Helsing posted:Britain did use protectionism to shield the growth of its industry and it practiced "land reform" of a sort via enclosures of common land, but I don't think the British government consciously stimulated industry in the 18th century in the same way that the USA, Japan, South Korea, or China did in the 19th and 20th centuries. I'd have to check some historical sources before saying anything more than that.
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# ? Mar 18, 2014 19:41 |
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# ? May 11, 2024 15:25 |
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Also to be frank, the US in around 1850 was in fact largely agricultural and pre-industrial, you could argue not "medieval" but it was a very different place in 1910. If anything most industrial phases of development share more commonality in timing and function then they don't. The USSR is a bit of a weird case because it had to stop and start its development at least twice do to wars and a revolutions but in general the Stalinist period did in fact have a very high rate of industrialization. Britain's colonial empire was obviously different than the largely domestic resources of the US or present-day China's reliance on international trade. One can argue though the UK/US emphasis on resources their governments physically controlled (including crown corporations) gave them a more secure source of resources than China, as in general international trade is more uncontrollable and unpredictable. Anyway, China's economy isn't going to disappear, but China's just won't have the breakneck pace growth of constant industrialization. It happened to Japan, and it happened to the Asian tigers and it will happen to China. The real problem I think is the Western media and the complete lack of acknowledgement that industrialization has happened before (and will happen again) and growth rates of the sort have happen and will happen again. From about 2005 to 2012, there was plenty of hysteria in the states (very close to the same sort of attitude in the US during the 1980s) without little or any reflection on what was going on versus very recent history. To be that issue on its own is problematic. Ardennes fucked around with this message at 01:33 on Mar 20, 2014 |
# ? Mar 18, 2014 22:13 |
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http://www.ft.com/intl/fastftquote:ALLUSEUROZONEUKASIAECONOMYCOMPANIES
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# ? Mar 19, 2014 07:44 |
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there are almost certainly quite a few insolvent banks, we just don't know which ones they are, and the panic when the wave of bankruptcies starts will take at least a few years to sort out.
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# ? Mar 19, 2014 14:21 |
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Oh shadow banking. Ohhhh boy. I remember my colleagues telling me about businesses working with gangsters to smuggle in USD/Forex during the early 90's. State loans are definitely much harder to get but Chinese companies do set up subsidiaries and shell companies in Hong Kong to circumvent liquidity problems. I'm in the manufacturing side, so if you have any questions I will try my best to answer them.
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# ? Mar 19, 2014 18:48 |
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I have to say the more one looks at China the more it looks like a Japan / American style asset bubble might be present in the economy. The fact that so much of the financing for corporations comes from this unregulated and largely opaque shadow banking puts an element of uncertainty into the mix that could be really devastating if people start to get anxious about the loans they've extended. Of course its very hard to develop rapidly without having some kind of bubble like behaviour. American industrial expansion in the 19th century lead to the panic of 1873 and the long depression. The major developments of the 20th century, i.e. mass electrification, the development of consumer auto-mobiles, the rolling out of mass appliances like refrigerators, coincided with the Great Depression. Big bursts of technological and industrial development tend to stimulate the animal spirits of investors and make ever more risky investments seem like a good idea (bad money chases out good money) and then eventually there's some kind of crash which leads to a period of stagnation. Its not altogether clear that a market based economy can avoid this cycle of development. So from the perspective of the Chinese leadership the real question might be if they can manage a probably inevitable shock to the system with a minimal amount of disruption and pain. It will be truly remarkable if they are able to avoid a crash altogether so the real priority here from the perspective of the regime may be damage control. I imagine the Chinese have watched developments like the fall of the USSR or the Arab Spring with great anxiety, since that is the sort of situation they could end up in if they don't play their hand well. Nessus posted:What probably helped in this matter was that there wasn't an industrial state nearby willing to intervene in British affairs in order to ensure their own market positions stayed good. I recall vaguely reading that one of the major motivators for a lot of Asian industrialization wasn't so much "we want to inherit the great bounty of dark Satanic mills with 14 hour work-shifts" as "we'd prefer not to be a colonial fiefdom." It was certainly the primary motivator for Japan. Even in the case of England, under Henry VII there was a conscious industrial policy. In the 15th century England was a a wool producing country. Henry Tudor Tudor spent a large portion of his youth in exile since the rival House of York controlled the English throne, and during this time Henry observed the wealth of the Flemish textile producers. After he defeated Richard III and took the English throne he imposed heavy tariffs on the export of raw wool. That in turn stimulated an indigenous textile industry which would eventually become the basis for the industrial revolution two centuries later. The big difference between the industrialization of England / Britain and the industrialization of countries like the US, Germany, Japan, etc. is that the specific inventions such as the perfection of steam power were developed largely through the personal financing of the investors themselves drawing upon their profits from the rationalization and commercialization of agriculture following the enclosure acts. In the USA case the government played a more specific role in trying to encourage these industries, in the case of Germany I think a lot of the encouragement came from large banks who ended up owning controlling shares in German manufacturing firms. So the British approach, while certainly not 'laissez-faire' in the Adam Smith sense, happened without the same level of conscious stimulation. There had been previous policies intended to encourage growth and the consolidation of new industry, but as far as the development of steam power and the first modern factories I think that happened without the kind of conscious encouragement that subsequent countries employed. Of course even here you have to be cautious. Part of the British decision to move toward free trade in agriculture in the 1830s / 1840s was to discourage other countries from developing their manufacturing base. The logic here was that if the British opened up their market for agricultural goods then this would encourage other economies to invest capital in the agricultural sector (where they had their 'comparative advantage') rather than try to develop their own manufacturers.
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# ? Mar 19, 2014 20:49 |
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computer parts posted:It only took the USSR about 30 years, command economies are good for short term economic growth. The Soviet Union went from medieval to developed economy by contemporary 1950 standards in ~30 years. That's a much smaller step than the same starting point to 21st century standards. Though I agree command economies can be great for rapid directed development and China is a semi example of that. Fojar38 posted:Not that difficult when a decent chunk of the world has already advanced to a post-industrial society and is pouring money and investment into China. This is why I find it hard to accept comparisons between early industrialization and modern development. The policy options available to modern developing economies are completely different. No country has or should emulate economic policy from the 19th century. Helsing posted:Can anyone think of any economy in the last thirty years that has grown rapidly without relying in part on asset bubbles or the presence of a valuable commodity like oil? Other Asian Tigers like Taiwan and South Korea? Their starting points were similar but they're way ahead today.
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# ? Mar 20, 2014 01:45 |
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asdf32 posted:The Soviet Union went from medieval to developed economy by contemporary 1950 standards in ~30 years. Tsarist Russia wasn't medieval. For instance the giant hydroprojects realised at the Aral Sea were originally drafted by a Tsarist commission. And there was an industrial basis already present throughout Russia - how else do you think the country survived the WWI?
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# ? Mar 20, 2014 02:08 |
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asdf32 posted:This is why I find it hard to accept comparisons between early industrialization and modern development. The policy options available to modern developing economies are completely different. No country has or should emulate economic policy from the 19th century. Some policy options are different but there are some very striking similarities in terms of circumstances and strategy that show up in the history of successfully developed countries its foolhardy to dismiss or ignore them. quote:Other Asian Tigers like Taiwan and South Korea? Their starting points were similar but they're way ahead today. Those countries had a very nasty experience in 1997, and I think its noteworthy that it followed a rather similar path to what happened in the US or Japan. A period of booming growth and lax government regulation leads to asset bubbles and eventually a huge number of non-performing loans which leads to a sharp and contagious economic downturn.
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# ? Mar 20, 2014 07:24 |
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Helsing posted:Some policy options are different but there are some very striking similarities in terms of circumstances and strategy that show up in the history of successfully developed countries its foolhardy to dismiss or ignore them. Taiwan wasn't affected much at all. Second, to say that they countries fall under the category of "booming growth and lax government regulation" is sort of the opposite of the situation. South Korea's government was played a major role both in setting broader goals for the economy and in setting micro level policies. In return it gave businesses all the credit they wanted and more, which led to the later crisis, but that's not the same thing as lax regulation by any means.
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# ? Mar 20, 2014 07:45 |
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asdf32 posted:The Soviet Union went from medieval to developed economy by contemporary 1950 standards in ~30 years. That's a much smaller step than the same starting point to 21st century standards. Though I agree command economies can be great for rapid directed development and China is a semi example of that. http://en.wikipedia.org/wiki/List_of_regions_by_past_GDP_(PPP)_per_capita The Soviet experience (and Chinese for that matter) also needs to be put in the perspective of their precedessors. Both Tsarist Russia and the KMT experienced rapid (see the Nanjing decade), state driven economical growth in the years preceding the wars which gave rise to Communists governments. Russia in the 1890s-1900s was rather like China today, an autocratic country which experienced growth as high as 9% per annuam (https://www.russianlegacy.com/russian_culture/history/ep_tsarist_economy.htm). In this context the Soviet model was not particularly unique (though far more brutal and extreme) or effective relative to their right wing counterparts. The Chinese model pre-1979 was notable for being even more extreme than the Soviets. Soviet style central planning was the position of conservatives within the party. Whereas Mao himself has a tendency of wanting to repeat the worst of the Soviet experiment on a bigger style with less success (the GLF) and bringing on the economic disruptions for the sake of politics (targeting the CCP bureaucracy during the Cultural revolution). Typo fucked around with this message at 07:48 on Mar 20, 2014 |
# ? Mar 20, 2014 07:46 |
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dilbertschalter posted:Taiwan wasn't affected much at all. Second, to say that they countries fall under the category of "booming growth and lax government regulation" is sort of the opposite of the situation. South Korea's government was played a major role both in setting broader goals for the economy and in setting micro level policies. In return it gave businesses all the credit they wanted and more, which led to the later crisis, but that's not the same thing as lax regulation by any means. Let's call it 'lax termination of insolvent creditors', instead, since that would be a good rough characterization of the 1997 crisis.
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# ? Mar 20, 2014 08:11 |
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ronya posted:there are almost certainly quite a few insolvent banks, we just don't know which ones they are, and the panic when the wave of bankruptcies starts will take at least a few years to sort out. Well, "a few banks" is significant in the case of China because 5 banks (BoChina, BoComm, CBC, ABC, and ICBC) make up around edit:looked up the numbers on assets again, found out it wasn't as high as I remember. But 50% is pretty high given the primacy of bank lending in China. CIGNX fucked around with this message at 10:28 on Mar 20, 2014 |
# ? Mar 20, 2014 08:46 |
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Helsing posted:Some policy options are different but there are some very striking similarities in terms of circumstances and strategy that show up in the history of successfully developed countries its foolhardy to dismiss or ignore them. Quickly which ones? I'm accustomed to hearing about protection, government direction and land reform. I have a hard time with the first two on the grounds that they don't directly lead to growth (accumulation of capital) and at best they can only be a catalyst to its internal production (contrast with trade and foreign investment which can literally net you a crane or a CNC machine). Industrialization and rapid economic development are themselves a common element when making these comparisons so it's easy for cause and effect to be obfuscated. quote:Those countries had a very nasty experience in 1997, and I think its noteworthy that it followed a rather similar path to what happened in the US or Japan. A period of booming growth and lax government regulation leads to asset bubbles and eventually a huge number of non-performing loans which leads to a sharp and contagious economic downturn. What do you mean similar path to U.S. or Japan (the U.S. started industrializing 2 centuries ago..)? Are you just contrasting them to China which has so far mostly avoided crisis? I agree that generally centralized systems should be more stable and that China stands as a pretty unique example with both really rapid growth and a highly state driven economy.
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# ? Mar 20, 2014 13:53 |
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dilbertschalter posted:Taiwan wasn't affected much at all. Second, to say that they countries fall under the category of "booming growth and lax government regulation" is sort of the opposite of the situation. South Korea's government was played a major role both in setting broader goals for the economy and in setting micro level policies. In return it gave businesses all the credit they wanted and more, which led to the later crisis, but that's not the same thing as lax regulation by any means. Lax regulation in the sense that a lot of loans and extensions of credit that were stimulated by the boom suddenly became a huge weight on the economy following the crash. I'm not overly familiar with the financial regulations of the South Korean government but my understanding of the crash is that both the banks and the chaebols were very aggressive in their expansion and extensions of credit, and this ended up leading to a lot of non-performing loans and bad investment decisions. Perhaps I should have said "lax oversight" to avoid the connotation that I was specifically or exclusively talking about government regulation. asdf32 posted:Quickly which ones? I'm accustomed to hearing about protection, government direction and land reform. I have a hard time with the first two on the grounds that they don't directly lead to growth (accumulation of capital) and at best they can only be a catalyst to its internal production (contrast with trade and foreign investment which can literally net you a crane or a CNC machine). Over the last five centuries there's been a fairly reliable dynamic at play where certain industries, whether its textiles or automobiles or information technology, tend to be growing at a much faster rate than any other industry. This paper gives an overview of this process. As the paper demonstrates industries tend to follow something called a "learning curve". As we see with these examples from the textiles and footwear industries there is an initial burst of productivity growth that eventually tapers off. Eventually the technology, which was previously transformative, becomes such a ubiquitous and standard part of the economy that we barely even notice it, and productivity growth in the industry becomes measurably slower or basically stops altogether. Successful industrialization tends to revolve around encouraging industries that are still in the takeoff phase of the learning curve. Poorer countries tend to be countries that are stuck producing goods that have already had all their potential for explosive productivity gains exhausted. Obviously this changes over time. So in the 19th century Britain was specialized in textiles, which were then experiencing a dizzying climb in productivity. As textiles reached the mature phase of the learning curve however the productivity growth tapered off and Britain began to transition to other goods. Today textiles tend to be something that poor countries specialize in. As Reinert explains: Erik Reinert, A Note on Capitalist Dynamics posted:Learning Curves and Experience Curves. A successful industrializing strategy tends to revolve around identifying industries that are still in the early phase of the learning curve and finding ways to stimulate this industry domestically. While many countries accumulate capital and foreign reserves by initially producing goods like textiles that have already 'matured', the countries that succesfully reach middle or high income status have economies that are able to make the transition to producing goods with high productivity growth.This high productivity growth makes it possible to have both high wages and high profits and leads to a virtuous circle of development. That may involve protective tariffs, subsidies, attracting foreign capital, building right kind of infrastructure, establishing the right trade relationships, ensuring you have the right kind of financial system, etc. By way of analogy there is no precise strategy for winning a boxing match but that doesn't mean that a boxer can expect to win if they don't learn the techniques of boxing. You have to know how to throw a jab, a cross or a hook and how to cover up when your opponent is pummelling you. Similarly, if you want to industrialize your country and reach high income status globally then you need to be familiar with the menu of techniques that can stimulate the right kind of industrial growth so that your economy doesn't end up specializing in industries with low productivity gains and, as a result, low wages. quote:Industrialization and rapid economic development are themselves a common element when making these comparisons so it's easy for cause and effect to be obfuscated. That could be said of almost any complex process. The role of scholarship is to investigate the underling processes so that we can identify causal mechanisms. quote:What do you mean similar path to U.S. or Japan (the U.S. started industrializing 2 centuries ago..)? I thought I explained myself pretty clearly in that post. It tends to be the case that when a country is growing really rapidly and at the forefront of technological innovation you'll have a boom period which creates the conditions for so called 'irrational exuberance'. Growth in the real economy leads to growth in the financial economy. Credit and loans get extended to riskier and riskier ventures as the boom persists, creating the potential for bubbles to appear. Eventually something happens that halts the boom and suddenly a lot of the loans made during the boom become none-performing. It turns out that some investments that made sense during the height of the boom were actually not such a good idea. The result is a painful economic slowdown or contraction. You can see this kind of pattern occurring in the US with the long depression and, a half century later, the Great Depression (arguably something similar may have happened in 2007 / 2008). In both cases a period of very impressive growth in the real economy eventually produced a speculative bubble that popped, leading to an economic contraction. You can also see it in the case of Japan, which grew very rapidly during the 70s and 80s, leading to an asset bubble that eventually popped, which lead to the 'lost decade(s)'. My point about China was that, based on these precedents, there's reason to believe that sooner or later the Chinese economy will have to face some kind of reckoning. It seems to be a standard part of explosive economic growth.
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# ? Mar 20, 2014 18:33 |
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Hong Kong luxury real estate sell off: http://mobile.reuters.com/article/idUSL3N0MG1B220140319?irpc=932
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# ? Mar 20, 2014 21:20 |
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Hermes doing fine despite crack down on corruption and gifts in China. Louis vuitton and Gucci not so much. http://m.theglobeandmail.com/report...1&click=dlvr.it
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# ? Mar 20, 2014 21:23 |
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Helsing posted:Over the last five centuries there's been a fairly reliable dynamic at play where certain industries, whether its textiles or automobiles or information technology, tend to be growing at a much faster rate than any other industry. This paper gives an overview of this process. As the paper demonstrates industries tend to follow something called a "learning curve". Really poor countries are really poor because they're not productive at anything. They're not productive at anything because they lack human and physical capital. When you're starting from low levels of productivity across the board international productivity averages and growth rates don't matter. What matters is figuring out the quickest way to grow the productivity of your workers. Not coincidentally this often means adopting the industries which developed countries figured out and perfected a long time ago. So for example while textile productivity growth rates may be low and stagnated internationally they still might be far higher than your country's current productivity average. So installing boring t-shirt machines can be a boon. The point is I agree that productivity and productivity growth rates are critical, but so long as productivity is growing it doesn't matter whether it's coming from a cutting edge industry or not. I think the burden of worrying about that falls primarily on already developed countries. And separately we'd have to decide what the role of government is navigating between productive industries when profit already creates the incentive to do exactly that. quote:That could be said of almost any complex process. The role of scholarship is to investigate the underling processes so that we can identify causal mechanisms. Yeah bubbles and crisis are obviously part of the process with capitalism and I agree that history suggests China should hit one soon.
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# ? Mar 21, 2014 02:01 |
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asdf32 posted:Yeah bubbles and crisis are obviously part of the process with capitalism and I agree that history suggests China should hit one soon. The BBC documentary is pretty good, basically the main way China coped with the 2009 recession was taking the credit bubble and state controlled economy to a extreme level. Doing things such as building massive mass transit projects or skyscrapers in half the normal time compared to the west just to avoid angry unemployed workers.
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# ? Mar 21, 2014 03:09 |
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Typo posted:Therefore China had the option of rapidly importing technology, investments and expertise far in advance of its own (either from the Soviets or the west) to fuel growth. asdf32 posted:So for example while textile productivity growth rates may be low and stagnated internationally they still might be far higher than your country's current productivity average. So installing boring t-shirt machines can be a boon. The point is I agree that productivity and productivity growth rates are critical, but so long as productivity is growing it doesn't matter whether it's coming from a cutting edge industry or not. This narrative isn't what happens in real life, and I'm shocked that people still think this way despite the opposite being heavily documented in mainstream media. There's tons of liberal tearjerkers about sweatshops and cheap labor in Asia and Africa, and you don't hear about developing countries adopting the latest fully automated assembly systems. There's a reason for that - developing countries are competing on the cost of labor and if you have high productivity systems, the cost of labor goes down and so does that advantage. Without a strong state to say 'adopt this less profitable but technologically advanced venture,' there is no incentive for firms in a developing country to adopt the latest productive technologies if it's more profitable to stick with labor-intensive ones. That's why very basic poo poo is still made by humans in poor countries when they can be made by robots, and it's hampering the growth of productivity. On topic anecdote: I'm from Wenzhou, and yup it's the richest city you've never heard of. I currently live in the US but when I went back a few years ago (after the shadow banking crisis hit) I hung out with a financial advisor family friend and he was peddling the same old poo poo. Everyone knows about the crisis, it's like a mini-GFC in the city, but things seemed to have been all right. Maybe I didn't talk to the right people or the government bailed everyone out, but everything seemed normal in the aftermath. That's either good, or my worst fear which is that the crisis happened but no lessons were learned. Edit: anecdote is just anecdote, I'm no expert on shadow banking or what's going on in China. I just hang out with friends and family. flatbus fucked around with this message at 03:58 on Mar 21, 2014 |
# ? Mar 21, 2014 03:54 |
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flatbus posted:This narrative isn't what happens in real life, and I'm shocked that people still think this way despite the opposite being heavily documented in mainstream media. There's tons of liberal tearjerkers about sweatshops and cheap labor in Asia and Africa, and you don't hear about developing countries adopting the latest fully automated assembly systems. There's a reason for that - developing countries are competing on the cost of labor and if you have high productivity systems, the cost of labor goes down and so does that advantage. Without a strong state to say 'adopt this less profitable but technologically advanced venture,' there is no incentive for firms in a developing country to adopt the latest productive technologies if it's more profitable to stick with labor-intensive ones. That's why very basic poo poo is still made by humans in poor countries when they can be made by robots, and it's hampering the growth of productivity. If a country has an abundance of workers doing low productivity tasks then it's likely to be more profitable to distribute cheap capital widely than expensive capital to just a few of them (and given a certain dollar amount, that's the choice). Profit here isn't capitalist profit, but general surplus (and remember, subsidies are money taken from somewhere). Pointing out that poor workers are engaged in labor intensive and therefore low productivity jobs is obvious, but the latest machinery is going to come out of thin air. It's going to have to be slowly accumulated.
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# ? Mar 21, 2014 04:22 |
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asdf32 posted:If a country has an abundance of workers doing low productivity tasks then it's likely to be more profitable to distribute cheap capital widely than expensive capital to just a few of them (and given a certain dollar amount, that's the choice). Profit here isn't capitalist profit, but general surplus (and remember, subsidies are money taken from somewhere). This goes directly against the claim that countries can benefit from the path (or technology) taken by previously industrializing countries. China has a very strong state so I'm not counting it here (and this is going to veer off topic so I'll watch myself), but if you're saying that it's obvious that a developing country can't make use of the latest productive tech and should climb up the productivity chain all by its own, how in the world is convergence ever going to happen unless the developed countries stop innovating?
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# ? Mar 21, 2014 05:40 |
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flatbus posted:This narrative isn't what happens in real life, and I'm shocked that people still think this way despite the opposite being heavily documented in mainstream media. There's tons of liberal tearjerkers about sweatshops and cheap labor in Asia and Africa, and you don't hear about developing countries adopting the latest fully automated assembly systems. There's a reason for that - developing countries are competing on the cost of labor and if you have high productivity systems, the cost of labor goes down and so does that advantage. Without a strong state to say 'adopt this less profitable but technologically advanced venture,' there is no incentive for firms in a developing country to adopt the latest productive technologies if it's more profitable to stick with labor-intensive ones. That's why very basic poo poo is still made by humans in poor countries when they can be made by robots, and it's hampering the growth of productivity. Yes, you are correct that China and other developing countries succeeded by utilizing their cheap labor. But adopting western or Soviet technology does not necessarily mean the very latest automatic system, but rather subsets of technology which favors labor intensive manufacturing. See for instance, China essentially buying old steel mills from the Rhineland and transporting it to China. It doesn't change the fact you can grow very fast by moving farmers from pre-industrial methods of production into towns and factories using at least industrial level technology. There is also the fact that a lot of the technological expertise adopted aren't even factory equipment, the Soviets for instance helped to massively improve the infrastructure in China. My hometown still uses a bridge which was built by the Soviets in the 1950s. Typo fucked around with this message at 07:00 on Mar 21, 2014 |
# ? Mar 21, 2014 06:57 |
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flatbus posted:This goes directly against the claim that countries can benefit from the path (or technology) taken by previously industrializing countries. China has a very strong state so I'm not counting it here (and this is going to veer off topic so I'll watch myself), but if you're saying that it's obvious that a developing country can't make use of the latest productive tech and should climb up the productivity chain all by its own, how in the world is convergence ever going to happen unless the developed countries stop innovating?
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# ? Mar 21, 2014 06:58 |
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flatbus posted:how in the world is convergence ever going to happen unless the developed countries stop innovating? It's simply faster for me to adopt existing technology than to invent new ones.
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# ? Mar 21, 2014 07:01 |
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Typo posted:One of the ways (China today) handles this is by simply be really good at copying other country's innovations. That also has the effect of not having an indigenous base of knowledge to call back on to make your own revolutionary improvements.
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# ? Mar 21, 2014 07:07 |
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Labour-intensive low-productivity industry is not intended to be superior to capital-intensive high-productivity industry; it is intended to be superior to agricultural productivity, which is always very low. China has not yet finished mobilizing its rural population, far from it, so it has a while to go before it stops adding more labour-intensive production
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# ? Mar 21, 2014 07:32 |
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Ardennes posted:That also has the effect of not having an indigenous base of knowledge to call back on to make your own revolutionary improvements. First of all, we should clarify what is the cause and what is the effect. The base of knowledge doesn't exist in China for innovation on par with the west anyway, this is partially because China have something like 5-10 world class universities, and then the quality of higher education drops off a cliff after that. Which means human capital is poor in China except for the very top tier, and many of them choose to go abroad anyway. This is why China has to resort to copying western innovations in the first place. But China deals with the need to copy foreign innovation and still foster domestic improvements by 1) The tried and true method of pooling resources into (attempting at least) creating national champions: world class technology giants where there is a real attempt at having good corporate governance and be competitive on the world stage (best examples are Huawei and ZTE). 2) The tried and true method of protectionism. By design or coincidence, banning Facebook, Twitter, and Google means your population has to use domestic products like RenRen, Weibao and Baidu instead. So that leaves institutions which are at least theoretically capable of innovating on the same field as the west. ronya posted:Labour-intensive low-productivity industry is not intended to be superior to capital-intensive high-productivity industry; it is intended to be superior to agricultural productivity, which is always very low. China has not yet finished mobilizing its rural population, far from it, so it has a while to go before it stops adding more labour-intensive production Typo fucked around with this message at 07:41 on Mar 21, 2014 |
# ? Mar 21, 2014 07:36 |
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Ardennes posted:That also has the effect of not having an indigenous base of knowledge to call back on to make your own revolutionary improvements. That's how Industrialization works. You get a bunch of people copying the other guys (Germany -> UK, Japan -> Europe, etc) and then when you're rich you pump some of that money into education so you can make an educated base and innovate yourself.
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# ? Mar 21, 2014 13:16 |
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Typo posted:Yes, sort of. Being real loose with the definition of "world class university" here
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# ? Mar 21, 2014 13:25 |
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flatbus posted:This goes directly against the claim that countries can benefit from the path (or technology) taken by previously industrializing countries. China has a very strong state so I'm not counting it here (and this is going to veer off topic so I'll watch myself), but if you're saying that it's obvious that a developing country can't make use of the latest productive tech and should climb up the productivity chain all by its own, how in the world is convergence ever going to happen unless the developed countries stop innovating? No, you seem to be trying to drive a wedge between "the latest capital" and "capital that's better than we have now". I'm trying to argue that the distinction doesn't matter, so long as it's some capital that improves productivity. Typo posted:The latest? No, but look at this way, if a country is at the developmental level circa 1900, and another country is at the level circa 1980, the former can still do very well by adopting the technology of 1950. This is the best way to sum it up. But you can go from 1900 levels of capital to 1950 levels of capital in far less than 50 years. It's always easier to adopt technology that's already been developed. This helps lead to convergence.
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# ? Mar 21, 2014 14:22 |
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asdf32 posted:Really poor countries are really poor because they're not productive at anything. They're not productive at anything because they lack human and physical capital. Yes, at a low enough level of development it makes sense to adopt really basic industries like textiles since they are an improvement over agriculture. England, the US, Japan and Korea all followed a similar path. However that first step has to be followed by developing industries with greater room for rapid productivity growth and that usually requires that you somehow protect or subsidize your strategic industry from superior international competition. Countries that get trapped in labour intensive low productivity industries won't automatically transition out of it once they magically accumulate enough capital.
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# ? Mar 21, 2014 17:02 |
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Typo posted:Yes, sort of. In what manner are Chinese social media, search, or software companies even theoretically innovative?
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# ? Mar 21, 2014 17:13 |
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tbp posted:Being real loose with the definition of "world class university" here There's something like 7 Chinese Universities on there in the top 200 in the world
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# ? Mar 21, 2014 18:15 |
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TheBuilder posted:In what manner are Chinese social media, search, or software companies even theoretically innovative? Typo fucked around with this message at 18:54 on Mar 21, 2014 |
# ? Mar 21, 2014 18:19 |
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Helsing posted:Yes, at a low enough level of development it makes sense to adopt really basic industries like textiles since they are an improvement over agriculture. England, the US, Japan and Korea all followed a similar path. However that first step has to be followed by developing industries with greater room for rapid productivity growth and that usually requires that you somehow protect or subsidize your strategic industry from superior international competition. Why? Subsidies of all forms are basically just run of the mill investments - you take money from one place in the economy and invest it in another. At best the government's advantage is it's borrowing rate or size, but like any other investment there are costs and no guarantee of success. What you're asking for here, choosing high growth industries, is exactly the thing private capital is trying to do at the same time. And after accumulating a certain amount of capital it should be in a position to do exactly that. Government of course has an incredibly important role doing all the things government is uniquely well suited for - education, infrastructure, regulatory framework etc, but picking and choosing winning industries isn't really among them. Though I'll note that I think it's obvious from historical examples that government involvement in industry often isn't harmful, especially when the path to develop (get/deploy basic capital) is fairly clearcut. But that remains somewhat far removed from being evidence that it's necessary. The best argument here I think one of stability - government investment can be more stable than private which is relevant for certain industries. But I see that as a more limited argument applicable to specific industries rather than a general necessity for growth across the board.
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# ? Mar 22, 2014 03:43 |
asdf32 posted:Why?
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# ? Mar 22, 2014 05:26 |
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Nessus posted:The government has a time horizon beyond 'the next quarter' so there's that at least. Don't just parrot dumb arguments. The larger implication of the claim that business is exceedingly shortsighted is that the capitalist class is unable or unwilling peruse long term goals. I doubt that's the point you're trying to make. Generally I think business is too shortsighted too but it's a human trait which government is certainly not immune too. We have ample examples of politically expedient but shortsighted legislation. Government however still has some advantages in terms of long term investment in the sense that the actual interests of the population as a whole can't shift as fast as any individual firm or investor nor can government change policy as quickly as them if it wanted too. Government can also probably safely assume that it's going to be around in a decade or two.
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# ? Mar 22, 2014 06:21 |
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The main difference between strategic protection of infant industries between import-focused and export-focused, gauging from the postwar growth periods from the 50s to 70s, is indeed political - it is harder to bullshit export numbers. You cannot coerce Westerners to choose your stuff, the products really have to get better as the subsidies are withdrawn. Latin American governments pursuing import substitution, on the other hand, had much more difficulty policing the quality of investments, and distinguishing between policies that are supported to gain protection from imports versus protection from domestic competition. The point extends to other nominally interventionist trade policy, like capital controls. Malaysia can carry out capital controls well, because its particular variety of domestic corruption (involving cronies maneuvering themselves into leading the export industries) dislikes the controls. If Mahathir had not been locked in a power struggle with his finance minister Anwar Ibrahim at the time, Malaysia would have hiked interest rates instead; the controls were never popular and the limits were discarded soon after Anwar was moved out the way. Argentina and Brazil cannot carry out capital controls well, because their domestic dysfunctions interact badly with it; you can tell because it is actually popular policy. That is to say, perversely, the polities which want intervention the most, will implement it the worst.
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# ? Mar 22, 2014 08:36 |
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# ? May 11, 2024 15:25 |
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http://www.ft.com/intl/cms/s/0/a701...iteedition=intlquote:China bears face investment challenge
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# ? Mar 23, 2014 08:31 |