Kruse Kronicle

Five Hidden Ways That Globalization is Changing

Interesting infographic from McKinsey Global Institute. For details read Globalization in transition: The future of trade and value chains.

More Evidence of an Improving World - HDI

The world is becoming a better place. It is not a utopia. We are not without substantial challenges. But we are becoming (as in movement along a trajectory) better (as in measurably improved according to a standard.) 

The Human Development Index is a United Nations measure of well-being combining income, literacy, education, and life expectancy data. Here is the index for the world nations in 1980 and 2012. The reality is that we are living through the most astonishing transformation toward human well-being in all of history. You can find the interactive version of the chart at Our Data.

 

The European Refugee Crisis and Syria Explained

An excellent video that will make you an expert on what has happened with Syria.

6 New Rules of Business for the Next Industrial Revolution

Alan Murray at Fortune summarizes a lengthier piece by Geoff Colvin called Why every aspect of your business is about to change. Here is my summary of Murray's summary:

1. You don't need a lot of physical capital. ...

2. Human capital will matter more than ever. ...

3. The nature of employment will change. For the rest of your employees, gig work will grow. ...

4. Winners will win bigger, and the rest will fight harder for the remains. ... McKinsey Global Institute puts it: "tech and tech-enabled firms destroy more value for incumbents than they create for themselves."

5. Corporations will have shorter lives. The average life span of companies in the S&P 500 has already fallen from 61 years in 1958 to 20 years today. It will fall further.

6. Intellectual property knows no natural boundaries. 

Fascinating stuff.

How GDP shares have shifted across the world since 1000 AD

Business Insider: How GDP shares have shifted across the world since 1000 AD

Interesting graph.

How countries spend their money

Interesting graph from the Economist.

China and India Overtake Mexico for Inflow of Foreign-Born US Residents

Conversable Economist: China and India Overtake Mexico for Inflow of Foreign-Born US Residents

250 Million Migrant Workers Transforming World Finance

Conversable Economist: The Rise of Remittances

"Here's a pattern showing the rise in remittances over time compared to some other international financial flows.  Back in 1990, international remittances were lower than official development assistance (ODA). Flows of foreign direct investment (FDI) to developing countries were also smaller than ODA, as were flows of private debt and portfolio equity to developing countries. (The FDI flows to developing countries show here exclude China.) Remittances have been larger than development assistance for some years now, and the gap is growing. Perhaps more surprising, remittances also outstripped debt and portfolio equity flows to developing countries in recent years. The flows of remittances also look quite stable compared to other private-sector capital flows."

Americans, Led by Democrats, Get Friendlier With Free Trade

Conversable Economist: Americans, Led by Democrats, Get Friendlier With Free Trade

" ... I welcome the overall shift toward a more positive view of foreign trade among Americans. As I've argued on this blog before, the next few decades seem likely to be a time when the most rapid economic growth is happening outside the high-income countries of the world, and finding ways for the US economy to connect with and participate in that rapid growth could be an important driver of US economic growth in the decades ahead.  In a broad sense, US attitudes over foreign trade mirror the behavior of the US trade deficit: that is, when the US trade deficit was getting worse in the early 2000s, the share of those viewing trade as a "threat" was rising, but at about the same time that the US trade deficit started declining, the share of those viewing trade as an "opportunity" started to rise.

However, I feel considerable uncertainty over how to interpret these findings. For example, it's not clear to me why Democrats and Independents are shifting their opinions about trade more strongly than Republicans. This shift doesn't seem to reflect the political divisions in Congress, where it seems that Republicans are more often the ones to be pushing for agreements to reduce trade barriers and Democrats are more likely to be opposing them."

Why "Sustainable Development" is Not the Answer

New York Times: A Call to Look Past Sustainable Development - Eduardo Porter

If billions of impoverished humans are not offered a shot at genuine development, the environment will not be saved. And that requires not just help in financing low-carbon energy sources, but also a lot of new energy, period. Offering a solar panel for every thatched roof is not going to cut it.

"We shouldn't be talking about 10 villages that got power for a light bulb," said Joyashree Roy, a professor of economics at Jadavpur University in India who was among the leaders of the Intergovernmental Panel on Climate Change that won the 2007 Nobel Peace Prize.

"What we should be talking about," she said, "is how the village got a power connection for a cold storage facility or an industrial park."

Changing the conversation will not be easy. Our world of seven billion people — expected to reach 11 billion by the end of the century — will require an entirely different environmental paradigm....

... The "eco-modernists" propose economic development as an indispensable precondition to preserving the environment. Achieving it requires dropping the goal of "sustainable development," supposedly in harmonious interaction with nature, and replacing it with a strategy to shrink humanity's footprint by using nature more intensively.

"Natural systems will not, as a general rule, be protected or enhanced by the expansion of humankind's dependence upon them for sustenance and well-being," they wrote.

To mitigate climate change, spare nature and address global poverty requires nothing less, they argue, than "intensifying many human activities — particularly farming, energy extraction, forestry and settlement — so that they use less land and interfere less with the natural world."

As Mr. Shellenberger put it, the world would have a better shot at saving nature "by decoupling from nature rather than coupling with it."

This new framework favors a very different set of policies than those now in vogue. Eating the bounty of small-scale, local farming, for example, may be fine for denizens of Berkeley and Brooklyn. But using it to feed a world of nine billion people would consume every acre of the world's surface. Big Agriculture, using synthetic fertilizers and modern production techniques, could feed many more people using much less land and water.

As the manifesto notes, as much as three-quarters of all deforestation globally occurred before the Industrial Revolution, when humanity was supposedly in harmony with Mother Nature. Over the last half century, the amount of land required for growing crops and animal feed per average person declined by half. …

… Development would allow people in the world's poorest countries to move into cities — as they did decades ago in rich nations — and get better educations and jobs. Urban living would accelerate demographic transitions, lowering infant mortality rates and allowing fertility rates to decline, taking further pressure off the planet.

"By understanding and promoting these emergent processes, humans have the opportunity to re-wild and re-green the Earth — even as developing countries achieve modern living standards, and material poverty ends," the manifesto argues. …

Read the whole thing. Decoupling is essential. We have already seen this with land use. We are using no more land for agriculture in the United States than we were 100 years ago. Before that time, it took a fixed amount of land to feed each person. That same decoupling is developing worldwide, but it could be accelerated. The amount of energy consumed per unit of GDP has now begun to decline. We see this decoupling with other resources. Add a move to solar and nuclear power in combination with decoupling, and we have a real chance to drive down carbon emissions drastically.

I haven't yet read the whole EcoModernist Manifesto linked in the article, but the parameters and reasoning laid here are the best articulation of my views on economic development and sustainability that I have read.

What "Buy Local" Gets Wrong

Ethics and Economic Education of New England: Buying local and blocking out the sun

Incorporating the lens of opportunity cost into decision-making is probably one of the contributions of economic thinking. Failure to include it often leads well-intentioned movements into destructive outcomes. Jason Sorens does a good job illustrating this with the "Buy-Local" movement.

So return to the example of the plastic bins [Buying bins for $1 at Wal-Mart vs. local for $2]. If I buy them from Wal-Mart, I save $1. I can use that dollar to buy other things or to invest in producing things (by saving). I am better off than if I buy the bins at $2 each from the local retailer, Wal-Mart is better off, and whoever would benefit from my spending or saving that extra dollar is also better off. Only the local retailer is worse off.

Do the gains from buying from Wal-Mart rather than the local retailer in this example outweigh the losses? Yes. To see this, imagine that everyone bought local, all the time. Cars, airplanes, software, clothing, food… everything would have to be made and exchanged in the town where you live. What would happen to everyone's standard of living? It would fall dramatically. (How many skilled airplane manufacturers does your town have?) The same principle applies at the national level, or any other geographic level you choose. If you buy everything within that circumscribed area and exclude everything outside it, your community will be worse off than it would be if it bought from any willing seller.

Now, that's an extreme example, but it illustrates the principle. Some things are impossible to make locally (airplanes). Other things are difficult and costly to make locally (shipping and retailing of plastic bins). A few things will be most efficiently and affordably made locally, and you will want to buy them locally without having to be goaded into doing so – they'll simply be the best products for the price. Goading your community into buying shoddier or more costly products just because they're local or American or whatever just makes your community poorer.

Read the whole thing.

Economic Development Links

1. Economist: March of the Middle Class

2. Chrsitianity Today: Poverty Is a Moral Problem - Interview with William Easterly

... The sad thing is that the field and practice of development have too often been on the wrong side of this debate. They've implicitly painted themselves into a corner where they're on the authoritarian side. Then they're backing the autocrats, backing the oppressors against the oppressed. ...

... Any advice for a 20-year-old reading this article who wants to "change the world"?

I love young people who want to change the world!

I think we need rebalancing. A large share of the effort has been going to direct technical solutions to poverty. But this has neglected the other option of advocacy and education for rights as an important moral goal. Rights also work to promote development. ...

3. BBC: Ending poverty needs more than growth, World Bank says

... "This is simply not enough, and we need a laser-like focus on making growth more inclusive and targeting more programmes to assist the poor directly if we're going to end extreme poverty." ...

4. Mashable: 64% of World's Extreme Poor Live in Just 5 Countries

... Using the most recent data from 2010, the report shows that nearly two-thirds of the extremely poor — that is, those who live on less than $1.25 a day — live in just five countries: India, China, Nigeria, Bangladesh and the Democratic Republic of Congo. ...

5. Wired: The Hyper-Efficient, Highly Scientific Scheme to Help the World’s Poor

... How did ICS know the campaign would work? It made sense in theory—free textbooks should mean more kids read them, so more kids learn from them—but they had no evidence to back that up. On the spot, Kremer suggested a rigorous way to evaluate the program: Identify twice the number of qualifying schools as it had the money to support. Then randomly pick half of those schools to receive the textbooks, while the rest got none. By comparing outcomes between the two cohorts, they could gauge whether the textbooks were making a difference.

What Kremer was suggesting is a scientific technique that has long been considered the gold standard in medical research: the randomized controlled trial. At the time, though, such trials were used almost exclusively in medicine—and were conducted by large, well-funded institutions with the necessary infrastructure and staff to manage such an operation. A randomized controlled trial was certainly not the domain of a recent PhD, partnering with a tiny NGO, out in the chaos of the developing world. ...

6. Christianity Today: How Female Farmers Could Solve the Hunger Crisis

... This gender inequality carries desperate consequences. Lack of basic tools and training means women grow and harvest significantly lower yields than men – not because they can't farm as well, but because they don't have necessary resources. In fact, female farmers do more to increase food security in rural communities than men. Women cultivate vegetable gardens and edible crops close to home, which allows them to watch their children and cook meals. In contrast, men tend to travel further from the house to grow cash crops like tobacco, coffee, and corn – crops that do little to supplement diet. ...

7. Businessweek: Have Higher Food Prices Actually Helped the World's Poor?

... Data, however, pointed in the other direction: The number of people in developing countries who reported that there had been times in the past 12 months when they didn’t have enough money to buy the food their family needed fell by hundreds of millions (PDF) from 2005 to 2009. In 2013 improved FAO estimates backed up the earlier polling reports: The numbers suggested that 842 million people in the 2011-13 period were unable to meet their dietary energy requirements, down nearly 6 percent (PDF) from 893 million people in the 2005-07 period. ...

... Heady suggests the fundamental assumption of previous poverty prediction models—that because poor people eat more food than they grow, they’re hurt by higher prices—did not account for the impact of food prices on wages. In a lot of places, as the prices of food rose, poor people earned more money. Even though they were paying more for food, their increased incomes more than made up for that and they got a little richer. In Bangladesh, for example, rural wages adjusted for the price of food increased by about a third from the middle of 2006 to the end of 2010. (Urban wages remained essentially unchanged.) ...

8. MR University: Water and common pool problem

The general logic here applies to a large number of problems in economic development, not just water. This is one of the key ideas of the theory of property rights.

9. Atlantic: How Sanitary Pads Can Help Women Improve Their Health and Education

... That's the little formula that's fueling Arunachalam Muruganantham's thriving sanitary-pad machine business, an undertaking that's not only making Muruganantham money, but one that will improve women’s hygiene in India and throughout the developing world.

Many women living in poverty use rags, newspaper, or even mud to manage their menstrual periods. None of these work very well and can introduce infections or injuries; they also circumscribe women’s movement. Often, women fear being in public without protection from blood staining. ...

10. Business Insider: Here's Why Mexico Is Increasingly Becoming A Crucial Global Manufacturing Hub...

However, another big beneficiary of rising Chinese labor costs and U.S. economic growth has been Mexico. This has come despite concerns about crime and safety.

Mexico benefits from the North America Free Trade Agreement (NAFTA). At 44, it also has more free-trade agreements than any other country. Mexico also benefits from having its natural gas prices tied to those in the U.S. where prices are substantially lower relative to the rest of the world.

Average electricity costs are about 4% lower in Mexico than in China, and the average price of industrial natural gas is 63% lower, according to a study by the Boston Consulting Group.

The same study found that by 2015, average manufacturing-labor costs in Mexico are projected to be 19% lower than in China. In 2000, Mexican labor was 58% more expensive than in China. ...

11. US AID: Full Speed Ahead on Malaria

Today, the greatest success story in global health is anchored by a continent once known mostly for famine and war. Many countries in sub-Saharan Africa are making unprecedented gains in child survival and reducing the devastating burden of malaria—a disease carried by mosquitoes and a major killer of children.

According to the World Health Organization an estimated 3.3 million lives were saved as a result of the scale-up of malaria control interventions over the last decade. Over the same period, malaria mortality rates in African children were reduced by an estimated 54 percent. ...

12. Huffington Post: Africa Is Richer Than You Think

Africa suffers from another kind of poverty: lack of accurate statistical data. And it is a tragic, messy situation. Nigeria nearly doubled the size of its economy overnight -- a whopping 89 percent -- surpassing South Africa to become Africa's largest economy and the world's 26th largest. What was thought to be a $270 billion economy one day became a $510 billion economy the next day, adding some $240 billion to its economy. To put the change into perspective, it is almost like adding Israel's economy, or more than Portugal's, to Nigeria's economy. It sounds like magic but it is not. Inaccurate economic data is commonplace across much of Africa. ...

13. Atlantic: How to Make Solar Panels Affordable—for Billions

Like the installment plans of the Great Depression, Simpa Networks' "Progressive Purchase" agreements are enabling customers in rural India to get solar power for their homes. ...

14. PBS: Capitalism in Cuba? It’s closer than the U.S. may think

... As an economist who had the opportunity to observe, first-hand, the difficult transitions of China and Russia from state to largely market-based economies, I was astounded by the counter-productive actions of my government. On its own, Cuba was well into a carefully planned transition to a market-based economy. The only impact of additional U.S. meddling would be to set back this process. ...

15. Mashable: 750 Million People Still Don't Have Access to Clean Drinking Water

... Since 1990, 2.3 billion people have gained access to drinking water from improved sources. But despite this progress, 748 million people — 90% of whom live in sub-Saharan Africa and Asia — still use unimproved drinking water sources, according to an updated report the World Health Organization and UNICEF released on Thursday. ...

16. New York Times: What’s So Scary About Smart Girls?

... Why are fanatics so terrified of girls’ education? Because there’s no force more powerful to transform a society. The greatest threat to extremism isn’t drones firing missiles, but girls reading books.

In that sense, Boko Haram was behaving perfectly rationally — albeit barbarically — when it kidnapped some of the brightest, most ambitious girls in the region and announced plans to sell them as slaves. If you want to mire a nation in backwardness, manacle your daughters. ...

 17. Businessweek: The Relentless Rise Of Global Happiness

... The rest of the world, however, is different: The average surveyed person planet-wide reports greater happiness than 10 years ago—which was happier than many reported 30 years ago. That said, it turns out that the factors that lead people to self-report as happy aren’t as obvious as you might think. And this suggests the limits of using happiness as a guide for making public policy. ...

... The World Values Survey presents an additional conundrum: While the share of the world population reporting itself happy has climbed since the 1980s, the average score on a question asking people if they are satisfied with life seems to have declined marginally. ...

 18. Atlantic: Having Kids Probably Won't Destroy the Planet

An overpopulated planet is not necessarily doomed. What matters most is how those billions of people choose to live. ...

Economics Links

1. AEI - James Pethokoukis: What MinuteClinics and Google Fiber teach about crony capitalism

... Andy Kessler explains how established Internet service providers are trying to block Google from deploying Google Fiber, its superfast, gigabit broadband service. His solution: “The FCC can change this overnight. Instead of allowing municipalities to dictate onerous terms and laws that lock in (slow) incumbents, the FCC can mandate right-of-way rules similar to those granted Google Fiber to all credible competitors. If only the federal regulator would promote progress and focus on what’s best for the U.S. economy rather than for those it regulates.” Regulation should promote innovation and competitive churn, not protect revenue streams of existing players.

There is a big difference between being pro-business and pro-market. One does the bidding of incumbents, with the result being a static economy. The other promotes competition. Safety nets are for people, not businesses. The result is innovation and dynamism. Right now, America has too much of the former, not enough of the latter.

2. Economist: The politics of poverty. Another two cents.

... Within this miscellany [of the Ryan budget] there are some clues as to the future direction of Republican anti-poverty policies. Mr Ryan recently gave a speech in which he praised Britain’s Universal Credit, a plan to roll lots of government anti-poverty programmes into one. In some ways Britain is a strange place to seek inspiration: the British scheme is hopelessly behind schedule, a victim of the kind of IT snafu that has hobbled the Affordable Care Act. But the thinking behind it is sensible.

The other initiative that looks to have Mr Ryan’s blessing is the expansion of the Earned-Income Tax Credit (EITC) to people who do not have children (at the moment the childless are eligible for this credit but there is a low cap on the maximum payment they may receive). Marco Rubio has already spoken in favour of this. The report from the House budget committee cites plenty of evidence on the power of EITCs to boost the number of people in work. The president’s budget, published on March 4th, includes an expansion of this programme too. ...

3. Bloomberg: Free-Market Bashers Aren't Helping the Poor

... There's a more basic flaw in the thesis that markets have done nothing to help the poor while government programs have done a lot: Where does the government get the money to fund these programs? Economic growth is what enables Social Security checks to get fatter over time. Unless you're prepared to argue that the government is responsible for 100 percent of economic growth and markets for none, markets have to get some of the credit for whatever good government does. ...

... Both markets and government are necessary to improve the lot of the poor, and we ought to reform government programs so that they do a better job of helping the poor participate in markets. That's just common sense, and no study or statistic has given us a good reason to reject it.

4. AEI - James Pethokoukis: Has America finally reached peak food-stamp enrollment?

5. Carpe Diem: US household net worth increased to a new record high of $80.6T in Q4, fueled by stock market and housing gains

6. Bloomberg: Decoupling Happened: U.S. Stocks Soared, China's Shrugged

The idea that emerging markets could keep growing smartly despite the collapse of the U.S. was something romanced quite a bit in recent years. Decoupling, as it’s called, was at least numerically possible. After all, China, Brazil, India, and Russia—the planet’s four biggest emerging economies, which chipped in two-fifths of global economic growth in the year leading up to Wall Street’s 2008 collapse—stood out as the least dependent on exports to America. Upwards of 95 percent of China’s double-digit growth was attributable to domestic demand.

Turns out a decoupling did transpire in the five years since peak meltdown—only it’s the U.S. market that seems to be doing fine while China founders. It’s a divergence of fortunes few would have predicted. ...

7. Slate: The “Made in China” Fallacy

... But are iPhones really “made in China”? More than a dozen companies from at least five countries supply parts for them. Infineon Technologies, in Germany, makes the wireless chip; Toshiba, in Japan, manufactures the touch screen; Broadcom, in the U.S., makes the Bluetooth chips that let the devices connect to wireless headsets or keyboards.

Analysts differ over how much of the final price of an iPhone or an iPad should be assigned to which country, but no one disputes that the largest slice should go not to China but to the U.S., where the design and marketing of such devices take place at Apple’s headquarters in Cupertino, Calif. The largest source of an iPhone’s value—and this goes for thousands of other high-tech products—lies not in its physical hardware but in its invention and the work of the individuals who conceived, designed, patented, packaged, and branded the device.

Taking these facts into account would leave China, the supposed country of origin, with a paltry piece of the pie. The Asian Development Bank estimates that as little as $10 of the value of every iPhone or iPad actually ends up in the Chinese economy.

Now magnify this across hundreds, even thousands of finished goods. Those Nike shoes that count as imports from China, all those flat-screen televisions, Android phones, clothing, furniture, Disney toys and figures. Almost all are the result of ideas generated in the U.S. (or Japan, or Germany, or Korea, and so on), with parts sourced globally and then assembled in China to be sold elsewhere. ...

8. Project Syndicate: The Poverty of Renewables

... Forcing everyone to buy more expensive, less reliable energy pushes up costs throughout the economy, leaving less for other public goods. The average of macroeconomic models indicates that the total cost of the EU’s climate policy will be €209 billion ($280 billion) per year from 2020 until the end of the century.

CommentsView/Create comment on this paragraphThe burden of these policies falls overwhelmingly on the world’s poor, because the rich can easily pay more for their energy. I am often taken aback by well-meaning and economically comfortable environmentalists who cavalierly suggest that gasoline prices should be doubled or electricity exclusively sourced from high-cost green sources. That may go over well in affluent Hunterdon County, New Jersey, where residents reportedly spend just 2% of their income on gasoline. But the poorest 30% of the US population spend almost 17% of their after-tax income on gasoline. ...

9. New York Times - Economix: Q. and A.: A Development Expert on Narrowing Inequality

Branko Milanovic has been studying income inequality around the world for a long time. ...

... Inequality calculated among all individuals in the world, as if they were part of one single nation, has been edging slightly downward over the past 10 to 15 years, mostly thanks to very high growth rates in China and India. These relatively poor giants (particularly India) have pulled quite a lot of people out of poverty and into something that can be called “the global middle class.”

That is the key factor behind the decline of global inequality: The distance between their incomes and the rather stagnant incomes of the middle class in rich countries has diminished. Yet global inequality is still extremely high by the standards of any single country. It is, for example, significantly higher than inequality in South Africa, which is the most unequal country in the world. ...

10. Prospect: “I started off as a libertarian economist, but I’ve come full circle”—Gregory Clark on social mobility

... If you look at England, for example, what we measure is whether you were at Oxford or Cambridge; how long you live, which is another good indicator of social status; occupational status; are you a member of parliament? Now one of the interesting findings here is that it doesn’t really matter which measure you use. For the families we’re looking at, all these things are actually highly correlated. The wealthy at any time are also the educated, members of parliament, those who live long. What the book shows is that there’s an underlying physics of social mobility which all of our political efforts seem to have no effect upon. And the startling conclusion is that we may never be able to change social mobility rates. ...

11. Business Insider: Every 25-Year-Old In America Should See This Chart

12. Business Insider: 13 Money Lies You Should Stop Telling Yourself By Age 40

... By the time you hit 40, rationalizing away your bad money management habits starts to have a serious impact on your financial future (not to mention age you).

Here are some of the top money lies that you should stop telling yourself by age 40: ...

13. Huffington Post: 5 Tools to Tackle Finances in Your Twenties

Your twenties are hard enough already: matriculating from college, finding your first "real" job, moving out on your own, learning how to pay bills for the first time and learning how to navigate adult relationships without the structure of college or free flow of alcohol. It is a scary and awkward time, no one disputes that -- but mastering your finances in your twenties will reduce your stress and increase your net worth in the long run. Below are 5 tools you need to tackle finances in your twenties. ...

Is China the new idol for emerging economies? - Dambisa Moyo

TED: Is China the new idol for emerging economies? - Dambisa Moyo

"The developed world holds up the ideals of capitalism, democracy and political rights for all. Those in emerging markets often don't have that luxury. In this powerful talk, economist Dambisa Moyo makes the case that the west can't afford to rest on its laurels and imagine others will blindly follow. Instead, a different model, embodied by China, is increasingly appealing. A call for open-minded political and economic cooperation in the name of transforming the world."

Will There Be Any Poor Countries Left in the World in 20 Years?

Atlantic: Will There Be Any Poor Countries Left in the World in 20 Years?

Bill and Melinda Gates Foundation:

We hear these myths raised at international conferences and at social gatherings. We get asked about them by politicians, reporters, students, and CEOs. All three reflect a dim view of the future, one that says the world isn’t improving but staying poor and sick, and getting overcrowded.

We’re going to make the opposite case, that the world is getting better, and that in two decades it will be better still. ...

... By 2035, there will be almost no poor countries left in the world. Almost all countries will be what we now call lower-middle income or richer. Countries will learn from their most productive neighbors and benefit from innovations like new vaccines, better seeds, and the digital revolution. Their labor forces, buoyed by expanded education, will attract new investments.

Developing Countries Are More Than Economic Rivals and Terror Threats

The Atlantic: Developing Countries Are More Than Economic Rivals and Terror Threats

I still hear many people today talk about the "Third World." It refers to those nations that were poor and not aligned with either Western capitalism (First World) or the communist world (Second World.) The Third World has vanished, and it is time to bury the term. The world's nations and populations exist on a continuum, and there are now multiple poles, not two, shaping the world. Furthermore, the story is not one of descent into global dystopia but rising prosperity. It is hard to address contemporary problems with antiquated frameworks meaningfully.

It's time to develop a new framework for assessing the post-Cold War, post-9/11 world. ...

... The three worlds used to be capitalist, communist, and the rest. Now they are the West, the failed states, and the emerging challengers. But that's still too simple a view. A small and declining number of developing countries are charity cases. And none are competitors with us in a zero-sum game. Rather than dividing most of the planet into two threatening classes, we need to see states of the developing world as vital partners—both in strengthening the global economy and in preserving the global environment. ...

... Given that much of the world only makes headlines when it is in the midst of a humanitarian crisis and U.S. assistance is on the way, it isn't surprising that the average American thinks things are going to hell in a handbasket: a recent survey of Americans found that two thirds believe extreme poverty worldwide has doubled over the past 20 years. The truth is that it has more than halved. This might also explain why Americans think that 28 percent of the federal budget goes to foreign aid—more than 28 times the actual share.

According to the World Bank, the developing world as a whole has seen average incomes rise from $1,000 in 1980 to $2,300 in 2011. Life expectancy at birth has increased from 60 to 69 years over that same time, and college enrollment has climbed from 6 to 23 percent of the college-age population. Progress is happening everywhere, including Africa: Six of the world's 10 fastest-growing economies over the past decade are in Africa. There were no inter-state conflicts in the world in 2013 and, despite tragic violence in countries including Syria and Afghanistan, the number of ongoing civil wars has dropped considerably over the last three decades. Emerging markets themselves are also playing an ever-expanding role in ensuring global security. The developing world is the major source for blue-helmeted UN peacekeepers, who are ending wars and preserving stability in 16 different operations worldwide. The 20 biggest contributors of police and military personnel to the UN's 96,887 peacekeepers are developing countries. ...

Very interesting piece. For more data, see yesterday's post, The (Mostly) Improving State of the World.

Economics Links

1. Here's The Chart That Destroys What Republicans Are Saying About The Deficit

2. The 10 Most Popular Charts On The World's Most Amazing Economics Website

Here is one example: Nominal GDP (3.1% growth year over year in Q2):

3. Global trade volume and world industrial production both reached new record highs in July

4. Gas prices dip to eight-month low despite Middle East tumult

Gas prices are at the lowest they've been since late January despite continued unease across the Middle East. Much of the decline in gas prices is part of the seasonal change in supply and demand, but it also reflects a shifting global oil market.

5. 19 Charts That Will Restore Your Faith in the World Economy

Here is one example. Some economists see the Baltic Dry Index as one of the best indicators of global trade and economic vitality:

6. Here Are The Countries That Collect The Most And Least In Taxes

7. Commentary: Robots Taking All Our Jobs? Ridiculous

... If technology enables the same amount of work to be done with fewer people, the argument goes, then it must be bad for employment. More sophisticated variants of this thesis further claim that accelerating technological change has created too much churn in labor markets, and robots are now storming the last few bastions of scarce human abilities.

This tale is not new. The original British Luddites rose up in the early 1800s to oppose mechanization of the textile industry and went so far as to destroy looms that were replacing workers. In the two centuries since, whenever unemployment rates have risen there have been some who blamed the machines. Many even argued that we were heading toward mass permanent unemployment. ...

... Fortunately for workers and for those who understand the potential of new technologies, these ideas are essentially misguided speculation. They fly in the face of years of economic data as well as current trends.

They all fall into what economists call the "Lump of Labor" fallacy, the idea that there's a limited amount of labor to be done. In reality, labor markets aren't fixed. If jobs in one firm or industry are reduced, they're replaced by jobs in other areas of the economy. This is why we did not see massive unemployment as agriculture mechanized in the early 20th century -- the workforce shifted to other professions. ...

8. The Global Economy In 17 Beautiful Maps

For example:

 

9. Is Innovation Leading to a New Age of Productivity in the U.S.?

... So-called intelligent machines increasingly communicate among themselves and with people. Mobile devices allow round-the-clock interconnectivity. Computers crunch terabytes of data. Such innovations have convinced some economists that the stage is set for a wave of productivity gains to rival the one spawned by the 10-year Internet boom that began in 1995. "I'm quite optimistic," says Erik Brynjolfsson, a professor at the Massachusetts Institute of Technology's Sloan School of Management. Leaps in productivity would allow faster growth without generating higher inflation. Companies could pay their workers more while still enjoying healthier earnings. Rising tax revenue would make it easier for the U.S. to cut its budget deficit. ...

Economics Links

1. Did living standards improve during the Industrial Revolution?

... So, while the Industrial Revolution ultimately led to big increases in wealth, progress was unsteady. For much of the period, the average person was not reaping the benefits of economic change.

So much for wages. Other measures of standard of living should be considered. ...

This a great piece highlighting the methods economic historians use to evaluate standards of living.

2. Annual Food Inflation

3.  Robert Reich on free markets

... In reality, the "free market" is a bunch of rules about (1) what can be owned and traded (the genome? slaves? nuclear materials? babies? votes?); (2) on what terms (equal access to the internet? the right to organize unions? corporate monopolies? the length of patent protections? ); (3) under what conditions (poisonous drugs? unsafe foods? deceptive Ponzi schemes? uninsured derivatives? dangerous workplaces?) (4) what's private and what's public (police? roads? clean air and clean water? healthcare? good schools? parks and playgrounds?); (5) how to pay for what (taxes, user fees, individual pricing?). And so on.

These rules don't exist in nature; they are human creations. Governments don't "intrude" on free markets; governments organize and maintain them. Markets aren't "free" of rules; the rules define them....

All true, but the rules were not arbitrarily written yesterday. Centuries of trial and error are reflected in the rules. That doesn't make them all just or above modification, but neither are they a game thrown together at a whim. To claim there are no free markets because government frames elements of exchange is like saying there is no such thing as free speech because government frames elements of public dialog.

4. American Farmers Say They Feed The World, But Do They?

... So I called , an economist at Cornell University who studies international agriculture and poverty.

They're both right," he says, chuckling. "Sometimes the opposite of a truth isn't a falsehood, but another truth, right?"

It's true, he says, that bigger harvests in the U.S. tend to make food more affordable around the world, and "lower food prices are a good thing for poor people." ...

... But Mellon is right, too, Barrett says. The big crops that American farmers send abroad don't provide the vitamins and minerals that billions of people need most. So if the U.S. exports lots of corn, driving down the cost of cornmeal, "it induces poor families to buy lots of cornmeal, and to buy less in the way of leafy green vegetables, or milk," that have the key nutrients. In this case, you're feeding the world, but not solving the nutrition problems. ...

 5. Why the U.S. Needs to Fall Out of Love With Homeownership

... Less developed countries have consistently higher levels of homeownership, while more advanced nations combine higher levels of economic development with substantially lower levels of homeownership.  (The correlation between the two is -.40 overall and it rises to -.58 when she removed outliers Singapore, Norway, Luxembourg and Switzerland). American political rhetoric tends to equate rising homeownership rates with strong economic development. Instead, the opposite is true. The rate of homeownership declines as nations get wealthier.

One reason for this may be because people in less developed nations have fewer options of where to put their money. In agrarian economies, land ownership is the basic source and measure of wealth. In more advanced capitalist economies, people have many more investment options. Many of the places with the highest rates of homeownership are in former Communist nations of Eastern Europe. ...

... And numerous studies have found that excessive homeownership significantly distorts the economy, diverting investment away from much more needed areas like technology and knowledge.

Homeownership continues to make sense for many Americans. But for those whose income is limited or who are still building their careers, a house can be an anchor than limits their ability to move to where jobs are.  ...

6. Household Incomes Remain Flat Despite Improving Economy

7. Brazil's New Middle Class: A Better Life, Not An Easy One

Tens of millions of Brazilians have risen out of poverty over the past decade in one of the world's great economic success stories. The reasons are many: strong overall economic growth, fueled by exports. A rise in the minimum wage. A more educated workforce. And big government spending programs, including direct payments to extremely poor families.

But becoming middle class in Brazil means a better life, not an easy one. The new, lowest rung of the middle class is what in the U.S. would be called the working poor, with monthly incomes of between $500 and $2,000.

Yet this group is driving consumer spending in Brazil as they cobble together enough money to buy a television, a cell phone or pay for their children to go to a private school. ...

How iPhone Is Made: A Surprising Report on How Much of Apple’s Top Product is US-manufactured

Finances Online: How iPhone Is Made: A Surprising Report on How Much of Apple’s Top Product is US-manufactured

... In this infographic we trace the iPhone supply and manufacturing chain. We’re providing snippets of information on both of the existing flagship model plus early breaking rumors for the next-gen iPhones. Did you know, for example, that 90% of all the rare-earth minerals used on an iPhone 5’s circuitry, screen, speakers, and glass cover are mined in China and Inner Mongolia? And did you know that Foxconn might soon be overtaken by Pegatron as Apple’s biggest manufacturing partner in China?

What does the rest of the world contribute to the making of the iPhone? Let’s find out!

 

Republished from www.financesonline.com

Communism vs. Democracy and Markets. Are these the only viable options?

The past century has been a competition between two metanarratives: communism vs. democracy and markets. Is it possible that there are other viable ways of organizing human societies? Eric Li offers a fascinating window into Chinese culture and suggests that there may indeed be viable alternatives. The Chinese model may not be feasible in other cultures, but that is his point. The future may be a variety of societal structures, not evolution toward one common mode of governance.

Saturday Links

I skipped Saturday Links last week due to the holiday weekend. I'm catching up this week.

1. Faith in the Free Market

"... Selke, now 36, is part of a vanguard of young Christians who believe that God uses not only the church and formal ministry but every sphere of society, including business and free markets, to advance his work of shalom. Selke parlayed his experience analyzing companies, creating spreadsheets, and evaluating profitable opportunities for an investment bank into helping social entrepreneurs—people who create organizations in order to benefit society.

In 2010, Selke co-founded Hub Ventures, an accelerator in San Francisco investing in entrepreneurs launching companies that produce a social good. The 12-week program provides up to $20,000 in seed funding, mentorship, workshops, and access to investors in exchange for an average of a 6 percent ownership stake. What separates Selke's program from other business accelerators en vogue in Silicon Valley is the focus on "entrepreneurs building technology solutions for a better world," Selke says. ..."

2. The Global Low Fertility Panic: Just a Phase?

"...Our new book, The Global Spread of Fertility Decline: Population, Fear, and Uncertainty (Yale University Press, 2013) analyzes these trends and the demographic, political and economic consequences and uncertainties as low fertility has become a global phenomenon. Like other facets of globalization, low fertility rates are by no means universal: High fertility persists in sub-Saharan Africa and in parts of the Middle East, but elsewhere low fertility is more the rule than the exception. These underlying trends in childbearing mean that in the near future the rate of population growth both in Europe and Asia are likely to decline. The world is not on a path of unrestrained demographic growth, as some believe. People all over the world have hit the brakes.

Thirty years ago only a small fraction of the world's population lived in the few countries with fertility rates substantially below the "replacement level" - the rate at which the fertility of a hypothetical cohort of women would exactly replace itself in the next generation - normally set at 2.1 children per woman for populations with low mortality conditions. Fast forward to 2013, with roughly 60 percent of the world's population living in countries with such below-replacement fertility rates.

The consequences of these changes are striking. ..."

3. Immigration and Entrepreneurship

According to a Small Business Administration-commissioned report in 2012 by Robert W. Fairlie, an economics professor at the University of California, Santa Cruz, the business ownership rate is higher for immigrants than the native-born, with 10.5 percent of the immigrant work force owning a business compared with 9.3 percent of the native-born work force.

4. Graft Is On The Rise Around The World

5. Job-Stealing Robots Go Global

Asian workers have scored some victories in rising wages, but many are learning something the West has known for some time: Employers will seek out the cheapest labor on offer, and machines are even cheaper than an underpaid human. In the late 20th century, manufacturing jobs shifted from America to China, then from China to Southeast Asia, and now even those are being automated.

For America, at least, this trend shouldn't be so disconcerting. After all, it's developed economies like ours that are designing the robots Nike is now using. Low-wage manufacturing jobs are drying up, but they're being replaced by jobs in building, operating, and repairing the tech in question. Increasingly, companies will be likely to "onshore" these jobs to America, when shipping and distribution becomes much easier and cheaper. Manufacturing, it seems, will come full circle.

6. Economist Mark Perry with a provocative claim: Yes, the middle-class has been disappearing, but they haven't fallen into the lower-class, they've risen into the upper-class

 

7. Co.exist with what they see as 4 Bogus Claims About Why Walmart Can't Pay A Living Wage (I'm not in full agreement but they make they present their side articulately.)

8. Gallup Has Never Seen So Many Americans Sitting Out Of The Stock Market

9. K-State study: Arguments about money best predictor of divorce

"Results revealed it didn't matter how much you made or how much you were worth," Britt said in the university statement. "Arguments about money are the top predictor for divorce because it happens at all levels."

She said couples should seek a financial planner as part of premarital counseling, and talk about finances.

10. How the Dismal Science Got Its Name (It had nothing to do with Thomas Malthus or scarcity ... or even with students who have suffered through Econ 101 classes.)

 11. Matt Ridley writes I may follow the crowd, but not because it's a crowd

"... My friend objected that I seemed to follow the herd on matters like the reality of evolution and the safety of genetically modified crops, so why not on climate change? Ah, said I, but I don't. I agree with the majority view on evolution, not because it is a majority view but because I have looked at evidence. It's the data that convince me, not the existence of a consensus. ..."

12. Dan Lewis debunks the myth that the end of the telegraph is here: The Spread of a False Fact

13. PC sales see 'longest decline' in history

Global personal computer (PC) sales have fallen for the fifth quarter in a row, making it the "longest duration of decline" in history.

14. Time of 'Incredible Violence': Historian Gives Readers Glimpse of Medieval Life

15. Farming Got Hip In Iran Some 12,000 Years Ago, Ancient Seeds Reveal

Archaeologists digging in the foothills of Iran's Zagros Mountains have discovered the remains of a Stone Age farming community. It turns out that people living there were growing plants like barley, peas and lentils as early as 12,000 years ago.

The findings offer a rare snapshot of a time when humans first started experimenting with farming. They also show that Iran was an important player in the origin of agriculture.

16. LGBT group finds acceptance at evangelical college

"... Fuller's community standards states that "sexual abstinence is required for the unmarried" and marriage is between one man and one woman.

Nevertheless, Fuller's decision not to push back against OneTable is a critical step toward acceptance for gay evangelical students, said Justin Lee, the executive director of the Gay Christian Network, which tracks the burgeoning movement. An increasing number of young people have been coming out on Christian campuses nationwide, whether they are accepted or not, and Fuller's move acknowledges that and provides a touchstone for students who would otherwise keep their sexuality a secret, he said. ..."

17. New generation activists build bridges

A traditional organizing approach makes opponents into 'enemies,' but a new crop of union and other activists is using love and empathy to create alliances and new possibilities.

 

It is capitalism, not democracy, that the Arab world needs most

Telegraph: It is capitalism, not democracy, that the Arab world needs most

Property rights for aid: this could be the most effective anti-poverty strategy in history

... But the Arab Spring was a demand for freedom, not necessarily democracy – and the distinction between the two is crucial. Take, for example, the case of Mohammed Bouazizi, who started this chain of events by burning himself alive on a Tunisian street market two years ago. As his family attest, he had no interest in politics. The freedom he wanted was the right to buy and sell, and to build his business without having to pay bribes to the police or fear having his goods confiscated at random. If he was a martyr to anything, it was to capitalism.

All this has been established by Hernando de Soto, a Peruvian economist who travelled to Egypt to investigate the causes of the Arab Spring. His team of researchers found that Bouazizi had inspired 60 similar cases of self-immolation, including five in Egypt, almost all of which had been overlooked by the press. The narrative of a 1989-style revolution in hope of regime change seemed so compelling to foreigners that there was little appetite for further explanation. But de Soto’s team tracked down those who survived their suicide attempts, and the bereaved families. Time and again, they found the same story: this was a protest for the basic freedom to own and acquire ras el mel, or capital.

 

A Fascinating Map of the Worst Countries for Modern Slavery

Atlantic: A Fascinating Map of the Worst Countries for Modern Slavery

When America Stops Importing Energy

New York Times: When America Stops Importing Energy

... The numbers tell the story: U.S. oil production has reversed its 30-plus year decline; U.S. imports from OPEC producers have fallen more than 20 percent in the past three years; U.S. natural gas reserves and production are up significantly and prices have dropped 75 percent in the past five years. The International Energy Agency forecasts that the United States could become the world’s largest oil producer by 2020 and may be energy self-sufficient by 2035. That’s a game changer.

While this is not a free lunch, it should not be feared. The production process is complicated and expensive, and if the industry is not careful there can be risks to the environment. But the potential is staggering. Significant domestic job growth and economic expansion has begun.

But let’s look beyond the impact on the United States and consider a few of the more profound implications for the rest of the world, because this revolution is also a game changer for international politics and the global economy. ...

... Like all revolutions, America’s new energy bonanza raises some fascinating questions. How might a lighter U.S. presence and heavier Chinese involvement change the world’s most volatile neighborhood? What can the next generation of Saudi leaders expect for their country’s future in a world where OPEC has lost much of its market power? Will Qatar’s support for Muslim Brotherhood governments in other Arab states and China’s interest in using the United Arab Emirates as an offshore trading center for its currency leave the Saudis dangerously isolated? Can Iran’s revolution survive the need to build a more modern economy?

A world in which the United States is less involved in answering these questions is a new world indeed.

Saturday Links

Some weeks the pickin's are thin. Not this week.

1. Asians are now the largest immigrant group in Southern California: New Suburban Dream Born of Asia and Southern California

2. Surge in unwed mothers: Deep in the stats, it's not what you think

According to the US Centers for Disease Control, 42 percent of children will have lived with cohabitating parents by the time they are 12 years old, almost twice as many who will have divorced parents. And this particular sort of family structure is on the rise, a number of studies show.

3. In a sharp trend reversal, highway fatalities rise

"The news, while disheartening, is not surprising," said Barbara Harsha, executive director of the Governors Highway Safety Association. "With the improving economy and historically low levels of motor vehicle deaths in recent years, we expected deaths to increase. Highway deaths have been declining significantly in recent years."

4. We live in a house that is 105 years old. IMO, most houses built after 1940 are boring. How Americans' Taste in Houses Has Evolved Over the Last Century

5. Are we purging the poorest?

In a new book, MIT urbanist Lawrence Vale examines the downsizing of public housing.

6. Eric Schmidt and Jared Cohen have been popping up everywhere promoting their new book, The New Digital Age: Reshaping the Future of People, Nations and Business. Here is a PBS interview:

Watch Google's Schmidt, Cohen Describe a 'New Digital Age' on PBS. See more from PBS NewsHour.

7. Love this story: Alleviating Poverty with a Washing Machine Powered by Your Feet

The GiraDora uses the principles of a salad spinner to make cleaning clothes less back-breaking and time-consuming work for millions of people in poverty.

8. Amen to this article. Good charities spend more on admin but it is not money wasted

The popular idea that charities fritter money on unnecessary admin has been proven wrong. You must spend to be effective.

9. Why US firms are turning to Mexico, leaving China behind

 ... Mexico has more international trade deals than any other country, and exports as many goods as the rest of Latin America combined.

There has always been an electronics manufacturing hub in Tijuana, but Chinese competition damaged its business a decade ago.

Now rising wage costs in Asia and a higher exchange rate are prompting many companies targeting the US market to take another look at Mexico. ...

...The new Mexican President Enrique Pena Nieto wants to put a new spin on the country with the image of a booming economy and as a good place to do business.

Security and the drugs problem still dominate talks between the US and Mexico, but its southern neighbour's increasing importance in the global economy is changing the relationship. ...

10. The Manufacturing Cost Components For A Bunch Of Different Things

11. Five Innovative Technologies that Bring Energy to the Developing World

12. No-Wash Shirt Doesn't Stink After 100 Days

13. Craig Stanford, 'Planet Without Apes' Author, Says Eco-Tourism Could Save The Primates

A slice of the money that tourists pay can run $500 an hour at some of the sites in East Africa and goes to build hospitals and hire teachers." Although it's not philosophically or altruistically driven, the bottom line is the animals are more valuable alive than dead, since there's an incentive to protect them.

14. Approaching Nutrition From An Investor's Mindset

How does one succeed in nutrition when nobody seems to agree on anything? How can one get the benefits that arrive in the early stages of a diet without staying too long and compromising their health? What has worked well for me is thinking about nutrition like an investor thinks about investment opportunities.

15. The Lies You've Been Told About the Origin of the QWERTY Keyboard.

The QWERTY configuration for typewriters can be traced, actually, to the telegraph.

16. Money Buys Happiness and You Can Never Have Too Much, New Research Says

Here again we have to revisit the differences between happiness, joy, meaning, and satisfaction.

17. Baseball as a Road to God

Watch Baseball and Religion on PBS. See more from Religion & Ethics NewsWeekly.

18. Why Older Minds Make Better Decisions

Recent research has already challenged what we thought we knew about the capability of the brain. What has become clear, says Dr. Gregory Samanez-Larkin of Vanderbilt University, one of the network's co-directors, is that despite a decline in some types of cognitive function, "older people often make better decisions than younger people."

19. Moon Landing Faked!!!—Why People Believe in Conspiracy Theories

New psychological research helps explain why some see intricate government conspiracies behind events like 9/11 or the Boston bombing.

20. Scot McKnight answers the question So What's an Anabaptist?

21. Beneath the stereotypes, a stressful life for preachers' kids

22. When and Where Is It Okay to Cry?

23. 10 Reasons Why Humor Is A Key To Success At Work

24. Scientists May Be On Brink Of Major Discovery In Hunt For HIV Cure

Danish scientists are expecting results that will show that "finding a mass-distributable and affordable cure to HIV is possible."

They are conducting clinical trials to test a "novel strategy" in which the HIV virus is stripped from human DNA and destroyed permanently by the immune system.

Do Foreigners Really Own America?

Source: Business Insider

Saturday Links

Have a wonderful Easter weekend!

1. Rewriting the story of polarized debate: He got Tea Party and Occupy to talk

Nabil Laoudji's Mantle Project puts citizens on stage to tell stories of the experiences that led them to their positions on tough issues. That's how he got members of the Tea Party and Occupy movement to speak on the same stage in a civil – and entertaining – exchange.

2. Next Reformation presents Barna's six reasons young Christians leave the church.

3. Forbes: The Happiest And Unhappiest Jobs In America

4. Mozambique: From Marxism to market

British journalist Paul Fauvet came to Mozambique in 1980 just as the country was plunged into a civil war. He has witnessed every key event since. Here he describes the transformation of his adopted country from revolutionary Marxist state to embracing the market and the exploitation of its resource riches.

5. Poor Americans Are Driving The Evolution Of The Banking System

We've reported on how people in emerging markets residents are opening bank accounts and paying for things with their mobile phones, transforming business in those countries. 

But the US Federal Reserve would like you to know (pdf) that the changes aren't all in other parts of the world.

Poor people in the US are some of the most avid users of mobile banking and mobile payment systems. ...

6. One In Four Teens Plan On Relying On Mom And Dad Till Age 27

7. Gen Y Isn't The 'Entrepreneurship Generation'

We all keep hearing that Gen Y's are the "entrepreneurship generation," but new research states otherwise. I worked with Monster.com on a new study focused on multi-generational worker attitudes to uncover the state of entrepreneurship through the eyes of different generations of workers. The report found that 41% of Gen X employees (ages 30-49) and 45% of Boomers (ages 50-69) consider themselves to be more entrepreneurial, compared to only 32% of Gen Y workers (ages 18-29 years). ...

8. Work Is More Than a Means to Evangelism

As already discussed, Matthew Lee Anderson's recent Christianity Today cover story on "radical Christianity" has been making waves. This week at The High Calling, Marcus Goodyear offers a healthy critique of one of Anderson's key subjects, David Platt, aligning quite closely with Anderson's analysis about the ultimate challenges such movements face when it comes to long-term cultural cultivation.

Focusing on Platt's latest book, Follow Me, Goodyear notes that, despite Platt's admirable efforts to get Christians "off their seats," he often "emphasizes the great commission so much, it overshadows all other teachings of the Bible."...

9. I don't know if I'm convinced, but here are The 21 Principles of Persuasion from Forbes.

10. Mental Floss with a great list of 30 Things Turning 30 This Year.

11. Few People Understand The Difference Between Risk And Genuine Uncertainty

What are the odds that your new idea will succeed?  If it does, what will the return to you be?

One of the problems that we have in business (and life!) is that we often can't know the answer to questions like this in advance.  And this drives us nuts.  Consequently, a lot of people invest a great deal of effort into reducing uncertainty.  There are two problems with this approach.  The first is that we often don't understand uncertainty very well, and the second is that profitably opportunities only exist where outcomes are genuinely uncertain. ...

12. Christopher Hitchens wants to know Has militant atheism become a religion?

... In my interactions with religious and nonreligious people alike, I now draw a sharp line, based not on what exactly they believe but on their level of dogmatism. I consider dogmatism a far greater threat than religion per se. I am particularly curious why anyone would drop religion while retaining the blinkers sometimes associated with it. Why are the "neo-atheists" of today so obsessed with God's nonexistence that they go on media rampages, wear T-shirts proclaiming their absence of belief, or call for a militant atheism? What does atheism have to offer that's worth fighting for? As one philosopher put it, being a militant atheist is like "sleeping furiously."...

13. Econbrowser has a detailed analysis of Declining U.S. carbon dioxide emissions.

14. David Shukman wants to know Why such a fuss about extinction?

What is wrong with extinction? I realise this question is the conservation equivalent of a landmine - or an elephant trap. And that it is likely to ruffle a lot of fur.

But I ask because I am merely wondering whether we sometimes forget a grim reality of the story of life on Earth - that extinction has always been with us.

In fact, it has quite often been good for us. ...

15. Is Google Maps Changing Our Behavior?

... The people who used the digital navigation device demonstrated pretty good route recognition and rather poor survey knowledge. By comparison, the paper map users scored better on the survey test and almost perfect on the route test. What's happening here, Münzer and colleagues argue, is that pedestrians who use computer navigation fail to envision, encode, and memorize the cognitive maps they otherwise would have. The cost of convenience, in other words, is spatial orientation. ...

16. 18 obsolete words, which never should have gone out of style

Saturday Links

1. Christian History magazine has an entire issue devoted to Christians in the New Industrial Economy: The World Changed, the Church Responded. It is a priceless collection of essays on how various religious traditions responded to (or failed to) the challenges of the Industrial Revolution.

Issue 104 examines the impact of automation on Europe and America and the varying responses of the church to the problems that developed. Topics examined are mission work, the rise of the Social Gospel, the impact of papal pronouncements, the Methodist phenomenon, Christian capitalists, attempts at communal living and much more.

2. Orange County Register says Don't count out mainline Protestants yet.

As flocks shrink, denominations that once defined America fight to stay relevant with new ways of reaching out.

3. The Washington Post reports that Megachurches thriving in tough economic times.

"Despite the tough economy, many of the nation’s largest churches are thriving, with increased offerings and plans to hire more staff, a new survey shows.

Just 3 percent of churches with 2,000 or more attendance surveyed by Leadership Network, a Dallas-based church think tank, said they were affected “very negatively” by the economy in recent years. Close to half — 47 percent — said they were affected “somewhat negatively,” but one-third said they were not affected at all. ..."

4. Harvard Business Review: Steve Blank on Why Big Companies Can't Innovate

... It's not surprising that younger entrepreneurial firms are considered more innovative. After all, they are born from a new idea, and survive by finding creative ways to make that idea commercially viable. Larger, well-rooted companies however have just as much motivation to be innovative — and, as Scott Anthony has argued, they have even more resources to invest in new ventures. So why doesn't innovation thrive in mature organizations? ...

... First, he says, the focus of an established firm is to execute an existing business model — to make sure it operates efficiently and satisfies customers. In contrast, the main job of a start-up is to search for a workable business model, to find the right match between customer needs and what the company can profitably offer. In other words in a start-up, innovation is not just about implementing a creative idea, but rather the search for a way to turn some aspect of that idea into something that customers are willing to pay for. ...

... discovering a new business model is inherently risky, and is far more likely to fail than to succeed ...

... Finally, Blank notes that the people who are best suited to search for new business models and conduct iterative experiments usually are not the same managers who succeed at running existing business units. ...

5. A fascinating, if sobering, look at the conflict over islands off the coast of East Asia. Trouble at sea

6. The rise of post-industrial China? (Economist)

7. New Geography thinks U.S. LATE TO THE PARTY ON LATIN AMERICA, AFRICA.

"President Barack Obama's proposed tilt of U.S. priorities toward the Pacific – and away from the historical link to Europe – represents one of the most encouraging aspects of his foreign policy. Although welcome, we should recognize that this shift comes about three decades too late and that it may miss the rising geopolitical centrality of sub-Saharan Africa and Latin America. The emergence of these longtime historically impoverished backwaters has been largely missed as American policy-makers and businesses are now obsessed with the challenges and opportunities posed by the emergence of China and, to a lesser extent, India. Sub-Saharan Africa, for example, over the past decade has produced six of the world's 10 fastest-growing economies. Through 2011-15, according to the International Monetary Fund, seven of the fastest-growing countries will be African, and Africa as a whole will surpass the slowing growth rates in Asia, particularly China.

This growth has caused the region's poverty rates, still unacceptably high, to fall from 56.5 percent in 1990 to 47 percent today. Further growth will likely push poverty levels down further."

8. New Geography also asks, Is the Family Finished? Some interesting thoughts about the impact of declining birthrates in the U.S.

9. A Portrait of U.S. Immigrants

Pew Research Center has compiled key findings from a new analysis of the nation’s foreign-born population, based on U.S. Census Bureau’s 2011 American Community Survey.

10. Marketing Daily says More Latinos See Themselves As Bicultural

With more than half the population of many U.S. cities who are multicultural and Hispanics comprising more and more of the U.S. population, when does it become meaningless and redundant to execute marketing strategy that is directed to a general market and a Latino market perceived to be homogenous?

11. Committee on Economic Development has an interesting piece looking at both the ideological and economic aspects underlying the debate about the minimum wage. Raising the Minimum Wage: “Which Side Are You On?”

"It is an easy call if you are either (a) a strict libertarian or (b) an enthusiastic advocate of the less fortunate with limited concern about the scarcity of resources.  (If you belong to both of those groups, there is little advice that I can offer.)  However, in between those poles of opinion, things become rather murky, rather quickly."

12. Being a Republican or a Democrat may all be in your head: Republican Brains Differ From Democrats' In New FMRI Study

... Comparing the Democrat and Republican participants turned up differences in two brain regions: the right amygdala and the left posterior insula. Republicans showed more activity than Democrats in the right amygdala when making a risky decision. This brain region is important for processing fear, risk and reward.

Meanwhile, Democrats showed more activity in the left posterior insula, a portion of the brain responsible for processing emotions, particularly visceral emotional cues from the body. The particular region of the insula that showed the heightened activity has also been linked with "theory of mind," or the ability to understand what others might be thinking. ...

... The functional differences did mesh well with political beliefs, however. The researchers were able to predict a person's political party by looking at their brain function 82.9 percent of the time. In comparison, knowing the structure of these regions predicts party correctly 71 percent of the time, and knowing someone's parents' political affiliation can tell you theirs 69.5 percent of the time, the researchers wrote. ...

13. Health Care Without the Doctors Coming to a Walmart Near You

STERLING, Va. - Perched by a computer monitor wedged between shelves of cough drops and the pharmacy in a bustling Walmart, Mohamed Khader taps out answers to questions such as how often he eats vegetables, whether anyone in his family has diabetes and his age.

He tests his eyesight, weighs himself and checks his blood pressure as a middle-aged couple watches at the blue-and-white SoloHealth station advertising "free health screenings." ...

... As Americans gain coverage under the federal health law, putting increased demand on primary care doctors and spurring interest in cheaper, more convenient care, unmanned kiosks like these may be part of what their manufacturer bills as a "self-service healthcare revolution." ...

14. Is this a case of marketing going too far? Young Japanese Women Rent Out Their Bare Legs as Advertising Space

15. Nanotechnology Rebuilds the Periodic Table

Recent developments in the field of nanotechnology might give new meaning to the phrase “nothing gold can stay.” Atoms and bonds developed not by Mother Nature, but by scientists, are gaining momentum as the building blocks for cutting-edge materials.

Using nanoparticles as “atoms” and DNA as “bonds,” Chad Mirkin, the director of Northwestern University’s International Institute for Nanotechnology, is constructing his very own periodic table. So far Mirkin has built more than 200 distinct crystal structures with 17 different particle arrangements. ...

16. ExtremeTech says NASA’s cold fusion tech could put a nuclear reactor in every home, car, and plane.

17. Atlantic Cities has some great maps showing the impact of railroads on travel time in the early 19th Century, thus shrinking the nation. A Mapped History of Train Travel in the United States

18. A soccer goalie's worst nightmare.

19. You might want to think twice before a game of horse with this cheerleader.

Saturday Links

1. The new global top dog in international trade is China. China Eclipses U.S. as Biggest Trading Nation

"U.S. exports and imports of goods last year totaled $3.82 trillion, the U.S. Commerce Department said last week. China's customs administration reported last month that the country's trade in goods in 2012 amounted to $3.87 trillion."

2. As U.S. birth rate drops, concern for the future mounts

The drop in U.S. births to their lowest level since 1920 is sounding alarms about the nation's ability to support its fast-growing elderly population.

As public concern mounts, a growing number of books, reports and columns are laying out challenges the United States will face because of this demographic upheaval: Fewer babies are being born while the wave of 78 million older Baby Boomers have only begun to retire (the oldest turn 67 this year). ...

3. Raising the minimum wage has become a hot topic once again. Jared Bernstein makes Obama's case in the Huffington Post, saying that numerous careful studies say raising the minimum wage does not have an impact on employment. While that is true, there are also many careful studies that suggest that it does have an impact. My perception is that raising the minimum wage helps some working poor who already have jobs but makes it more difficult for low-skilled unemployed workers, particularly minority men in urban contexts. It is interesting that 25 years ago, the New York Times came out in opposition to the minimum wage: New York Times Called To Abolish The Minimum Wage In 1987. Fiscal Times makes their case against the minimum wage hike: Raise the Minimum Wage and Get Minimum Jobs

4. Speaking of low-income workers, The 20 Companies With The Most Low-Wage Workers

5. Last week, I wrote a post that linked a Salon article that said we are often swayed toward liking policies we have previously disliked when a political figure we like adopts those policies. (See When liberals ignore injustice) A prime example of rationalizing this inconsistency is this article in the Atlantic: MSNBC Host: Trusting Obama More Than Bush Isn't Hypocritical. The willingness of Krystal Ball to alter the degree of power and discretion a president has based on personal affinity rather than on an impartial assessment of the office's role is disturbing (and this is true of left and right.)

6. Gleaming skyscrapers are springing up in major cities of many developing nations. Partly because of practical concerns and partly as status symbols. But not in India. Why India Keeps Its Cities So Short

7. Does the time of year you were born relative to the date that determines which year you start school have any impact on your life? How Birth Date Affects Future Success

8. This technology is pretty cool! Follow the self-made road: Incredible machine that lays out a carpet of bricks removing back-breaking hard work

9. Let us give thanks for the demise of this publishing niche. A Midcentury Travel Guide for African-American Drivers Navigating Jim Crow

10. My former professor at Palmer Theological Seminary is in the news again. Resigning From the AARP

"The AARP is a selfish lobby demanding things for seniors even though modest sacrifices would help us reduce the deficit and enable us to spend more on crucial things like better education for our children. In fact, John Rother (long-time chief lobbyist for the AARP) suggested that in 2011 and promptly lost his job. Selfish seniors protested loudly and the AARP quickly backpedalled."

(For the record, I have never joined AARP. I'm still in denial that I am old enough to join.)

11. There are only a few seconds left in the basketball game. Your team is up by three, but the other team is about to inbound the ball. Do you quickly foul to force two free throws, or do you simply play defense against any score? Yet another study about fouling when up 3

About That Overpopulation Problem

Five years ago, I wrote a piece called, Technophysio Evolution and Demographic Transition, explaining the dynamics and trends of global population growth and decline. Slate has an excellent article explaining the Demographic Transition Model.

Slate: About That Overpopulation Problem

Research suggests we may actually face a declining world population in the coming years.

The world’s seemingly relentless march toward overpopulation achieved a notable milestone in 2012: Somewhere on the planet, according to U.S. Census Bureau estimates, the 7 billionth living person came into existence.

Lucky No. 7,000,000,000 probably celebrated his or her birthday sometime in March and added to a population that’s already stressing the planet’s limited supplies of food, energy, and clean water. Should this trend continue, as the Los Angeles Times noted in a five-part series marking the occasion, by midcentury, “living conditions are likely to be bleak for much of humanity.”

A somewhat more arcane milestone, meanwhile, generated no media coverage at all: It took humankind 13 years to add its 7 billionth. That’s longer than the 12 years it took to add the 6 billionth—the first time in human history that interval had grown. (The 2 billionth, 3 billionth, 4 billionth, and 5 billionth took 123, 33, 14, and 13 years, respectively.) In other words, the rate of global population growth has slowed. And it’s expected to keep slowing. Indeed, according to experts’ best estimates, the total population of Earth will stop growing within the lifespan of people alive today.

And then it will fall. ...

... Why is this happening? Scientists who study population dynamics point to a phenomenon called “demographic transition.”

“For hundreds of thousands of years,” explains Warren Sanderson, a professor of economics at Stony Brook University, “in order for humanity to survive things like epidemics and wars and famine, birthrates had to be very high.” Eventually, thanks to technology, death rates started to fall in Europe and in North America, and the population size soared. In time, though, birthrates fell as well, and the population leveled out. The same pattern has repeated in countries around the world. Demographic transition, Sanderson says, “is a shift between two very different long-run states: from high death rates and high birthrates to low death rates and low birthrates.” Not only is the pattern well-documented, it’s well under way: Already, more than half the world’s population is reproducing at below the replacement rate. ...

... One of the most contentious issues is the question of whether birthrates in developed countries will remain low. The United Nation’s most recent forecast, released in 2010, assumes that low-fertility countries will eventually revert to a birthrate of around 2.0. In that scenario, the world population tops out at about 10 billion and stays there. But there’s no reason to believe that that birthrate will behave in that way—no one has every observed an inherent human tendency to have a nice, arithmetically stable 2.1 children per couple. On the contrary, people either tend to have an enormous number of kids (as they did throughout most of human history and still do in the most impoverished, war-torn parts of Africa) or far too few. We know how to dampen excessive population growth—just educate girls. The other problem has proved much more intractable: No one’s figured out how to boost fertility in countries where it has imploded. Singapore has been encouraging parenthood for nearly 30 years, with cash incentives of up to $18,000 per child. Its birthrate? A gasping-for-air 1.2. When Sweden started offering parents generous support, the birthrate soared but then fell back again, and after years of fluctuating, it now stands at 1.9—very high for Europe but still below replacement level.

The reason for the implacability of demographic transition can be expressed in one word: education. One of the first things that countries do when they start to develop is educate their young people, including girls. That dramatically improves the size and quality of the workforce. But it also introduces an opportunity cost for having babies. “Women with more schooling tend to have fewer children,” says William Butz, a senior research scholar at IIASA. ...

 

Why Africa Is Essential to America's Future

US News and World Report: Why Africa Is Essential to America's Future

... So, yes, let us acknowledge these problems in Africa, and let us not be romantic about the opportunities that exist in Africa. Instead, let us be realistic about the opportunities, and the reality is that the opportunities for investment, trade, and economic development are almost limitless on the continent of 54 different nations. There are challenges in some places but extraordinary opportunity in other places.

Many parts of Africa are booming and they present the greatest growth opportunities in the world at this time. Accra is a boom town, emerging into a global city. Ghana itself is growing almost as fast. In the Sahel, next to a Mali is a Burkina Faso, which is becoming a regional hub of development and a trading center between Europe and Africa.

Southern Africa is full of promise and has a far more receptive business climate than in many parts of the world, and the work of the East Africa Community is beginning to open the nations of East Africa as important business destinations for the world.

The promise of Africa is recognized internationally by many nations. While we talk much about the Chinese in Africa, so too are the Indians, Malaysians, Japanese, the Arab nations, Turkey, Israel, the Russians, the South Koreans, the Brazilians, and of course the Europeans. Let us also not forget that when energy investment is taken out of the equation, South Africa is a larger investor in the rest of Africa than is the United States. ...

Chinese Academics Are Openly Warning Of 'Violent Revolution' Without Reform

Business Insider: Chinese Academics Are Openly Warning Of 'Violent Revolution' Without Reform

A group of Chinese intellectuals has called on the government to implement urgent political reforms and respect human rights or risk "violent revolution".

In an open letter 71 top academics warned that growing economic imbalances were fuelling social unrest and an uprising could erupt if reforms were not implemented immediately, Hu Xingdou, one of the signatories, told AFP Monday.

"If urgent systematic reforms needed by Chinese society continue to suffer setbacks and stagnate, then official corruption and social dissatisfaction will boil up to a crisis point," said the letter, posted on the Internet last week.

"China will once again miss the opportunity for peaceful reform, and slip into the turbulence and chaos of violent revolution." ...

... While the latest call for reform steered away from Charter 08's advocacy of western-style democracy, it called on the Communist Party fully to implement the freedoms of speech, press and association that are protected by the constitution but routinely ignored by the authorities and police. ...

Saturday Links

(Like the Kruse Kronicle on Facebook if you want links to daily posts to appear in your Facebook feed.)

1. Several articles I saw this week reflect on data presented in The Pew Forum's The Global Religious Landscape: A Report on the Size and Distribution of the World's Major Religious Groups as of 2010. Here is one interesting chart from the survey showing what percentage of each religion's adherents live in minority religious status in their own country.

2. This is really fascinating. Smithsonian: Why Japan is Obsessed with Kentucky Fried Chicken on Christmas. “Kurisumasu ni wa kentakkii!” (Kentucky for Christmas!)

3. Four Harvard and MIT grads are experimenting with direct aid to the poor. "GiveDirectly, the brainchild of four Harvard and MIT graduate students, is so simple, it's genius. Give poor Kenyan families $1,000 -- and let them do whatever they want with it." Can 4 Economists Build the Most Economically Efficient Charity Ever?

4. From the Guardian, Private healthcare: the lessons from Sweden

"... Despite its reputation as a leftwing utopia, Sweden is now a laboratory for rightwing radicalism. Over the past 15 years a coalition of liberals and conservatives has brought in for-profit free schools in education, has sliced welfare to pay off the deficit and has privatised large parts of the health service.

Their success is envied by the centre right in Britain. Despite predictions of doom, Sweden's economy continues to grow and its pro-business coalition has remained in power since 2006. The last election was the first time since the war that a centre-right government had been re-elected after serving a full term.

As the state has been shrunk, the private sector has moved in. Göran Dahlgren, a former head civil servant at the Swedish department of health and a visiting professor at the University of Liverpool, says that "almost all welfare services are now owned by private equity firms". ..."

5. Scott Annan writes in The Future Of Business Is Morality, And The Future Is Now

"... We have reached a point in our economy where it is becoming increasingly clear that businesses are being measured not just for their profit, but also for their impact. And I'm not just talking about writing a check or funding a charity; I'm referring to business models for which community involvement and inspirational brand building are the profit centers. (Think Warby Parker, TOMS, and startups such as SOMA.) I recently went to a conference where the founders of a startup posited a powerful idea: the future of marketing is philanthropy. But I think the even bigger idea is the future of business is morality. My grandfather saw this early on.

At a time when the moral framework of America appears to be fractured – or at the very least confused – businesses are in the propitious position to espouse cultural standards that can help restore values that our youth can use to build the next generation of positive enterprise. In fact, whether businesses succeed in creating and promoting positive cultures might determine whether they stay in business at all. The future of business is morality, and the future is now.

Whether it's the job of the corporation or not to set the moral tone for society, the expectation is trending towards companies setting the right example for others to follow. With the sharp rise in entrepreneurship, young companies have the opportunity to establish strong cultures early on and share them with their communities. Money must have a moral center, and from greater consciousness in business, greater profit will follow. ..."

6. Scientific American asks, After 40 Years, Has Recycling Lived Up to Its Billing?

7. AOL has a short piece about the rise of small nuclear reactors. The Next Big Thing in Nuclear Power: Going Small

8. Scientific American has a list of The Top 10 Science Stories of 2012.

9. Depression Surpasses Asthma as Top Disability Problem among U.S. and Canadian Teens

"New data show an increasing contribution of mental and behavioral disorders to deterioration in the health-related quality of life among teens in the U.S. and Canada over the past two decades, and increases elsewhere around the globe."

10. Robotic arm controlled by the mind allows paraplegic woman to feed herself

11. Interesting piece on Why We Prefer Masculine Voices (Even in Women).

12. Atlantic Cities looks into The Mystery of Our Declining Mobility.

13. People Are Leaving California In Record Numbers

More people moved out of California in 2011 than moved in, according to the latest report from the U.S. Census Bureau, signaling that the Democrat-run state's economic woes continue to drive residents away.

Most statisticians attribute California's net loss of 100,000 people last year to its high cost of living, increased population density and troubling unemployment rate.

The widening middle class in Mexico is also encouraging some immigrants to remain in that country instead of moving to California.

Texas — home to lower taxes, less regulation and what the Manhattan Institute calls a "labor pool with the right skills at the right price" — is one of the most attractive destinations for companies departing from California, according to the Census Bureau. ...

14. The United States Has Seen A Huge Drop In Executions Since 2000.

"The country reported 85 executions in 2000 but only 43 in 2012, according to a new report released by the Death Penalty Information Center. Plus, far fewer people are being sentenced to death row in the first place. The year 2000 saw 224 new inmates sentenced to death, while 2012 saw only 78, according to the report."

15. Conor Friedersdorf at the Atlantic had a great piece: Why 'If We Can Just Save One Child ...' Is a Bad Argument, referring to President Obama's statement at Newtown, CT. When dealing with complex topics like gun control, we always talk about tradeoffs. For instance, I know how we can save more than 30,000 lives. There were 32,367 traffic fatalities last year. Let's set the speed limit to 5 miles per hour. Nearly all those lives would be saved. Should we do this "if we can save just one more life"? I, like Friedersforf, am not advocating any particular policy. I'm just pointing out the absurdity of making such statements, as politicians often do.

16. The New York Times has an opinion piece by John Dickerson, The Decline of Evangelical America

"I found that the structural supports of evangelicalism are quivering as a result of ground-shaking changes in American culture. Strategies that served evangelicals well just 15 years ago are now self- destructive. The more that evangelicals attempt to correct course, the more they splinter their movement. In coming years we will see the old evangelicalism whimper and wane."

He speaks of an Evangelical "collapse" having happened. That may be a bit premature, but his articulation of trends is right.

17. I saw two interesting posts on the sociology Facebook this week. The New York Times had a piece about announcing bad news on Facebook: On Facebook, Bad With the Good. Mashable reports that Socioeconomic Status Predicts Number of Facebook Friends.

18. Gangnam Style hits one billion views on YouTube. K pop rules!

Study Finds One in 6 Follows No Religion

New York Times: Study Finds One in 6 Follows No Religion

A global study of religious adherence released on Tuesday by the Pew Research Center found that about one of every six people worldwide has no religious affiliation. This makes the “unaffiliated,” as the study calls them, the third-largest group worldwide, with 16 percent of the global population — about equal to Catholics. ...

Source: World Religious Groups

A Simple Graph Showing the American Manufacturing Worker Is Suddenly an Incredible Bargain

Atlantic: Showing the American Manufacturing Worker Is Suddenly an Incredible Bargain

This month's Atlantic magazine predicts that we are on the verge of a U.S.-based manufacturing renaissance, as companies see the advantages to making more goods at home, such as more control over the final product, lower energy costs from moving goods across an ocean, and a falling "wage gap."

Simply put, U.S. factory workers are a much better deal than they were just ten years ago. ...

Alleviating World Poverty: A Progress Report

New Geography: Alleviating World Poverty: A Progress Report

There has been a substantial reduction in both the extreme poverty rate and the number of people living in extreme poverty since the early 1980s, according to information from the World Bank poverty database. The World Bank maintains data on developing world nations, which include both low income and middle income nations. The analysis below summarizes developing world (low and middle income nations) poverty trends from 1981 to the latest available year, 2008 (Table and Figure 1).

The article also includes this graph:

Go to the article for several interesting nuances in how poverty has changed.

A Historical Perspective on Violence and Murder in the United States

The horrific massacre in Newton, Connecticut, is sparking debate about guns and violence, as well it should. As the discussion gets underway, I think it is helpful to understand where we stand in the flow of history as it relates to violence in the United States. Here are a few things to consider.

Below is data from the most recent FBI Uniform Crime Report (UCR). The annual report compiles reported crimes. Its strength is the use of hard data. Its biggest weakness is the absence of unreported crime. The willingness of people to report crime varies by type of crime, and their willingness to report may change over time. Also, law enforcement’s diligence with different types of crime may change over time. Tougher enforcement can lead to fewer incidents of actual crime, even as incidents of reported crime rise. Nevertheless, the UCR is an important measure.

Crimes are grouped into two categories:

• Violent - murder and non-negligent manslaughter, forcible rape, robbery, and aggravated assault.
• Property - burglary, larceny theft, motor vehicle theft, and arson.

Violent crime is at a forty-year low.

A second measure is the National Crime Victimization Survey (NCVS). Twice a year, surveys ask members of households if they have been victims of particular crimes, reported or not. The strength of the survey is that it captures unreported crime. A weakness may be that some crimes, like domestic violence, are underreported.

The NCVS is also broken into two categories:  

• Violent - rape, robbery, and assault.
• Property - burglary, larceny theft, and motor vehicle theft.

(A different methodology was used in 2006, which makes it incomparable with other years. Also, 2011 data has been published and shows an uptick in crime. However, the 2002 and 2010 data in the recent report, used as comparison points, do not match earlier publications, and I have yet to determine why. I chose not to include it here until I better understand.)

An interesting question: Was there truly less crime fifty years ago, or were people simply less likely to report crimes? I doubt there is a definitive answer. Murder is sometimes used as a proxy for overall violence in society. Here is the United States murder rate per 100,000 population:

 

Additionally, there is this estimation of the murder rate over the last 300 years. (Source: The Public Intellectual)

The lowest murder rate ever was 4.6 in 1963. It was 4.7 in 2011.

It can conclusively be said that violence in American society is not spiraling out of control. We are living in one of the least violent eras in American history. But this is not the whole story.

Duke sociologist Kieran Healy published this graph a few months ago. (Source: America Is a Violent Country)

(Go to the source linked above for info about individual countries.)

The 4.7 homicide rate for the United States is a near-record low, but it is still two or three times the rate of other Organization for Economic Co-operation and Development nations. Guns are a big part of this difference. The good news is the precipitous decline in aggravated deaths. The bad news is how much more violence there is in the United States compared to other nations, even at all-time lows.

The final issue is the number of mass shootings. The Associated Press had this article No rise in mass killings, but their impact is huge. The article notes:

… And yet those who study mass shootings say they are not becoming more common.

"There is no pattern, there is no increase," says criminologist James Allen Fox of Boston's Northeastern University, who has been studying the subject since the 1980s, spurred by a rash of mass shootings in post offices.

The random mass shootings that get the most media attention are the rarest, Fox says. Most people who die of bullet wounds knew the identity of their killer. …

… Grant Duwe, a criminologist with the Minnesota Department of Corrections who has written a history of mass murders in America, said that while mass shootings rose between the 1960s and the 1990s, they actually dropped in the 2000s. And mass killings actually reached their peak in 1929, according to his data. He estimates that there were 32 in the 1980s, 42 in the 1990s and 26 in the first decade of the century.

Chances of being killed in a mass shooting, he says, are probably no greater than being struck by lightning.

Still, he understands the public perception - and extensive media coverage - when mass shootings occur in places like malls and schools. "There is this feeling that could have been me. It makes it so much more frightening." …

Here is a graph showing mass public murders (defined as four or more murders in 24 hours) by decade over the past 100 years. (Source: Opinion: The Rise and Decline of Mass Shootings – Grant Duwe)

 
(I realize that does not seem to square with the statement about mass shootings peaking in 1929. I suspect a typo, and "1999" was what was intended.)

This data was reported in March 2010. According to a recent Los Angeles Times article, Deadliest U.S. mass shootings, nine mass shootings in the United States have occurred in the first three years of this decade. That projects out to thirty for this decade. But there have been five mass shootings in the last five months. There clearly has been an uptick in mass shootings over the past year.

On a final note, the Sandy Hook massacre involved young children at school. Over the past twenty years, the number of children 5-18 years old murdered at school has ranged from a low of 14 (school years ending in 2000 and 2001) and a high of 34 (schools years ending 1993 and in 1998.) (Source: Indicators of School Safety: 2011) According to an article in the Guardian, Mass shootings at schools and universities in the US – timeline, over the last fifty years there have been six school mass shootings (including Sandy Hook) that have taken the lives of children 5-18. Three mass shootings occurred at primary schools (Stockton, CA, in 1989; Nickel Mines, PA, 2006; and now Sandy Hook.)

So here are a few observations and comments:

1. The United States has an excessively violent culture.
2. Violence has lessened significantly in recent years. We are not spiraling into chaos.
3. Guns are an important factor in the excessive homicide rates. I don't know why citizens need to own semi-automatic weapons. But more than access to these guns needs to be addressed here.
4. While a case can be made that mass murders have been declining in the long run, their sudden frequency in recent months is alarming (five in five months).
5. Nothing said above should detract from our outrage at the senseless deaths of innocent children and their teachers. But Friday’s shooting should not make us despair that things are spiraling out of control. Friday’s shooting should motivate us to ask anew how we can accelerate our march toward becoming a less violent society.

Update: You may also want to see 6 Timelines That Explain America's Persistent Gun Culture

Saturday Links

(Like the Kruse Kronicle on Facebook if you want links to daily posts to appear in your Facebook feed.)

1. Pray for Egypt Today!

More than 50 million Egyptians are voting today on a constitution that would be a giant step backward for Egypt and much of the Middle East, marginalizing women and religious minorities. A nation that has historically been a voice of moderation, the largest Muslim nation in the region, will likely move toward becoming an Islamist state. Remember to pray for Egypt. (See the Economist's The Founding Brothers)

2. Our prayers are with the victims' families at the Sandy Hook elementary school. Grace and peace to the entire community.

In the wake of the horrific shooting, more debate about gun control will surface. The Atlantic has some useful charts showing Americans' nuanced take on gun rights and control. Do Americans Want More or Less Gun Control? Both, Actually The Christian Science Monitor also has this piece: What gun control laws might US voters support?

3. Traffic deaths in 2011 fewest in six decades

Traffic deaths in the USA continued their historic decline last year, falling to the lowest level since 1949, the government announced Monday.

A total of 32,367 motorists, bicyclists and pedestrians died in 2011, a 1.9% decrease from 2010. Last year’s toll represents a 26% decline from 2005, the National Highway Traffic Safety Administration (NHTSA) said. ...

4. Obesity in Young Is Seen as Falling in Several Cities

... The trend has emerged in big cities like New York and Los Angeles, as well as smaller places like Anchorage, Alaska, and Kearney, Neb. The state of Mississippi has also registered a drop, but only among white students.

“It’s been nothing but bad news for 30 years, so the fact that we have any good news is a big story,” said Dr. Thomas Farley, the health commissioner in New York City, which reported a 5.5 percent decline in the number of obese schoolchildren from 2007 to 2011....

5. In Girl’s Last Hope, Altered Immune Cells Beat Leukemia

....The experiment, in April, used a disabled form of the virus that causes AIDS to reprogram Emma’s immune system genetically to kill cancer cells. ...

... The research is still in its early stages, and many questions remain. The researchers are not entirely sure why the treatment works, or why it sometimes fails. One patient had a remission after being treated only twice, and even then the reaction was so delayed that it took the researchers by surprise. For the patients who had no response whatsoever, the team suspects a flawed batch of T-cells. The child who had a temporary remission apparently relapsed because not all of her leukemic cells had the marker that was targeted by the altered T-cells. ...

6. The CDC says Chlamydia, gonorrhea cases increasing

....In 2011, 1.4 million chlamydia infections were reported to the CDC. The rate of cases per 100,000 people increased 8%, to 457.6 in 2011 from 423.6 in 2010.

The CDC reported 321,849 gonorrhea infections. The rate increased 4% to 104.2 cases per 100,000 in 2011 from 100.2 in 2010. Like chlamydia, gonorrhea can lead to pelvic inflammatory disease, a major cause of infertility in women.

Last year, 13,970 primary and secondary syphilis cases were reported. The rate of 4.5 cases per 100,000 was unchanged from 2010. ...

7. You may be bilingual, but can you write in two languages, one with each hand, at the same time?!

8. Washington State Senate: Republicans Claim Majority After Democrats Defect. That makes two states where Democrats have won majorities in the state Senate and then a small number of Democrats decide to caucus with Republicans, giving Republicans the majority. The same thing happened in the New York Senate last week.

9. One-party dominance grows in states

10. Kevin Drum of Mother Jones speculates on why liberals have more exaggerated perceptions of political differences. We Are More Alike Than We Think

11. A surprising "right to work" bill was signed into law in Michigan. That has spurred much debate about unions and the right to work. Michael Kinsley wrote a thoughtful piece opposing RTW, The Liberal Case Against Right-to-Work Laws. David Henderson has a piece in support of RTW, The Economics of "Right to Work".

12. Slate has a piece about The Great Schism in the Environmental Movement. Keith Kloor opines on the division between modernist environmentalists (or eco-pragmatists) and conservation traditionalists.

... Modernist greens don't dispute the ecological tumult associated with the Anthropocene. But this is the world as it is, they say, so we might as well reconcile the needs of people with the needs of nature. To this end, Kareiva advises conservationists to craft "a new vision of a planet in which nature—forests, wetlands, diverse species, and other ancient ecosystems—exists amid a wide variety of modern, human landscapes."

This shift in thinking is already under way. For example, ecologists increasingly appreciate (and study) the diversity of species and importance of ecosystem services in cities, giving rise to the discipline of urban ecology. That was unthinkable at the dawn of the modern environmental movement 50 years ago, when greens loathed cities as the antithesis of wilderness. ...

13. One of the creepiest Twilight Zone episodes I remember from childhood was when this woman ends up trapped in a department store at night. The mannequins begin calling to her. She discovers she is actually a mannequin who has overstayed her time out in the world, and it is time for the next mannequin to spend some time outside the store. This story confirms my worst nightmares: In Some Stores, the Mannequins Are Watching You

14. Carpe Diem: World manufacturing output, 2011

15. One of the biggest concerns about fracking technology is the enormous amount of water it uses. A company has figured out how to recycle water so that far less water is used in fracking. Solving fracking's biggest problem

16. Scientific American has an interesting article on the potential impact of 3-D Printing: Why 3-D Printing Matters for "Made in U.S.A."

... 3D printing represents the latest version of what industry experts call "additive manufacturing" — a way to turn practically any computer designs into real objects by building them up layer-by-layer using plastics, metals or other materials. The technology could end up affecting every major industry — aerospace, defense, medicine, transportation, food, fashion — and have an even bigger impact on U.S. manufacturing than the robot revolution. ...

17. Popular Mechanics is celebrating its 110th anniversary. In celebration, they are publishing 110 Predictions For the Next 110 Years.

18. Scot McKnight has a great post reflecting on the (false, IMO) equation of progressive with prophetic: The Prophetic is the Progressive

19. Dirk Kurbjuweit offers some interesting insights into Why Germany Can't Shed Its Troubling Past.

20. Michael Cheshire has a great piece in Leadership Journal on "What I learned about grace and redemption through my friendship with a Christian pariah." Going To Hell with Ted Haggard

".... A while back I was having a business lunch at a sports bar in the Denver area with a close atheist friend. He's a great guy and a very deep thinker. During lunch, he pointed at the large TV screen on the wall. It was set to a channel recapping Ted's fall. He pointed his finger at the HD and said, "That is the reason I will not become a Christian. Many of the things you say make sense, Mike, but that's what keeps me away."

It was well after the story had died down, so I had to study the screen to see what my friend was talking about. I assumed he was referring to Ted's hypocrisy. "Hey man, not all of us do things like that," I responded. He laughed and said, "Michael, you just proved my point. See, that guy said sorry a long time ago. Even his wife and kids stayed and forgave him, but all you Christians still seem to hate him. You guys can't forgive him and let him back into your good graces. Every time you talk to me about God, you explain that he will take me as I am. You say he forgives all my failures and will restore my hope, and as long as I stay outside the church, you say God wants to forgive me. But that guy failed while he was one of you, and most of you are still vicious to him." Then he uttered words that left me reeling: "You Christians eat your own. Always have. Always will."

He was running late for a meeting and had to take off. I, however, could barely move. I studied the TV and read the caption as a well-known religious leader kept shoveling dirt on a man who had admitted he was unclean. And at that moment, my heart started to change. I began to distance myself from my previously harsh statements and tried to understand what Ted and his family must have been through. When I brought up the topic to other men and women I love and respect, the very mention of Haggard's name made our conversations toxic. Their reactions were visceral."

21. Leonardo Bonucci got a yellow card for faking a collision during a soccer game. It should have been a red card. No one deserves to be a professional soccer player with acting skills this bad!

Global Trends 2030

AP: Report: Asian economies will surpass US, Europe

AP has a story summarizing Global Trends 2030, a report put out by the U.S. Intelligence community.

... The study said that in a best-case scenario, Americans, together with nearly two-thirds of the world's population, will be middle class, mostly living in cities, connected by advanced technology, protected by advanced health care and linked by countries that work together, perhaps with the United States and China cooperating to lead the way.

Violent acts of terrorism will also be less frequent as the U.S. drawdown in troops from Iraq and Afghanistan robs extremist ideologies of a rallying cry to spur attacks. But that will likely be replaced by acts like cyber-terrorism, wreaking havoc on an economy with a keystroke, the study's authors say.

In countries where there are declining birth rates and an aging population like the U.S., economic growth may slow.

"Aging countries will face an uphill battle in maintaining living standards," Kojm said. "So too will China, because its median age will be higher than the U.S. by 2030."

The rising populations of disenfranchised youth in places like Nigeria and Pakistan may lead to conflict over water and food, with "nearly half of the world's population ... experiencing severe water stress," the report said. Africa and the Middle East will be most at risk, but China and India are also vulnerable.

That instability could lead to conflict and contribute to global economic collapse, especially if combined with rapid climate change that could make it harder for governments to feed global populations, the authors warn.

That's the grimmest among the "Potential Worlds" the report sketches for 2030. Under the heading "Stalled Engines," in the "most plausible worst-case scenario, the risks of interstate conflict increase," the report said. "The U.S. draws inward and globalization stalls." ...

Here is the overview from the report:

Over the next two decades, the relative power of major international actors will shift markedly.  Around 2030,  after nearly a century as the preeminent global economic power, the United States will be surpassed by China as the world’s largest economy. With its trade in goods expected to nearly double that of the U.S. and Europe, China’s international economic clout will reach new heights.  By 2030, India will become the world’s most populous country and third-largest economy, while Brazil’s economy will rank fourth in size.  India and Brazil will join China at the high table of 21^st century international politics alongside the United States, even as the relative weight of Russia and Japan diminishes.  The European economy will remain in the top tier, but it is not clear whether Europe will be able to act with common purpose to leverage this source of strength.

With its enhanced economic base, Beijing could rival Washington in overall military spending, even as a slowing Chinese economy and internal political conflict complicate China’s ability to lead internationally.  The United States will remain primus inter pares in light of its continued advantages across the full spectrum of national power and the legacy benefits of its leadership.  It will, however, be operating in a post-Western world in which the bulk of global economic power is held by countries whose per capita incomes are far below those of the traditional great powers.  This reality will leave China, India, Brazil, and other players focused on internal development and domestic challenges, torn between their desire to be global powers and their interest in free-riding on Western management of the interna­tional system.

How will the rise of the rest impact the international system?  The National Intelligence Council’s draft Global Trends 2030: Alternative Worlds maps out three broad scenarios:

Reverse Engines. Under this scenario, the international system would consist of several powerful countries — but no single state or bloc of states would have the political or economic leverage to drive the international community toward collective action. Such a world, characterized by a global vacuum of power, assumes that the United States will no longer be willing or capable of sustaining the predominant leadership role it has assumed since 1945.   With no other country able to step in to replace the U.S. as a global leader, the resulting diver­gence of interests would lead to fragmentation and the inability of great powers to work cooperatively to solve global issues.  Mercantilism and protectionism could lead economic globalization to go into reverse, constraining technological breakthroughs required to manage scarce global resources.  Conflict and disorder would follow.

Great Power Convergence.  An alternative scenario is what the NIC calls a “fusion” world, in which major powers work together to adopt and enforce a set of globally accepted rules and norms. As U.S. predominance over the international system recedes, other emerging powers would step in to assume greater responsibility for the management of international affairs commensurate with their swelling economic might.  Emerging powers emerge as full stakeholders in a global order that is transformed by power shifts but remains liberal and pluralistic.  Great power concert (perhaps enabled by democratization in China) to meet global challenges increases the stability of the international system even as power is diffused within it.  U.S. resilience enables it to create enduring partnerships with rising powers to sustain the basis of liberal order.   Technological advances create new possibilities for joint management of key global challenges, rewarding positive-sum behavior by the great powers.

Multipolar Divergence—U.S. Primacy.  A third scenario, one the NIC calls “fragmentation,” involves a multipolar system characterized by a divergence of views among great powers that challenges global governance.  The United States would continue to maintain disproportionate global influence and leverage that influence to address global challenges by working through coalitions of like-minded states.  A multispeed global economy accelerates the diffusion of power but an alternative coalition to the West does not form, with developing giants consumed by their domestic challenges – even as the global middle class explodes in ways that transform politics within the rising powers.  With inclusive global institutions effectively stalemated, the United States instead turns to its old and new allies in Europe and Asia, who would continue to see Washington as their partner of choice in advancing the norms and rules of a liberal order.  The risk of conflict increases with the continued rise of new powers like China and the rapid pace of technological change.

One key conclusion of the NIC study is that the future role of the United States in the international system is a decisive variable in determining what kind of “alternative world” will exist in 2030.  The choices U.S. leaders make – about how to marshal (and preserve) domestic resources, how vigorously to assert U.S. military and economic leadership overseas, and how much to invest in alliances old and new – will be central to determining which of the above pathways the international system will follow over the coming 20 years.  To a certain extent, the answer to the question of how the “rise of the rest” impacts the U.S.-led international system is that it is not up to them… so much as it is up to us.

Praying for Egypt

Last year, I had the privilege of visiting the leaders of the Synod of Syria and Lebanon and the Synod of the Nile (Egypt) a year ago, partner denominations to the Presbyterian Church USA. I heard firsthand about the struggles of Christians in these countries. It was apparent that a central component to any lasting peace in the region is for moderate Muslims, Christians, and religious minorities to form a healthy civil society. Dedicated Christians from our partner denominations in these regions have worked diligently toward that end.

We are hearing much about the violence in Syria and with good reason. The immediacy of the suffering is tragic. But I sense Egypt may be the bigger story in the long run. There are more than eighty million Egyptians, dwarfing the size of other nations in the region. There is also a history of stronger, more tolerant, societal institutions. If Egypt is transformed into an Islamist state, then I think the implications will be tragic and far-reaching for much of the rest of the region.

As I recall, about 90% of Egyptians are Muslim. About 9% are Coptic Orthodox Christians. About 1% are Protestant. Moderate Muslims and Christians alike were part of the protests that ousted Mubarak. Moderate Muslims and Christians are leading the protests against Morsi’s power grab and against the troubling new constitution that is being proposed.

While in Egypt, I had the privilege of dining in the home of a young family who also acted as our tour guides for a day. The wife and mother of this family have been posting articles and pictures relating to the protests on Facebook, like this picture of brave women taking the front row of a march towards the presidential palace carrying their own shrouds (coffin cloth) in their arms.

And this picture is of a Christian doctor treating an injured member of the Muslim Brotherhood on the grounds of a church in Cairo.

Three hours ago, my friend posted that the referendum on the constitution has now been delayed until the 12^th. The pressure has been to pass this constitution as quickly as possible, and there is some hope this delay may lead to good things.

Let us all remember to keep Egypt in our prayers. Let us pray that moderate Muslims and Christians will be able to influence events toward creating a healthy civil society, delivering Egypt from the bondage of extremist elements, even if we continue to pray for an end to the horrific suffering in Syria.

The Global Reality of Reducing CO2 from Coal.

The Atlantic: Why the U.S. Can't Stop Climate Change Alone (In 2 Graphs)

In recent months, I've linked a graph that shows that CO2 emissions from energy production have dropped to 1990 levels in the United States, mostly because of natural gas replacing coal power. That's the good news if you want to reduce CO2. But here is the challenge presented in the two graphs by Jordan Wiessmann.

Finally, Globalization May Help American Workers

U.S. News: Finally, Globalization May Help American Workers

It's a stunning thought: The United States, long dependent on foreign oil, may actually achieve energy independence over the next two decades. And by 2030 it could become a net exporter of oil. ...

... That intriguing possibility has generated most of the headlines, but the IEA report draws attention to another trend that's just as important: A possible reversal of globalization trends that until now have mostly caused a net outflow of jobs from the United States to lower-cost nations, such as China and India. ...

... Some economists have been predicting a second phase of globalization, in which foreign labor costs rise and it becomes more cost-effective to produce things in developed nations such as the United States. And now, the booming U.S. energy sector may give that trend a boost.

The IEA report points out that abundant energy in the United States will have at least two secondary effects: It will make the U.S. an energy supplier to the rest of the world. And it will lower costs for U.S. manufacturers, since energy is a key input for factories who run assembly lines.

Energy is already a growing industry that supports perhaps 10 million U.S. jobs, and while the growth of some fields, such as green energy, may sometimes be overstated, it's clear that energy jobs tend to be high-paying ones that can help replace some of the blue-collar jobs that have been lost. ...

... ower energy costs will also be a growing competitive advantage for U.S. manufacturers. Some foreign manufacturers—especially those based in Europe—already find it cheaper to build certain things in America, especially products that are sold here. If the gap in energy costs grows, it will only lure more firms across the pond.

Some economists believe a "reshoring" trend is already underway....

China leaders consider internal democratic reform

Reuters: China leaders consider internal democratic reform

(Reuters) - China's outgoing leader and his likely successor are pushing the ruling Communist Party to adopt a more democratic process this month for choosing a new leadership, sources said, in an attempt to boost its flagging legitimacy in the eyes of the public.

The extent of the reform would be unprecedented in communist China where elections for the highest tiers of the party, held every five years, have been mainly exercises in rubber-stamping candidates already agreed upon by party power-brokers.

The Communist Party, which has held unbroken power since 1949, is struggling to maintain its popular legitimacy in the face of rising inequality, corruption and environmental degradation, even as the economy continues to bound ahead.

President Hu Jintao and his heir, Xi Jinping, have proposed that the party's 18th Congress, which opens on Thursday, should hold elections for the elite Politburo where for the first time there would be more candidates than available seats, said three sources with ties to the party leadership. ...

One theory of economic development is that as long as the masses are poor, there is little incentive to develop sound economic and governmental institutions. As prosperity begins to emerge, those who have benefited have more to lose through arbitrary and ineffective institutions. The presence of a rising middle class creates hope among the poor that they too can prosper. Citizens begin to press for better institutions and greater accountability. Better institutions and accountability lead to more prosperity. And on the cycle goes.

Is that happening here? Let's hope so.

Higher costs forcing firms to relocate (from China)

China Daily: Higher costs forcing firms to relocate

Jobs going to other countries in China's 'great industry transfer'

Rising wages and shrinking export demand are forcing manufacturers to relocate to neighboring Southeast Asian nations and many that remain are seriously considering moving, a foreign trade official from the Ministry of Commerce said.

The official, who declined to be named, said that "nearly one-third of Chinese manufacturers of textiles, garments, shoes and hats" are now working "under growing pressure" and have moved all, or part, of their production outside China in what he called the great industry transfer.

Favored destinations are usually members of the Association of Southeast Asian Nations, especially Vietnam, Indonesia and Malaysia.

And in all likelihood, "the trend will continue" with more traditional labor-intensive manufacturers transferring production, he told China Daily. ...

... China's labor costs have surged recently by 15 to 20 percent annually, squeezing margins and driving some companies to bankruptcy.

According to the Ministry of Human Resources and Social Security, from January to June the minimum wage was raised, on average, by 20 percent in 16 provinces.

The minimum wage in Shenzhen now stands at 1,500 yuan ($238) per month, setting the highest standard for the whole Chinese mainland.

Many developing countries in Southeast Asia have lower labor costs.

The monthly wage for manufacturing jobs in Vietnam was, on average, 600 yuan in 2011, equivalent to the level of 10 years ago in Dongguan, an industrial town in South China's Pearl River Delta....

...But lower costs in other countries could soon change, some said.

"The advantage (of labor and production costs) in Southeast Asian countries will only last for a few years," said Chen Jian, a general manager of a garment company headquartered in Foshan, on the Pearl River Delta.

"The trend is just like what happened some 10 years ago when many manufacturing industries in Hong Kong and Taiwan moved to the Pearl River Delta to chase cheap labor. But now you can see how much our labor costs have gone up."

Reverse brain drain: Economic shifts lure migrants home

Christian Science Monitor: Reverse brain drain: Economic shifts lure migrants home

The tide of brain drain – from developing countries to industrialized nations – has turned. Human capital is returning home to Asia, Latin America, Eastern Europe, and Africa, while some European professionals squeezed by the recession, turn toward developing countries for advancement.

"Brain drain" – the flow of intellect and skilled labor from poor to rich countries – has been so constant in modern times that the Nigerian cabdriver who was educated as a doctor back home is just as much a fixture of New York City's landscape as a fledgling Broadway actress or Wall Street banker.

Academics and college-educated engineers from Brazil to China to Poland have long set off for the world's more developed nations for better opportunities, sometimes in their own fields, often behind steering wheels or in fast-food or restaurant kitchens.

But now that tide is turning; immigrants no longer always see developed countries as a better place to be. ...

... Emerging economies not only are faring better than most of the developed world in the current recession, they also continue to grow, drawing back their expatriates and, in some cases, even luring new high-skilled citizens of the US and Europe.

It is the "democratization of talent," says Demetrios Papademetriou, president of the nonprofit Migration Policy Institute in Washington, D.C. "Everyone went to four or five English-speaking countries before, [and all other nations] got the third-rung talent. Today, knowledge is no longer monopolized anywhere." ...

... Benefits are not just measured in the individuals' skills or number of jobs generated but also in a host of ancillary benefits.

"When you've lived in an OECD country and you see how things work there, I would think you become less tolerant of a corruption, of things that don't work, inefficiency, people sitting on their thumbs," says Georges Lemaitre, an expert on workforce migration at the Organization for Economic Cooperation and Development. "You want to see your own country with much more available services and with the efficiency that you are used to."

Such benefits, he adds, could become a global pattern in coming years, both from new migration and reverse migration.

In the meantime, those countries losing their allure could also lose their competitive edge. ...

Abhijit Banerjee: 'The poor, probably rightly, see that their chances of getting somewhere different are minimal'

Guardian: Abhijit Banerjee: 'The poor, probably rightly, see that their chances of getting somewhere different are minimal'

The author of Poor Economics on why aid that assumes the poor will do the right thing is misguided – and why political corruption does not necessarily mean economic stagnation.

... Until Poor Economics appeared last year, the debate about aid had been broadly polarised into two positions. On the left was Jeffrey Sachs, arguing that the single biggest factor keeping poor people poor is poverty. If foreign aid can lift them out of the poverty trap long enough to free them from the disease, ignorance and debt that thwart their potential, then pretty soon they will be able to solve their own problems for themselves. On the right, William Easterly argued that the real problem isn't a poverty trap but aid itself, which creates a dependency culture that keeps the poor poor, and distorts their only real roadmap to prosperity – the free market.

As Banerjee saw it, both positions owed more to polemic and conjecture than empirical evidence. Aid budgets run into billions, yet very little work had been done to analyse their outcomes. He and Duflo, both economists at the Massachusetts Institute of Technology, thought a better approach would be to appropriate the methodology of the pharmaceutical industry, and subject different types of aid to randomised controlled trials. In 2003 they established a Poverty Action Lab, and by 2010 its researchers had conducted more than 240 experiments in 40 countries, in a Herculean attempt to find out what actually works.

The results are fascinating. Recipients of free or subsidised mosquito nets, say, or water chlorination tablets, or schooling, or contraception, often prove bafflingly disinclined to use them. Such apparent indifference to life-saving gifts seems puzzling to the point of perverse. Even microcredit, widely lauded as the panacea to world poverty, turns out to be less revolutionary than previously thought. But Poor Economics doesn't vindicate Easterly, because the authors discovered that tiny adjustments to the delivery mechanism of aid can radically transform its efficacy. For example, offering Kenyan farmers half-price fertiliser at sowing time didn't work, because they hadn't saved enough money from harvest time to buy it. But selling farmers a full-price voucher directly after the harvest, when they could afford it, to be exchanged for fertiliser at sowing time when they needed it, increased fertiliser use by 50%. When aid is carefully designed to navigate the specific socio-cultural landscape of its recipients' lives, it begins to deliver the sort of results Sachs claims.

"This book will not tell you whether aid is good or bad," its authors write, "but it will say whether particular instances of aid did some good or not." Their overwhelming message is that there is no Big Idea or golden bullet, so we should stop thinking about "Aid", and start thinking about "aid". Poor Economics makes this case so persuasively that I can't honestly see how anyone could disagree after reading it. The surprise for me was the book's striking parallels between poverty in the developing world and in the UK, and its relevance to our attempts to help the poor in Hartlepool or Glasgow. When studied closely, it becomes clear that people who live on less than a dollar a day are not uniquely mysterious, but subject to the very same psychological and behavioural patterns as the rest of us. ...

 

I've been working my way through the book. It is a fascinating read, and there is much to digest. This article does a great job of summarizing the central points of the book.

Hits, and Misses, in a War on Bribery

New York Times: Hits, and Misses, in a War on Bribery

Until recently, federal prosecutors had won settlements in nearly every battle involving charges of foreign bribery by multinational corporations and their executives. But in late February — indeed, the very week that Mr. Stanley was sentenced — the Justice Department had an embarrassing setback: it abruptly withdrew the biggest case ever brought against individuals under the Foreign Corrupt Practices Act.

It was an extraordinary turn of events. The F.B.I. had recorded 800 hours of video and audio as part of a sting operation involving supposed arms contracts in Africa. Twenty-two executives had been arrested.

Then the whole case fell apart. In a withering appraisal, the federal judge in the case, Richard J. Leon, called the government’s effort “a long and sad chapter in the annals of white-collar criminal enforcement.” Its approach to the law, Judge Leon said, had been “very, very aggressive.”

THE development opened the door for critics who assert that federal authorities have overstepped in trying to fight corruption overseas. They say that the crackdown, which began in earnest three years ago, has made it harder for companies to win legitimate business and that it has needlessly instilled fear among executives. Many companies would rather make any charges brought under the act go away with a quick settlement than try to fight them in court.

“We are seeing companies getting scooped up in aggressive enforcement actions and investigations,” said Lisa A. Rickard, president of the United States Chamber of Commerce’s Institute for Legal Reform, which is pushing to modify the law. “A culture of overzealousness has grabbed the Justice Department.”

“The last time I checked,” Ms. Rickard added, “we were not living in a police state.”

Such heated criticism aside, federal authorities say they are unbowed.

Lanny A. Breuer, the assistant United States attorney general who has stepped up enforcement actions under the act, said he saw no reason to change course. In fact, he is expanding his staff — and his range of potential targets. ...

... AS they pursue their overall campaign, federal authorities have their work cut out for them. As business has gone global, so has graft, particularly as companies in rich nations push into poorer regions. The World Bank estimates that $1 trillion in bribes is paid annually to government officials. In Africa alone, $148 billion is siphoned off annually, according to Transparency International, a global nonprofit group that tracks corruption. ...

... Leading the efforts to modernize the corruption act — or weaken it, in the eyes of the government — is the Chamber of Commerce. The group, in Washington, has been in discussions with the Justice Department and the Securities and Exchange Commission about new guidelines on enforcement. That guidance, expected later this spring, would give corporations a better notion of what they need to do to stay on the right side of the law.

Corporate America clearly wants its views heard.

“You are dealing with criminal liability, and that strikes fear and terror through the heart of the corporate suite,” said Ms. Rickard at the chamber.

In a letter signed by more than 30 trade associations, the chamber asks that the guidance allow companies with strong compliance programs to use that as a defense against liability. It also asks that the definition of a “foreign official” be more limited and that companies not be held accountable for the past wrongdoing of foreign companies they may purchase, among other provisions. ...

... Mr. Breuer and other government lawyers have spoken out against the provisions. They have been joined by 33 human rights groups, including Amnesty International, Oxfam America and Transparency International. ...

Dire Poverty Falls Despite Global Slump, Report Finds

New York Times: Dire Poverty Falls Despite Global Slump, Report Finds

WASHINGTON — A World Bank report shows a broad reduction in extreme poverty — and indicates that the global recession, contrary to economists’ expectations, did not increase poverty in the developing world.

The report shows that for the first time the proportion of people living in extreme poverty — on less than $1.25 a day — fell in every developing region from 2005 to 2008. And the biggest recession since the Great Depression seems not to have thrown that trend off course, preliminary data from 2010 indicate.

The progress is so drastic that the world has met the United Nations’ Millennium Development Goals to cut extreme poverty in half five years before its 2015 deadline. ...

... The report contained a raft of statistics showing broad declines in poverty throughout the 2000s. For the first time since the World Bank started keeping statistics in 1981, poverty fell in every region of the world on a three-year timeframe. In sub-Saharan Africa, the proportion of the population living in extreme poverty fell below 50 percent for the first time. And between 1981 and 2008, poverty fell to just less than a quarter of the developing world’s population from more than half .

Much of the story was about China, which moved nearly 700 million people out of poverty between 1981 and 2008, with the proportion of its population living in extreme poverty falling to 13 percent from 84 percent during that period. The country’s annual pace of economic growth never dipped below 9 percent, even in 2009, when the world’s economy contracted.

But perhaps the most surprising success story is sub-Saharan Africa, where the proportion of people living in extreme poverty actually increased through the 1990s, before declining in the 2000s.

“People used to worry, ‘Is Africa going to be poor forever?’ ” said Mr. Kenny of the Center for Global Development. “Well, it doesn’t really look like it, does it?”

Extreme poverty in the Middle East and North Africa fell to just 2.7 percent in 2008 from 4.2 percent in 2002. And extreme poverty in sub-Saharan Africa fell to 47.5 percent in 2008 from 55.7 percent in 2002. ...

Is a Woman in Brazil Better Off than a Woman in the U.S.?

Time: Is a Woman in Brazil Better Off than a Woman in the U.S.?

Women overseas are reaching new heights professionally. Here's what we can learn from our emerging market counterpart.

The mention of women in emerging economies often evokes a picture of oppressed and poverty-stricken victims, relegated to the sidelines of male-dominated cultures. That’s the usual narrative, exemplified by the best-selling Half the Sky by Nicholas Kristof and Sheryl Wu Dunn. Yes, these problems are real and of critical importance. But educated women in Brazil, Russia, India and China — the BRIC economies which represent the four largest emerging markets — and the United Arab Emirates, are telling a different tale: one of agency and power.

Just as in the U.S. — where female college graduates now outnumber men — BRIC women are flooding into universities and graduate schools. They represent 65% of college graduates in the UAE, 60% in Brazil and 57% in Russia. These figures represent more than just a tiny elite: Between 15 and 25% of young women in the BRICs/UAE are now college-educated — a substantial number. And they’re not just earning degrees: They are bursting with the desire to use them.

Highly educated women the world over are ambitious, but ambition and aspiration among BRIC/UAE women is off the charts. New data from the Center for Work-Life Policy show that 85% of female college graduates in India and 92% in the UAE consider themselves very ambitious, compared to a paltry 36% in the U.S. In India, 86% of college-educated women are shooting for the top job, closely followed by their counterparts in Brazil (80%) and China (76%).

And turbo-charged ambition is paying off. In Brazil, 14% of the CEOs of large companies are female; in India, the figure is 11%. Meanwhile, the number of women who head up Fortune 500 corporations in the United States and FTSE 100 firms in the United Kingdom is stuck at less than 5%. What’s behind these startling numbers? Our study — which is based on rich, new data — describes opportunities and obstacles, which are surprisingly different from those in the West. ...

Cargill and Economic Development for the Poor

Fortune: Cargill: Inside the quiet giant that rules the food business

Here is just one example of a large "evil" multinational corporation's positive impact on economic development among the poor. There are many other stories similar to these that are rarely seen in the press.

... Seventy percent of the world's cocoa grows in West Africa, and most of that in one country, Ivory Coast. Since 1999, Ivory Coast has been through a bloody succession of military coups, rigged elections, and civil wars. "We were concerned about running into a ceiling on production there," says Harold Poelma, managing director of Cargill Cocoa. So Cargill began looking for other options. The solution that it came up with perfectly illustrates the company's global reach and long view.

Cocoa trees look like something Dr. Seuss would draw, with clusters of hard-shelled pods, as big and colorful as Halloween gourds, sprouting directly from the trunk and limbs. They don't grow just anyplace. They need shade, warmth, and humidity, as well as deep, rich soil -- conditions generally found within a band 20 degrees north and south of the equator. That band passes through Vietnam.

Cargill was one of the first U.S. multinationals to return to Vietnam when President Bill Clinton normalized relations with the government in Hanoi in 1995. Today it is the country's largest domestic producer of livestock feed and a central player in Vietnam's fast-moving shift from a state-controlled agricultural economy to one where small farmers are encouraged to work private plots for private gain. The effect of that shift has been transformative. Not long ago, Vietnam was importing a million tons of rice a year. Last year it became the world's second leading rice exporter. "Same people, same land," Vietnam's director of crop production, Dr. Nguyen Tri Ngoc, told me in his Hanoi office, speaking through a translator. "Before, farmers were not really farmers. They were workers in the fields, and they worked under the supervision of the government." And the difference now? "Free markets!" he says in English.

In 2004, Cargill launched a public-private partnership with one of its biggest customers, chocolate giant Mars, and the governments of Vietnam and the Netherlands. The aim: to create something that had never before existed in Vietnam, a cocoa-export economy.

First, Cargill had to convince a front line of growers to switch to cocoa from well-established crops like coffee, black pepper, and cashews. Two years before the first harvest (it takes at least that long for cocoa seedlings to produce fruit), before there was anything to buy, Cargill opened two fully staffed cocoa buying stations on major roads, in Ben Tre and Dak Lak provinces. It made an early commitment to transparency, posting on the Cargill website and offering by text message both the daily international price on the London market and what Cargill is paying locally; growers can lock their price for three weeks, the time it takes to ferment and dry the beans after harvest. Cargill also built a network of more than 100 demonstration farms, where curious growers can learn from their neighbors. And in February 2011 the company took delivery of the first Vietnamese cocoa beans to carry UTZ certification -- an independent sustainability program through which growers can earn an extra $100 per ton.

This year Vietnamese farmers will produce about 2,500 metric tons of cocoa, 70% of which will go to Cargill. That's a tiny sliver of the 3.4 million-ton global market, but the growth trend is impressive: 40,000 acres under cultivation in 2010, compared with 1,200 in 2003, and already 32,000 active growers in 12 provinces. Poelma sees the potential for 100,000 tons by 2020. Instead of shipping all of that to Cargill's North Sea Canal processing plant in Wormer, the Netherlands -- a voyage that takes 24 days -- Cargill hopes to have a Cargill factory in Vietnam by then, processing cocoa liquor, cocoa butter, and cocoa powder for export to growing markets in China and India.

None of that happens without the eager participation of thousands of small growers. One I met last summer was Trinh Van Thanh, a smooth-cheeked 43-year-old with a wife, three daughters, and roughly four acres of land in Baria-Vungtau province, a two-hour drive southeast from Ho Chi Minh City. Five years ago Thanh was growing pepper and coffee and raising pigs, and he was struggling. His pepper trees were afflicted by blight. The yield from his mature coffee trees was declining year by year. He says he was $5,000 in debt.

Thanh planted his first cocoa saplings, as Vietnamese farmers often do, in the shade of his coffee trees. He enrolled in an agricultural extension program in Ho Chi Minh City, where he learned how to build a specialized slow-drip irrigation system based on technology invented on an Israeli kibbutz. When the first crop came in, Thanh made the ambitious choice to ferment and dry the cocoa beans himself. Ultimately, he built more fermentation boxes and drying tables than he needed for his own crop, which meant he could perform those value-adding services for other growers. Soon he wasn't just farming, he was running a collection station. Next he planted a cocoa-tree nursery. Then he launched an irrigation consulting business. (The man gets the concept of a virtuous cycle.) Thanh still sells all his beans to Cargill but maybe not for long. What he really wants to learn how to do next, he told me, is make and sell chocolate.

Thanh's success so far almost defies belief. He says his mini cocoa conglomerate will gross more than $850,000 this year. And if his daughter, who's about to graduate from high school, wants to go to college in America -- and he hopes that she will -- he can easily afford it.

Later in Hanoi, I tell Ngoc all about my visit to Baria-Vungtau province. When does a farmer like Thanh, I ask him, become too much of a capitalist for the Socialist Republic of Vietnam? Ngoc beams. "No limit!" he says. Again in English. ...