If you think China, think the Pearl River delta. A sleepy, rural backwater through the 1980s, the 11-megacity district is the world’s largest manufacturing zone, turning out incredible variety, from electronics to toys and tires. Are the world’s financial markets tied to the output of the globe’s top economic zone? No. If the Dow falls, Apple and Intel will get their chips and handsets, shelves will be filled, Amazon shipping received in 3 days.
Somewhere capital expansion separated from labor and output. Newsweek says China produced a million new millionaires in 2014–2,740 a day! A recent US Presidential candidate sequestered millions offshore. Two African women in oil and mining match Oprah’s wealth. Russia’s feudal industrialism is second in global billionaires, 12 serve in parliament!
The colossal expansion in world capital produced by labor now weighs on labor’s shoulders with no return or reward. Capital’s massive heft swashes around the globe to tilt playing fields; its weight hedged, shorted, electronically traded, offered as derivatives, indexes, ETFs, shelters and high risk coupons; capital attacks countries (Argentina!), funds wars and black markets, destroys pensions, leaving family coffers bare.
China is a convenient scapegoat. Yes, China has economic issues. These point to more engulfing, global problems. Invisible hands are driving the markets. Deflecting to China is a ready made answer to the wrong set of questions.
So what are the right questions–the best global models? How do nations and ordinary investors move away from stat-driven value models, corporate control of output, political collusion on wages and benefits, and attacks on retirement benefits that seek to privatize the world’s largest pool of free public cash? How exactly can economies grow and preserve?
Look globally: Brasil and Mexico offer the best model to fight poverty and move families into the middle class through the UN recognized program, Bolsa Familia, which provides cash transfers to families tied to the educational progress of the family’s children. Education breaks the generational cycle, families are motivated by the aid to push for high results.
Look at home: Research Triangle in the Raleigh, Durham, Chapel Hill region of North Carolina is a spectacularly successful model of public-private inclusive planning, careful listening and vision creation in all sectors, even the arts. Its newest plan will create 100,000 new jobs!
Look at financial markets and corporate decision-making: Yahoo’s Marissa Mayer spent $1.1 billion in a deal to buy Tumblr, whose contribution she describes in editorial terms of technology and “rich stories” (silent about its bottom line!) as she announces a 10% cut–1,000 jobs!–in the corporate workforce, while never fixing its email.
Move the focus away from 90 day balance sheets; offer tax incentives for annual hiring growth! Invest in public-private partnerships.
When China Stumbles – The New York Times http://nyti.ms/1TJxJbm
(replies) As money is more centralized at the upper level and tied up in phony investment, families will be passed over and the damage will hit where money is centralized precisely because families have already been cheated out of their investments. The irony of the .01% is that the more they are unto themselves, the more they will feel the negative effect of their money games. There’s little that anyone can do to those already knocked to the bottom.
~~The billionaires from China are transforming Vancouver, BC. That’s only 80 miles from Seattle and even closer to Bremerton. Pleasant older neighborhoods are being replaced with mansions and multistory apartment complexes with ready access to booming commercial and business centers. Traffic corridors are crowded and development is pushing north across the Fraser river with decided vigor. I wonder how long it will be before Chinese frigates are paying good-will visits to BC.
~~I teach law overseas. I teach a Comparative Law seminar. I use the histor as a method to explain the development of law. I start out explaining a few principles, the prisoners dilemma and something I call the “jurisprudence of the carrot & the stick” then go off into history. I rely on several movies as the subtitles help ease the language barrier.
I start with the Big Bang to make the point that we are going pre-history and that students should drop what they know. Then we go into the Hunting & Gather age. I use “Dances with Wolves” to demonstrate this life. It’s fiction but its basic depiction is confirmed by a CNN mini-documentary on the Hadza tribe in Africa (http://goo.gl/QMtIsW) essentially a community in harmony. In pre-history we didn’t have law but we didn’t need it.
The problem though was a lack of control of food supply. Enter the Neolithic/ag revolution. We get better control of food supply & material benefits but we quickly shift into a hierarchy. Those at the top, create & consume cultural attainments, but they consume too much at the expense of the farmers upon whom everything depends. Thus these societies are brittle, prone to collapse. We lost harmony & find cruelty. The movie I use to depict this is Apocalypto: it brilliantly moves from hunting & gathering harmony to neolythic dystopic cruelty. The solution was the axial age: the invention of fairness/the golden rule, including law (& some religions). Alas, it only slowed the process.
When China Stumbles – The New York Times http://nyti.ms/1JBelga