An article from The Economist‘s Christmas special edition examines the idea of progress of humanity, especially in the past century and this. I had problems reading this initially as it feels rather heavy on philosophy, but in essence I gather that in terms of health and economic growth we have made tremendous progress, but in terms of our humanity our progress is questionable.
It even raises the possibility that the concept of progress could be misguided or abused. Take, as mentioned in the article, how Hitler used ‘progress’ and subsumed it into ‘the shared destiny of a (German) nation’. All the more reason to question what progress is. So what exactly constitutes progress?
It seems like to be able to determine whether we have really ‘progressed’, we need to examine different parameters, such as in terms of science, in terms of material wealth… I never found progress this difficult to define until I encountered this article. I examine and read this from a very layman and not from a philosophical point of view, so pardon me if I appear naive or ill-informed.
After penning the entry on Yuan’s appreciation, I come to observe another sort of criticism that is used on China that does contribute to the global imbalance and probably needs more attention than the currency but is an issue the Chinese government have way less control. That is the lack of spending by the Chinese, which is something repeated time and again. The Economist’s Banyan column recently compared India to China:
Levels of capital and infrastructure investment [of India] compare favourably with China’s. And, much more than in China, the hot story in India is domestic demand. India is no mercantilist adding to global imbalances. It imports more than it exports, creating much needed global demand.
Although the article goes on to discuss the flaws of the Indian economy, especially its lack of participation in the supply chains that link up much of the emerging economies of Asia as a result of their focus on exporting services rather than industrial goods. Industrial production in India remains largely in the hands of a huge number of medium-sized enterprises.
Anyways, back to the fact that China is under-consuming; James Surowiecki explains on The New Yorkerwhy the Chinese don’t spend. He briefly ponders over culture, but goes on to focus on the nature of their economy, and the structures that are reducing access to credit and thus raising the need to save, which means perenially low consumption.
In a sense, the culture revolves around the idea of investment for the future, saving first so that one would be able to spend them. The long history of struggles and uncertainty means the Chinese are probably more risk adverse than their Western counterparts and reluctant to take on debts. In a period of growing wealth, the Chinese naturally hopes to put aside money for the future (be it studies, starting a business, a family or just for rainy days).
As the economy develops, it’ll mature and eventually shift towards higher credit and lower savings. The large investment that the government is pumping into the economy will have to induce greater efficiency in use of capital to help speed up the maturity. Till then, Americans will still get the chance to complain about Chinese inability to spend in the consumer sense.
This week’s package has arrived! It’s pretty heavy so I’m cutting down on the quantity of reads. As always, we begin with a talk from the wonderful conference, TED; by Physicist David Deutsch that attempts to explain the sudden explosive development in our ability to explain the world. Deutsch speaks slowly and refers to his notes frequently but his explanations and knowledge of reality is brilliant. The anecdotes and examples he gave are both apt and interesting enough to compensate for his lack of speaking prowess. In the lecture, Deutsch introduced the Royal Society‘s motto, “Nullius in Verba” (Latin for “take nobody’s word for it”) which I found immensely intriguing.
For those interested to know about economics in the world today can listen to the interview with 2005 Nobel Economics Laureate Joseph Stiglitz. It’s a pity there’s no subtitles available for the interview as well as the TED.com lecture linked above.
Finally, plunge into the long read by Peter York from moreIntelligentLife, How Marketing has got under our skin explores the history, trends and current state of the issue of self-branding or personal branding.