CONDITION: A Very Nice Foreign Affairs Review of Slouching from þe extremely sharp Liaquat Ahamed:
A full-length review in the Nov/Dec issue!:
A masterfully sweeping account… a joy to read. Few economic historians have as fluent a grasp of political or military history or, more important, write as lucidly and with such great flair about these subjects… —Liaquat Ahamed, Foreign Affairs
FIRST: Development, & Colonization, External & Internal:
And Matthew Yglesias has joined those posting screenshots from their copies of Slouching Towards Utopia <bit.ly/3pP3Krk>:
Matthew Yglesias: ‘Interesting thoughts from @delong on education and development in East Asia vs Latin America—perhaps a result of a nationalist elite relative to elites who see themselves as essentially colonizers…
& from the end of Chapter 1: Globalizing the World:
The example of the North Atlantic industrial core seemed easy to follow. Inventing the technologies of the original British Industrial Revolution—steam power, spinning mills, automatic looms, iron- and steel-making, and railroad-building—had required many independent strokes of genius. But copying those technologies did not, especially when you could buy and cheaply ship the same industrial equipment that supplied the industries of England and the United States.
If Henry Ford could redesign production so that unskilled assembly-line workers could do what skilled craftsmen used to do, why couldn’t Ford—or someone else—also redesign production so that unskilled and even lower-wage Peruvians or Poles or Kenyans could do what Americans were then doing? After all, even by 1914, Americans were extraordinarily expensive labor by world standards.
Did the difficulty lie in political risks? Was the decisive factor the relative advantage afforded by being near your machine suppliers and other factories making similar products? Was it the need to have specialists close at hand to fix the many things that can go wrong?
It remains a great puzzle to me. And not just to me, but to other economic historians as well. We understand far too little about why the pace of technological diffusion outside of the industrial core was so slow before World War I.
“Peripheral” economies did a superb job at specializing in plantation agriculture for export. They did a bad job at creating modern manufacturing industries that could have also turned their low relative wages into a durable source of comparative advantage.
When I am asked why this happened, I say that the initial cost advantage enjoyed by Britain (and then the United States, and then Germany) was so huge that it would have required staggeringly high tariffs in order to nurture “infant industries” in other locations. I say that colonial rulers refused to let the colonized try. I say that the ideological dominance of free trade kept many others from even considering the possibility. Few even thought of taking a few steps away from the ideology of free trade as the be-all and end-all toward the practical political economy of Alexander Hamilton and company. Yet a Hamiltonian “developmental state” approach might have mightily benefited their economies in the long run.
Unmanaged, a market economy will strive to its utmost to satisfy the desires of those who hold the valuable property rights. But valuable property owners seek a high standard of living for themselves boosted by purchase of foreign luxuries. They are not patient people who wish to enable and accelerate long-run growth, let alone encourage the trickling-down of wealth and opportunity to the working class. Moreover, while the market economy sees the profits from establishing plantations, and from the revenues that can be charged for the use of infrastructure such as railroads and docks, it does not see and cannot take account of the knowledge that workers and engineers gain from being part of a community of practice. Watching what goes wrong and right with pioneers and competitors, and listening to them boast when things go right and commiserate with them when things go wrong with their enterprises, is a powerful social channel for productivity growth. Yet there was no money flow associated with conversations at Silicon Valley's Wagon Wheel Bar Grill. And so the market cannot see the benefits to the economy.
Such “acquired skill and experience,” John Stuart Mill wrote, can create a “superiority of one country over another in a branch of production . . . aris[ing] only from having begun it sooner . . . [with] no inherent advantage.” But—unless managed—the market economy’s maximum-profitability test would keep that skill and experience from ever being acquired. And so 1870–1950 saw the most profitable and the most innovation-supporting parts of economic activity becoming more and more concentrated in what we now call the global north.
The economic historian Robert Allen thinks the dominant factor was imperialism: colonial governments were uninterested in adopting a “standard package”—ports, railroads, schools, banks, plus “infant industry” tariffs in sectors just beyond currently profitable export industries—of policy measures that would have enabled industrialization. Arthur Lewis thought that the most important issue was migration and global commodity trade: industrialization required a prosperous domestic middle class to buy the products of the factories, and tropical economies could not develop one. Economic historian Joel Mokyr thinks that it was the habits of thought and intellectual exchange developed during the European Enlightenment that laid the groundwork for the communities of engineering practice upon which the North Atlantic core’s industrial power was based. And development economist Raul Prebisch thought that what mattered most were the landlord aristocracies notionally descended from Castilian conquistadores, who thought their dominance over society could best be maintained if the factories that produced the luxuries they craved were kept oceans away.
I do not know enough to judge. The answer lies somewhere in the causal mix of individuals reaching individual decisions and larger cultural and political forces. What I know that we cannot know is what might have happened if the twentieth century hadn’t happened the way it did.
And from Chapter 12: False (& True) Starts to Economic Development in the Global South:
Results were strikingly at variance with the expectations of neoclassical, neoliberal, and neoliberal-adjacent economists like myself, who hold that discovery is—or should be—more difficult than development, that development is more difficult than deployment, and so that the world economy should “converge” over time. Between 1911 and 1990 that did not happen. The opposite did: the world economy diverged to a stunning degree.
How to make sense of this? Economic historian Robert Allen had a checklist that countries needed to work through in order to step onto the escalator to prosperity that was post-1870 economic growth. It included having a stable, market-promoting government; building railroads, canals, and ports; chartering banks for commerce and investment; establishing systems of mass education; and imposing tariffs to protect industries and the communities of engineering practice that support them, and in which their long-run comparative advantage lay. Then, in addition, there needed to be a “Big Push” to set all the virtuous circles of economic development in motion.
For most of the economies in the global south, it simply did not happen. They did not catch up to, or even keep pace with, the fast-runners of economic growth and development. The reason? The pre–World War II colonial masters did next to nothing to prepare the colonized nations of Asia and Africa for independent prosperity. Before World War II, these colonizers had little interest in bringing about a Big Push to jumpstart the economies and aid the populations of their colonial subjects. Compounding their problems, the workers of the colonized nations of Asia and Africa faced stiff competition from the workers of extremely low-wage India and China, which hindered their ability to build the sort of middle class that could have driven demand and spurred industry.
Similar patterns held elsewhere in the global south. Consider Latin America, which had achieved independence from Spain and Portugal early in the 1800s. Mexico, Colombia, Peru, Brazil, and the others suffered, by and large, from what one might call “internal colonialists”: a landed elite privileged by property ownership and Iberian descent that feared an educated proletariat, loved foreign-made manufactures, and had Iberian-derived legal systems that did not mesh well with the needs of commerce and industry…
One Video: Timothy Snyder: Þe Making of Modern Ukraine:
One Image: Global Warming: Þe Seven Hottest Years on Record Were þe Past Seven:
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Must-Read: China:
Guoguang Wu & Lii Yua: The Party Congress and the Future of China: ‘The removal of a former Party head, whether with friendly or nefarious intentions and whether for political or health reasons, should have at least merited a vague comment or two from Xi Jinping or Li Keqiang. They should’ve, at minimum, explained to the delegates present that comrade Hu Jintao had to leave for health reasons and asked everyone to kindly bid farewell, or say that they regret that he’s unable to stay…Li Yuan: … or even something like a thank-you, that would’ve been fine. Guoguang Wu: Exactly, that’s just basic human kindness. As we saw, all the people Hu Jintao promoted — Li Keqiang, Wang Yang, Hu Chunhua, and the many others present — sat there extremely nervously, and none of them expressed any sympathy or tried to comfort him. I actually saw lots of positive social media comments about Li Zhanshu, who acted on his instinct and moved a bit…
Oþer Things Þt Went Whizzing by…
Very Briefly Noted:
John Scalzi: Staying Or Going at Twitter: Ironically, a Twitter Thread…
Ben Thompson & Dan Wang: The China Chip Ban: ‘he U.S. government thinks that Beijing has become a much more unfriendly power, even more so than during the Trump years, after President Xi aligned himself so closely with President Putin in February with a no limits partnership…. The reason why you see this not only continuity but strengthening in anti-China sentiment relative to the Trump administration is because this is actually driven much more by the bureaucracy…
Jamie Merisotis: Struggles of the Modern Male: ‘Boys are now significantly less likely than girls to earn a high school diploma (a gap of 6 percentage points), go to college (14 points), or enroll in grad school (nearly 20 points). Outside a small cohort of men who continue to dominate elite institutions, most are earning lower wages than they did 40 years ago...
Charlie Warzel: Welcome to Geriatric Social Media: ‘I’ve been trying to talk myself into the social-media death-spiral idea, but it feels like the wrong framework to describe what is essentially just an evolution…
Matt Yglesias: Elon Musk needs to make Twitter better: ‘I hope that some of the people who’ve stopped meaningfully engaging with their accounts for self-defensive reasons will be tempted by circles to re-engage…. Making it easy to sort your own list of followers would make having a big list of followers more valuable…. I like… MegaBlock…. “Nobody is allowed to be annoying” is not a reasonable content moderation goal. What you need is things like MegaBlock functionality...
Joshua Brustein: Musk's Twitter Takeover Is In Its Score-Settling Phase: ‘Musk has obviously seen buying Twitter as a great troll…. Musk posted an open letter to advertisers…. The letter was an indication, it appeared, that Musk… finally wanted to play it straight. Nope. Within days Musk had tweeted a risible conspiracy theory about the assault on House Speaker Nancy Pelosi’s husband, then deleted it, then denied having deleted it, calling the New York Times fake news in the process. This is what the burn-it-all-down crowd was hoping for from Musk as “Chief Twit”…
Leah Platt Boustan, Jiwon Choi & David Clingingsmith: Automation After the Assembly Line: Computerized Machine Tools, Employment and Productivity in the United States: ‘Since the 1970s, computerized machine tools…. Industries more exposed to CNC increased capital investment and experienced higher labor productivity. Total employment rose, with gains for college-educated workers and abstract tasks…. Employment gains were strongest for unionized jobs...
Rana Foroohar: After Neoliberalism: ‘Neoliberal policies…immense inequalities within countries…. Since the beginning of the neoliberal era, a handful of economists had pushed back against the received wisdom of the field. Karl Polanyi…
Jeremy Siegel, Jeremy Schwartz & Barry Ritholtz: Transcript: ‘RITHOLZ: So let’s not bury the lead, if market cap isn’t the most efficient way to organize an index, what is?…. SIEGEL: We like dividends and/or earnings…. RITHOLTZ: And you guys prefer the name fundamental as opposed to smart beta?… SCHWARTZ: It’s semantics and branding. We actually use the term modern alpha now…. RITHOLTZ: I like dumb beta, but that’s just me…
¶s:
Dave Karpf: Staring down the Twitterpocalypse: ‘Reduce the size of the Twitter workforce — not because the employees aren’t doing necessary work, but just because he has to slash budgets to reduce overhead costs… roll out an endless stream of harebrained monetization ploys…. He’s just on the hook for way too much money here. The abuse. Fewer employees, less moderation, and a general return of the worst of the alt-right asshole brigade is going to amplify all the worst parts of the Twitter experience…. The death spiral. As the accounts you like to interact with go dark and/or move elsewhere, you’ll move elsewhere too. If we look at the history of social media, this has happened plenty of times…. So my expectation is that Twitter will seem mostly unchanged in a month or two, and then will be a hollowed-out shell of its former self in a year or two. Elon spent too much, he doesn’t have a real plan, and he’s stumbled into the biggest tech downturn since the dotcom crash…
Mark Gongloff: Elon Musk grabs Twitter wheel, aims for cliff: ‘Musk, after paying $44 billion for Twitter — a struggling social media platform probably worth [spins random number wheel] $12 billion — seems determined to drive its value to $0 billion as fast as possible. In just a few days, he has: Fired most top managers and the entire board. Tweeted and deleted a conspiracy theory about Paul Pelosi. Threatened to charge users $20 a month for account verification. Threatened to fire engineers who can’t make the $20-a-month thing happen in a week. And outsourced content-moderation strategy to @catturd2… to name just a few. It’s not an encouraging start…
Parmy Olson: Musk’s main policy solution so far: ‘Musk will soon learn that Twitter’s most valuable service is content moderation itself. Were it not for thoughtful curation, the site would become the “free-for-all hellscape” that he has promised advertisers he’d avoid. Coordinating that is now one of the most challenging jobs in technology, requiring a deep understanding of law and ethics. Musk at least, has shown some humility in the face of that task: “Failure in pursuing this goal, despite our best efforts, is a very real possibility,” he told advertisers. That may have been his most reasonable statement yet…
I'm no expert (I have a twitter account but haven't used it in forever), but the argument by Yglesias seems mistaken.
"If you read the conservative media, they don’t use the n-word or call gay men and lesbians “faggots” and “dykes,” so a space that censors those kinds of slurs won’t be seen as violating conservatives’ own community norms."
The problem, of course, is that, even if "conservative media" do not use such terminology, the right-wing consumers of that media do use it. Which means that, if they are not allowed to use such terminology on Twitter, then they will object to their being censored.
Re development etc, as my neighbor said the other day: It's difficult to make predictions, especially about the past.