Via Bruce Sterling, who rightly points out that at just US$1500, this thing’s cheap enough to end up in favelas worldwide; it’s made and sold by these people.
I can almost hear the street rubbing its hands together in anticipation of finding its own uses for this thing…
The latest book in the wave of economics-for-the-layman texts, piggybacking on the global sense of “WTF just happened?” in the wake of the subprime collapse and its ripples, is 23 Things They Don’t Tell You About Capitalism from Cambridge economist Doctor Ha-Joon Chang, who apparently manages to play a currently popular theme (“free markets are bad”) with a less-popular counterpoint (“the welfare state should be expanded”) [via TheBigThink].
“It is like The Matrix. There is a reality where things could and should be better,” he said. “In order to wake people up to that alternative reality, you need to show them that it isn’t impossible. I’m not necessarily saying that I have a solution, but we have to recognise that some of the things we accept as inevitable aren’t.”
But while Dr Chang may not have the answer, he is sure of the problem – arguing that free-market capitalism has left the global economy more unstable, and people with less job security and greater feelings of insecurity, than ever before. His conviction that, post-recession, we should be rebuilding our country in a “moral” way – by acknowledging the social consequences of economic choices such as benefit cuts and job losses – will strike a chord with many.
“Another myth that needs to be busted is the idea that we can discuss economics without any moral implications,” he said. “What kind of economy we build changes us, so what we do in terms of monetary policy determines who we are.”
Kudos to any pundit honest enough to admit that they don’t have a silver bullet in the breech. I’m in close agreement with Chang’s thoughts about the morality of economic processes, though I take some issue with his rejection of free markets (which is, to be fair, hardly new to Chang). I’d agree that what are usually described as “free markets” are indeed broken (there’s too much evidence to ignore), but I remain to be convinced that those markets are truly “free” in any way that Adam Smith himself would have recognised. I’m no economics boffin, of course, and as such I’m not going to state with certainty that truly free markets would be the solution to all our economic woes… but I think it’s fair to say that regulation is never going to prevent disasters and abuses in a system wherein certain groups and individuals are given (or simply invent for themselves) ways of avoiding or circumventing such.
Like Chang, I don’t have a solution, but I suspect our best route forward is through the territory of transparency. Another thing that would help would be encouraging economic actors to be less trusting, but how that could be achieved is quite beyond me; the duplicitous and deceitful tactics of lending institutions prey on what appears to be a hardwired psychological blindspot whereby we privilege short-term advantage over long-term consequences. For example, would the global collapse still have happened if all the people who simply couldn’t afford the mortgages they were signed up to had looked rationally at their situation and never taken them on? Which is easier: to prevent institutions flogging dodgy deals, or to prevent people from signing a contract they don’t fully understand?
Easier said than done, of course: the rational actor is possibly the greatest myth of economic theory. But could the rational actor be nurtured? I think that perhaps you wouldn’t need to educate everyone in the intricacies of economic theory to achieve this; simply encouraging a pathological cynicism toward the deal that looks too good to be true might be enough (which recent events seem to have gone some small way toward accomplishing), and in a networked peer-to-peer society, more knowledgeable and trustworthy individuals would develop a reputation for reliable advice on complex financial issues. I’d certainly place more trust in a succession of recommendations and reviews from ordinary people more than in a diploma certificate and an expensive office…
… and it looks like my anarcho-utopianism is showing again*. I have no idea whether it would be possible to rationalise the economic thinking of everyday people (though I suspect that, if it were to occur, it would most likely occur as an emergent phenomenon in small local groups at first, possibly piggybacking on local currency movements and/or cooperative communities)… but I doubt it’s any more impossible than building a system of laws that’s big enough to encapsulate the world economy, yet devoid of the regulatory loopholes and protectionism that tend to push us into these periodic catastrophes.
Shorter version: the grass is so much greener on that side of the fence, but I have no idea how we should climb it.
[ * It’s awkward and frustrating, sometimes, being cynical enough to poke holes in one’s own underlying optimism about people. People call me a pessimist, but that’s not the case: if anything, I’m a pragmatic optimist. And so much for nomenclature. ]
There’s few things I enjoy more during my daily feed-reader trawl than a headline with two potential meanings… and here’s a classic case from The Big Think: “Brazilian Model Could Feed The World“. Wow – has he/she started a gene-mod crops business with his/her superstar income? Or perhaps he/she is just very very large, and thus could be sliced up and distributed to the world’s most needy?
As you’ve probably guessed from my own headline, it’s nothing at all to do with a monstrous fifty-foot Brazilian catwalk star (which is slightly disappointing for the B-movie fans in the audience, I guess). As the target article at The Economist explains, the model in question is Brazil’s agricultural policies:
Even more striking than the fact of its success has been the manner of it. Brazil has followed more or less the opposite of the agro-pessimists’ prescription. For them, sustainability is the greatest virtue and is best achieved by encouraging small farms and organic practices. They frown on monocultures and chemical fertilisers. They like agricultural research but loathe genetically modified (GM) plants. They think it is more important for food to be sold on local than on international markets. Brazil’s farms are sustainable, too, thanks to abundant land and water. But they are many times the size even of American ones. Farmers buy inputs and sell crops on a scale that makes sense only if there are world markets for them. And they depend critically on new technology. As the briefing explains, Brazil’s progress has been underpinned by the state agricultural-research company and pushed forward by GM crops. Brazil represents a clear alternative to the growing belief that, in farming, small and organic are beautiful.
That alternative commands respect for three reasons. First, it is magnificently productive. It is not too much to talk about a miracle, and one that has been achieved without the huge state subsidies that prop up farmers in Europe and America. Second, the Brazilian way of farming is more likely to do good in the poorest countries of Africa and Asia. Brazil’s climate is tropical, like theirs. Its success was built partly on improving grasses from Africa and cattle from India. Of course there are myriad reasons why its way of farming will not translate easily, notably that its success was achieved at a time when the climate was relatively stable whereas now uncertainty looms. Still, the basic ingredients of Brazil’s success—agricultural research, capital-intensive large farms, openness to trade and to new farming techniques—should work elsewhere.
Nothing new about people giving the big-ups to sustainable farming, of course… but to see it lauded in a venue like The Economist (alongside an admission that there’s a food crisis on the way, and that the Demographic Formerly Known As The First World is in the firing line too) is a new one, at least to me. Are we seeing a shift in attitude in business and government – a recognition that the long game is the only one in town, if you want there to still be a town when the game is over?
Richard Gowan of Global Dashboard points us to the blog of one Dhruva Jaishankar, who’s wondering whether the ability for states to project power is a function of the stability of their political surroundings. Turns out there are historical examples to the contrary: Europe, Japan and China, for instance.
Exhibit C. China. The growth of China is a remarkable story, but once again it has come despite—not because of—its political relationships with its neighbours. Certainly, China has not had a significant conflict since 1979 and it has settled many of its land boundary disputes. However, it continues to have uneasy relations with almost all its neighbours, including a sizeable dispute with its largest regional competitor, India. It also has one of the most unstable states in the world—North Korea—immediately bordering it. And the military presence of the world’s preeminent power in its region severely limits its actions. None of this, however, has stopped China’s rapid rise.
If you’re thinking “yeah, so what?”, then consider the fairly universal expectation that there’s more political and economic disorder coming down the pipeline, thanks to things like climate change, resource shortages and disruptive technologies. As such, predicting the next generation of global players is not a clear-cut game; nation-states we currently overlook for an assortment of reasons may jockey to the fore, while the pre-race favourites fall at early fences.
For example, what happens if a nation-state strengthens itself economically and politically by taking on all the jobs that the citizens of more fortunate states object to? Call it YIMBYism [via BoingBoing]: let the big boys outsource their problem jobs to you, and alongside the money you get political leverage (and a whole raft of vested interests in maintaining and/or manipulating the status quo to boot).
This works for corporations, too; think of all the mercenary outfits like Blackwater who’ve been taking on the dirty work in democracy- and stability-exporting (ho-ho-ho) conflicts around the world. Comparatively small change for a big nation’s military budget, but big money for a small post-national organisation, who – as a bonus, or perhaps as they intended all along, depending on the ambition and longsightedness of their founders – also get access to the broken and corrupt power systems in the areas where they’re employed.
I think it’d be interesting to look at this on a more local scale as well – zooming in to the level of states and counties, say, or even further in to urban neighbourhoods. How does power and advantage shift in a city like Sao Paolo, for instance, with its rapidly shifting map of interstitial favelas?
Yet another subject to add to the list of “stuff I’d love a small research grant to cover”…
They’re both meatspace brands who’ve seen substantial success from crossmarketing themselves with digital equivalents in virtual spaces and MMOs. If the trend of material minimalism continues (which doesn’t seem utterly infeasible, given the continued rocky uncertainties of the world’s economies), the digital sphere may become the last bastion for affordable and aspirational conspicuous consumption*… and a real moneyspinner for the more established virtual worlds.
And those worlds are already a moneyspinner: Blizzard recently got a US$88million judgement against someone who was running their own (unlicensed) WoW server/world, charging users for access and virtual goods. That’s not pocket change, at least not in this household.
[ * Although, based on my experiences in Second Life, you’d be best not to expect virtual bling and brands to be any more tasteful than their meatspace equivalents. 0_o ]