Utopia and Dystopia have something in common: they both confirm the moral sensibilities you started with. Whether the world is a libertarian utopia of the non-initiation of violence and everyone free to start their own business, or a hellish dystopia of government regulation and intrusion—you might like to find yourself in the first, and hate to find yourself in the second; but either way you nod and say, "Guess I was right all along."Weirdtopias, on the other hand, make us scratch our heads and think "how did that happen"?
An example, from our Founding Fathers. Alexander Hamilton might consider Utopia a centralized state with a strong industrial base funded by a powerful bank. That's Thomas Jefferson's Dystopia. TJ envisions an agricultural society with a weak government and practically no over-arching financial system.
What actually happened is a society of people who pay farmers to Not Farm, let robots build their cars, work in hospitals or supporting hospitals 8 hours a day, and then spend the rest of their time staring at LolCatz.
That's Weirdtopia.
Weirdtopia remains difficult for us to imagine. We lack the ability to think beyond our specific cultural constraints. This is why many historical thinkers believe Travel remains the best teacher: exposing yourself to new cultures challenges your viewpoints and exposes you to problem-solving skills you might never have imagined.
How can we apply this to Economic Policy, though?
If you believe Joe Studwell, Asian Economies function much like Weirdtopias. Let's consider two competing ways for advising developing economies in the Post-War world:
1. Washington Consensus: liberal market reforms, the advancement of parliamentary democracy, opening up markets for foreign direct investment with relatively little restriction, development of large capital markets to allow greater investment, education of workers, etc.
2. ISI: Create huge barriers to trade and phase out foreign competition. Enable your internal industries to grow without competition.
Okay, okay, now what if I told you I was going to....
1. Redistribute all land to all peasants for labor-intensive farming.
2. Centrally purchase all their crops and centrally sell them on the foreign market.
3. Force them to keep their money in local banks while financing my government almost entirely through inflation, thus reducing the real savings of peasants.
4. Imprison my nation's richest men until they agree to build factories for me.
5. ?????
6. Profit!
That sounds insane.
Yet, according to Studwell, that's more or less how the Northeast Asian Economies actually developed. The key element in economic growth, particularly for LDCs, is actually Industrial Learning: they don't need to invent ANYTHING, because everything they need has been around for centuries. They need, and should, try to climb the Learning Curve as quickly as possible.
That might be tough for Mitsubishi to do on its own. But the entire nation of Japan? They have more leverage when dealing with foreign businesses and can extract better deals. Their emphasis, though, will be on teaching their own companies modern business practices. They are shielded from competition, yes, but there's a huge public-private partnership designed to increase the skill of private companies.
As for the peasants....you're not teaching them how to read?! Nope, not really necessary: for the most part, agricultural productivity in poorer nations is poorer because the emphasis is not on growing food, but growing cash crops with as little labor as possible. This doesn't fit the government model, which needs to feed its own citizens, and has a lot of extra labor that isn't useful for anything else.
The financial system is then repressed, to support only one thing: helping world-class industries scale faster.
That's actually a Weirdtopia.
The funny thing is that this makes a bit of sense. Clearly we're able to rationalize how this works. It simply requires us to put aside our ideological models and then consider the growth of LDCs entirely from the viewpoint of scaling up the industrial ladder.
How to apply this to OUR economy, currently going through a long-term stagnation?
First, it requires us to abandon certain demands for ideological purity. Metternich wasn't right, but neither was Cromwell. Our current world would disgust both: it's likely that OUR future will disgust US as well.
Next it requires us to boil down "success" into a few key attributes. Our policy debates are schizophrenic: STEM Workers, immigration, H1-B immigration, unemployment, short-term unemployment, marginal unemployment, health-care expenses, derivatives trading, etc. It's highly unlikely that most of this matters to any great extent. Our future success will hinge on a few KEY items, and if we can get those right, everything else will fall into place.
The question is, what are those few key elements?
What might give us a hint is thinking about what disgusts us, and envisioning the opposite. For instance, we think high-skill immigration is good, low-skill immigration bad.
Maybe that's wrong.
Maybe the US actually needs to import a hundred million low-skilled Indians, for instance: our management class here and our institutions here will improve their producitivity overnight, while freeing up the time of the Indian political class to implement needed reforms and build world-class firms. Maybe we actually need to BAN H1-Bs entirely, and only allow immigrants who intend to be remedial workers. Maybe treating immigrants as second-class citizens gives our own citizens a huge status boost, or reduces the cost inflation of education and health care and allows our second-class citizens to start investing more in their children.
Just a thought.
No comments:
Post a Comment