Tuesday, March 22, 2011
Monday, February 07, 2011
"China Has Problems"
Sent to you by Gerald via Google Reader:
About 20 years ago, Mike Munger told disbelieving faculty members at Dartmouth's B-school, including an "Ass. Dean," that "Japan is a giant economic bubble."
That prediction looks pretty darn good now. Most recent evidence here. (Who says economists can't predict?)
So people should probably pay attention to his latest prediction.
The point is that China is going to run up against a captial constraint, and may (this is delightful) actually follow the Marxist predictions about industrial capitalism. Marx didn't understand capital, but neither do our Chinese friends. Unless the Chinese can get huge amounts of liquidity to feed the need for physical investment, wages from increased human capital are going to start to squeeze them really bad. And there may actually be the worker's revolt that Marx predicted for Western Europe. Except it will happen in a communist country, precisely because it is not capitalist enough to have common stock offerings.
Read the whole thing.
Note: famed business writer Michael Lewis seems to agree:
I've never been to China, other than a quick stop in Beijing, so I don't have a great feel for what is happening there. But I get his e-mail blasts, and they're pretty persuasive. They make Ireland look like chump change. There are whole cities that are empty. I'm very prepared to hear the skeptical arguments about China. Not so long ago, people were saying the same things about Japan that we are hearing now: "This unbeatable beast in the East is going to come up and end up owning America." Instead what happened was that some people in Japan got ripped off by American investment bankers and Hollywood producers. Then their economy collapsed on their own contradictions.
The Chinese so far have avoided interaction with the American investment bankers and American Hollywood producers, but that's the only mistake they haven't made. Instead what they've done is they've embraced the U.S. Treasury. It may be that 20 years from now we're all laughing about what fools we were for thinking China was such a threat. I don't believe that the Chinese political system can sustain a really successful economy. There's going to have to be a political revolution there before they're competitive with us. But what do I know?
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Friday, December 10, 2010
The Main Reason Why You Suck at Interviews: Lack of Preparation [Jobs]
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Thursday, July 08, 2010
The answer is 42! Why Development is not about solutions, it’s about problem...
Sent to you by Gerald via Google Reader:
Yesterday we ran a blog post that fits into a now classic genre in development commentary. This genre, after some discussion, always ends with a conclusion like: "Solution X (a transparency law, microcredit, malaria bed nets, conditional cash transfers, web-based clever thing, eliminating business red tape, etc.) is moderately helpful, but a long way from a panacea." Of course, nobody really claims explicitly "X will be a panacea!" But each new X is systematically oversold, expectations are raised way too high, and the expectations are always later disappointed.
Here's why direct solutions to problems cannot foster development. Each direct solution depends on lots of other complementary factors, so the solutions can seldom be generalized across different settings; Solutions must fit each local context. Solutions that generate the highest payoff in each setting should be a higher priority than the lowest payoff solutions. Since there is little or no feedback on how well each solution is working in each local situation, there is little possibility for any such adjustments.
Development happens thanks to problem-solving systems. To vastly oversimplify for illustrative purposes, the market is a decentralized (private) problem solving system with rich feedback and accountability. Democracy, civil liberties, free speech, protection of rights of dissidents and activists is a decentralized (public) problem solving system with (imperfect) feedback and accountability. Individual liberty in general fosters systems that allow many different individuals to use their particular local knowledge and expertise to attempt many different independent trials at solutions. When you have a large number of independent trials, the probability of solutions goes way up.
Good systems make the private returns to decentralized problem-solvers close to the social returns. Again oversimplifying to drive home the big point, the market does this with private goods (even allowing for well-known exceptions of market failures), and a free political system is the best way known to do this for public goods (reward political actors in line with the social return to their actions).
The problem-solving systems could very well use some of the same solutions that were discussed above (a transparency law, microcredit, malaria bed nets, conditional cash transfers, web-based clever thing, eliminating business red tape). This leads to much confusion, as people then try to directly imitate particular solutions in the absence of a problem-solving system, which as stated above, leads to disappointing results.
A famous joke is that the Answer to the Ultimate Question of Life, the Universe, and Everything is 42.[1] Indeed, 42 could come out of a problem-solving system to solve a particular problem (the guests at my party have brought seven six-packs, will I have enough beer?), but is rather unlikely to generalize to other problems.
The problem-solving system is adapting solutions to local circumstances. And even more importantly, a problem-solving system coordinates the efforts of many different problem-solvers with nobody in charge (for example, in the market, prices serve as signals to coordinate the actions of many different suppliers to solve the problems of demanders).
Direct solutions to problems (say, using aid programs) still may be worthwhile as benefiting a lot of people. But a long list of many such solutions is not development; development is the gradual emergence of a problem-solving system.
[1] Douglas Adams, Hitchhiker's Guide to the Galaxy
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Tuesday, June 22, 2010
Tuesday, December 08, 2009
Google Chrome Extensions: Blog This! (by Google)
Thursday, August 13, 2009
Google Reader Adds Social Sharing and Mark as Read Controls [Feeds]
But the most important changes, for those using Reader to get their news reading done, are the Mark as Read tweaks. It's not a custom search by date, exactly, but it does let you skip through a huge pile of unread items after, say, a long weekend, week's vacation, or general absence from your feed reader. You get the ability to mark items older than one day, one week, or two weeks as read, which is a pretty good start.
A few other changes are in effect for mobile users and note sharing, so hit the link to learn about them, and share what you're able to do now, or what you don't really like about Reader's changes, in the comments.
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