Workers returning to the office and socialising after pandemic lockdowns helped lead to a 15% surge in sales of deodorants, according to the maker of Dove, Rexona and Impulse.
A friend is fond of pointing out and celebrating teachable moments, and I’m going to struggle to find better examples of complementary goods!
By the way, I’ll be in Vietnam this entire week, first in Hanoi and then in Hoi An, so food recommendations, and other tips – very much in that order – are very welcome.
This link was shared with me via a WhatsApp group which shares one interesting link a day, and the group is set up in such a way that only the admins can send messages. Social media done right, if you ask me.
If, he suggests, it were more obvious to people that we now live in a stagnant world, more might be said and done to address it. But the key reason this isn’t happening is “that we’ve been distracted from the lack of progress” by “the shift from exteriority, from measurable things” such as “faster speeds, supersonic airplanes or longer life expectancies” and re-oriented on “the interior world of yoga, meditation, psychology, parapsychology, psychopharmacology, psychedelic drugs, video games, the internet et cetera”.
She quit last August, and has since pursued work that feels meaningful: she has written a children’s book about being mixed race, advised on inclusive recruiting strategy, coached corporate types in empathic leadership, and taught meditation – “to slow everyone else down too”. It has not been easy to turn down opportunities or to adjust to the step-down in status and income. “But I feel so much more me.” She doesn’t start work before 10am or carry on past 5pm, does yoga daily and spends quality time with family. “Ambition used to mean a bigger paycheck, a bigger brand, a more senior position … Now I’d actually rather go and watch the sunset.”
I’ve started to read columns, essays and blogposts on TFP and measuring productivity,((and please, if you have recommendations, send ’em along! This is a very short list, and I hope to add much more reading as I go)) because I’ve been thinking about writing out a series on this topic, and that’s one of the reasons I chanced upon the Thiel interview:
Thiel characterises this stagnation as a long, slow victory of the Club of Rome, a nonprofit founded in 1968 to drive political change premised on the belief that infinite growth is impossible. As Thiel sees it, this tacit postwar abandonment of the growth aspiration has resulted in “something like a societal and cultural lockdown; not just the last two years but in many ways the last 40 or 50”. There’s “a cultural version, a demographic version, and a technological version of this stagnant or decadent society,” he suggests. And the upshot of this paralysis has been “a world of technological stagnation and demographic collapse”, along with “sclerosis in government and banal repetition in culture”.
I’m not sure how to interpret the demographic version from a global perspective. There’s Italy (most of Europe, actually), Japan, China and the United States, but hey, we’re still growing (albeit ever more slowly), and Africa is going to chug right along this century.
And then on the supply side we have the exhaustion that seems to have settled like a fog on on most of us over the last two years, and certainly among folks somewhat younger than I:
My burnout was especially distressing for being self-inflicted; I felt bewildered and betrayed, as if my trusty north star had led me astray. Gingerly, I started interrogating my ambition: what was I seeking from work, and where might this feeling be better sourced? By my 30th birthday, in March 2021, the version of myself who had organised her entire life around her career felt like a stranger. I was still productive, but no longer at the expense of my health, happiness or relationships. It was as if the fire that had been fuelling me for half my life was down to a smoulder – and for the first time, I was content to let it go out. It turns out I was not alone. This has been called the age of anti-ambition: over the past two and a half years, many people have taken stock – of how they spend their time, where they find meaning, their hopes for the future – and found work wanting.
How to increase productivity begs the question: how does one measure it? And the more you read about both of these questions, the more you wonder if we know as much as we should about the latter, and whether we are worried (at all) about the former.
Food for thought, but for the moment, these are disquieting thoughts.
I ate a most delicious snack yesterday, and probably more of it than I should have. A student from Vasai had gotten along some fried surmai (which was also outstanding), but in a remarkable event where I am concerned, it was the vegetarian item that won the Kulkarni Tastebud contest yesterday.
The item in question was sukeli, and it looks like this:
This is what the website has to say about the product:
Dried bananas are 100% natural Dried Fruit, without any Artificial Flavor, Preservatives or Color. These are Soft, Chewy and full of Sweet Fruity flavor. These are rich in Potassium which regulates the Blood Pressure (BP). It contains Natural Sugar, Soluble Fiber, Minerals, Vitamins and Antioxidants which are essential to maintain good health. Dried Banana is great energy snack favorite of Athletes and Sportsperson. (sic)
I wouldn’t know about the nutritional qualities, but I can attest to the sukelis being soft, chewy and full of sweet fruity flavor. Think of it as an intensely addictive cross between bananas and jackfruits.
Do you know which is the most popular type of banana grown the world over? It is the Cavendish banana, and we produce a lot – a lot – of Cavendish bananas.
Here’s Vikram Doctor in on old piece from the Economic Times:
To get good bananas in Mumbai you must go to CST station. Not to take a train, but because every evening a few hawkers bring baskets of bananas to sell to the evening commuter crowd. The bananas are grown just outside Mumbai and they are small, fat and full of creamy-sweet flavour. They are usually not quite ripe when sold, and tend to ripen unevenly, but nearly all get sold by end of day. It used to be easier to get good bananas. Long Moira bananas from Goa, plantains from Mangalore that had to be kept till their skins turned black, several types of small bananas, thick red bananas, humble green Robustas and Rasthalis from Tamil Nadu so fat they were bursting out of their skin. Today you mostly just find one cheap green banana, one small banana and then the type that now rules the market. It is perfectly shaped, perfectly yellow coloured and a taste that is perfectly boring, but just banana tasting enough to be acceptable. Fruit vendors call it Golden Banana and push it hard, justifying its higher price by telling you it is meant for export. Which is correct since this is a kind of Cavendish, the banana variety that accounts for 99 per cent of the world market.
You might also want to listen to a podcast (now discontinued, alas, but it was truly excellent while it lasted) about the same topic. It used to be hosted by Vikram himself, and all episodes are worth a listen. It no longer seems to be online, more’s the pity, but perhaps the more intrepid readers might be able to surface a source for all of us? My top three episodes were about coffee, butter and bananas.
But back to bananas: as I said, we produce a lot of Cavendish bananas. Why? Well, economies of scale, in the jargon of my tribe. In English, we were optimizing for cost minimization:
Nature has a simple way to adapt to different climates: genetic diversity. Even if some plants react poorly to higher temperatures or less rainfall, other varieties can not only survive – but thrive, giving humans more options on what to grow and eat. But the powerful food industry had other ideas and over the past century, humans have increasingly relied on fewer and fewer crop varieties that can be mass produced and shipped around the world. “The line between abundance and disaster is becoming thinner and thinner and the public is unaware and unconcerned,” writes Dan Saladino in his book Eating to Extinction.
If a pest comes along that is particularly bad for that particular variety, well, we’re in deep doo-doo (and the infographic in the Guardian article is an excellent way to understand how we refuse to learn from history). And well, such a pest is now with us:
…diversity boosts the overall resilience in our food systems against new climate and environmental changes that can ruin crops and drive the emergence of new or more aggressive pathogens. It’s what enabled humans to produce food and thrive at high altitudes and in the desert, but rather than learn from the past, we’ve put all our eggs in a few genetic baskets. This is why a single pathogen, Panama 4, could wipe out the banana industry as we know it. It’s been detected in every continent including most recently Latin America, the world’s top banana export region, where entire communities depend on the Cavendish for their livelihoods. “It’s history repeating itself,” said banana breeder Fernando Garcia-Bastidas.
And when they say “every continent”, they aren’t exaggerating:
Tropical Race 4 (TR4), the virulent strain of fungus Fusarium oxysporum cubense that is threatening banana crop globally with the fusarium wilt disease, has hit the plantations in India, the world’s top producer of the fruit. The devastating disease which surfaced in the Cavendish group of bananas in parts of Bihar is now spreading to Uttar Pradesh, Madhya Pradesh and even Gujarat, and threatening to inflict heavy losses to the country’s ₹50,000-crore banana industry.
Well, OK, you might say, bring on the guys in the white coats and figure out the solution. Here’s Wikipedia on the topic, and the relevant section doesn’t have a reassuring heading: it’s called “Disease Management”. Personally, I would have felt better if it was more along the lines of disease eradication. But the first line of this section gives one a sinking feeling:
“As fungicides are largely ineffective, there are few options for managing Panama disease”
The Wikipedia article on Cavendish bananas is equally gloomy on the topic, save for a single line of some hope towards the end:
Cavendish bananas, accounting for around 99% of banana exports to developed countries, are vulnerable to the fungal disease known as Panama disease. There is a risk of extinction of the variety. Because Cavendish bananas are parthenocarpic (they don’t have seeds and reproduce only through cloning), their resistance to disease is often low. Development of disease resistance depends on mutations occurring in the propagation units, and hence evolves more slowly than in seed-propagated crops.[ The development of resistant varieties has therefore been the only alternative to protect the fruit trees from tropical and subtropical diseases like bacterial wilt and Fusarium wilt, commonly known as Panama disease. A replacement for the Cavendish would likely depend on genetic engineering, which is banned in some countries. Conventional plant breeding has not yet been able to produce a variety that preserves the flavor and shelf-life of the Cavendish. In 2017 James Dale, a biotechnologist at Queensland University of Technology in Brisbane, Australia produced just such a transgenic banana resistant to Tropical Race 4
It’s not just bananas, of course. The Guardian article is a lot of fun to read, and I would encourage you to arm yourself with a coffee and spend some time going through it. Corn is another great example!
Cost minimization is a great idea, but as with food, it is the dose that makes the poison. Long time readers will know that I have a bee in my bonnet about this, but I honestly think it is an idea that has been taken too far across multiple dimensions.
Ask what you’re optimizing for, and begin to worry if the answer is a single-minded focus on cost minimization.
Raghuram Rajan got this one right, in a different context: what matters is risk-adjusted returns. And it applies across multiple dimensions, not just finance. Moreover, when you design systems, think of risk across large horizons of time, not just short term optimization.
Be clear about what you’re optimizing for, and realize that cost minimization can only take you so far.
Simple lessons, but oh-so-underrated!
But hey, if you get a chance to try the sukeli out, please do!
Noah Smith had a rather exasperated blogpost (or newsletter post) out recently about Jason Hickel.
Hickel, an anthropologist by training, has two major theses about the world:
He believes that global poverty reduction is a myth, and He believes that degrowth is the best solution to environmental problems. Both theses are wrong. And not just wrong in the “Ackshually, sir, you don’t have the facts quite right” sense, but wrong in consequential, potentially dangerous ways. In this post I’m only going to push back against the first of these two narratives; I promise I will write more about degrowth later, and in the meantime you can read this and this.
What Roser’s numbers actually reveal is that the world went from a situation where most of humanity had no need of money at all to one where today most of humanity struggles to survive on extremely small amounts of money. The graph casts this as a decline in poverty, but in reality what was going on was a process of dispossession that bulldozed people into the capitalist labour system, during the enclosure movements in Europe and the colonisation of the global south. Prior to colonisation, most people lived in subsistence economies where they enjoyed access to abundant commons – land, water, forests, livestock and robust systems of sharing and reciprocity. They had little if any money, but then they didn’t need it in order to live well – so it makes little sense to claim that they were poor. This way of life was violently destroyed by colonisers who forced people off the land and into European-owned mines, factories and plantations, where they were paid paltry wages for work they never wanted to do in the first place.
I honestly don’t know where to begin in terms of refuting just this excerpt, let alone the rest of the essay, but thankfully, I don’t really need to. Noah Smith takes on part of the burden in his essay already, and Max Roser also pads up in this essay:
You can see this more clearly in the chart below. Clicking on the ‘relative’ button shifts the chart from absolute numbers to percentages. Whilst the proportion of the world’s population living in extreme poverty has been falling consistently since 1820, it is only in recent decades that this has translated into a decline in the number of people living in extreme poverty.
The chart above is absolute numbers, while the one below is in percentage terms. Both charts are from the essay by Roser linked to above. Here is the link again.
Look, much remains to be done in our battle with poverty. Much, much more. The fight is nowhere close to finishing, and we still aren’t sure about how to best reduce poverty – and by we I mean even the best of economists, no matter how you measure “best”. But this fact is incontestable: the world is better off today than it was a century ago, and that by various measures. One of which is the fact that poverty levels are down. By how much, by which yardstick, for which country and why – all are questions worthy of debate. Your answer about the magnitude of reduction in absolute levels of poverty might differ from mine, as might your choice of poverty line. It might also differ in terms of proximate cause.
But not the direction. Your answer about the direction when it comes to reduction of poverty ought to be the same: lower.
The title itself brought to mind Peter Thiel’s quote about being promised flying cars, and being given 140 characters instead. You may want to make a snarky joke about whether 280 characters counts as progress or not, but the point is well taken. And indeed, reinforced by this quote from David Rotman’s article: .. .. “In an age of artificial intelligence, genomic medicine, and self-driving cars, our most effective response to the outbreak has been mass quarantines, a public health technique borrowed from the Middle Ages.” .. ..
The article then goes on to highlight at least three separate aspects of why tech has failed us: lesser government support for technology and innovation (particularly in the USA), a sclerotic bureaucracy, and policy-making that is not a) proactive enough b) good at managing risks effectively c) far too focused on short-term issues d) aware of the pitfalls of focusing solely on efficiency. .. .. Let’s begin with the last of these points: .. ..
““The pandemic has shone a bright light on just how much US manufacturing capabilities have moved offshore,” says Erica Fuchs, a manufacturing expert at Carnegie Mellon University.” .. .. I teach courses in international economics at the Gokhale Institute, and one of the fundamental insights that I think students need to walk away with is the concept of a non-zero sum game. Trade makes both parties better off, and therefore more trade is good, is literally the basic starting block of a course on trade. For an excellent summary of this idea, read this article by Paul Krugman, or watch this TED talk by Matt Ridley. .. .. But two basic concepts from economics have come to haunt this rather neat idea. One is scale, and the other is the need to diversify. Both are very closely related. .. ..
If, conventional theoretical thinking goes, a firm is able to scale up effectively, it will be able to produce more for cheaper. Yes, it is more complicated than that, but that’s the gist of the benefits of scale. Now, think of all countries as firms, and China is the obvious example of a country that scaled more rapidly than other countries, and was able to produce stuff cheaper than almost anywhere else. And that’s how China became the “manufacturing centre of the world”. The more you import from China, the more they scale (and effectively!). The more they scale, they cheaper they can make stuff. The cheaper stuff gets, the more you have an incentive to import from China. And once the loop is up and running, it becomes difficult to stop. .. ..
And that’s a simple explanation for how the world ended up putting all of its eggs in one basket. We failed to diversify, because we focused on efficiency, without worrying about risk. What happens if an increasingly efficient global trading order suddenly breaks down? The price of efficiency is two fold: a) a lack of diversification b) not enough risk mitigation measures that allow one to fall back on domestic production. Which is where most of the world finds itself today. Readjusting global supply chains away from China is necessary, but it will not be easy. Especially because most countries will not want to pursue twin objectives: a) diversification away from China into other potential export powerhouses b) some production to be kept at home, especially in crucial sectors such as healthcare. .. .. Scale, and a lack of diversification. There’s a lesson in there for us at the individual level as well, of course. A single minded pursuit of some goal (say money, or career growth) at the cost of other things isn’t necessarily a good idea. .. ..
“Why couldn’t the US’s dominant tech industry and large biomedical sector provide these things? It’s tempting to simply blame the Trump administration’s inaction.” .. .. The truth is always more complicated than you think, and beware simple explanations, but that being said, you might want to read The Fifth Risk. Here’s a slightly tangential review from The Guardian if you are feeling lazy, and a quote from that article follows: .. .. “But we’re actually much more likely to die driving to the shops. The fifth risk is something impossible to conceive of in advance, or to prepare for directly. What matters is having a well-organised government in place to respond to these contingencies when they hit – exactly what the Trump administration has failed to do.” .. .. No government, or Big Ol’ Central Planner is perfect, of course (and there’s a very readable book about that topic, or here’s a fascinating review of the same book), but Michael Lewis makes the claim that the Trump administration is rather less than perfect even by our less than exacting standards. .. ..
“Any country’s capacity to invent and then deploy the technologies it needs is shaped by public funding and government policies. In the US, public investment in manufacturing, new materials, and vaccines and diagnostics has not been a priority, and there is almost no system of government direction, financial backing, or technical support for many critically important new technologies. Without it, the country was caught flat-footed.” .. .. The book to read about this topic, if you ask me, is The Entrepreneurial State, by Mariana Mazzucato. Here’s the Wikipedia link about the book. Governments need to play, she says (and I suspect the author of this article would agree), a more active role in fostering the tech ecosystem in a country. Shades of Studwell, perhaps, but I have a counterargument here: .. ..
“Incompetence and a sclerotic bureaucracy” is a phrase David Rotman uses early in the article when speaking about the Center for Disease Control in the USA. I find myself in complete agreement with the adjectives used. Why presume, then, that other government departments are likely any better? The truth, as always, lies somewhere in the middle. You can certainly make the case a la Michael Lewis, that the Trump administration took us to one end of the spectrum – but you should beware equally the other end of it! .. ..
“Economists like to measure the impact of innovation in terms of productivity growth, particularly “total factor productivity”—the ability to get more output from the same inputs (such as labor and capital). Productivity growth is what makes advanced nations richer and more prosperous over the long run. For the US as well as most other rich countries, this measure of innovation has been dismal for nearly two decades.” .. .. Well, yes, sure. And there is more than a grain of truth to the charge laid above, and not just for America. But keep in mind that measuring TFP is really and truly hard, and I am nowhere close to being convinced that we do a good job of it, even for a country like the USA, forget India. I am writing this post while sitting in my bed, using a laptop that allows me to keep multiple tabs (well over 50 right now) open in a modern browser, while being seamlessly connected to an overwhelming variety of news sources. All this while I listen to a Spotify playlist, and sip on excellent coffee that is made using home delivered Arabic beans. I’ll stop channeling my inner Keynes now, but most of this was not possible, especially at these prices, two decades ago. .. .. Progress may not be fast enough for our tastes, sure – but it has been taking place. If you would like to read a book with a take contrarian to mine, try this on for size: The Rise and Fall of American Growth, by Robert Gordon. .. ..
“The problem with letting private investment alone drive innovation is that the money is skewed toward the most lucrative markets.” .. .. Churchill’s quote about democracy comes to mind! .. ..
“In a widely circulated blog post, internet pioneer and Silicon Valley icon Marc Andreessen decried the US’s inability to “build” and produce needed supplies like masks, claiming that “we chose not to have the mechanisms, the factories, the systems to make these things.” The accusation resonated with many: the US, where manufacturing has deteriorated, seemed unable to churn out things like masks and ventilators, while countries with strong and innovative manufacturing sectors, such as China, Japan, Taiwan, and Germany, have fared far better.” .. .. Here’s is Andreessen’s post, and also, this is your periodic reminder to read How Asia Works. China, Japan, Taiwan and Germany being up there isn’t a coincidence. .. ..
““The great lesson from the pandemic,” says Suzanne Berger, a political scientist at MIT and an expert on advanced manufacturing, is “how we traded resilience for low-cost and just-in-time production.”” .. .. Options are easy to teach, but difficult to grasp, and even more difficult to implement. See put, long. .. ..
“…they are calling for an immediate ramp-up of public investment in technology, but also for a bigger government role in guiding the direction of technologists’ work. The key will be to spend at least some of the cash in the gigantic US fiscal stimulus bills not just on juicing the economy but on reviving innovation in neglected sectors like advanced manufacturing and boosting the development of promising areas like AI. “We’re going to be spending a great deal of money, so can we use this in a productive way? Without diminishing the enormous suffering that has happened, can we use this as a wake-up call?” asks Harvard’s Henderson.” .. .. More participation from the government than is currently happening, but throw also into the mix a more venture-capital-ish approach, and don’t forget prizes! In fact, I found myself wishing midway through the article that the author had explored other options, rather than the government-or-markets binary. .. ..
I hope I haven’t comes across as overly critical of the article, and my apologies if I have. That has certainly not been my objective. We rely far too much on the private sector now, that is true – and government can and should play a bigger role than is the case currently. But an extreme position, in either direction, always worries me a little!
“Here is a game called buzkashi that is played only in Afghanistan and the central Asian steppe. It involves men on horseback competing to snatch a goat carcass off the ground and carry it to each of two designated posts while the other players, riding alongside at full gallop, fight to wrest the goat carcass away. The men play as individuals, each for his own glory. There are no teams. There is no set number of players. The distance between the posts is arbitrary. The field of play has no boundaries or chalk marks. No referee rides alongside to whistle plays dead and none is needed, for there are no fouls. The game is governed and regulated by its own traditions, by the social context and its customs, and by the implicit understandings among the players. If you need the protection of an official rule book, you shouldn’t be playing. Two hundred years ago, buzkashi offered an apt metaphor for Afghan society. The major theme of the country’s history since then has been a contention about whether and how to impose rules on the buzkashi of Afghan society.”
That is an excerpt from an excerpt – the book is called Games Without Rules, and the author, Tamim Ansary, has written a very readable book indeed about the last two centuries or so of Afghanistan’s history.
It has customs, and it has traditions, but it doesn’t have rules, and good luck trying to impose them. The British tried (thrice) as did the Russians and now the Americans, but Afghanistan has proven to be the better of all of them.
Let’s begin with the Russians: why did they invade?
One day in October 1979, an American diplomat named Archer K. Blood arrived at Afghanistan’s government headquarters, summoned by the new president, whose ousted predecessor had just been smothered to death with a pillow.
While the Kabul government was a client of the Soviet Union, the new president, Hafizullah Amin, had something else in mind. “I think he wants an improvement in U.S.-Afghan relations,” Mr. Blood wrote in a cable back to Washington. It was possible, he added, that Mr. Amin wanted “a long-range hedge against over-dependence on the Soviet Union.”
Pete Baker in the NYT speaks of recently made available archival history, which essentially reconfirms what seems to have been the popular view all along: the USSR could not afford to let Afghanistan slip away from the Communist world, no matter the cost. And as Prisoners of Geography makes clear, and the NYT article mentions, there was always the tantalizing dream of accessing the Indian Ocean.
By the way, somebody should dig deeper into Archer K. Blood, and maybe write a book about him. There’s one already, but that’s a story for another day.
The supplying of billions of dollars in arms to the Afghan mujahideen militants was one of the CIA’s longest and most expensive covert operations. The CIA provided assistance to the fundamentalist insurgents through the Pakistani secret services, Inter-Services Intelligence (ISI), in a program called Operation Cyclone. At least 3 billion in U.S. dollars were funneled into the country to train and equip troops with weapons. Together with similar programs by Saudi Arabia, Britain’s MI6 and SAS, Egypt, Iran, and the People’s Republic of China, the arms included FIM-43 Redeye, shoulder-fired, antiaircraft weapons that they used against Soviet helicopters. Pakistan’s secret service, Inter-Services Intelligence (ISI), was used as an intermediary for most of these activities to disguise the sources of support for the resistance.
But if you are interested in the how, rather than the what – and if you are interested in public choice – then do read this review, and do watch the movie. Charlie Wilson’s War is a great, great yarn.
AP Photo, sourced from the Atlantic photo essay credited below.
Powerful photographs that hint at what the chaos of those nine years must have been like, from the Atlantic.
This myth of the 1980s was given new life by George Crile’s 2003 book Charlie Wilson’s War and the 2007 film of the same name, starring Tom Hanks as the loud-mouthed congressman from Texas. Both book and movie claim that Wilson turned the tide of the war by persuading Ronald Reagan to supply the mujahideen with shoulder-fired missiles that could shoot down helicopters. The Stingers certainly forced a shift in Soviet tactics. Helicopter crews switched their operations to night raids since the mujahideen had no night-vision equipment. Pilots made bombing runs at greater height, thereby diminishing the accuracy of the attacks, but the rate of Soviet and Afghan aircraft losses did not change significantly from what it was in the first six years of the war.
I’ve thoroughly enjoyed learning more about Germany as a consequence of writing these articles. Alas, I am all too aware that the learning has been very superficial indeed, but that will hopefully only serve to whet my appetite further. I’ll attempt to summarize my key learnings in a post scheduled for later this week, and in March, we’ll learn more about France.
Onwards then, to the topic of today’s essay: where does Germany go from here?
For many years, Germany’s economic strength has been based on prudent
monetary policy, a highly skilled workforce and a renowned manufacturing
sector that has successfully built up export markets across the world. Germany
has enjoyed political stability and exhibited a contained approach towards
foreign policy, where Germany regularly played by the rules set by others in the
liberal international order.
However, these pillars of Germany’s strength and stability may not be the right
tools to manage the upcoming disruptive changes.
That is from the executive summary of a report titled “Is Germany ready for the future? The case for action in a climate changed world“. The report speaks about how increasing digitilization, rising social inequality (globally), the disruption to the rules based trading order that worked so well for Germany, rising nationalism (again, globally) and low/non-existent aggregate demand will challenge Germany’s current model. The infographic below gives their (the authors) recommendations to deal with these challenges. Also, the word for the day where I am concerned: mittelstand.
Figure 1 from the same report linked to above
“Germany isn’t exactly in a state of disrepair. It doesn’t feel as though it is, even though potholed streets aren’t a rarity, trains often don’t run on time and cellular reception is spotty outside cities. Nor, however, does it feel future-proofed enough, even after a decade and a half of Merkel’s generally successful rule. The WEF touts unshakable financial stability (the country got 100 points out of 100 for it in the competitiveness ranking) as one of Germany’s biggest advantages, but that stability has been achieved, in part, by shifting problems to the local level. “
The World Economic Forum ranks Germany as the world’s seventh-most-competitive economy this year, down from third in 2018. According to WEF, its greatest weakness is in information and communication technology adoption, where it’s ranked 36th in the world; only one German out of 100 has a fiber optic broadband subscription, compared with one out of 32 in South Korea.
In an embarrassing episode on Monday, a state TV broadcast about a special government session on improving mobile coverage was broken off because of a bad connection.
I traveled through parts of Germany last month, and while Internet speeds in both Airbnb’s that I stayed in were slower than in France, they were certainly good enough, and with no loss in connectivity. I’ll note that for about four hours in a town called Gottingen, I lost connectivity on my phone.
Does this report on population trends in Germany by the year 2050 hold a cultural clue that might help us think more about the excerpt above? Pure conjecture on my part, of course, but worth thinking about, perhaps.
As a result, there will be a clear shift in the age structure of working-age people.
At present, 50% of working-age people belong to the medium-age group, which includes people of 30 to 49 years, nearly 20% belong to the young age group of 20 to
29 years and 30% to the older age group of 50 to 64 years. In 2020, the medium-age
group will account for as little as 42%, the older one, however, will remain almost
unchanged at about 40%; the situation will be similar in 2050 (medium group: 43%,
older group: nearly 40%). The percentage of the 20 to under 30-year-olds will not
change very strongly. As a result, older people will clearly prevail among working-age population.
I’d never heard of Strategic Perspective 2040 until I started searching for phrases linked to the future of Germany. But the fact that it was written, leaked, and the responses to it – they’re all equally fascinating.
The assumption behind the UK’s repeated promise of security cooperation with Europe after Brexit is that the core democracies – Germany, France, Italy and Spain – will remain committed to Nato, democracy and the rule of law. And that a reformed and revitalised Europe will deliver enough jobs and growth to sap the energy of the nationalist and xenophobic right. But it would also be wise for politicians to begin admitting that these things are no longer certain. If we want order, we have to create it – through engagement, multilateralism, by accommodating what we can of the demands of rising powers and through the promotion of resilient democratic institutions. If we fail to achieve order, we must deal with disorder when the US is no longer a reliable ally, nor even a stable democracy.
And now for the bonus. I have read quite a few articles/PDF’s/essays about Germany, and given last week’s essay, about the Berlin Wall. None was as gripping as this one. It is titled “The Story of Tunnel 29“, and it is an absolute must read.
My thanks to Gandhar Joshi, a student of the BSc programme at Gokhale Institute, for sharing it with me.
What was Germany like after World War II? How different were the two parts of Germany, and why? How different was the growth trajectory in each part, and what consequences did it have for their current state? These are the questions that we try and answer in today’s post.
Still, not all participating nations benefitted equally. Nations such as Italy, who had fought with the Axis powers alongside Nazi Germany, and those who remained neutral (e.g., Switzerland) received less assistance per capita than those countries who fought with the United States and the other Allied powers.
The notable exception was West Germany: Though all of Germany was damaged significantly toward the end of World War II, a viable and revitalized West Germany was seen as essential to economic stability in the region, and as a not-so-subtle rebuke of the communist government and economic system on the other side of the “Iron Curtain” in East Germany.
A very short, and simple introduction to the Marshall plan from history.com. Key takeaways for me? It might be useful to think of the Marshall plan as first a political tool and second an economic plan (or at least a combination of the two), that political alignments (past and present) had a role to play in allocations, and the CIA seems to have been a surprisingly (although perhaps not, if you think about) large beneficiary of the plan!
As we have indicated, that Germany was a Marshall Plan recipient in the first place
did not make the other participating countries very happy, but taking economic revenge was simply not a viable alternative. In fact, Germany had already received a large amount of U.S. aid before the Marshall Plan was even conceived: starting almost immediately after the end of the war, the Allied-occupied part of the country received U.S. goods through the GARIOA program (Government and Relief in Occupied Areas), and the value of these goods amounted to around $1.7 billion.
So the Marshall Plan aid to Germany, which amounted to about $1.4 billion in the
first four years, was not that dramatic in itself. Britain, France and Italy all received a larger slice of the cake (see listing below for the distribution of help to the ERP countries). And yet Germany put the aid to better use than any other country, and today, 50 years later, still continues to benefit directly from the ERP counterpart fund, known after 1953 as the ERP Special Fund.
Put it this way: because of the lessons learned from the First World War,the Marshall Plan can be seen as the response to the Economic Consequences of the Peace. This article was also worth a read for me because it spoke about the origins (sort of) of the KfW, the 1972 visit of Chancellor Brandt, and a useful counterfactual towards the end of the essay.
What if I wanted to teach myself what post-war German society was like through the medium of movies? The only one I have seen is The Reader.
But here’s an IMDB list that is as much of a bookmark for me as recommendations for you! I have not seen almost all of them.
“There is no example of merging two states with such vastly different political systems that has worked so smoothly. But this reunification was, and continues to be, far more difficult to achieve than was thought during the exuberance of the reunification celebrations.
“Even if the two parts were only separated for 41 years – that’s less than two generations – the citizens of east and west were socialised in such a different way that in retrospect the idea that integration would be swift was utopian.”
Klingholz estimates that it will take at least another generation before the two parts have truly grown back together. One major piece of evidence for that, he says, is that “many Wessis have never even been to the east,” while most Ossis have been to the west.
Written on the 25th anniversary of reunification, this article from the Guardian cites how long it takes for cultural reunification, and how little time (or generations) it takes for a hitherto united nation to grow apart. For obvious reasons, a depressing read. The report cited in the article is in German – if anybody knows of a English version, please let me know!
In 1936, industrial labour productivity was already 9 per cent lower in the East than in the West, largely due to a transfer of less productive industries to the East German region, and more productive sectors to the West. By 1950, this gap had reached 35 per cent and East Germany had lower labour productivity in every industrial sector. In fact, Sleifer estimates that 36 per cent of the East–West productivity gap between 1936 and 2002 had occurred before 1950. The main causes for this decline can be attributed to the war, reparations to the Soviet Union, and the loss of access for East German industries to their West German suppliers.
That is from a book review, the subject of which has now been added to the ever expanding list!
Five articles that I enjoyed reading this week, with a couple of sentences on why I think you might benefit from reading them.
The extent to which Amazon, via the Kindle, tracks your reading habits. Most of this article did not come as a surprise to me, and of course the Kindle and the books on it are as cheap as they are precisely because Amazon makes money by tracking precisely what this article says they do. Personally, I am OK with that – but you might want to read this before you make your own decision.
Could Amazon’s monopoly over the publishing industry change the nature of books themselves? As a result of the economic pressures of the streaming industry, the length of the average song on the Billboard Hot 100 fell from 3 minutes and 50 seconds to 3 minutes and 30 seconds between 2013 and 2018. Will books be the next art form to be altered? Greer said it is possible.
“Never underestimate the power, or willingness, of tech companies to do almost anything to make a little extra money – including shifting the entire way we make music or read and write books,” she said. “They are perfectly willing for art to be collateral damage in their pursuit of profit.”
“A decade after Uber got its start, and eight years after Lyft changed the ride-hail model by allowing anyone to use their everyday car to pick up passengers, British Columbia thinks it has nailed how to regulate these companies, which have often slipped into the gray areas between transportation and labor laws. Call it the last mover advantage. Government officials in the province have spent years studying how other places dealt with an influx of ride-hail vehicles—and the sometimes unfortunate effects they had on local transportation systems.”
Vivek Kaul explains one application of the law of unintended consequences in this article in the Livemint, about onions.
When prices of an essential commodity, like onions, go up, state governments can impose stockholding limits. This leads to a situation where wholesalers, distributors and retailers dealing in the essential commodity need to reduce the inventory that they hold in order to meet the requirements of a reduced stock limit. The idea is to curb hoarding, maintain an adequate supply of the essential commodity and, thus, maintain affordable prices. This is where the law of unintended consequences strikes. Instead of ensuring prices of the essential commodity remain affordable, ECA makes it expensive.
The plots do not support the hypothesis that small government produces either greater prosperity or greater freedom. (In reading the charts, remember that the SGOV index is constructed so that 0 indicates the largest government and 10 the smallest government.) Instead, smaller government tends to be associated with less prosperity and less freedom. Both relationships are statistically significant, with correlations of 0.43 for prosperity and 0.35 for freedom.
To attend these contests, quizzers rearrange the furniture of their lives, budgeting their time away from their families, or ensuring that they don’t travel overseas for work during a quiz weekend. I know one quizzer who switched jobs because his city’s quiz scene wasn’t active enough; I know another who scheduled his wedding to avoid a clash with a quiz. Once, while we were waiting around for a popular annual quiz to begin, a friend remarked that his wife was heavily pregnant; he hoped she wouldn’t go into labour over the next few hours. That would be unfortunate, we agreed.
“No, you don’t understand,” he said. “If my daughter’s born today, that means she’ll have a birthday party on this date every year. Which means I can never come to this quiz again.”
EconForEverybody 