America on the Rise?

http://www.newgeography.com/content/001408-americas-dubious-decline

by cwan • 16 years ago

47 34 16 years ago

aresant• 16 years ago

Finally some data to back-up what I inherently feel every time I visit hacker news: the US has a HUGE resource in the up-and-coming generation (and of course our friends around the world that participate!)

I loved this article, thanks for sharing.

zoba• 16 years ago

One thing that excites me when I worry about the US losing its status is how competitive young people are.

College admissions are absurd, and good grades are a necessity. People take the SAT several times just to get a slightly higher score. Kids are fighting really hard to get into good schools, and so when I think of the younger generation being video gaming, tweeting, facebook addicts, I'm also happy to remember how much harder we work at school than our parents did.

joe_the_user2• 16 years ago

The question is whether the competitive ethos of young people is aimed at improving their relative position or whether they also aim to improve this society as a whole.

(Anecdote Warning): My cousin at BP tells a story of rising executive who was fired for stealing a PC from work. She was nonplussed because his eventual salary would have made the cost of a PC nominal but he thought he deserved more right now - not a good story of "millennials".

sailormoon2• 16 years ago

I don't buy it. The whole premise is confused. On the one hand, the author makes some well-founded points about Japan's demographic situation, which is indeed pretty dire if gross numbers of working-age citizens are what you're predicting. China is in a similar boat, it's true, with the one child policy.

But Japan's downfall had little to do with demographics and a lot to do with an unsustainable bubble economy writ very large indeed. The problems with Japan are manyfold, you could write a very long essay just covering the major points, but basically boil down to cultural risk-averseness. There are not many entrepreneurs in Japan. The country needed to re-invent itself and failed.

China could not be more different. Many, many Chinese are entrepreneurial, brash go-getters. Whereas Japan is all about social harmony and "wa" and not rocking the boat, Chinese are the most capitalist people imaginable and a brief visit to basically any Chinese city will convince you utterly of this fact. I don't think you can compare the two at all.

It's true China has some systemic problems. If the banks' account sheets were audited properly I bet many of them are in the red, deeply. There is corruption and nepotism and all manner of petty inefficiencies imposed by officialdom. But the raw productivity cannot be denied.

The author also assumes the instability of the Chinese government. He/she seems to take this as a matter of faith - I see no signs of instability. If the government can raise people from poverty into a decent middle class - and they are doing an outstanding job of this - then their position is assured. The rich do not revolt.

I also have questions about the whole idea that more workers is what is needed to assure economic success. While it's true Japan's youth are dwindling in number, there is by no means a worker shortage in that country. If there was, wages would be high. They are not. There is plenty of youth unemployment. The growing automation of any number of industries may make all those idle youth obsolete. It may well turn out that in the future, less workers are needed, not more. And it's not as if America's teeming masses are particularly well-skilled. What will happen when a robot can flip the burgers? It's not too far off.

I could go on and on but basically I think the article makes an awful lot of assumptions and comes off as wishful thinking. I am not about to bet against America, but I wouldn't exactly sell my shares in China just yet either. I doubt China will rocket up to dominate the world like the breathless predictions of "sinophiles" but I can't see too many alternate futures where they don't have the largest economy by 2050. It's pretty hard to beat a 400% larger population no matter how much "sokojikara" you have.

poutine• 16 years ago

Well, "But Japan's downfall had little to do with demographics...There are not many entrepreneurs in Japan."

I would say that has everything to do with demographics. Older people are in general less entrepreneurial due to more risk aversion.

gamble• 16 years ago

Unless you're talking about the truly elderly, that's not true. The average age of an entrepreneur in the US is about 38. (The average age of successful entrepreneurs is even older) It skews younger in tech, but the middle aged are still more likely to start a business. After all, they tend to have more experience, contacts, and money.

kiba• 16 years ago

There will alway be jobs because well, of scarcity. Not to mention that trade allow people who have a comparative advantage to work even if their trading partner are vastly more productive in everything.

Probably the biggest reasons why teenager are unemployed is labor laws.

If the minimum wage is too high for teenage productivity, than it is likely that the employers will not hire them.

pyre3• 16 years ago

> Probably the biggest reasons why teenager are unemployed is labor laws.

Is that really the case? Are there people that want to hire more people but it's too expensive? It may just be that there isn't enough work for them anymore because business has been reduced.

To put it in simpler terms, McDonald's isn't hiring more teenagers because less people are frequenting McDonald's. They aren't going to hire someone just to stand around most of the time just because their budget allows for them to employ the person.

steveplace2• 16 years ago

but basically boil down to cultural risk-averseness.

That's not why Japan fell.

http://en.wikipedia.org/wiki/Japanese_asset_price_bubble

Also, China may be the start of a new bubble-- there's more rooms being built in CRE than there are people.

sailormoon2• 16 years ago

Yes, the asset bubble was a major - perhaps the primary - cause of the collapse. But what I was talking about was the failure to recover. Basically, after the crash the government had to step in and force the banks to write off their losses, stop lending to failed companies, start lending to new ones, and get the green shoots growing again. They just couldn't do it. Just why they couldn't is the subject of countless books and essays but the result is not contested - Japan needed painful, wrenching reforms, and never got them.

Risk-averseness is probably the wrong word to describe this phenomenon but I didn't know how else to put it. Basically there's a cultural tendency there to try to keep the status quo at all costs. Risk averse, resistance to change, unwillingness to step up and be the one who proclaims the nakedness of the emperor - call it what you want, but what it boils down to is they needed to make a hard decision, and in the end, couldn't. Whether or not other countries could have is a matter for further discussion!

there's more rooms being built in CRE than there are people.

CRE? I presume you mean Chinese Real Estate? Really, there's over 1.3 billion rooms being built? I'm going to need a citation for that. It seems ridiculously high and, indeed, impossible.

gxs• 16 years ago

Past performance is not indicative of future success.

Even if the article were true, I think a little fear of your competition is healthy. I like how people are sweating it. I hope it spurs innovation and growth here at home.

tybris• 16 years ago

I, for one, welcome our existing American overlords.

but more seriously, I'm not that sure the 21th century will be decided by population size. The level of American consumption is already unsustainable.

noonespecial• 16 years ago

It occurs to me that the level of American consumption has always been unsustainable in the long term given the contemporary technology at any given time. New York city was on the verge of uninhabitable because of all of the horses and their needs before Mr. Ford got his groove on.

The best that can be said is that the level of American consumption is unsustainable given the current level of technological development. What I think has made America such a singularity on the world stage is that the Americans have been able to use innovation to stay just a tiny bit ahead of "unsustainability" and do so with remarkable consistency.

pyre3• 16 years ago

> Looking over the next few decades Will sees an aging, obsolescent America in retreat to a young and aggressive China.

China seems to put so much emphasis on their being a '3000 year old country' so I think we should take them up on that and stop calling them 'young.'

papersmith2• 16 years ago

"China" or "Middle Kingdom" as it's called in China, was historically a fairly vague concept. It was popularized in the 20th century by Sun Yat-sen to refer to the 56 ethnic groups the republic inherited from the Qing empire (Han, Manchurian, Mongolian, Tibetan, Uighur being the major ones).

The 5000-year history refers to the lineage of Han culture in particular. For example, in Japan where most if its Sinic influence was before the republic, Chinese medicine is called Han medicine (Kampo 漢方), Chinese writing is called Han script (Kanji 漢字).

http://en.wikipedia.org/wiki/Chinese_nationalism

I believe when people describe to China as young, they are either referring to the 1911 republic, the 1949 republic, or the 1978 reform.

pyre3• 16 years ago

I understand what people mean when they are calling China 'young.' My comment was a bit of a snarky commentary on how China seems to pull out this "we're a 3000-year-old country" line whenever someone criticizes them. Such a response is of laughable logic since the government -- which is what most people are criticizing -- is far younger than 3000 years.

(I keep saying 3000 years, because I'm pretty sure the number I've seen used on multiple occasions is 3000, not 5000. I'm not sure from what point in time -- other than the obvious '3000 years' -- they are calling the start of this period to which they are referring, though.)

dkimball2• 16 years ago

I would add that China faces the prospect of, to say the least, internal political instability. Like all postmodern authoritarian governments, theirs is based on the idea that in exchange for sacrificing freedom and autonomy, the population will get very rich -- so if they don't deliver on the wealth, they'll face a great deal of restiveness.

While a few provinces are doing well (Guangdong most prominently), inland China is still very backwards -- and, reportedly, increasingly disgusted with the government. The one-child policy is still enforced there, brutally; despite the almost complete lack of journalists' access to mainland China, I've heard reports of spontaneous, armed "mutinies" among the populace -- attacks on government officials, on account of the one-child policy, or over taxes, or for whatever reason.

China is less politically stable than it looks; for all we know, the next Liu Bang or Zhu Yuanzhang may have already taken to the hills. And if you think that the Chinese government can't possibly collapse _now_, that we'll never see a period of good old-fashioned Chinese interregnal warlordism in the 21st century, I remind you that we saw one in the 20th, when it was equally anachronistic and inconceivable -- the most chaotic period of the Five Races Under One Union was the 1920s, contemporary with the Wiemar Republic and _The Great Gatsby_.

Of course, China eventually becoming powerful is almost inevitable; sailormoon points out that their sheer numbers argue for that, especially when combined with a culture which, though nominally Confucian-Legalist, has a very real "go-getting" idiom. This is the other side of China: the brash, independent style of the world of mountain and river, ultimately tracing back to the xiá (侠), the knights of the feudal Zhou dynasty. It may be some time before this happens -- their current postmodern authoritarian government has to either reform or be overthrown first, I think -- but it will arrive.

For further reading, look up Boye de Mente's _The Chinese Have a Word for It_.

netcan2• 16 years ago

Like all postmodern authoritarian governments, theirs is based on the idea that in exchange for sacrificing freedom and autonomy, the population will get very rich -- so if they don't deliver on the wealth, they'll face a great deal of restiveness.

Mybe you're right but, I think that the reason most people think this is because they are disgusted with the Chinese system and therefore are quick to conclude that it is bad and failing in every other way. It is less table, for example.

The truth is that any system that fails to provide growth, internal peace or fails to meet expectations is probably at risk. Looking far enough into the future (say, 50 years), any system is at risk.

dkimball2• 16 years ago

I agree that any system that fails to provide growth is in a certain amount of danger. For what it's worth, I try to remain objective in appraising China's situation; I'm not exactly delighted with them, but I try to avoid being actively disgusted, or at least to avoid letting my disgust get in the way of my appraisal of the situation.

I continue to think, though, that "postmodern authoritarianism" (my phrase, but I'm sure it's been coined elsewhere) is more vulnerable than most other systems of government, because the whole implicit promise involved here is that the people will sacrifice certain desiderata in exchange for certain others. When a medieval state failed to provide prosperity to its people, they weren't happy and often became restive, but the damage was mitigated by its being the judgment of God; when the United States faced extreme difficulties in the Great Depression, the rate of crime went down, not up (with some obvious fedora-wearing exceptions), as most of the population was loyal to itself and saw the government as an extension of itself; when Imperial Japan instituted strict rationing and drafted large numbers of soldiers in the Second World War, their credibility was not at risk at all, since all these were sacrifices for a cause, for the will of Amaterasu.

But a postmodern authoritarianism doesn't have a reason for its citizens to remain loyal, it doesn't have a higher goal for them to work for, and it doesn't have an external cause (or an external enemy: I didn't mention the Nazis above, but I could have) to be blamed for its problems. Its whole social contract is "give up on certain freedoms and you'll be rich!", so when that's no longer the case, the government is in trouble.

In fairness, though, this may not be the case in China as much as in Russia. The United Russia party's platform has been more or less explicitly this: "let us stay in power and we'll restore the prosperity, military might, and international prestige of Russia." Communist China doesn't really have a "platform" of this sort, especially now that they're "CINOs" (Communists In Name Only) in the post-Deng Xiaoping era; so economic failures might not discredit them as much or as quickly, but, on the other hand, they're still not going to have much of a flag to rally around.

netcan2• 16 years ago

The truth is that any system that fails to provide growth, internal peace or fails to meet expectations is probably at risk. Looking far enough into the future (say, 50 years), any system is at risk.

mhartl2• 16 years ago

Japan . . . was and remains a stable, functioning democracy . . . China is a fundamentally unstable autocracy

Why is this obviously wrong assumption about the stability of democracy vs. autocracy so pervasive? Stable democracies (USG) are stable, unstable democracies (Weimar) are unstable; stable autocracies (Louis XIV) are stable, unstable autocracies (Louis XVI) are unstable. As a criterion for good government, stability simply doesn't give you a clear reason to choose one form over the other.

golwengaud• 16 years ago

I think the argument is that democracies tend to be more stable. Weimar was an attempt to patch together a democratic successor to a fairly authoritarian state, and Louis XIV's rule was at best metastable. Near the end of his reign, the War of the Spanish Succession (among other things) was causing France to begin to run into the financial difficulties that would cause Louis XVI trouble.

More generally, if Amartya Sen is right (http://en.wikipedia.org/wiki/Amartya_Sen#Research), democracies are rather less likely to do things that would lead to popular unrest.

mhartl2• 16 years ago

I agree that people argue that democracies are more stable (though usually they just assume it), but the lists of unstable democracies and stable autocracies are both incredibly long. At the very best, there may be a rough correlation between stability and democracy; I rather suspect an anti-correlation, but in any case I don't see anything that would justify the blithe yet pervasive confidence of democratic stability exemplified by the assertion quoted in my original comment.

steveplace2• 16 years ago

Sentiment in American (and other places) is cyclical. The populous has high points and low points. The top was just before 9/11 and we're pretty close to the low point (I'd say March did it). March sucked, it was the end of capitalism, guns were being stockpiled, and so on. We're on our way to a new cycle-- assuming you don't believe what zerohedge and reddit say.

America sucks sometimes. We've got deficits, health care problems, and a hijacked government. And yet with all this going around, immigrants are still begging to be let in.

One of the main advantages over China is that we own shit. We have material reserves in lumber, coal, natgas, etc. So when you hear that China's SWF just bought out another mining operation in Africa, it's not because their looking to difersify, it's that they don't have any decent natural resources of their own.

If you need to feel happy, don't read reddit or watch the stock market for a month.

metamemetics• 16 years ago

http://www.businessinsider.com/chinese-stimulus-spending-con...

"Chinese Stimulus Spending Constructed An Empty City In The Middle Of Nowhere"

check out THAT housing bubble lol

nradov• 16 years ago

For a counterpoint see this Atlantic article: "How a New Jobless Era Will Transform America". http://www.theatlantic.com/doc/201003/jobless-america-future

Phelps and Tilman finger several culprits: a patent system that’s become stifling; an increasingly myopic focus among public companies on quarterly results, rather than long-term value creation; and, not least, a financial industry that for a generation has focused its talent and resources not on funding business innovation, but on proprietary trading, regulatory arbitrage, and arcane financial engineering. None of these problems is likely to disappear quickly.

discolemonade2• 16 years ago

The British Empire lasted over 300 years. America as an Empire has been around for only around 100. The American Empire is like the British Empire squared because of its endless capacity for self-renewal. It's like a starfish that regenerates limbs. One of the things that makes it so dynamic is the great universities and their relationship with business. No Chinese university is even in the top 200 in the world. Of the world's top 20 universities, all but three are American. Of the top 50, all but 11 are in the U.S. And then you think about a concept like the "new economy". It's an American invention. Most of the best startups and the best software are made in America. In just about every measure of soft power, nobody compares.

_juof2• 16 years ago

I'm not sure universities and start-ups matter that much.Israel is great at doing start-ups , probably better than the u.s.(at least at start-ups per capita). but usually the start-ups get bought by multinationals, so they get the job creation and economic power that comes with those innovations. not necessarily Israel.

While historically most big multinationals were centered around the u.s., this might be changing. The shift in multinational jobs to outside the u.s. is one datapoint. and the rise of strong non u.s. multinationals is another.just look at the Chinese green energy sector.

And take into account that change today is much faster then at 19 century Britain.

discolemonade2• 16 years ago

How do universities and startups not matter? They're incubators of knowledge and wealth creation. And regarding multinationals, most of the biggest multinationals are either Japanese, American or European. Places like China and Indonesia do a lot of the manufacturing for them, but most of the wealth still flows back to the countries where the knowledge for that technology is developed. Most of Apple's wealth is concentrated in the U.S because that's where Apple's knowledge creators are based. Same with Nokia or Toyota or any company. The world isn't totally flat despite what Tom Friedman thinks. Pockets of innovation will always exist. I think India is a better example of a developing power with a strong innovation base than China is.

bob321• 16 years ago

The article seemed... confused. China is predicted to surpass the US not in per-capita income/wealth, but in total economic power. China doesn't need to reach a PPP GDP/capita of $46k to surpass us, but of around $15k. China will have a very hard time reaching the US $45k.

The core macroeconomic trend is that communications is getting cheaper. We can talk to people around the world essentially for free. We can ship things pretty darned cheap. Right now, an engineer in the US makes about 10x the salary of an engineer in China or India. Unskilled labor in the US makes 40-100x unskilled labor in China and India. This is unsustainable. US workers are more productive, but not by this large a factor. Wages have to come closer to equalizing. Wages here may be a factor of 2x greater than there, due to better education, infrastructure, more natural resource, etc., but not 10x-100x greater.

This means income disparity in the US will grow, while income disparity in China and India will shrink. The wages will come closer together. With 3x the population, China will pass the US as an economic power in the not-too-distant future, and India will most likely do the same a couple of decades later.

China's government is overstated as a problem. The Chinese are, by and large, happy with its government. Government control of the internet is annoying to human rights, but doesn't impede economic progress in any way. The government errs on the side of less, rather than more, control. The core effect is that getting information on Tienanmen or Taiwan or whatever is annoying, lost in a sea of noise, and practically few people do it. It's much like getting information on the US monetary system, or how lobbyists control the government, or dozens of other issues affecting Americans. They are public scandals that no one knows about; they are not reported by the media, and the information gets lost in a sea of noise of conspiracy theories.

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