degrowth going now it's going to be too late for the world.
It's hypocritical, but also if the world is industrialized completely it won't be livable anymore.
In either case, it's the tragedy of the commons and we're all f-ed.
What makes you think so? What specific bad things do you have in mind that would happen?
https://en.wikipedia.org/wiki/Economic_impacts_of_climate_ch... suggests that eg climate change's economic impact will be between 0% to 20% loss of GDP. That's a lot, but it's also only about at most a decade of growth.
It's also a lot less than the difference between the US and the UK's GDP per capita. It would hurt Americans to have to live like Brits, but British living conditions are far from an existential threat.
https://en.wikipedia.org/wiki/Economic_impacts_of_climate_ch... suggests that eg climate change's economic impact will be between 0% to 20% loss of GDP. That's a lot, but it's also only about at most a decade of growth.
It's also a lot less than the difference between the US and the UK's GDP per capita. It would hurt Americans to have to live like Brits, but British living conditions are far from an existential threat.
I'm worried about the climate impact of economics, not the economic impact of climate change.
We could live with less, and we have to if we want to at least lessen the impact of climate change.
So we need to get a concerted effort going for degrowth in the world. But it looks like every country is still aiming for maximum industrialization and growth, which is understandable since it's individual optimization.
We could live with less, and we have to if we want to at least lessen the impact of climate change.
So we need to get a concerted effort going for degrowth in the world. But it looks like every country is still aiming for maximum industrialization and growth, which is understandable since it's individual optimization.
Eh, this is a bit misleading without context. The person in question is Raghuram Rajan. He is not criticising manufacturing led growth, but the idea that India can blindly follow the path that China took, simply because the world is very different now than 30 years ago when it comes to globalisation.
He thus thinks it is more appropriate to "make for India" than "make in India", the latter being the name of the initiative the current government started back in 2014 - when he was the governor of RBI. Also he has been saying it since 2014 at least, not "now" as the parent implies.
https://www.livemint.com/Politics/nEPZGnUMtLN3o86upKbPsI/Rag...
He thus thinks it is more appropriate to "make for India" than "make in India", the latter being the name of the initiative the current government started back in 2014 - when he was the governor of RBI. Also he has been saying it since 2014 at least, not "now" as the parent implies.
https://www.livemint.com/Politics/nEPZGnUMtLN3o86upKbPsI/Rag...
https://www.youtube.com/watch?v=kfAEgdri6C4
https://economictimes.indiatimes.com/news/economy/policy/the...
He's been pretty explicitly against manufacturing-led growth and in favor of services-led growth. And indeed "make for India" strategy would mean India remains a net manufacturing importer as it makes some goods for itself and imports others, without any exports to balance out the goods it cannot produce.
https://economictimes.indiatimes.com/news/economy/policy/the...
He's been pretty explicitly against manufacturing-led growth and in favor of services-led growth. And indeed "make for India" strategy would mean India remains a net manufacturing importer as it makes some goods for itself and imports others, without any exports to balance out the goods it cannot produce.
I am not sure your sources are in disagreement with what I said. You are hypothesizing a situation where only manufacturing exports can balance out manufacturing imports, but that is not true - we gain capital from service exports also.
It is fine to disagree with him, but your logic isn't sound. I personally also think India needs more industrialisation but that's not in conflict with what Rajan is saying.
It is fine to disagree with him, but your logic isn't sound. I personally also think India needs more industrialisation but that's not in conflict with what Rajan is saying.
This characterization of Raghuram Rajan is seriously misleading. He has never advocated against manufacturing. He's cautioning that we(I'm Indian) won't be able to replicate China's rate of progress as the conditions in the world are different now.
The previous RBI governor is entering politics and joining the opposition, so his current opinions should be taken as political rather than purely academic.
I don't follow what he says but I very much doubt his current opinions are any different from before. I've been reading about India + service economy + how great service economies are + how India can skip the manufacturing phase of a developing economy and jump straight into service economy in mainstream media articles in both US and India since at least early 2000s.
To provide more context on this, Raghuram Rajan participated in a march across India led by the then leader of opposition. He has not in any official capacity joined the opposition.
It's hard to know how real stagnation is. Certainly since 1961 growth has been on a tear, rising more than 7 fold in low income countries[1], and 26 times for the world as a whole[2].
If you restrict attention to the window from 2014 to 2021, then growth in low income countries has been nil -- but the same is true from 1976 to 2001[1].
Rises in gdp per person are almost by definition technological, and the improvements in and the diffusion of tech are both hard to predict.
It's clear, though, that growth in lower income countries has been slower.
[1] https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location... [2] https://data.worldbank.org/indicator/NY.GDP.PCAP.CD
If you restrict attention to the window from 2014 to 2021, then growth in low income countries has been nil -- but the same is true from 1976 to 2001[1].
Rises in gdp per person are almost by definition technological, and the improvements in and the diffusion of tech are both hard to predict.
It's clear, though, that growth in lower income countries has been slower.
[1] https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location... [2] https://data.worldbank.org/indicator/NY.GDP.PCAP.CD
Interesting that a journal called "American Affairs" is essentially rejecting the Washington consensus/neoliberalism and strongly imply that the neo-Westphalian/Chinese model is the future. We are truly entering a new era.
Anyone can name their publication anything. This article was written by David Oks, who is the furthest thing from the Washington consensus. He was one of the high school kids who promoted Mike Gravel for president on Twitter in 2020:
https://en.m.wikipedia.org/wiki/David_Oks
https://en.m.wikipedia.org/wiki/David_Oks
American Affairs is a very anti-globalist journal, kinda broadly aligned with Trump's foreign policy (but they abhor Trump's crassness, populism, etc.).
There are good people on both sides.
American political discourse has been against the Washington consensus and neoliberalism for quite a while now.
Come to think of it, neoliberalism has been unpopular for quite a while now. It's a miracle the world is broadly still as neoliberal as it is. I guess politicians fear the economic fallout from giving in to populism more than they want the short term vote gains?
Come to think of it, neoliberalism has been unpopular for quite a while now. It's a miracle the world is broadly still as neoliberal as it is. I guess politicians fear the economic fallout from giving in to populism more than they want the short term vote gains?
> From the perspective of poverty statistics, Africa will assume particular importance: by far the continent with the worst economic performance over the last several decades, it is there that the most significant population growth will occur over the next century. The result, pending dramatic change, is a world in which the progress made against poverty over the last forty years will slow, stagnate, or even reverse.
It has always struck me as strange that Africa as a continent would grow its population so much without corresponding development.
It has always struck me as strange that Africa as a continent would grow its population so much without corresponding development.
This argument, though, is pulled out of thin air. Population growth in Africa is slowing dramatically as it’s urbanizing, and it’s also dramatically developing. Even some of its poorest areas (with fundamental geographic challenges, like being landlocked, on top of a plateau without navigable rivers to the sea and without hood road or rail networks in neighboring countries) are doing pretty well. Rwanda, for instance, has grown a factor of 4 in real per capita gdp (PPP) from 2000 ($616/capita) to 2021 ($2460/capita). https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locat...
Literally 4 times the wealth per person! And the effects are not just due to a small number of people or raw money alone. The infant mortality rate has dropped from 110 per 1000 live births in 2000 to just 30 in 2021 and still falling. https://data.worldbank.org/indicator/SP.DYN.IMRT.IN?location...
…as its birthrate has dropped from 5.9 per woman in 2000 to 3.9 in 2020 (and still falling fairly quickly). https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locat...
There’s no reason to suspect this trend won’t continue as infrastructure is built up and these places further urbanize. In fact, some of the wealth effects are almost mechanical as fertility rates stabilize, because of the improvement in the dependency ratio.
Fertility rate is going to fall in Africa and I’ve seen no good argument for why it wouldn’t. Every trend is in that direction and every obvious force as well.
Literally 4 times the wealth per person! And the effects are not just due to a small number of people or raw money alone. The infant mortality rate has dropped from 110 per 1000 live births in 2000 to just 30 in 2021 and still falling. https://data.worldbank.org/indicator/SP.DYN.IMRT.IN?location...
…as its birthrate has dropped from 5.9 per woman in 2000 to 3.9 in 2020 (and still falling fairly quickly). https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locat...
There’s no reason to suspect this trend won’t continue as infrastructure is built up and these places further urbanize. In fact, some of the wealth effects are almost mechanical as fertility rates stabilize, because of the improvement in the dependency ratio.
Fertility rate is going to fall in Africa and I’ve seen no good argument for why it wouldn’t. Every trend is in that direction and every obvious force as well.
but it is not pulled out of thin air, they list a bunch of case studies in TFA. If you don't like their numbers/stories, here is a recent quote from the World Bank on Nigeria:
> This, it said, translates into growth per capita of 0.2 per cent in 2023 and 0.4 per cent in 2024–25, which is insufficient to reduce extreme poverty in the country.
https://www.premiumtimesng.com/business/business-news/592952...
that country grows by a Rwanda every couple of years. Sure it will probably slow down the population growth by mid- or end of this century. But the economy is not keeping up for them to get out of poverty.
> This, it said, translates into growth per capita of 0.2 per cent in 2023 and 0.4 per cent in 2024–25, which is insufficient to reduce extreme poverty in the country.
https://www.premiumtimesng.com/business/business-news/592952...
that country grows by a Rwanda every couple of years. Sure it will probably slow down the population growth by mid- or end of this century. But the economy is not keeping up for them to get out of poverty.
That’s really a Nigeria problem, tho, not the entire continent. Nigeria has stumbled the last few years, most other African nations have not.
The argument is based on cherry-picking arguments like that. Overall, Africa is quite rapidly developing. Not as fast as we would like, but the overall narrative of the article is cherry-picked nonsense not consistent with reality. Subsaharan Africa overall has grown in per capita gdp by about 2x since 2000. https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locat...
…while its birthrate per woman has fallen from 5.7 to 4.7 (and on a steeper decline now than 20 years ago). https://data.worldbank.org/indicator/SP.DYN.TFRT.IN?location...
In fact, I’m even more confident that birthrate will fall to near replacement in 50 years than I am about development, but even if just the birthrate drops, the improved dependency ratio will just about automatically increase the per capita gdp. Africa currently has roughly twice the number of dependents-per-worker as east Asia, for instance. (Or did in 2010), and a reducing fertility rate will mechanistically improve that dramatically. That alone is good for like a 50-100% increase in per capita gdp, let alone the compounding effects of a beneficial dependency ratio.
The argument is based on cherry-picking arguments like that. Overall, Africa is quite rapidly developing. Not as fast as we would like, but the overall narrative of the article is cherry-picked nonsense not consistent with reality. Subsaharan Africa overall has grown in per capita gdp by about 2x since 2000. https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locat...
…while its birthrate per woman has fallen from 5.7 to 4.7 (and on a steeper decline now than 20 years ago). https://data.worldbank.org/indicator/SP.DYN.TFRT.IN?location...
In fact, I’m even more confident that birthrate will fall to near replacement in 50 years than I am about development, but even if just the birthrate drops, the improved dependency ratio will just about automatically increase the per capita gdp. Africa currently has roughly twice the number of dependents-per-worker as east Asia, for instance. (Or did in 2010), and a reducing fertility rate will mechanistically improve that dramatically. That alone is good for like a 50-100% increase in per capita gdp, let alone the compounding effects of a beneficial dependency ratio.
Would have to search for it but read an article recently that, even in Africa, population growth is slowing faster than expected. It was basically saying that peak global human population would peak earlier than recently thought.
This is a well documented phenomenon. Poor people have more kids than rich people.
Africans tried many times over the past centuries to establish stable sovereign states (a prerequisite to large-scale development), and each time they got brutally crushed by foreign powers. It's not for lack of trying.
> the tradability of manufactured goods means that there are no such automatic limits to manufacturing growth
This statement seems at odds with the rest of the piece.
The problem with manufacturing as a development strategy (and I agree with the opening - it's the only proven development strategy) is that not everyone can manufacture. You'd have too many goods!
I've always disagreed with the economic belief that demand is infinite and only constrained by supply. As others in this thread have alluded to, our material progress (as opposed to digital progress) began to slow down in the 1970s. I think part of this is that to a large extent people's material needs in developed countries were met by things like plumbing and electrification. I use developed countries here both as an example of economic trends at the frontier, and as the most likely consumers of industrial goods given their wealth.
Of course that leaves the needs of 90% of people in developing countries unmet, but as the article explains China supplied those needs after 1979. Manufacturing is efficient and one factory worker can meet the material needs of 1+N consumers.
The whole world can't work in factories because there isn't enough demand for all those manufactured goods. Just look at the global steel industry.
A lot of people are too poor to engage in global trade, and manufacturers of any extraction will not give away their wares.
Development, unlike the global phenomenon observed from 1945-1975, seems more like taking turns being the workshop of the world. 1980-2020 was China's turn.
This statement seems at odds with the rest of the piece.
The problem with manufacturing as a development strategy (and I agree with the opening - it's the only proven development strategy) is that not everyone can manufacture. You'd have too many goods!
I've always disagreed with the economic belief that demand is infinite and only constrained by supply. As others in this thread have alluded to, our material progress (as opposed to digital progress) began to slow down in the 1970s. I think part of this is that to a large extent people's material needs in developed countries were met by things like plumbing and electrification. I use developed countries here both as an example of economic trends at the frontier, and as the most likely consumers of industrial goods given their wealth.
Of course that leaves the needs of 90% of people in developing countries unmet, but as the article explains China supplied those needs after 1979. Manufacturing is efficient and one factory worker can meet the material needs of 1+N consumers.
The whole world can't work in factories because there isn't enough demand for all those manufactured goods. Just look at the global steel industry.
A lot of people are too poor to engage in global trade, and manufacturers of any extraction will not give away their wares.
Development, unlike the global phenomenon observed from 1945-1975, seems more like taking turns being the workshop of the world. 1980-2020 was China's turn.
Building a Manufacturing Industrial Base in at least some Goods is mandatory for every Developing country. The Services Industry will always be disrupted by emerging technologies and hence is not reliable to base an Economy on. It is also the case that only Manufacturing can absorb Unskilled Labour which is the main problem in developing countries.
The Covid pandemic and Ukraine-Russia war has exposed the weaknesses inherent in the "Global Economy" where a single problem affects the entire World due to everything being interlinked together. This is further intensified by the self-interest/selfishness/hypocrisy of the developed Western countries since they have managed to engineer the system to their benefit while short shrifting the developing countries.
The Covid pandemic and Ukraine-Russia war has exposed the weaknesses inherent in the "Global Economy" where a single problem affects the entire World due to everything being interlinked together. This is further intensified by the self-interest/selfishness/hypocrisy of the developed Western countries since they have managed to engineer the system to their benefit while short shrifting the developing countries.
I think there is massive demand for goods (maybe not infinite), but demand is largely constrained by supply. I could think of hundreds of things I would love to own, but can't, due to the expense. If there was more supply, the prices would be lower, and I could consume more.
You're assuming that manufacturing growth has to be primarily export-led, as China's was. But that wasn't how many of the other industrialization success stories kicked off their manufacturing industry - they did so by starting out primarily producing for domestic markets. There, there is high latent demand that can be bootstrapped via industrialization.
>that wasn't how many of the other industrialization success stories
Within context of modern developement, i.e. post ww2, where development is rapid industrialization in a few generations, success stories are essentially the Asian Tigers who hammered export led growth to accumulate foreign reserve (usd) then spend to accumulate increasingly expensive capital to make modern goods, throw in some industrial policy to protect native industries without pissing off trade partners (almost benefactors) who can turn off the FX / even tech transfer tap. Very few developing countries have the resources to bootstrap without bringing in foreign cash to buy foreign capital to bootstrap industrialization. Otherwise they start at essentially square one, for which the products are uncompetitive enough relative to imports from sufficiently industrialized economies that there is little latent demand, unless you go NK autarky route. It's the difference between saving up for decades vs taking out a loan and starting right away.
Within context of modern developement, i.e. post ww2, where development is rapid industrialization in a few generations, success stories are essentially the Asian Tigers who hammered export led growth to accumulate foreign reserve (usd) then spend to accumulate increasingly expensive capital to make modern goods, throw in some industrial policy to protect native industries without pissing off trade partners (almost benefactors) who can turn off the FX / even tech transfer tap. Very few developing countries have the resources to bootstrap without bringing in foreign cash to buy foreign capital to bootstrap industrialization. Otherwise they start at essentially square one, for which the products are uncompetitive enough relative to imports from sufficiently industrialized economies that there is little latent demand, unless you go NK autarky route. It's the difference between saving up for decades vs taking out a loan and starting right away.
+1.
Also every developing country needs its own base manufacturing industry in somethings to give it some degree of autonomy in deciding its own future.
Also every developing country needs its own base manufacturing industry in somethings to give it some degree of autonomy in deciding its own future.
Why? Australia did well on the back of exporting commodities. They seem to be able to decide their own future just fine. At least not worse than anyone else.
(They had a bit of manufacturing, but it was mostly ill-fated. A substantial portion came from misguided attempts at industrial policy.)
(They had a bit of manufacturing, but it was mostly ill-fated. A substantial portion came from misguided attempts at industrial policy.)
Australia is already a developed country and hence the importance of Industrialization/Manufacturing may not be as applicable to it as to other developing countries. It seems to be unique in its Mineral wealth which i suspect is what propelled it into the "Developed" category (https://en.wikipedia.org/wiki/Economy_of_Australia).
It is Industrialization/Manufacturing which gives any country a stake in the Global Economic framework and hence its "worth" in the World. Note that Manufacturing in the 21st century is quite different from what it was in the 19th/20th centuries. The Covid pandemic and the Ukraine-Russia war has exposed the weaknesses in the Global Supply Chain i.e. a single point of failure due to complete dependency on a single Nation (i.e. China) and this needs to be reworked into a true distributed system. Every Nation needs a certain degree of Self-Sufficiency/Self-Autonomy to hold its own in the "New World Order". Finally Manufacturing is the driver for everything else like a)Innovation b)Productivity c)Standard of Living etc. which are at the very heart of development.
See Also:
1) Manufacturing (still) Matters (pdf) - https://australiainstitute.org.au/wp-content/uploads/2020/12...
2) https://asiasociety.org/australia/looking-ahead-manufacturin...
3) https://amtil.com.au/weldaustralia-manufacturing-amtil/
It is Industrialization/Manufacturing which gives any country a stake in the Global Economic framework and hence its "worth" in the World. Note that Manufacturing in the 21st century is quite different from what it was in the 19th/20th centuries. The Covid pandemic and the Ukraine-Russia war has exposed the weaknesses in the Global Supply Chain i.e. a single point of failure due to complete dependency on a single Nation (i.e. China) and this needs to be reworked into a true distributed system. Every Nation needs a certain degree of Self-Sufficiency/Self-Autonomy to hold its own in the "New World Order". Finally Manufacturing is the driver for everything else like a)Innovation b)Productivity c)Standard of Living etc. which are at the very heart of development.
See Also:
1) Manufacturing (still) Matters (pdf) - https://australiainstitute.org.au/wp-content/uploads/2020/12...
2) https://asiasociety.org/australia/looking-ahead-manufacturin...
3) https://amtil.com.au/weldaustralia-manufacturing-amtil/
Also consider PRC manufacturing + secondary industry sectors roughly peaking at ~300M for both domestic and global demand. Past decades of global demand wasn't enough to lift 1.4B PRC into higher income like other Asian Tigers, and PRC industrial policy + automation means they intend to hold on to as much industries as possible. Going forward, there's going to be less manufacturing jobs to spread around. Some small/medium size countries can grab their workshop turn, but I think with return of big bloc industrial policy, especially for strategic sectors, very few will get chance to build up to high end manufacturing / high income.
> not everyone can manufacture. You'd have too many goods!
This is not a factor; even when there isn't any demand for more manufactured goods in an absolute sense, there's plenty of demand for increased product variety and differentiation, which requires extra labor and capital to supply.
This is not a factor; even when there isn't any demand for more manufactured goods in an absolute sense, there's plenty of demand for increased product variety and differentiation, which requires extra labor and capital to supply.
> one factory worker can meet the material needs of 1+N consumers.
Non native speaker here from the Netherlands. What meaning is implied in your usage of 1+N?
Non native speaker here from the Netherlands. What meaning is implied in your usage of 1+N?
N being a positive number, maybe fractional. So one factory worker assembling sinks can supply sinks for five households. Of course there's a team of workers assembling the sinks, but you get the idea. In this example N=4.
but why +1? Is this an obscure reference to the N+1 problem that ORMs face?
I think it's just supposed to mean "that one worker can provide stuff for more than one person," i.e. manufacturing scales.
The worker (1) + N more...
Great Link!
See also all the other articles on various countries named The Developing Country Industrialization series by the same author here: https://noahpinion.substack.com/p/the-developing-country-ind...
See also all the other articles on various countries named The Developing Country Industrialization series by the same author here: https://noahpinion.substack.com/p/the-developing-country-ind...
There's an argument that the world of atoms stalled decades ago and most growth since then has been in the world of bytes.
If that's true, why? What happened in the world of atoms?
If that's true, why? What happened in the world of atoms?
Market consolidation happened.
Our technology started favoring really large companies again, ending the era of innovation that was the late 19th and most of the 20th centuries. People just can't start from nothing and create something on the real world.
Our technology started favoring really large companies again, ending the era of innovation that was the late 19th and most of the 20th centuries. People just can't start from nothing and create something on the real world.
My naive theory is that we're well into the diminishing return stages of the S-curves of many of our technologies. We need major breakthroughs that can start new S-curves.
This feels intuitively correct to me, but I’d have trouble clearly explaining why. I’m interested to see where bio-tech goes in the next ten years though.
Growth as some kind of synonym for quantified (how?) technological progress: I'm unqualified to answer but I suspect it has something to do with reconciling macroeconomics and the ecological concept of net primary production.
Growth in terms of $ equivalent, adjusted for inflation: even for the mere world of atoms, this is untrue. Global GDP roughly dectupled from 1950 to 2008 and there's no way that's solely attributable to digital services.
Growth in terms of $ equivalent, adjusted for inflation: even for the mere world of atoms, this is untrue. Global GDP roughly dectupled from 1950 to 2008 and there's no way that's solely attributable to digital services.
>>What happened in the world of atoms?
Regulatory regimentation by centralized authorities. Just one of many examples: 5 percent of occupations required a license in 1950. Today, around 30 percent.
In every sector, professional and industry groups have become adept at locking down the market by manufacturing consent for regulatory restrictions. See what the Hotel Lobby did to stem the disruptive potential of Airbnb:
https://www.nytimes.com/2017/04/16/technology/inside-the-hot...
In the housing market, the effect of mounting regulatory regimentation resulted in the US having an estimated 36 percent less GDP growth between 1964 and 2009:
https://www.aeaweb.org/articles?id=10.1257/mac.20170388
Regulatory regimentation by centralized authorities. Just one of many examples: 5 percent of occupations required a license in 1950. Today, around 30 percent.
In every sector, professional and industry groups have become adept at locking down the market by manufacturing consent for regulatory restrictions. See what the Hotel Lobby did to stem the disruptive potential of Airbnb:
https://www.nytimes.com/2017/04/16/technology/inside-the-hot...
In the housing market, the effect of mounting regulatory regimentation resulted in the US having an estimated 36 percent less GDP growth between 1964 and 2009:
https://www.aeaweb.org/articles?id=10.1257/mac.20170388
Bytes are just much more tractable, that's the root of the opportunity/problem.
And nothing happened in the world of atoms, it's just that the first somewhat useful things spawned by the world of bytes appeared in the mid-70s or so and, bytes being so much more tractable, capital and intellectual energy started flowing to that world in massive amounts.
And nothing happened in the world of atoms, it's just that the first somewhat useful things spawned by the world of bytes appeared in the mid-70s or so and, bytes being so much more tractable, capital and intellectual energy started flowing to that world in massive amounts.
This is Peter Thiel's thesis, and his answer is basically overregulation born of a cultural fear and pessimism of science bringing doom rather than progress that crept in slowly after WW2.
Not to be semantic, but you meant that this is his answer as to what the cause is? Or that’s his recommendation? I don’t really follow his stuff much but I’m guessing the first.
Btw, I have to be skeptical of the thesis here. Certainly the tech world is not full of “overregulation”. And I think it’s quite a stretch to say “cultural fear and pessimism of science bringing doom” given the broad glowing admiration of whatever the industry hype flavor of the month is. Not to mention the cult-like levels of belief and worship among the singularity peeps et al. While back down here on earth, many of us are scratching our heads about what we can possibly do in the face of climate change, a polarizing and surveillance enabled internet, millions of lines of technical debt that have little chance of keeping a persistent cyber threat at bay, and various other second order networks effects that we never seem to foresee in our first order money opportunities. Heck, I’ll throw in one more that certainly has been a cultural trope for a while but prob isn’t given enough airtime these days. If you take the recent advancements in drones (swarms especially), autonomous vehicles, near realtime satellite imagery and internet communications… and link that up with a current global geopolitical trendline that’s clearly not looking overly rosy… you’re racing directly at the Skynet-ish scenario cliche of autonomous machines that kill. I don’t think that swarms of cheap drones will allow us to keep the man-in-the-loop control given a global race to the bottom. And I say these things as an MBA and former army officer who would prob have laughed at these claims even 10 years ago.
Heck, I’ll go ad hominem here. Given that I have libertarian leanings myself, Thiel does seem to come across as someone who has made his money in an industry gone south, but now simply doesn’t want to pay his taxes.
Apologies… that escalated kinda quickly. I actually started this diatribe intending to ask for clarification. And perhaps you were merely stating Thiel’s thesis and my ire is completely unjustified.
But apparently these days I have little patience for the weak sauce party lines that have been parroted for decades.
~ edited for an egregious typo
Btw, I have to be skeptical of the thesis here. Certainly the tech world is not full of “overregulation”. And I think it’s quite a stretch to say “cultural fear and pessimism of science bringing doom” given the broad glowing admiration of whatever the industry hype flavor of the month is. Not to mention the cult-like levels of belief and worship among the singularity peeps et al. While back down here on earth, many of us are scratching our heads about what we can possibly do in the face of climate change, a polarizing and surveillance enabled internet, millions of lines of technical debt that have little chance of keeping a persistent cyber threat at bay, and various other second order networks effects that we never seem to foresee in our first order money opportunities. Heck, I’ll throw in one more that certainly has been a cultural trope for a while but prob isn’t given enough airtime these days. If you take the recent advancements in drones (swarms especially), autonomous vehicles, near realtime satellite imagery and internet communications… and link that up with a current global geopolitical trendline that’s clearly not looking overly rosy… you’re racing directly at the Skynet-ish scenario cliche of autonomous machines that kill. I don’t think that swarms of cheap drones will allow us to keep the man-in-the-loop control given a global race to the bottom. And I say these things as an MBA and former army officer who would prob have laughed at these claims even 10 years ago.
Heck, I’ll go ad hominem here. Given that I have libertarian leanings myself, Thiel does seem to come across as someone who has made his money in an industry gone south, but now simply doesn’t want to pay his taxes.
Apologies… that escalated kinda quickly. I actually started this diatribe intending to ask for clarification. And perhaps you were merely stating Thiel’s thesis and my ire is completely unjustified.
But apparently these days I have little patience for the weak sauce party lines that have been parroted for decades.
~ edited for an egregious typo
I apologize for not being clear enough. Thiel means that the IT world is unregulated, so that's where most of the progress has been. Various government agencies have saddled traditional tech (energy, medicine, electrical engineering, etc.) with intense regulation that has made it toxic for investment at all but the highest levels which is itself risk averse in the way that scientific breakthrough often needs, squeezes out scrappy tiny companies, and discourages people with revolutionary ideas from wanting to enter them, because safety and compliance concerns have run amok. And this is all borne of a cultural shift toward a fear that traditional scientific progress will kill us sooner that help us, maybe due to the Bomb and Cold War, but I forgot whether he precisely named an event.
Ok, gotcha. And apologies for the rant… :)
> Btw, I have to be skeptical of the thesis here. Certainly the tech world is not full of “overregulation”.
Luckily, yes. But lots of other sectors of the economy are.
Luckily, yes. But lots of other sectors of the economy are.
What does that even mean? And what statistics or other evidence do you have for that view?
To take one perhaps naive interpretation:
For example, encyclopedias used to be sold as a collection of dozens of heavy volumes. Producing them was a lively business.
Nowadays, everyone gets free access to Wikipedia, which has more content than your shelf of Encyclopedia Britannica could ever hold and gets updated all the time.
When you bought Encyclopedia Britannica that showed up in gdp statistics. Wikipedia doesn't.
To take one perhaps naive interpretation:
For example, encyclopedias used to be sold as a collection of dozens of heavy volumes. Producing them was a lively business.
Nowadays, everyone gets free access to Wikipedia, which has more content than your shelf of Encyclopedia Britannica could ever hold and gets updated all the time.
When you bought Encyclopedia Britannica that showed up in gdp statistics. Wikipedia doesn't.
I'm a little curious, but haven't heard a word of what you're referring to. A quick search for 'atoms stalled' didn't result in anything that felt helpful.
Do you have a link that would clarify?
Do you have a link that would clarify?
I assume they mean "atoms" as in physical material. I think they're saying physical sciences are stalling out and computer science is responsible for most growth now. I'm not familiar with this term though, and disagree with the sentiment.
In other words, we expected flying cars, but then we got Facebook instead.
Energy production/consumption started plateauing because people were afraid of nuclear.
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>>Other problems are more subjective; many have criticized the $2.15-a-day threshold (at 2017 purchasing-power-adjusted prices)—designed to reflect who would be poorest in the most impoverished countries, like Mali or Afghanistan, and not in even slightly richer countries like Angola or Pakistan—for being far too low to provide for sustenance or normal human health outcomes, and thus to measure anything meaningful about real graduation from poverty.
This is mental gymnastics done to dispel evidence that goes against the cynical anti-capitalist ideology that is so in-vogue.
The poverty line in question does, contrary to this claim, "measure [some]thing meaningful about real graduation from poverty".
If the author contends that living at the $2.15-a-day threshold is an abysmal quality of life, then what does he imagine living at below that threshold to be like?
Does he imagine that it's all indistinguishable anguish at those levels, and therefore that living on $2.50 a day is no improvement over living on $1.25 a day? Nothing could be further from the truth. At extreme levels of poverty, a 50% or 100% increase daily purchasing power is often the difference between life and death.
This is mental gymnastics done to dispel evidence that goes against the cynical anti-capitalist ideology that is so in-vogue.
The poverty line in question does, contrary to this claim, "measure [some]thing meaningful about real graduation from poverty".
If the author contends that living at the $2.15-a-day threshold is an abysmal quality of life, then what does he imagine living at below that threshold to be like?
Does he imagine that it's all indistinguishable anguish at those levels, and therefore that living on $2.50 a day is no improvement over living on $1.25 a day? Nothing could be further from the truth. At extreme levels of poverty, a 50% or 100% increase daily purchasing power is often the difference between life and death.
So if the macroeconomic trends look bleak for the world, what's the microeconomic approach? Attempt to move to a location where there will be more economic growth? Have more kids? Buy gold?
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From the point of view of Koch, Halliburton and Bechtel, for example, I suppose this is probably true.
https://ourworldindata.org/grapher/gdp-per-capita-maddison-2...
(edit) This is at Purchasing Power Parity, thanks to unmonk for pointing this out.