Typo report: the plot below "Here’s relative GDP growth (ie as a percent of starting point) since 1950:" is a second copy of the preceding plot (absolute GDP growth since 1950).
> Relocating a lot of US factories to China is surely good for Chinese factory workers and bad for US factory workers. Then once China becomes less attractive, those same factories relocate to Vietnam or Ethiopia or somewhere.
But is it bad for us workers in general, it surely makes cars a lot cheaper in general.
True. The only way US manufacturing workers could truly compete with say, Vietnam, would be to accept third world wages. A blunt fact that was glossed over when the US went all in on “globalization is good.”
Presumably we just give them better jobs and/or better education. The problem, it seems, is that we've been bad at helping people transition from factory jobs to more skilled labor/knowledge work.
I agree that it has been disruptive, but any change will be at least a little disruptive. I believe other countries have done very well transitioning, and I don't think the idea of transitioning from a manufacturing economy to a knowledge economy is bad. I would probably speculate that it is the decentralized nature of the US that has caused road bumps. The federal government controls tariffs but the states must deal with those affected.
Sure, but if you help everyone who has a low-wage job transition to a high-wage job, the high-wages jobs will stop being high wage. If everyone currently unemployed in the US (9.5 million) "learned to code," then the wages for coding would plummet.
If you teached people more productive professions, they would produce more. The size of the pie (the total amount of production) isn't fixed: it would grow. Sure, if you channelled too many people into one profession (such as programming), wages in that profession would decrease; however, the (price-adjusted) wages in other professions would increase, as software products (and products made using software) would become cheaper.
just give them free money for all I care, i much rather pay that cost in taxes than in tariffs. At least now these guys have the time to persue what they like too, and we get to lift a billion chinese people out of poverty.
I'd like a reference point on how historically crappy the "lower wage jobs trying to make ends meet" are compared to a point in history that is not 1945 - 1965.
I get it. There were 20 years where the US was the only developed country in the world still standing and had just pumped out incredible amounts of industrial infrastructure. Life was amazing for your average Joe.
Can you benchmark a present day retail worker against the equivalent (pick any decade that's not immediately post WWII) American?
I'll start with what the present day retail worker has access to:
- The best emergency health care in world history. We may attempt to bankrupt you , but we will treat your late stage rare cancer like you're British royalty.
- Access to almost all movies, television, books, and music in the common English (and much of the world) cannon for roughly 1 day of work a month (including the cost of your internet).
- A wider arrange of food products than has been available to anyone in history. Yes there is a chance you live in a food desert and have to travel a bit farther to get this bounty, but it's still available to you.
- Access to low cost travel. For all of human history the idea of a lower or lower middle class person being able to travel to another country annually or every few years was unheard of. It is now common place.
- Ability to communicate with friends and family no matter where they are, live and in video, daily at almost no cost.
- Your "lower wage crap job" involves standing around talking to be people, moving some light objects, and being bored. As opposed to.... digging in a coal mine, working in a field, completing hours of intense repetitive activities. Overall, your # of working hours has actually gone down (Again depending on the exact decade you're pointing to, but for much of industrialization the lower classes worked far more hours than most do today).
I could keep going but I'd love an objective, qualitative discussion of how the poor in America today are not the wealthiest poor in human history.
The natural thought is that if the total financial impact of the transition to US people is positive, then you should just tax everyone who has net gains some fraction of their gains, and use it to pay everyone who has net losses more than the amount of their net loss.
That is, if cars get cheaper for everyone, and former US auto workers have to get new jobs doing something else, then just put a general tax on cars that is less than half the decrease in price of cars, and pay that money as a pension to former auto workers who lost their jobs.
The question that has never been answered is what happens when people in the third world want more than third world wages, since wage increases is supposedly what they are getting out of this.
They are getting their higher wages and the cheap markets are moving elsewere. What if everyone is rich? Then we're back at the start - except now everyone is rich not just a few countries'-
sure, but at least there is something to compete over. I too would prefer it if the west industrialised in a matter where they pay their factory workers well, but till then the alternatives are
I'm not sure what you mean. Taiwan and Korea got their start in development working for third world wages in manufacturing industries, and got rich, and are now no longer working for third world wages. The point of all this is that it's a transition that starts with land reform, moves to third world wage factory work, generating a market for domestic non-exportable industries (like medical care and real estate and retail and the whole service economy), and the factory work eventually moves up the value chain and brings the wages for domestic non-exportable industries up with it.
Manufacturers use factories that pay third world wages to keep costs down. Countries that have these factories supposedly end up transitioning out of them.
And the unsustainability is *the entire point*. The *point* of this is to get people to high incomes, not to get stuck with factory work forever. Once every country has gone through this phase, either factory work in the last low income country starts paying more, and all the high income countries start having to pay more for factory goods, or else factories start getting automated while everyone in the world is at higher income.
That's outrageous! That means profits are down over 20% from the $100+ billion they took in in the 1st quarter. As an Apple shareholder, I am incensed by this miserable performance.
You then have a bunch of people who are unable to do more than make cars. They end up unemployed. So you end up having to pay their wages anyways but get nothing out of it.
Also third world environmental standards. I'd wager that a lot of the developed world's improvements in air and water quality are offset by degradation of same in the developing world. It might even be zero sum.
Wrong. The reason Americans make more money than the Vietnamese is that they generally produce more with a given amount of work. That applies to manufacturing as well. The reason basic manufacturing jobs move to countries like Vietnam is that Vietnam has a *comparative advantage* at them: they are (say) 3 times worse at basic manufacturing, but (say) 10 times worse at more complex jobs. So it makes sense to do basic manufacturing in Vietnam, and more complex jobs in the US. But even in manufacturing, Americans could make more than the Vietnamese, because they are more productive.
Where are those American manufacturing workers actually making Vietnamese wages? Either they still work in manufacturing and make a multiple of Vietnamese wages, or they moved to other sectors, and (once again) make a multiple of Vietnamese wages.
I'd assume that's because that's because prices are lower in rural areas (especially rents), but I don't know. I don't see the relation with the comparative advantages of Vietnam and the US.
You think the cost of living is different between rural and urban-coastal US but the same between the U.S. and Vietnam?
A living wage in rural Vietnam is $6 US per day. Pay is less in Vietnam because workers can be hired for less money. It may or may-not be true that Vietnamese workers are less productive initially or even finally. But the reason they get paid less is that they are willing to work for less.
I never said anything about the cost of living in Vietnam vs. the US. (If, by asking a question, you actually mean to make an argument against my comment, please state your counterargument explicitly instead.)
They are willing to work for less because no one is willing to pay them as much as to Americans. No one is willing to pay them as much as to Americans because they are less productive. If they were as productive as Americans, they would make similar wages. That they are less productive is clear: their per capita GDP is approx. 1/6 of that of America when adjusted for price levels. Note that the GDP includes the value of all production, whether it goes to wages or profits, so what happening isn't that they are equally productive, and the sales revenue just goes towards profits rather than wages.
The reason poor countries generally have lower price levels is that productivity differences are generally smaller for products and services that are difficult or impossible to transport (primarily construction, and services such as retail and hospitality). Wholesale prices of cheaply transportable goods are approx. the same everywhere (at least as long as tariffs are low; and retailers may add different markups): if one country had higher prices than another, producers would sell more goods to that country, until price levels equalized. In rich countries, people making cheaply transportable goods have higher salaries because they are more productive. Services/industries whose products can't be traded internationally compete for workers with industries making cheaply transportable goods, so they have to pay higher salaries too, compared to less productive countries. And since rich countries aren't that much more productive when it comes to hard-to-transport goods or services, so prices will be higher too.
It's bad for the factory worker, but it might be good for the factory worker's kids or grandkids, who are now in a position to pick up more advanced work. Both sides might benefit from the transition.
As an example, Sweden still has a steel industry, but it can't compete against bulk manufacture in East Asia. Instead, it produces higher-value specialist steels that aren't as easy to reproduce through mere heavy industry. The British shipbuilding industry is much the same - it can compete in specialized quality and advanced ships, but not in bulk.
One underlying theme of these cross country comparisons is that hard core mercantilism has been pretty effective. Taiwan has been able to keep a drastically undervalued exchange rate for longer than Japan or Korea and it has grown faster. There is a pretty positive retrospective of mercantilism towards the end of Keynes’ General Theory and of course Erik Reinert has written several books about it. Of course not everyone can mercantilist at once and this would explain the conga line effect Noah was talking about.
Though I hope it is wrong/overstated, I do still think we insult the South Asian and other developing countries by understating the IQ/hbd point.
To cite data to the points I made before:
1) Japanese/Chinese in South America (who were once impoverished and disliked immigrants) hugely out perform local groups. Hard to find go English data for SA countries, but see figure 2 of the below report for Japanese success in Brazil
2) This point is supported by the IQ data of international adoptees. See Caplan here for a good discussion (which also has a nice balance of nature and nurture points)
In fact, it is hard to find a country where once impoverished Chinese do not outperform, in spite of what is typically strong resentment from local groups
4) What’s more interesting is to look at those nations/demographics that are outliers in economic success relative to iq data. Is there some other hbd trait (hopefully more fungible) at play? Was there some development strategy that we can learn from. To take 2 examples
a. Indian immigrants abroad. Though this seems to be due to some combo of i) best and brightest from large population, ii) unsavory stratification (brahmin and merchant classes have much better iq perf from what I have seen, though hopefully, this changes reduced poverty in India), iii) the unique Indian personality, culture, immigrant experience
b. Ireland. Performed very well relative to iq estimates (as I understand them). My gut would say due to some combo of tax arbitrage and English language default enabling rise of global financial center, though this is speculation.
Hate to keep pushing back to the IQ/hbd point, but I do think it is the fundamental issue and strategies that can impact it (pollution, lead, iodine, natal environment, maybe even embryo selection) should therefore be the obsession of developmental economists
The IQ estimates for Ireland don’t make sense if you look at latest PISA results.
In any case why would a Northern European country genetically not too divergent do so badly in the 70s? It’s probably a delayed Flynn effect.
As for the Chinese. I do believe they are smart, and well organised. The future is theres if they play it cool. As in don’t care about Taiwan for a generation.
From my reading, Ireland probably had some combination of three things going on:
1. Not the best IQ data.
2. Delayed Flynn (as you state) due to its poverty.
3. A persistent brain drain to UK and US, which, when it ceased (or at least slowed), resulted in some reversion to the mean (but note that such things don't fully revert to the mean and Southern England might be more or less permanently a bit ahead of the rest of the British Isles for this reason).
It feels like the "ethnic minority in foreign countries rising above natives" effect could be explained by culturally indoctrinated spite towards how they were treated when they first arrived. "These people treated us like trash so we're going to grow rich and powerful. That'll show 'em!"
Or into petty crime, like the Romany. That doesn't always work out so well. Or they can be forced *into* farming, but at e.g. the migrant farm worker level rather than the yeoman farmer level.
Think you mislinked the Singapore point - but funny enough, ethnically Indian Singaporeans outearn ethnically Chinese Singaporeans (despite the latter scoring higher on tests). I think it's a factor of returns to verbal IQ being higher than returns to spatial IQ (also seen in US where Ashkenazi Jews outearn everyone).
Industrialization does have massive network cumulative effects following higher economic freedoms / lenient introduction of capitalistic policies but this is a one-time upgrade that is dependent on low-corruption, high-trust and high-intellect aptitude societies. Countries where resources are the primary method of exploitation and labour is not needed tends towards higher corruption because the leaders are balancing their power amongst a smaller share of collective interests that are not necessarily the population's, likewise those with lower intellect/lower trust affinity seeing a longer delay/lag if they don't have an outgroup population to run things and/or force policies of centralization and increased economic freedoms. However the lower distributions of the curve get pushed out and the standard quality of life diminishes rapidly following urbanization, not only with reduced aggregate demand due to population-bust latent generation lag effects but also cumulative asset inflation (moral hazard) created from chasing high-financier yields that have yield no productivity gains (only improvement of technologies/capital). The increased complexity/nature of the work makes it so a greater share of wealth goes to the top, and less are suited/selection for intellect-oriented work is diminished by differential fecundity (not mortality) due to lenient conditions. Saturation, grade inflation, degree inflation, experience inflation all simultaneously happens as only a fraction of the population can fulfill an increasingly limited amount of high-income roles (IT/finance/medicine/management) with depressed fertility rates of the more intelligent fraction + aging population demographic pyramid structure. The spatial tilt of g enables better micro-evolution of engineering and contributes to the sustained Taiwan income surplus over other nations. Also IQ is only increasing on the least-g loaded tests, real g has declined since the 1850s (evidenced by hard measures of decreased vocabulary complexity, fluency, backward-digit span, memory span, rates of macro-evolution technological progress, and simple reaction time by .7 points per decade - Woodley effect). The news/books/nature of discussions are all much more complex back then (can be seen in interviews, television news or anything) -- we are seeing a slow-down and negative interest rates worldwide by stagnating growth, stalled population demand and inflationary pressures. Industries will not be migrating indefinitely and there will be a stable-state equilibrium between automation and fraction of available population for work. The inputs become corresponding less and less needed per unit of free energy/calorie/food/housing (potentially infinite with deuterium-splitting or any other fission/fusion-related technologies). The demographic and economic transition will be substantial given the Elite's NWO plans to dominate the globe into mega-sector economies with directed authorianism/scientific dictatorship tendencies (evaluating, studying and changing human behaviour en-masse) to pursue technological singularities. The rentier economy/circular economy would produce a higher marginal utility / increase purchase life of items/objects, although the net gains would still go to the top .001% with lessened externality costs (i.e. pollution) presumably.
I found this claim fascinating: " IQ is only increasing on the least-g loaded tests, real g has declined since the 1850s (evidenced by hard measures of decreased vocabulary complexity, fluency, backward-digit span, memory span, rates of macro-evolution technological progress, and simple reaction time by .7 points per decade - Woodley effect)"
Do you have a good source for me? Or preferably several with possible rebuttals/discussion?
On the issue of the efficacy of protectionism, the South Korean economist Ha-Joon Chang has written some interesting polemical books in this vein, namely:
With regard to the United States specifically, Michael Lind is an enthusiastic booster of the idea that Hamilton/Clay/Lincoln style tariffs (and government coordination more broadly) were a key booster of industrialization. Here's his economic history of the US: https://www.amazon.com/dp/B005HFI0X2/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1
I find it interesting, and perhaps revealing, that economists' most beloved policy recommendation, international free trade, is more obviously beneficial in theory than it has been in practice.
Ha-Joon Chang's work always reminds me of the old story from Irving Copi's logic book (adapted because of my memory failures):
Some scientists are investigating the causes of drunkenness. They self-experiment. Firstly, they have Scotches on the rocks. They then get drunk and record the results. Secondly, the next night, they have gin and tonics. They then get drunk and record the results. Thirdly, they have vodka and ice. They then get drunk and record the results. Finally, the scientists look over their results, and conclude that the common factor, water, was the cause of their drunkenness.
In Ha-Joon Chang's case, he focuses on finding something - anything - that constitutes state intervention in development successes, and attributes the success to that state intervention. Even if success correlates with reductions of state intervention, it was whatever state interventions he can find that is the cause of the success in the country's development. He might make positive claims about the "mixed economy" being his preferred model, but in conversation, I remember him attributing South Korea's relative success over North Korea to the large sums of money that North Korea had to spend on defence against the US...
For a more thorough critique of Ha-Joon Chang's casual empiricism, see Bill Easterly 's "The Anarchy of Success". Even if you disagree with Easterly's positive claims, his epistemological critiques of Chang seem sound.
One of the things on my 'something to learn more about' list is the Spanish Economic Miracle. The very short version I've heard (which I presume is incomplete at best, total nonsense at worst) is that Franco tried autarky and independence on the advice of his fascist advisors, eventually noticed he was still very poor and his neighbors were getting very rich, and fired them and hired free-market economic advisors, at which point the Spanish economy boomed. But this is probably somewhere between 'a massive oversimplification' and 'lies to children.' Anyone have a book recommendation on the topic?
Re Mexican land reform and industrial policy broadly:
A) Mexican land reform created communal plots that more or less everyone acknowledges were suboptimal from a development pov. Studwell also mentions something called ‘urban bias’ to explain Latin American agricultural underperformance. He barely mentions it, though (iirc it was tucked away in an endnote) but I’ve googled it a couple times and it seems like a seriously discussed topic among economic historians, so I wouldnt dismiss it.
B) I can’t remember too well but I believe he mentioned export discipline as something Latin America lacked. Definitely said most countries attempting to industrialize with interventionist policy failed to do so. For Mexico in particular, I am pretty sure we always lacked it, given reports of our goods being eternally shoddy.
C) Resource endowments in general as a Bad Thing seems like an underappreciated part of this story. Again, Mexico lost a couple decades directly as a result of an oil boom induced debt crisis (the Volcker shock certainly didnt help, though). The book talks a good deal about Malaysia and Indonesia, big failures and also big commodity producers.
This is an interesting discussion, but to me, these conclusions rely too much on an informal analysis of correlations. That never gets you very far in economics given the complexity of the systems were dealing with. The better approach is usually some combination of formal statistics and simulation modelling.
There are some very sophisticated simulation models for these problems. While they are simplifications of reality, the advantage is that you can run experiments of sorts, adjusting policy while holding everything else constant.
The other thing that's missing is a discussion of alternatives. Sometimes tariffs are better than doing nothing, but there is almost always a better and more direct alternative.
One example would be computable general equibrium models, such as GTAP. It's been a few years since I've looked into it, but I'm pretty sure people have built versions with endogenous knowledge accumulation.
To be honest my knowledge of this mostly comes from Wikipedia, but Finland is another notable example of a country which did land reform after 1945 as a compromise intended to defuse pro-communist factions. Prior to WW1, at least, their level of economic development was very similar to Russia (because they were part of the Russian Empire, and not an especially well-developed part!); their subsequent developmental trajectory is, suffice to say, very good.
The average farm's area increased by 10x and yields per acre increased by 7x at the same time. This combines to a 70x increase in output-per-farm, which seems roughly in line with the huge decrease in the population percentage of farmers. Yield increases are explained by better seeds, better fertilizer, better agricultural science, and better machinery. These new technologies are available worldwide. So if agricultural productivity is the key to development, then in 1866 development was on Hard Mode and in 2020 development is on Easy Mode. The extra agricultural productivity that everybody got from the new technology probably far exceeds whatever small effect land reform could have had: 7x from technology vs maybe 1.5x from distributional efficiencies. So it seems extremely unlikely that land reform is the bottleneck.
One consideration: population boomed in many developing countries. It did in the US too if we are comparing with 1870, but (AFAIK) land is much more abundant in the US. So while many new technologies are available in poor countries as well, they also need higher yields to achieve subsistence. Yield increases did outpace population increase; I'm just saying that not all the yield increase goes towards increased living standards.
A) agribusiness doesn't go to the third world to grow corn.
The developing country gets a first rate futuristic bananas plantation, the produce of which is shipped off to the first world in exchange for the modern equivalent of a steel hatchet, a fifth of whiskey and a handful of beads.
(pps: I have experience with this, actually, in Latin America. I lived near the bananera for a while, which was predictably modern and efficient, and after workers finished their shift they would come home and work their quinta of beans with hand tools.)
(ps: to be fair, nobody in a place that grows bananas would want a nasty-ass export banana. They are yellow sky potatoes and should not be looked at directly)
B) the motivational and moral value of land reform is as important as the actual production.
It's kinda like the CEO taking a pay cut, giving a huge raise, and showing up to put in 70 hours with the proles, right? It makes you feel like you are a participant, instead of a component.
Ukraine did not redistribute land in 1930's — it did that in the 20's, then it was seized by the government to form kolkhozes and sovkhoses, big collective farms. Whether agricultural productivity was worse is debatable, yet full scale industrialisation was dependent on collectivisation and only started circa 1929.
It sure seems like a land value tax would sufficiently reduces the rents of landlords (e.g. of farm land) to have much of the same effect, but I can imagine a sufficiently enticing 'premium' from the actual agricultural workers controlling or owning the land too, on top of the benefits of the tax.
Not empirically. If a land value tax accomplished what the Georgists wanted it to then you would have seen the effects in places like Ancien Regime China. Virtually all of these regimes had land value taxes prior to reform. The new industrializing regime abolished such taxes, including China, Korea, Taiwan, and Japan did. (The others might have too, I don't know.) You can read the official line of the Chinese government about land taxes. They will tell you endlessly about how it was oppressive and exploitative to the workers and how the bold and brave Mao Zedong ended them.
Empirically, land value taxes just do not work the way Georgists want them to. Which is why Georgists tend to be so light on actually examining where they're implemented.
This is interesting and is related to some thoughts I've had about the practical implementation of Georgism!
I think 'land' is probably a pretty poor term to use nowadays for one – I _think_ 'natural resources' probably better captures what George intended the concept/category to cover.
So my immediate thought after reading "Virtually all of these regimes had land value taxes ..." is 'Were those _land value_ taxes or more like what would be described as 'property taxes'?'. The Georgist idea is to tax (and _all_ of, or nearly all of) the value of 'land' – but NOT 'property', i.e. someone _improving_ their 'land' should NOT result in a higher valuation of that 'land' and thus NOT result in higher taxes. (Tho maybe those improvements _would_ result in higher land value taxes for other nearby properties.)
I am still pretty skeptical about how, or whether, a 'pure' land value tax could work, e.g. be assessed. George apparently did explicitly discuss land values _eventually_ including some past improvements (and that being mostly okay), and, in the review (I think), either George himself or other Georgists, there was a brief mention of options like only requiring (some) land value taxes to be paid when land is sold.
Okay! The Irish IQ question! I don't know this Unz guy from a hole in the ground, so I am going to go full bore on "Yes indeed Lynn is full of what makes the roses grow". I've never trusted his figures, I did some exploring of what the data was and where the data he used came from years back (which I didn't then bookmark or keep because I am careless) so off to races we go!
To quote from the linked article:
"For example, when I pointed out that Lynn had devoted many years of personal research in Ireland and eventually concluded that they were clearly a low-IQ race, several commenters angrily denounced Lynn, one going so far as to call him an anti-Irish bigot of KKK- or Nazi-like proportions."
That's because Lynn does have a political axe to grind here. I'm not even going to touch Eysenck, that dead horse has been flogged enough. But Lynn is an Orangeman (no, not in the Trumpian "Orange Man Bad" sense, in the "1690, 12th July, marching flute band" sense). He's one of the "pining for the Empire" lot, and his thesis is that the ungrateful Paddies in the South who threw off the loving embrace of Mother England could only do so by being both stupid and evil.
He gets the stupid by having the measured IQ of those bogtrotters infesting the Republic of Ireland be lower than the staunch loyal and true British subjects living in the North of Ireland (even though that means people who are literally living across the road from each other) which in turn are lower than the Fine Upstanding Naturally Superior Anglo-Saxon Race of the mainland, i.e. Great Britain.
His "many years" of research in Ireland were three IQ tests, carried out not by Lynn but by a pair of young researchers who wrote two of them up into a thesis in the early 70s. Lynn, in his (in)famous book which kludges together
This is Unz' "So the huge and apparently well-designed 1972 study of 3,466 Irish schoolchildren which placed the mean Irish IQ at just 87 hardly seems an absurd outlier."
Uh-huh, Ron, and who knows what Ireland in the 70s was like, you or me? I was nine years old in 1972 and one of those primary school kids in a rural town (not a small town by our standards, but a small town by other standards). We didn't take part in any of those tests, and I take my leave to differ on how "well-designed" those were, since the time I went digging for the original test, it was one that the researchers developed and used for a middle-class British school, they just re-purposed it. And I can't recall the age ranges in that test conducted in Ireland, but it wasn't all a cohort of the same age. But very well! I am one of those 87 IQ nine year olds in Ireland, who miraculously grew up to have a higher IQ in the Celtic Tiger boom years.
My arse, to be vulgar about it.
"Although Lynn has inexplicibly dropped that 1972 study in his latest 2012 book, this new volume otherwise contains a plethora of additional Irish IQ studies, displaying a wide variety of results."
"Inexplicably" only until you realise that Lynn was forced to agree with the critics that kludging together three tests, two done on kids, one done on adults, and then averaging out the results was not good practice.
"Furthermore, since Lynn used British scores for normalization, and Ireland is geographically and culturally an immediate British neighbor as well as English-speaking, British tests could presumably be used without modification, reducing the risk of language or cultural bias during the translation process."
Yes and no. Ireland in the 70s was behind Britain. Education was one of those areas. One reason I am sceptical about IQ test results from around the world is that I think the 'improvement' in the Irish score - jumping up from the low of 87 to the respectable normality of 100 - is down to things like "getting better at taking tests" and educational system catching up with the standards elsewhere.
Otherwise, you have to accept that my generation of the 87 IQ dummies were thick as the ditch, but our kids grew up to be the 100 IQ smarties. If you can explain the Magic Beans which gave us this result, you don't need polygenetic testing or the likes to improve IQ for future babies, just replicate the Irish Thirteen-Point Miracle Gain. Even Unz has to admit that there is some improbable Secret Sauce at work in the ostensible results:
"Within the social sciences, a correlation of 0.86 is extraordinarily high, almost implausibly so. The inescapable conclusion is that Irish IQs rose at an almost linear rate during the three or four decades after 1972.
Why this occurred is an entirely different matter. I find it extremely difficult to think of a plausible biological explanation, though others are welcome to try. During this exact period, Ireland was undergoing a very rapid rise in urbanization and affluence, and I’d suggest those factors. Perhaps there’s some other cause instead. But the empirical rise of Flynn-adjusted Irish IQ by nearly a full standard deviation in 37 years seems proven fact."
"Proven fact" my royal Irish backside. A combination of sociological factors (including poverty), yes industrialisation, and wishful thinking around the break from Britain on Lynn's side is most of the explanation I find satisfactory.
My dudgeon being so high, my attention to proof-reading was commensurably low so to finish my disdain for Richard Lynn:
Lynn, in his (in)famous book which kludges together results from all over the world, including "if I don't have a test for this country/particular ethnic group, I'll just guesstimate from what I consider the closest similar results" is not trustworthy, even Unz in his later list of Real Proper IQ Tests has to tidy up Lynn's work for the Irish:
" Here is the complete listing of all IQ studies provided by Lynn (omitting his careless duplications), including sample-size, year, and Flynn-adjusted score, to which I have added a 2009 IQ of 100 based on the recent PISA results, which were almost identical to those of Britain".
A note about "almost identical to that of Britain" - the population of the Republic of Ireland in 1972 was 3 million people, the population of the United Kingdom (that includes Northern Ireland) was 56 million. Estimated population of the Republic of Ireland in 2020 is 5 million, of the UK is 67 million. With higher population, I imagine you have better chance of more higher-scoring (and of course lower-scoring) on tests. The population of London alone in 1970 was 7.5 million, nearly twice that of the Republic. A better like-with-like would have been "compare Irish IQ and London IQ tests".
Indeed, the next most populous British city in 1971 was Birmingham, with 1 million people. Has anyone done "London versus Birmingham" IQ studies, and what does that tell us about the stupid or otherwise Brummies by comparison with the Londoners?
Well, we seem to be bouncing around all over the place! We dropped 3 points between 1964 and 1972, clambered a whole 10 points up in 1988, lost that 10 point gain in 1990 (just two years later, what happened, did the Smart Kids all emigrate?), pulled ourselves back up by our bootstraps in 1991 (maybe the Smart Kids had just been on holiday when the tests were taken and were now back), lost either 3 or 5 points again in 1993, managed to redeem ourselves in 2000, then slumped back down in 2012. End result being that between 1964-2012, a period of forty-eight years, we managed to improve only from 90 to 92 IQ, which I suppose is within a margin of error saying we never improved at all.
I don't know what we did in the PISA tests in 2009 to improve so drastically. Or manage to hang on to decent results in every test since. https://www.erc.ie/studies/pisa/
With only a measly national IQ of anywhere from 92 to 100 (as judged by the IQ tests Unz relies upon to back up Lynn), for 2015 PISA:
"Ireland continues to maintain high standards in Science, Mathematics and in reading.
The mean performance of Irish students in reading was significantly above the OECD average. Ireland ranked 3rd out of the 35 OECD countries and 5th of all 70 participating countries.
The mean scores for Ireland in both Mathematics and Science are significantly above the average scores for OECD countries and Ireland’s performance ranked 13th among all OECD countries in both in 2015.
Ireland has improved on its performance in Mathematics compared to other PISA cycles and is now significantly above the average for the second cycle in a row."
Maybe we're bribing the judges with Guinness, Jameson, crubeens and buxom red-haired colleens? Or maybe, just maybe, those IQ tests are full of the same thing that Richard Lynn is full of?
I think the important aspect of the land reform is, in the context of industrialization, the ability to transfer a significant portion of the workforce from agriculture to industry. So, say, Britain was an already-rich country running on agricultural surplus, kickstarting industrialization required forcing people, who were doing well in the countryside, to move to towns. Which they did, by immiserating them. Or, say, Soviet Russia needed to create a legible agriculture to maximize the surplus extracted from their peasants. Which, again, they did (in this case, immiseration was an unintended consequence).
Poor Asian countries needed their populations to raise above subsistence level, to have any surplus at all, and so they did. But as a pro-industrialization policy that is also (immediately) good from humanitarian standpoint and beneficial to everyone, it may be a rare special case. (I smell an industrialisation/urbanization-era sequel to "Against the Grain" waiting to be written.)
Apparently I have not yet discharged my overflowing bosom sufficiently on that Irish IQ Test Special.
One final comparison:
3466(1972) = 87
1361(1988) = 97
191(1990) = 87
So, from 1972-1990 we bounced from 87 to 97 and back again. In the finest tradition of the high-quality analysis of Richard Lynn, I'm going to average these three and get a result of - tah-dah! Average Irish IQ in the period was 90!
Funnily enough, let's see what was going on in my nation between 1980-1990. Oh look, it's the Young Europeans campaign, as well as a horrendous recession and emigration peaking once more in the traditional way we solve our economic problems: export them elsewhere:
"UCD engineering graduates were to the fore in the 'Young Europeans' campaign by the Industrial Development Authority (IDA) in the mid-1980s. Designed to showcase Ireland's highly-educated cohort of engineering and science graduates, the campaign was very influential in the development of Ireland's profile within the technology sector internationally. Professor Liam Murphy, one of the Merrion Street graduates featured in the campaign, recalls 'I'm not sure we realised at the time how widespread the picture would become. But it was great to be a part of something which helped to raise awareness of the quality of Ireland's high-tech workforce!'
The economic reality of Ireland in the mid-1980s saw many of the most highly-skilled graduates leave the country in search of opportunity. This famously included many of the graduates from the iconic IDA advertisement. However, subsequent years saw many emigrants of the 1980s return to Ireland, bringing the skills and experience they had acquired abroad and contributing to the transformation of Ireland's industrial base."
Well, I imagine that proves that an Irish four-year engineering degree wasn't worth a straw, seeing as how you could easily get one with just an IQ of 90.
I mean, Lynn and Unz can't be wrong on that, can they?
What I kind of disliked about the book (based on the review ; haven't read it) is that it seems to imply economists are basically morons.
But there are lots of economists and thought currents that have had ideas close to Studwell's. Say, Stiglitz? Certainly "globalisation and its discontents" (2002) would agree with Studwell that the IMF is evil. It's also easy to see that Krugman's ideas translate into criticisms of the world order of the World Bank, IMF and WTO...
My point is - Not All Economists... And, also, economists don't really make the rules. Countries, with geopolitical agendas, do. They might just source the economists who will support whatever it is they wanted to do.
As to "it means that everywhere in the world will get rich eventually, free markets are doing their job, and US wage stagnation is (in some sense) nothing to worry about. It would be bad if - well, if people learned it was true and then everyone started demanding tariffs to keep all their country’s wage growth for themselves.
But this is extremely unsupported speculation off of Noah’s already pretty unsupported speculation, and probably some economist will show up to tell me why it’s definitely not true".
... it's basically how I view what has happened since 2000 and China entry into the WTO.
Noah has a point about manufacturing moving from country to country and industrialisation therefore moving down the list of available places. This is stylized. Manufacturers need countries to have decent legal systems, decent infrastructure, somewhat educated/urban population with lower wages etc. So "good" policies are part of why manufacturing moves across countries over time.
It's also somewhat dynamic. You move your textile industry from eg Europe/US to Japan. Fine. Then Japanese get rich enough to consume some of the clothing so you expanded the market, you move your textile to China, they get rich enough, you move to Bangladesh, expanding the market all the while.
But, yes, there is no doubt in my mind that the Western countries' middle class took a significant hit to its earnings and that allowed China etc. to develop a middle class. It's all to the long term good, maybe, though we need to avoid falling for fascism as a consequence long enough to see that potential long term good.
Another way to look at it - imagine one worker/consumer in one rich country and one industry. At first, the worker works for the industry and consume the output in the rich country. Then, the industry move to a poor country to exploit the cheap labor there and hide the profits in an offshore center/Switzerland. The industry makes a lot more money in round 1 but the whole thing collapses in round 2 as the initial worker, now jobless, cannot consume, the cheap laborer can't consume enough and obviously Switzerland doesn't get a huge enough cut to consume all that is produced...
Again - this is just stylized stuff. But I think it shows something important and why we don't all industrialize fast. There's only so much solvent demand in the world and therefore only so much need for manufacturing. If we want more countries to industrialize faster, we got to find a way to boost solvent demand across the globe instead of relying on the slow process of countries' labor force negotiating salary increases in the teeth of the opposition of the local and international elites.
The 'everyone else is an idiot/moron' trope/cliche/whatever is _very_ common in 'academic' (and other intellectual) works, so I wouldn't hold that against Studwell very strongly.
Doesn't the description of manufacturing in South Korea remind you of VC funded startups? Long periods of intentionally making losses while learning more about a technology, finding product-market-fit and growing a customer base. Similarly to how SK needed to get export numbers to evaluate whether a company could be successful, the value of a startup is measured in how well it does in the outside world using growth rates and customer acquisition costs (not just raw profits).
Since investment is one of the main drivers of economic growth and most of our economy doesn't really engage in it (see all the companies buying back stock when they should be creating new strategies), maybe we can learn something from the developing countries here? We should create more spaces in our economy where the companies have the slack to innovate while having an incentive to do so, either as a monopoly like Google which is afraid that the next consumer computing device is controlled by Apple, or as startups that can explore a frontier without immediate profits. If I have time I might flesh out the similarites between How Asia Works and Zero To One a bit more later.
Mauritius is currently slightly poorer than Malaysia by PPP GDP. It's unclear why they included it, but not Malaysia. Both are near the upper end of the range that we usually consider "developing" rather than developed.
In any case, even assuming the book is correct about what policies helped East Asian countries become rich(er), it's unclear how applicable it is today. Based on the review, it assumes a mostly agricultural country, one where peasants have little or no surplus above subsistence levels. Today, this only describes the poorest countries. At this point, moderately-poor countries like Indonesia or Thailand (let alone moderately rich ones like Malaysia) are industrialized, and large segments of the population have incomes well above subsistence levels.
The mention of Israel makes me think: it might be instructive to do a compare and contrast of the Enclosures with the purchase of land from traditional Ottoman landlords by pre-state Zionist settlers. There would seem to be possible parallels both in legibility of land tenure unlocking economic development, and in negative effects on tenants whose traditional, illegible rights (or what they perceived to be rights, at least) were taken away.
Czech Vietnamese youngsters do very well academically. Their parents or grandparents were mostly invited as factory workers in the 1970s-1980s, so there should not be a strong founder effect there.
One reason I think industrialization might be important is transport costs. A strong economy requires a solid infrastructure. The cost of transporting the raw materials is enormous, so you need local manufacturing.
"Taiwan and Japan both bought out landlords with bond "
Much of the land in Taiwan was owned by the Japanese. Taiwan having become a Japanese protectorate in 1895. The owners fled in 1945 with the defeat of Japan. I'm pretty sure they were just expropriated.
"The bonds became worth less because since government bonds grew more slowly than the economy. "
The bonds became worthless because they were issued in 1946 and between 1946 and 1949 Japan experienced triple digit inflation. The prewar yen traded at ¥3.6 to the $1. By 1949 when prices stabilized it was trading at ¥360 to the $1.
"I think it’s fair to speculate that most of the northern vs. southern Asian IQ difference is just that northerners are more Flynn-ified."
Don't believe that for a second. Huge Chinese/Malay gap in Malaysia and Singapore (and huge Taiwanese aborigine/Taiwanese Chinese gap in Taiwan), Brunei does not score well on standardized tests. Chinese in Thailand, Indonesia, and the Philippines also earn higher incomes. All evidence suggests the Asian gap is as intractable as the Mediterranean gap.
"How much of US wage stagnation has been that we “exported” our potential wage growth to China (or other developing countries)?"
Some, but the general stagnation in trade during the 2010s combined with real, but fairly modest wage gains suggests it's not the most crucial factor.
"I don’t know if the statistics we use to prove that Japan etc had a Flynn Effect"
Japan and especially Korea did have a Flynn effect; see the 2012 PIAAC. But Korea already started at a southern European level despite being much poorer than Southern Europe.
"Malaysia, Thailand, and Vietnam all come out about the same!"
Jason Malloy did some research on this; Thailand comes out to around 90, and Vietnam is similar
Philippines's PISA results are truly dismal, but some evidence suggests its IQ is in the 80s. I think its PISA results will improve over time, but not enough to ever close the gaps. As a rule, lower-middle income countries (but not upper-middle income countries) tend to have standardized test scores that seem below the trendline suggested by inference from racial composition (see PISA for Development results).
The most interesting aspects of the IQ and national income debate aren't the countries that are on the trendline, but the positive outliers -for instance, the Dominican Republic, Romania, Austria, Turkey, Lithuania, and America.
The land reform thing never made sense. The whole concept of specialization of labor should suggest to us that it's better to have three guys doing agriculture and 47 guys doing other things than to have 48 guys doing agriculture -- on the same land -- and 2 guys doing other things.
Of course, that's an argument about how the labor pool should be allocated. To the extent that we're holding labor allocation fixed and arguing over how agriculture should be *organized*... we'd still expect the large landholders to be more productive than smallholders are? We see gains from scale in every other industry; why would agriculture be different?
This is also, as far as I'm aware, the explicit lesson we learn from the de-Romanization of Britain. Under Roman rule, British agriculture was done in a system of a small number of centralized great estates. With the fall of the Empire, Germanic settlers came in and reappropriated all the same land into a system of a large number of decentralized individual holdings. And total agricultural production cratered.
I think the idea is that this is what happens. Under landlordism, there's no push for intensive farming and improvements to efficiency, as there's no point, and agricultural production increases slowly at best. Then you have land reform, and now farmers care about their own lot, and production skyrockets. This in turn means that there's more room for urbanization, and additionally, successful farmers might now buy out less successful ones, also sending those to the cities.
So the land reform _does_ lead to urbanization and specialization. It's conceivable that you could _also_ get this increased production by having large farms with mere agricultural labor, where the landlord has both incentives and possibility to create improvements through having _control_ of the production rather than just renting out the land - this seems to be the British way. It's tenant farming that seems to get the worst of both worlds.
Re: Mexico and Latin America. Mexico's and Argentina's per capita (nominal) is $10k. Yes this is lower than Korea's $30k but certainly above, for example, Honduras at $2.5k. Are we certain land reform was not a success there?
I do think we should look at China's growth and then adjust it for two very important factors: the enormous portion of the wealth that is owned by people who get it via membership in the party and corruption rather than productive activity (it's got to be a huge number although there's no way to know what that number is), and the enormously costly destruction of the environment and human life that is caused by the amazing levels of pollution of air, water, soil, and food.
Chinese low-wage workers are not really getting significant gains. Seven years ago, a low-wage worker in a first-tier city made about 3000RMB a month. Now he makes about 3000RMB a month, and both food and housing are more expensive. This is not what is reported, but it is what is going on.
I too would love to learn more about Mauritius. It is a very interesting special case. Maybe its geography gave it artifically low crime, which helped with high value tourism? Maybe there's a financial-hub-like effect to being the first place in a wider region that doesn't suck?
It's trade-and-finance, which works well for a tiny island. It also has an interesting ethnic mix, with lots of Indians.
Wikipedia: "According to the Financial Services Commission, financial and insurance activities contributed to 11.1% of the country's GDP in 2018. Over the years, Mauritius has been positioning itself as the preferred hub for investment into Africa due its strategic location between Asia and Africa, hybrid regulatory framework, ease of doing business, investment protection treaties, non-double taxation treaties, highly qualified and multilingual workforce, political stability, low crime rate coupled with modern infrastructure and connectivity."
"Secondly, he completely ignores the many times land reform failed. East Asia is not unique in its attempts at land reform. It was fairly common in Africa, Eastern Europe, etc. Ukraine and Romania had incredibly fertile soil and it's hard to think of regimes that eliminated their landlords harder."
The point of land reform is to put the land into the hands of the farmers, not to collectivize into even _more_ clumsy and inefficient agricultural solutions. _Murdering_ your independent farmers as "kulaks" is kinda the opposite.
Going further back, Sweden had a big land reform in the 1820s, which is commonly regarded as a major success. But unlike the international ones where the landowners have their land taken and redistributed, Sweden already had predominantly independent farmers. What it _did_ do was to unify the lands of each farmer, where they had previously been so spread out in patches that the whole thing was communally controlled at the village level, something that didn't exactly lend itself to experimentation and competition. With each farm having mostly unified farmland after the so-called "lawful shift", the same kinds of efficiency gains as with the more common land reform became possible, some parts of the population were driven into the cities, and industrialization could begin.
"So Studwell is picking a pretty decent fraction of the limited number of cherries that exist."
That misses the point. Even if one picks all the cherries and they all have an X in common, it's not strong evidence of X causing cherryness. Not until you look at non-cherries to make sure they don't also have X.
The old timey go-to cartoon example is highly successful US executives who watch football on Sundays.
> One possible defense of Studwell’s “cherry picking” is that, as per Wikipedia, “Since 1960, only 15 economies have escaped the middle income trap […]” […] So Studwell is picking a pretty decent fraction of the limited number of cherries that exist.
What kind of broken logic is this? The criticism was, paraphrased:
“The claim that X causes economic success isn’t well supported enough, because he failed to take into account countries that did X but didn’t achieve economic success.”
And your rebuttal to this is:
“Yeah but there are only very few economic success stories.”
What? The commenter Salemicus was specifically asking you to take into account the countries that were NOT economic success stories, even though they tried X. (With X being some combination of land reform, protectionism, etc.)
"Secondly, he completely ignores the many times land reform failed. East Asia is not unique in its attempts at land reform. It was fairly common in Africa, Eastern Europe, etc. Ukraine and Romania had incredibly fertile soil and it's hard to think of regimes that eliminated their landlords harder."
There was a similar land reform in Ukraine during NEP, after less than 10 years the collectivisation policies were implemented, which were the bedrock of the pre-war rapid industrialisation in SU.
After SU collapsed land plots were transferred back to people but as every reform done at that time in Ukraine the gains from it went to big businesses. Now Ukrainian agricultural sector is dominated by oligarchs.
Basically, there were not much time when Ukrainian peasants were able to become small farmers as outlined by Studwell. Also by 90's Ukraine was urban - around 73% of people already lived in citied, and industrialized, so there is a lot of difference between 50's South Korea and most post-Soviet republics.
Regarding the controversy over different land reform outcomes in East Asia vs Western nations - some attention should be paid to differences in what is being farmed.
Rice farming is much more labour-intensive than wheat farming. Rice paddy irrigation requires the constant maintenance of fast-eroding dikes and canals. Because of said earthworks, high water levels, and the nature of the crop, mechanization has proven much slower in southern, rice-focused areas of China than in northern wheat-focused areas.
This 2003 paper explores these barriers to mechanization in Chinese rice farming:
We may, therefore, hypothesize that Western wheat farmers can more easily utilize economies of scale to increase crop yield than Eastern rice farmers, because:
a) Machines can be used at almost every stage of the furrowing-to-harvesting process.
b) The comparative technological simplicity of mechanization reduces its cost.
c) The countervailing harm to yields done by less attention-paid-per-plot is less intense for wheat than for rice, due to its reduced maintenance needs.
To put it another way:
If the countervailing costs of less attention-paid-per-plot outweigh the gains of mechanization in rice-farming areas, but not wheat-farming areas, we would expect land redistribution to increase yields in the former but not the latter.
This would explain the experience of England, whereby industrialization was spurred by landowners cutting their workforce whilst increasing crop yields sufficient to create a permanent food surplus – i.e. the opposite of what the East Asian experience would predict.
A good way to test this hypothesis would be to study the differential effects of land reform on crop yield in wheat-focused vs rice-focused parts of China. If anyone knows of such a study, let me know.
Oh God, I see all my typos now. Teach me for just banging out some thoughts and not editing.
It is distressing. Maybe I’ll edit, copy and paste from now on.
We need that edit button immediately, I just noticed I never completed a sentence in the above screed. I'll get onto that right now 😁
Typo report: the plot below "Here’s relative GDP growth (ie as a percent of starting point) since 1950:" is a second copy of the preceding plot (absolute GDP growth since 1950).
Another typo: Vietnam has a GDP/capita PPP of ~5000, not 500, eyeballing the relevant chart.
Also, the link in "I tried tracking down the original source, and I think it’s this paper" doesn't work.
A link to the intended second plot:
https://ourworldindata.org/grapher/maddison-data-gdp-per-capita-in-2011us-single-benchmark?stackMode=relative&time=1950..latest&country=IDN~KOR~CHN~MYS~LAO~TWN~VNM~JPN~KHM~PHL~THA
> Relocating a lot of US factories to China is surely good for Chinese factory workers and bad for US factory workers. Then once China becomes less attractive, those same factories relocate to Vietnam or Ethiopia or somewhere.
But is it bad for us workers in general, it surely makes cars a lot cheaper in general.
True. The only way US manufacturing workers could truly compete with say, Vietnam, would be to accept third world wages. A blunt fact that was glossed over when the US went all in on “globalization is good.”
I do not see it as a counterpoint to globalisation is good. I quite like when cars are cheap.
well actually i hate cars but that is an unrelated issue, but my point is il like it when commodities are cheap.
Roger that. So what about the factory workers? Any thoughts?
Presumably we just give them better jobs and/or better education. The problem, it seems, is that we've been bad at helping people transition from factory jobs to more skilled labor/knowledge work.
The process has been disruptive at the very least.
I agree that it has been disruptive, but any change will be at least a little disruptive. I believe other countries have done very well transitioning, and I don't think the idea of transitioning from a manufacturing economy to a knowledge economy is bad. I would probably speculate that it is the decentralized nature of the US that has caused road bumps. The federal government controls tariffs but the states must deal with those affected.
Sure, but if you help everyone who has a low-wage job transition to a high-wage job, the high-wages jobs will stop being high wage. If everyone currently unemployed in the US (9.5 million) "learned to code," then the wages for coding would plummet.
If you teached people more productive professions, they would produce more. The size of the pie (the total amount of production) isn't fixed: it would grow. Sure, if you channelled too many people into one profession (such as programming), wages in that profession would decrease; however, the (price-adjusted) wages in other professions would increase, as software products (and products made using software) would become cheaper.
just give them free money for all I care, i much rather pay that cost in taxes than in tariffs. At least now these guys have the time to persue what they like too, and we get to lift a billion chinese people out of poverty.
They really don’t really have more free time. They are working at much lower wage crap jobs trying to make ends meet.
What's your reference point?
I'd like a reference point on how historically crappy the "lower wage jobs trying to make ends meet" are compared to a point in history that is not 1945 - 1965.
I get it. There were 20 years where the US was the only developed country in the world still standing and had just pumped out incredible amounts of industrial infrastructure. Life was amazing for your average Joe.
Can you benchmark a present day retail worker against the equivalent (pick any decade that's not immediately post WWII) American?
I'll start with what the present day retail worker has access to:
- The best emergency health care in world history. We may attempt to bankrupt you , but we will treat your late stage rare cancer like you're British royalty.
- Access to almost all movies, television, books, and music in the common English (and much of the world) cannon for roughly 1 day of work a month (including the cost of your internet).
- A wider arrange of food products than has been available to anyone in history. Yes there is a chance you live in a food desert and have to travel a bit farther to get this bounty, but it's still available to you.
- Access to low cost travel. For all of human history the idea of a lower or lower middle class person being able to travel to another country annually or every few years was unheard of. It is now common place.
- Ability to communicate with friends and family no matter where they are, live and in video, daily at almost no cost.
- Your "lower wage crap job" involves standing around talking to be people, moving some light objects, and being bored. As opposed to.... digging in a coal mine, working in a field, completing hours of intense repetitive activities. Overall, your # of working hours has actually gone down (Again depending on the exact decade you're pointing to, but for much of industrialization the lower classes worked far more hours than most do today).
I could keep going but I'd love an objective, qualitative discussion of how the poor in America today are not the wealthiest poor in human history.
The natural thought is that if the total financial impact of the transition to US people is positive, then you should just tax everyone who has net gains some fraction of their gains, and use it to pay everyone who has net losses more than the amount of their net loss.
That is, if cars get cheaper for everyone, and former US auto workers have to get new jobs doing something else, then just put a general tax on cars that is less than half the decrease in price of cars, and pay that money as a pension to former auto workers who lost their jobs.
Everything that was being made before, is still being made. The food is still shelf, refrigerators are still in the stores.
Thus, if their work can be replaced without anything changing, they were not doing useful work.
This applies to everyone, everywhere.
It's why I support some sort of basic income.
The question that has never been answered is what happens when people in the third world want more than third world wages, since wage increases is supposedly what they are getting out of this.
Chinese Workers Making iPhones Work 11-Hour Shifts, 6 Days A Week, For $1.50 Per Hour
https://www.businessinsider.com/china-labor-watch-apple-iphone-workers-2013-7?amp
what wage were they getting on their farms before? I too would prefer if they were paid more, but that just isnt a posibility under capitalism.
Apple market capitalization; $2.08 billion
https://www.investopedia.com/news/apple-now-bigger-these-5-things/
?
The 2 numbers summarize a glaring problem.
Freddy de Boer, feel free to jump in at any point.
Typo. Should say $2.08 trillion. Not billion.
Wages have more than doubled or tripled since then in those factories. China has seen very large increases in wages in the last free decades.
They are getting their higher wages and the cheap markets are moving elsewere. What if everyone is rich? Then we're back at the start - except now everyone is rich not just a few countries'-
The implicit problem is the global race to the bottom for wages.
sure, but at least there is something to compete over. I too would prefer it if the west industrialised in a matter where they pay their factory workers well, but till then the alternatives are
1. globalisation
2. the third world remains poor forever
What evidence is there that real wages in developed countries generally fall substantially with international trade, let alone to third world levels?
I'm not sure what you mean. Taiwan and Korea got their start in development working for third world wages in manufacturing industries, and got rich, and are now no longer working for third world wages. The point of all this is that it's a transition that starts with land reform, moves to third world wage factory work, generating a market for domestic non-exportable industries (like medical care and real estate and retail and the whole service economy), and the factory work eventually moves up the value chain and brings the wages for domestic non-exportable industries up with it.
Manufacturers use factories that pay third world wages to keep costs down. Countries that have these factories supposedly end up transitioning out of them.
I think the unsustainability is fairly obvious.
And the unsustainability is *the entire point*. The *point* of this is to get people to high incomes, not to get stuck with factory work forever. Once every country has gone through this phase, either factory work in the last low income country starts paying more, and all the high income countries start having to pay more for factory goods, or else factories start getting automated while everyone in the world is at higher income.
One more. Apple 2021 second quarter profits: $89.6 billion
https://www.apple.com/newsroom/2021/04/apple-reports-second-quarter-results/
And?
That's outrageous! That means profits are down over 20% from the $100+ billion they took in in the 1st quarter. As an Apple shareholder, I am incensed by this miserable performance.
Revenue is not the same thing as profits.
Some goods become more affordable, other don't. Things like housing are going to become relatively more expensive.
You then have a bunch of people who are unable to do more than make cars. They end up unemployed. So you end up having to pay their wages anyways but get nothing out of it.
Also third world environmental standards. I'd wager that a lot of the developed world's improvements in air and water quality are offset by degradation of same in the developing world. It might even be zero sum.
Wrong. The reason Americans make more money than the Vietnamese is that they generally produce more with a given amount of work. That applies to manufacturing as well. The reason basic manufacturing jobs move to countries like Vietnam is that Vietnam has a *comparative advantage* at them: they are (say) 3 times worse at basic manufacturing, but (say) 10 times worse at more complex jobs. So it makes sense to do basic manufacturing in Vietnam, and more complex jobs in the US. But even in manufacturing, Americans could make more than the Vietnamese, because they are more productive.
Where are those American manufacturing workers actually making Vietnamese wages? Either they still work in manufacturing and make a multiple of Vietnamese wages, or they moved to other sectors, and (once again) make a multiple of Vietnamese wages.
Is this why people in coastal cities make more than people in rural areas doing the same job?
I'd assume that's because that's because prices are lower in rural areas (especially rents), but I don't know. I don't see the relation with the comparative advantages of Vietnam and the US.
You think the cost of living is different between rural and urban-coastal US but the same between the U.S. and Vietnam?
A living wage in rural Vietnam is $6 US per day. Pay is less in Vietnam because workers can be hired for less money. It may or may-not be true that Vietnamese workers are less productive initially or even finally. But the reason they get paid less is that they are willing to work for less.
<Fixed a typo>
I never said anything about the cost of living in Vietnam vs. the US. (If, by asking a question, you actually mean to make an argument against my comment, please state your counterargument explicitly instead.)
They are willing to work for less because no one is willing to pay them as much as to Americans. No one is willing to pay them as much as to Americans because they are less productive. If they were as productive as Americans, they would make similar wages. That they are less productive is clear: their per capita GDP is approx. 1/6 of that of America when adjusted for price levels. Note that the GDP includes the value of all production, whether it goes to wages or profits, so what happening isn't that they are equally productive, and the sales revenue just goes towards profits rather than wages.
The reason poor countries generally have lower price levels is that productivity differences are generally smaller for products and services that are difficult or impossible to transport (primarily construction, and services such as retail and hospitality). Wholesale prices of cheaply transportable goods are approx. the same everywhere (at least as long as tariffs are low; and retailers may add different markups): if one country had higher prices than another, producers would sell more goods to that country, until price levels equalized. In rich countries, people making cheaply transportable goods have higher salaries because they are more productive. Services/industries whose products can't be traded internationally compete for workers with industries making cheaply transportable goods, so they have to pay higher salaries too, compared to less productive countries. And since rich countries aren't that much more productive when it comes to hard-to-transport goods or services, so prices will be higher too.
It's bad for the factory worker, but it might be good for the factory worker's kids or grandkids, who are now in a position to pick up more advanced work. Both sides might benefit from the transition.
As an example, Sweden still has a steel industry, but it can't compete against bulk manufacture in East Asia. Instead, it produces higher-value specialist steels that aren't as easy to reproduce through mere heavy industry. The British shipbuilding industry is much the same - it can compete in specialized quality and advanced ships, but not in bulk.
How many people are employed in the contemporary Swedish steel industry and British shipbuilding industries, compared to fifty years ago?
Fewer, but producing far more value per person.
One underlying theme of these cross country comparisons is that hard core mercantilism has been pretty effective. Taiwan has been able to keep a drastically undervalued exchange rate for longer than Japan or Korea and it has grown faster. There is a pretty positive retrospective of mercantilism towards the end of Keynes’ General Theory and of course Erik Reinert has written several books about it. Of course not everyone can mercantilist at once and this would explain the conga line effect Noah was talking about.
Though I hope it is wrong/overstated, I do still think we insult the South Asian and other developing countries by understating the IQ/hbd point.
To cite data to the points I made before:
1) Japanese/Chinese in South America (who were once impoverished and disliked immigrants) hugely out perform local groups. Hard to find go English data for SA countries, but see figure 2 of the below report for Japanese success in Brazil
http://microdata.worldbank.org/index.php/catalog/2231/download/32463#:~:text=Mean%20monthly%20income%20in%20Brazil,the%20same%20workers%20in%20Brazil.
2) This point is supported by the IQ data of international adoptees. See Caplan here for a good discussion (which also has a nice balance of nature and nurture points)
a. https://www.econlib.org/archives/2017/09/the_wonder_of_i.html
3) Ethnic Chinese outperformance relative to South Asians is seen throughout South Asia including in
a. Singapore (page 6) - https://www.econlib.org/archives/2017/09/the_wonder_of_i.html
b. Thailand (see rise to economic dominance) - https://en.wikipedia.org/wiki/Thai_Chinese
c. Indonesia (see economic aptitude) - https://en.wikipedia.org/wiki/Chinese_Indonesians
In fact, it is hard to find a country where once impoverished Chinese do not outperform, in spite of what is typically strong resentment from local groups
4) What’s more interesting is to look at those nations/demographics that are outliers in economic success relative to iq data. Is there some other hbd trait (hopefully more fungible) at play? Was there some development strategy that we can learn from. To take 2 examples
a. Indian immigrants abroad. Though this seems to be due to some combo of i) best and brightest from large population, ii) unsavory stratification (brahmin and merchant classes have much better iq perf from what I have seen, though hopefully, this changes reduced poverty in India), iii) the unique Indian personality, culture, immigrant experience
b. Ireland. Performed very well relative to iq estimates (as I understand them). My gut would say due to some combo of tax arbitrage and English language default enabling rise of global financial center, though this is speculation.
Hate to keep pushing back to the IQ/hbd point, but I do think it is the fundamental issue and strategies that can impact it (pollution, lead, iodine, natal environment, maybe even embryo selection) should therefore be the obsession of developmental economists
The IQ estimates for Ireland don’t make sense if you look at latest PISA results.
In any case why would a Northern European country genetically not too divergent do so badly in the 70s? It’s probably a delayed Flynn effect.
As for the Chinese. I do believe they are smart, and well organised. The future is theres if they play it cool. As in don’t care about Taiwan for a generation.
From my reading, Ireland probably had some combination of three things going on:
1. Not the best IQ data.
2. Delayed Flynn (as you state) due to its poverty.
3. A persistent brain drain to UK and US, which, when it ceased (or at least slowed), resulted in some reversion to the mean (but note that such things don't fully revert to the mean and Southern England might be more or less permanently a bit ahead of the rest of the British Isles for this reason).
It feels like the "ethnic minority in foreign countries rising above natives" effect could be explained by culturally indoctrinated spite towards how they were treated when they first arrived. "These people treated us like trash so we're going to grow rich and powerful. That'll show 'em!"
Frequently, such minorities are also kept away from farming, "forcing" them into more productive urban work. Jews are the obvious example.
Or into petty crime, like the Romany. That doesn't always work out so well. Or they can be forced *into* farming, but at e.g. the migrant farm worker level rather than the yeoman farmer level.
Never thought of it this way, but it’s an interesting idea.
Think you mislinked the Singapore point - but funny enough, ethnically Indian Singaporeans outearn ethnically Chinese Singaporeans (despite the latter scoring higher on tests). I think it's a factor of returns to verbal IQ being higher than returns to spatial IQ (also seen in US where Ashkenazi Jews outearn everyone).
Industrialization does have massive network cumulative effects following higher economic freedoms / lenient introduction of capitalistic policies but this is a one-time upgrade that is dependent on low-corruption, high-trust and high-intellect aptitude societies. Countries where resources are the primary method of exploitation and labour is not needed tends towards higher corruption because the leaders are balancing their power amongst a smaller share of collective interests that are not necessarily the population's, likewise those with lower intellect/lower trust affinity seeing a longer delay/lag if they don't have an outgroup population to run things and/or force policies of centralization and increased economic freedoms. However the lower distributions of the curve get pushed out and the standard quality of life diminishes rapidly following urbanization, not only with reduced aggregate demand due to population-bust latent generation lag effects but also cumulative asset inflation (moral hazard) created from chasing high-financier yields that have yield no productivity gains (only improvement of technologies/capital). The increased complexity/nature of the work makes it so a greater share of wealth goes to the top, and less are suited/selection for intellect-oriented work is diminished by differential fecundity (not mortality) due to lenient conditions. Saturation, grade inflation, degree inflation, experience inflation all simultaneously happens as only a fraction of the population can fulfill an increasingly limited amount of high-income roles (IT/finance/medicine/management) with depressed fertility rates of the more intelligent fraction + aging population demographic pyramid structure. The spatial tilt of g enables better micro-evolution of engineering and contributes to the sustained Taiwan income surplus over other nations. Also IQ is only increasing on the least-g loaded tests, real g has declined since the 1850s (evidenced by hard measures of decreased vocabulary complexity, fluency, backward-digit span, memory span, rates of macro-evolution technological progress, and simple reaction time by .7 points per decade - Woodley effect). The news/books/nature of discussions are all much more complex back then (can be seen in interviews, television news or anything) -- we are seeing a slow-down and negative interest rates worldwide by stagnating growth, stalled population demand and inflationary pressures. Industries will not be migrating indefinitely and there will be a stable-state equilibrium between automation and fraction of available population for work. The inputs become corresponding less and less needed per unit of free energy/calorie/food/housing (potentially infinite with deuterium-splitting or any other fission/fusion-related technologies). The demographic and economic transition will be substantial given the Elite's NWO plans to dominate the globe into mega-sector economies with directed authorianism/scientific dictatorship tendencies (evaluating, studying and changing human behaviour en-masse) to pursue technological singularities. The rentier economy/circular economy would produce a higher marginal utility / increase purchase life of items/objects, although the net gains would still go to the top .001% with lessened externality costs (i.e. pollution) presumably.
I found this claim fascinating: " IQ is only increasing on the least-g loaded tests, real g has declined since the 1850s (evidenced by hard measures of decreased vocabulary complexity, fluency, backward-digit span, memory span, rates of macro-evolution technological progress, and simple reaction time by .7 points per decade - Woodley effect)"
Do you have a good source for me? Or preferably several with possible rebuttals/discussion?
On the issue of the efficacy of protectionism, the South Korean economist Ha-Joon Chang has written some interesting polemical books in this vein, namely:
https://www.amazon.com/gp/product/B003Z9L4NA/ref=dbs_a_def_rwt_hsch_vapi_tkin_p1_i2
https://www.amazon.com/Kicking-Away-Ladder-Development-Perspective/dp/1843310279
With regard to the United States specifically, Michael Lind is an enthusiastic booster of the idea that Hamilton/Clay/Lincoln style tariffs (and government coordination more broadly) were a key booster of industrialization. Here's his economic history of the US: https://www.amazon.com/dp/B005HFI0X2/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1
I find it interesting, and perhaps revealing, that economists' most beloved policy recommendation, international free trade, is more obviously beneficial in theory than it has been in practice.
Ha-Joon Chang's work always reminds me of the old story from Irving Copi's logic book (adapted because of my memory failures):
Some scientists are investigating the causes of drunkenness. They self-experiment. Firstly, they have Scotches on the rocks. They then get drunk and record the results. Secondly, the next night, they have gin and tonics. They then get drunk and record the results. Thirdly, they have vodka and ice. They then get drunk and record the results. Finally, the scientists look over their results, and conclude that the common factor, water, was the cause of their drunkenness.
In Ha-Joon Chang's case, he focuses on finding something - anything - that constitutes state intervention in development successes, and attributes the success to that state intervention. Even if success correlates with reductions of state intervention, it was whatever state interventions he can find that is the cause of the success in the country's development. He might make positive claims about the "mixed economy" being his preferred model, but in conversation, I remember him attributing South Korea's relative success over North Korea to the large sums of money that North Korea had to spend on defence against the US...
For a more thorough critique of Ha-Joon Chang's casual empiricism, see Bill Easterly 's "The Anarchy of Success". Even if you disagree with Easterly's positive claims, his epistemological critiques of Chang seem sound.
One of the things on my 'something to learn more about' list is the Spanish Economic Miracle. The very short version I've heard (which I presume is incomplete at best, total nonsense at worst) is that Franco tried autarky and independence on the advice of his fascist advisors, eventually noticed he was still very poor and his neighbors were getting very rich, and fired them and hired free-market economic advisors, at which point the Spanish economy boomed. But this is probably somewhere between 'a massive oversimplification' and 'lies to children.' Anyone have a book recommendation on the topic?
Re Mexican land reform and industrial policy broadly:
A) Mexican land reform created communal plots that more or less everyone acknowledges were suboptimal from a development pov. Studwell also mentions something called ‘urban bias’ to explain Latin American agricultural underperformance. He barely mentions it, though (iirc it was tucked away in an endnote) but I’ve googled it a couple times and it seems like a seriously discussed topic among economic historians, so I wouldnt dismiss it.
B) I can’t remember too well but I believe he mentioned export discipline as something Latin America lacked. Definitely said most countries attempting to industrialize with interventionist policy failed to do so. For Mexico in particular, I am pretty sure we always lacked it, given reports of our goods being eternally shoddy.
C) Resource endowments in general as a Bad Thing seems like an underappreciated part of this story. Again, Mexico lost a couple decades directly as a result of an oil boom induced debt crisis (the Volcker shock certainly didnt help, though). The book talks a good deal about Malaysia and Indonesia, big failures and also big commodity producers.
This is an interesting discussion, but to me, these conclusions rely too much on an informal analysis of correlations. That never gets you very far in economics given the complexity of the systems were dealing with. The better approach is usually some combination of formal statistics and simulation modelling.
There are some very sophisticated simulation models for these problems. While they are simplifications of reality, the advantage is that you can run experiments of sorts, adjusting policy while holding everything else constant.
The other thing that's missing is a discussion of alternatives. Sometimes tariffs are better than doing nothing, but there is almost always a better and more direct alternative.
I would like to know more about the "sophisticated simulation models" you mentioned - do you have any pointers?
One example would be computable general equibrium models, such as GTAP. It's been a few years since I've looked into it, but I'm pretty sure people have built versions with endogenous knowledge accumulation.
https://www.gtap.agecon.purdue.edu/default.asp
SimCity
To be honest my knowledge of this mostly comes from Wikipedia, but Finland is another notable example of a country which did land reform after 1945 as a compromise intended to defuse pro-communist factions. Prior to WW1, at least, their level of economic development was very similar to Russia (because they were part of the Russian Empire, and not an especially well-developed part!); their subsequent developmental trajectory is, suffice to say, very good.
Interwar from 1918 onwards, but otherwise yeah. Cottars received the right to buy out their lands.
Here's a plot of US corn yields in bushels per acre from 1866-2019: https://www.agry.purdue.edu/ext/corn/news/timeless/YieldTrends.html
Here's a plot of average farm size in Nebraska from 1870-2002: https://www.researchgate.net/figure/Estimates-of-number-of-farms-circles-with-solid-line-and-mean-farm-size-triangles-with_fig5_228639771
The average farm's area increased by 10x and yields per acre increased by 7x at the same time. This combines to a 70x increase in output-per-farm, which seems roughly in line with the huge decrease in the population percentage of farmers. Yield increases are explained by better seeds, better fertilizer, better agricultural science, and better machinery. These new technologies are available worldwide. So if agricultural productivity is the key to development, then in 1866 development was on Hard Mode and in 2020 development is on Easy Mode. The extra agricultural productivity that everybody got from the new technology probably far exceeds whatever small effect land reform could have had: 7x from technology vs maybe 1.5x from distributional efficiencies. So it seems extremely unlikely that land reform is the bottleneck.
Meanwhile, some countries that redistributed land made agricultural productivity much worse: Ukraine in the 1930s, Zimbabwe in the 2000s. After Zimbabwe got rid of its white kulaks, it had to beg them to come back: https://www.abc.net.au/news/2018-02-11/zimbabwe-asks-exiled-farmers-to-return-home/9419226
One consideration: population boomed in many developing countries. It did in the US too if we are comparing with 1870, but (AFAIK) land is much more abundant in the US. So while many new technologies are available in poor countries as well, they also need higher yields to achieve subsistence. Yield increases did outpace population increase; I'm just saying that not all the yield increase goes towards increased living standards.
I think his point about land reform was:
A) agribusiness doesn't go to the third world to grow corn.
The developing country gets a first rate futuristic bananas plantation, the produce of which is shipped off to the first world in exchange for the modern equivalent of a steel hatchet, a fifth of whiskey and a handful of beads.
(pps: I have experience with this, actually, in Latin America. I lived near the bananera for a while, which was predictably modern and efficient, and after workers finished their shift they would come home and work their quinta of beans with hand tools.)
(ps: to be fair, nobody in a place that grows bananas would want a nasty-ass export banana. They are yellow sky potatoes and should not be looked at directly)
B) the motivational and moral value of land reform is as important as the actual production.
It's kinda like the CEO taking a pay cut, giving a huge raise, and showing up to put in 70 hours with the proles, right? It makes you feel like you are a participant, instead of a component.
Ukraine did not redistribute land in 1930's — it did that in the 20's, then it was seized by the government to form kolkhozes and sovkhoses, big collective farms. Whether agricultural productivity was worse is debatable, yet full scale industrialisation was dependent on collectivisation and only started circa 1929.
Wouldn't the optimal land reform be Land Value Tax, and then land goes to whoever can use it most optimally through market forces?
By George, I too see this everywhere!
It sure seems like a land value tax would sufficiently reduces the rents of landlords (e.g. of farm land) to have much of the same effect, but I can imagine a sufficiently enticing 'premium' from the actual agricultural workers controlling or owning the land too, on top of the benefits of the tax.
Not empirically. If a land value tax accomplished what the Georgists wanted it to then you would have seen the effects in places like Ancien Regime China. Virtually all of these regimes had land value taxes prior to reform. The new industrializing regime abolished such taxes, including China, Korea, Taiwan, and Japan did. (The others might have too, I don't know.) You can read the official line of the Chinese government about land taxes. They will tell you endlessly about how it was oppressive and exploitative to the workers and how the bold and brave Mao Zedong ended them.
Empirically, land value taxes just do not work the way Georgists want them to. Which is why Georgists tend to be so light on actually examining where they're implemented.
This is interesting and is related to some thoughts I've had about the practical implementation of Georgism!
I think 'land' is probably a pretty poor term to use nowadays for one – I _think_ 'natural resources' probably better captures what George intended the concept/category to cover.
So my immediate thought after reading "Virtually all of these regimes had land value taxes ..." is 'Were those _land value_ taxes or more like what would be described as 'property taxes'?'. The Georgist idea is to tax (and _all_ of, or nearly all of) the value of 'land' – but NOT 'property', i.e. someone _improving_ their 'land' should NOT result in a higher valuation of that 'land' and thus NOT result in higher taxes. (Tho maybe those improvements _would_ result in higher land value taxes for other nearby properties.)
I am still pretty skeptical about how, or whether, a 'pure' land value tax could work, e.g. be assessed. George apparently did explicitly discuss land values _eventually_ including some past improvements (and that being mostly okay), and, in the review (I think), either George himself or other Georgists, there was a brief mention of options like only requiring (some) land value taxes to be paid when land is sold.
Okay! The Irish IQ question! I don't know this Unz guy from a hole in the ground, so I am going to go full bore on "Yes indeed Lynn is full of what makes the roses grow". I've never trusted his figures, I did some exploring of what the data was and where the data he used came from years back (which I didn't then bookmark or keep because I am careless) so off to races we go!
To quote from the linked article:
"For example, when I pointed out that Lynn had devoted many years of personal research in Ireland and eventually concluded that they were clearly a low-IQ race, several commenters angrily denounced Lynn, one going so far as to call him an anti-Irish bigot of KKK- or Nazi-like proportions."
That's because Lynn does have a political axe to grind here. I'm not even going to touch Eysenck, that dead horse has been flogged enough. But Lynn is an Orangeman (no, not in the Trumpian "Orange Man Bad" sense, in the "1690, 12th July, marching flute band" sense). He's one of the "pining for the Empire" lot, and his thesis is that the ungrateful Paddies in the South who threw off the loving embrace of Mother England could only do so by being both stupid and evil.
He gets the stupid by having the measured IQ of those bogtrotters infesting the Republic of Ireland be lower than the staunch loyal and true British subjects living in the North of Ireland (even though that means people who are literally living across the road from each other) which in turn are lower than the Fine Upstanding Naturally Superior Anglo-Saxon Race of the mainland, i.e. Great Britain.
His "many years" of research in Ireland were three IQ tests, carried out not by Lynn but by a pair of young researchers who wrote two of them up into a thesis in the early 70s. Lynn, in his (in)famous book which kludges together
This is Unz' "So the huge and apparently well-designed 1972 study of 3,466 Irish schoolchildren which placed the mean Irish IQ at just 87 hardly seems an absurd outlier."
Uh-huh, Ron, and who knows what Ireland in the 70s was like, you or me? I was nine years old in 1972 and one of those primary school kids in a rural town (not a small town by our standards, but a small town by other standards). We didn't take part in any of those tests, and I take my leave to differ on how "well-designed" those were, since the time I went digging for the original test, it was one that the researchers developed and used for a middle-class British school, they just re-purposed it. And I can't recall the age ranges in that test conducted in Ireland, but it wasn't all a cohort of the same age. But very well! I am one of those 87 IQ nine year olds in Ireland, who miraculously grew up to have a higher IQ in the Celtic Tiger boom years.
My arse, to be vulgar about it.
"Although Lynn has inexplicibly dropped that 1972 study in his latest 2012 book, this new volume otherwise contains a plethora of additional Irish IQ studies, displaying a wide variety of results."
"Inexplicably" only until you realise that Lynn was forced to agree with the critics that kludging together three tests, two done on kids, one done on adults, and then averaging out the results was not good practice.
"Furthermore, since Lynn used British scores for normalization, and Ireland is geographically and culturally an immediate British neighbor as well as English-speaking, British tests could presumably be used without modification, reducing the risk of language or cultural bias during the translation process."
Yes and no. Ireland in the 70s was behind Britain. Education was one of those areas. One reason I am sceptical about IQ test results from around the world is that I think the 'improvement' in the Irish score - jumping up from the low of 87 to the respectable normality of 100 - is down to things like "getting better at taking tests" and educational system catching up with the standards elsewhere.
Otherwise, you have to accept that my generation of the 87 IQ dummies were thick as the ditch, but our kids grew up to be the 100 IQ smarties. If you can explain the Magic Beans which gave us this result, you don't need polygenetic testing or the likes to improve IQ for future babies, just replicate the Irish Thirteen-Point Miracle Gain. Even Unz has to admit that there is some improbable Secret Sauce at work in the ostensible results:
"Within the social sciences, a correlation of 0.86 is extraordinarily high, almost implausibly so. The inescapable conclusion is that Irish IQs rose at an almost linear rate during the three or four decades after 1972.
Why this occurred is an entirely different matter. I find it extremely difficult to think of a plausible biological explanation, though others are welcome to try. During this exact period, Ireland was undergoing a very rapid rise in urbanization and affluence, and I’d suggest those factors. Perhaps there’s some other cause instead. But the empirical rise of Flynn-adjusted Irish IQ by nearly a full standard deviation in 37 years seems proven fact."
"Proven fact" my royal Irish backside. A combination of sociological factors (including poverty), yes industrialisation, and wishful thinking around the break from Britain on Lynn's side is most of the explanation I find satisfactory.
My dudgeon being so high, my attention to proof-reading was commensurably low so to finish my disdain for Richard Lynn:
Lynn, in his (in)famous book which kludges together results from all over the world, including "if I don't have a test for this country/particular ethnic group, I'll just guesstimate from what I consider the closest similar results" is not trustworthy, even Unz in his later list of Real Proper IQ Tests has to tidy up Lynn's work for the Irish:
" Here is the complete listing of all IQ studies provided by Lynn (omitting his careless duplications), including sample-size, year, and Flynn-adjusted score, to which I have added a 2009 IQ of 100 based on the recent PISA results, which were almost identical to those of Britain".
A note about "almost identical to that of Britain" - the population of the Republic of Ireland in 1972 was 3 million people, the population of the United Kingdom (that includes Northern Ireland) was 56 million. Estimated population of the Republic of Ireland in 2020 is 5 million, of the UK is 67 million. With higher population, I imagine you have better chance of more higher-scoring (and of course lower-scoring) on tests. The population of London alone in 1970 was 7.5 million, nearly twice that of the Republic. A better like-with-like would have been "compare Irish IQ and London IQ tests".
Indeed, the next most populous British city in 1971 was Birmingham, with 1 million people. Has anyone done "London versus Birmingham" IQ studies, and what does that tell us about the stupid or otherwise Brummies by comparison with the Londoners?
And let me have a look at Unz' list o' tests:
96(1964) = 90
3466(1972) = 87
1361(1988) = 97
191(1990) = 87
2029(1991) = 96
1361(1993) = 93
2029(1993) = 91
10000(2000) = 95
3937(2009 PISA) = 100
200(2012) = 92
Well, we seem to be bouncing around all over the place! We dropped 3 points between 1964 and 1972, clambered a whole 10 points up in 1988, lost that 10 point gain in 1990 (just two years later, what happened, did the Smart Kids all emigrate?), pulled ourselves back up by our bootstraps in 1991 (maybe the Smart Kids had just been on holiday when the tests were taken and were now back), lost either 3 or 5 points again in 1993, managed to redeem ourselves in 2000, then slumped back down in 2012. End result being that between 1964-2012, a period of forty-eight years, we managed to improve only from 90 to 92 IQ, which I suppose is within a margin of error saying we never improved at all.
I don't know what we did in the PISA tests in 2009 to improve so drastically. Or manage to hang on to decent results in every test since. https://www.erc.ie/studies/pisa/
Breakdown and analysis of our 2015 results: https://assets.gov.ie/30799/d84ea08601da4c5d8825b0af84b59540.pdf
With only a measly national IQ of anywhere from 92 to 100 (as judged by the IQ tests Unz relies upon to back up Lynn), for 2015 PISA:
"Ireland continues to maintain high standards in Science, Mathematics and in reading.
The mean performance of Irish students in reading was significantly above the OECD average. Ireland ranked 3rd out of the 35 OECD countries and 5th of all 70 participating countries.
The mean scores for Ireland in both Mathematics and Science are significantly above the average scores for OECD countries and Ireland’s performance ranked 13th among all OECD countries in both in 2015.
Ireland has improved on its performance in Mathematics compared to other PISA cycles and is now significantly above the average for the second cycle in a row."
Maybe we're bribing the judges with Guinness, Jameson, crubeens and buxom red-haired colleens? Or maybe, just maybe, those IQ tests are full of the same thing that Richard Lynn is full of?
I think the important aspect of the land reform is, in the context of industrialization, the ability to transfer a significant portion of the workforce from agriculture to industry. So, say, Britain was an already-rich country running on agricultural surplus, kickstarting industrialization required forcing people, who were doing well in the countryside, to move to towns. Which they did, by immiserating them. Or, say, Soviet Russia needed to create a legible agriculture to maximize the surplus extracted from their peasants. Which, again, they did (in this case, immiseration was an unintended consequence).
Poor Asian countries needed their populations to raise above subsistence level, to have any surplus at all, and so they did. But as a pro-industrialization policy that is also (immediately) good from humanitarian standpoint and beneficial to everyone, it may be a rare special case. (I smell an industrialisation/urbanization-era sequel to "Against the Grain" waiting to be written.)
Apparently I have not yet discharged my overflowing bosom sufficiently on that Irish IQ Test Special.
One final comparison:
3466(1972) = 87
1361(1988) = 97
191(1990) = 87
So, from 1972-1990 we bounced from 87 to 97 and back again. In the finest tradition of the high-quality analysis of Richard Lynn, I'm going to average these three and get a result of - tah-dah! Average Irish IQ in the period was 90!
Funnily enough, let's see what was going on in my nation between 1980-1990. Oh look, it's the Young Europeans campaign, as well as a horrendous recession and emigration peaking once more in the traditional way we solve our economic problems: export them elsewhere:
https://www.ucd.ie/merrionstreet/1980_europeans.html
"UCD engineering graduates were to the fore in the 'Young Europeans' campaign by the Industrial Development Authority (IDA) in the mid-1980s. Designed to showcase Ireland's highly-educated cohort of engineering and science graduates, the campaign was very influential in the development of Ireland's profile within the technology sector internationally. Professor Liam Murphy, one of the Merrion Street graduates featured in the campaign, recalls 'I'm not sure we realised at the time how widespread the picture would become. But it was great to be a part of something which helped to raise awareness of the quality of Ireland's high-tech workforce!'
The economic reality of Ireland in the mid-1980s saw many of the most highly-skilled graduates leave the country in search of opportunity. This famously included many of the graduates from the iconic IDA advertisement. However, subsequent years saw many emigrants of the 1980s return to Ireland, bringing the skills and experience they had acquired abroad and contributing to the transformation of Ireland's industrial base."
Well, I imagine that proves that an Irish four-year engineering degree wasn't worth a straw, seeing as how you could easily get one with just an IQ of 90.
I mean, Lynn and Unz can't be wrong on that, can they?
Signed, a member of the 87 IQ 1972 cohort.
Also for the times, a song from The Pogues:
https://www.youtube.com/watch?v=swQNNjXztsI
"Thousands are sailing
Again across the ocean
Where the hand of opportunity
Draws tickets in a lottery
Postcards we're mailing
Of sky-blue skies and oceans
From rooms the daylight never sees
Where lights don't glow on Christmas trees
But we dance to the music
And we dance"
What I kind of disliked about the book (based on the review ; haven't read it) is that it seems to imply economists are basically morons.
But there are lots of economists and thought currents that have had ideas close to Studwell's. Say, Stiglitz? Certainly "globalisation and its discontents" (2002) would agree with Studwell that the IMF is evil. It's also easy to see that Krugman's ideas translate into criticisms of the world order of the World Bank, IMF and WTO...
In terms of current of thought, what about institutional economics? (https://en.wikipedia.org/wiki/Institutional_economics ) They've been saying stuff that sounds very much like Studwell for a while...
My point is - Not All Economists... And, also, economists don't really make the rules. Countries, with geopolitical agendas, do. They might just source the economists who will support whatever it is they wanted to do.
As to "it means that everywhere in the world will get rich eventually, free markets are doing their job, and US wage stagnation is (in some sense) nothing to worry about. It would be bad if - well, if people learned it was true and then everyone started demanding tariffs to keep all their country’s wage growth for themselves.
But this is extremely unsupported speculation off of Noah’s already pretty unsupported speculation, and probably some economist will show up to tell me why it’s definitely not true".
... it's basically how I view what has happened since 2000 and China entry into the WTO.
Noah has a point about manufacturing moving from country to country and industrialisation therefore moving down the list of available places. This is stylized. Manufacturers need countries to have decent legal systems, decent infrastructure, somewhat educated/urban population with lower wages etc. So "good" policies are part of why manufacturing moves across countries over time.
It's also somewhat dynamic. You move your textile industry from eg Europe/US to Japan. Fine. Then Japanese get rich enough to consume some of the clothing so you expanded the market, you move your textile to China, they get rich enough, you move to Bangladesh, expanding the market all the while.
But, yes, there is no doubt in my mind that the Western countries' middle class took a significant hit to its earnings and that allowed China etc. to develop a middle class. It's all to the long term good, maybe, though we need to avoid falling for fascism as a consequence long enough to see that potential long term good.
Another way to look at it - imagine one worker/consumer in one rich country and one industry. At first, the worker works for the industry and consume the output in the rich country. Then, the industry move to a poor country to exploit the cheap labor there and hide the profits in an offshore center/Switzerland. The industry makes a lot more money in round 1 but the whole thing collapses in round 2 as the initial worker, now jobless, cannot consume, the cheap laborer can't consume enough and obviously Switzerland doesn't get a huge enough cut to consume all that is produced...
Again - this is just stylized stuff. But I think it shows something important and why we don't all industrialize fast. There's only so much solvent demand in the world and therefore only so much need for manufacturing. If we want more countries to industrialize faster, we got to find a way to boost solvent demand across the globe instead of relying on the slow process of countries' labor force negotiating salary increases in the teeth of the opposition of the local and international elites.
The 'everyone else is an idiot/moron' trope/cliche/whatever is _very_ common in 'academic' (and other intellectual) works, so I wouldn't hold that against Studwell very strongly.
Hahaha. Nice.
Doesn't the description of manufacturing in South Korea remind you of VC funded startups? Long periods of intentionally making losses while learning more about a technology, finding product-market-fit and growing a customer base. Similarly to how SK needed to get export numbers to evaluate whether a company could be successful, the value of a startup is measured in how well it does in the outside world using growth rates and customer acquisition costs (not just raw profits).
Since investment is one of the main drivers of economic growth and most of our economy doesn't really engage in it (see all the companies buying back stock when they should be creating new strategies), maybe we can learn something from the developing countries here? We should create more spaces in our economy where the companies have the slack to innovate while having an incentive to do so, either as a monopoly like Google which is afraid that the next consumer computing device is controlled by Apple, or as startups that can explore a frontier without immediate profits. If I have time I might flesh out the similarites between How Asia Works and Zero To One a bit more later.
etymonline attests fritz as a stand-in for Germany from 1883, much before the 1914 given by World Wide Words.
Still no definitive evidence, but it's not impossible for that to be the origin.
Mauritius is currently slightly poorer than Malaysia by PPP GDP. It's unclear why they included it, but not Malaysia. Both are near the upper end of the range that we usually consider "developing" rather than developed.
In any case, even assuming the book is correct about what policies helped East Asian countries become rich(er), it's unclear how applicable it is today. Based on the review, it assumes a mostly agricultural country, one where peasants have little or no surplus above subsistence levels. Today, this only describes the poorest countries. At this point, moderately-poor countries like Indonesia or Thailand (let alone moderately rich ones like Malaysia) are industrialized, and large segments of the population have incomes well above subsistence levels.
The mention of Israel makes me think: it might be instructive to do a compare and contrast of the Enclosures with the purchase of land from traditional Ottoman landlords by pre-state Zionist settlers. There would seem to be possible parallels both in legibility of land tenure unlocking economic development, and in negative effects on tenants whose traditional, illegible rights (or what they perceived to be rights, at least) were taken away.
An observation re Vietnamese IQ levels:
Czech Vietnamese youngsters do very well academically. Their parents or grandparents were mostly invited as factory workers in the 1970s-1980s, so there should not be a strong founder effect there.
One reason I think industrialization might be important is transport costs. A strong economy requires a solid infrastructure. The cost of transporting the raw materials is enormous, so you need local manufacturing.
"Taiwan and Japan both bought out landlords with bond "
Much of the land in Taiwan was owned by the Japanese. Taiwan having become a Japanese protectorate in 1895. The owners fled in 1945 with the defeat of Japan. I'm pretty sure they were just expropriated.
"The bonds became worth less because since government bonds grew more slowly than the economy. "
The bonds became worthless because they were issued in 1946 and between 1946 and 1949 Japan experienced triple digit inflation. The prewar yen traded at ¥3.6 to the $1. By 1949 when prices stabilized it was trading at ¥360 to the $1.
"I think it’s fair to speculate that most of the northern vs. southern Asian IQ difference is just that northerners are more Flynn-ified."
Don't believe that for a second. Huge Chinese/Malay gap in Malaysia and Singapore (and huge Taiwanese aborigine/Taiwanese Chinese gap in Taiwan), Brunei does not score well on standardized tests. Chinese in Thailand, Indonesia, and the Philippines also earn higher incomes. All evidence suggests the Asian gap is as intractable as the Mediterranean gap.
"How much of US wage stagnation has been that we “exported” our potential wage growth to China (or other developing countries)?"
Some, but the general stagnation in trade during the 2010s combined with real, but fairly modest wage gains suggests it's not the most crucial factor.
"I don’t know if the statistics we use to prove that Japan etc had a Flynn Effect"
Japan and especially Korea did have a Flynn effect; see the 2012 PIAAC. But Korea already started at a southern European level despite being much poorer than Southern Europe.
"Malaysia, Thailand, and Vietnam all come out about the same!"
Jason Malloy did some research on this; Thailand comes out to around 90, and Vietnam is similar
https://humanvarieties.org/2014/07/16/hvgiq-thailand/
https://humanvarieties.org/2014/06/19/hvgiq-vietnam/
Philippines's PISA results are truly dismal, but some evidence suggests its IQ is in the 80s. I think its PISA results will improve over time, but not enough to ever close the gaps. As a rule, lower-middle income countries (but not upper-middle income countries) tend to have standardized test scores that seem below the trendline suggested by inference from racial composition (see PISA for Development results).
The most interesting aspects of the IQ and national income debate aren't the countries that are on the trendline, but the positive outliers -for instance, the Dominican Republic, Romania, Austria, Turkey, Lithuania, and America.
The land reform thing never made sense. The whole concept of specialization of labor should suggest to us that it's better to have three guys doing agriculture and 47 guys doing other things than to have 48 guys doing agriculture -- on the same land -- and 2 guys doing other things.
Of course, that's an argument about how the labor pool should be allocated. To the extent that we're holding labor allocation fixed and arguing over how agriculture should be *organized*... we'd still expect the large landholders to be more productive than smallholders are? We see gains from scale in every other industry; why would agriculture be different?
This is also, as far as I'm aware, the explicit lesson we learn from the de-Romanization of Britain. Under Roman rule, British agriculture was done in a system of a small number of centralized great estates. With the fall of the Empire, Germanic settlers came in and reappropriated all the same land into a system of a large number of decentralized individual holdings. And total agricultural production cratered.
I think the idea is that this is what happens. Under landlordism, there's no push for intensive farming and improvements to efficiency, as there's no point, and agricultural production increases slowly at best. Then you have land reform, and now farmers care about their own lot, and production skyrockets. This in turn means that there's more room for urbanization, and additionally, successful farmers might now buy out less successful ones, also sending those to the cities.
So the land reform _does_ lead to urbanization and specialization. It's conceivable that you could _also_ get this increased production by having large farms with mere agricultural labor, where the landlord has both incentives and possibility to create improvements through having _control_ of the production rather than just renting out the land - this seems to be the British way. It's tenant farming that seems to get the worst of both worlds.
Re: Mexico and Latin America. Mexico's and Argentina's per capita (nominal) is $10k. Yes this is lower than Korea's $30k but certainly above, for example, Honduras at $2.5k. Are we certain land reform was not a success there?
I do think we should look at China's growth and then adjust it for two very important factors: the enormous portion of the wealth that is owned by people who get it via membership in the party and corruption rather than productive activity (it's got to be a huge number although there's no way to know what that number is), and the enormously costly destruction of the environment and human life that is caused by the amazing levels of pollution of air, water, soil, and food.
Chinese low-wage workers are not really getting significant gains. Seven years ago, a low-wage worker in a first-tier city made about 3000RMB a month. Now he makes about 3000RMB a month, and both food and housing are more expensive. This is not what is reported, but it is what is going on.
I too would love to learn more about Mauritius. It is a very interesting special case. Maybe its geography gave it artifically low crime, which helped with high value tourism? Maybe there's a financial-hub-like effect to being the first place in a wider region that doesn't suck?
It's trade-and-finance, which works well for a tiny island. It also has an interesting ethnic mix, with lots of Indians.
Wikipedia: "According to the Financial Services Commission, financial and insurance activities contributed to 11.1% of the country's GDP in 2018. Over the years, Mauritius has been positioning itself as the preferred hub for investment into Africa due its strategic location between Asia and Africa, hybrid regulatory framework, ease of doing business, investment protection treaties, non-double taxation treaties, highly qualified and multilingual workforce, political stability, low crime rate coupled with modern infrastructure and connectivity."
"Secondly, he completely ignores the many times land reform failed. East Asia is not unique in its attempts at land reform. It was fairly common in Africa, Eastern Europe, etc. Ukraine and Romania had incredibly fertile soil and it's hard to think of regimes that eliminated their landlords harder."
The point of land reform is to put the land into the hands of the farmers, not to collectivize into even _more_ clumsy and inefficient agricultural solutions. _Murdering_ your independent farmers as "kulaks" is kinda the opposite.
Going further back, Sweden had a big land reform in the 1820s, which is commonly regarded as a major success. But unlike the international ones where the landowners have their land taken and redistributed, Sweden already had predominantly independent farmers. What it _did_ do was to unify the lands of each farmer, where they had previously been so spread out in patches that the whole thing was communally controlled at the village level, something that didn't exactly lend itself to experimentation and competition. With each farm having mostly unified farmland after the so-called "lawful shift", the same kinds of efficiency gains as with the more common land reform became possible, some parts of the population were driven into the cities, and industrialization could begin.
"So Studwell is picking a pretty decent fraction of the limited number of cherries that exist."
That misses the point. Even if one picks all the cherries and they all have an X in common, it's not strong evidence of X causing cherryness. Not until you look at non-cherries to make sure they don't also have X.
The old timey go-to cartoon example is highly successful US executives who watch football on Sundays.
> One possible defense of Studwell’s “cherry picking” is that, as per Wikipedia, “Since 1960, only 15 economies have escaped the middle income trap […]” […] So Studwell is picking a pretty decent fraction of the limited number of cherries that exist.
What kind of broken logic is this? The criticism was, paraphrased:
“The claim that X causes economic success isn’t well supported enough, because he failed to take into account countries that did X but didn’t achieve economic success.”
And your rebuttal to this is:
“Yeah but there are only very few economic success stories.”
What? The commenter Salemicus was specifically asking you to take into account the countries that were NOT economic success stories, even though they tried X. (With X being some combination of land reform, protectionism, etc.)
The Pseudo-Erasmus tweets don't seem to be publicly visible. Perhaps one needs a twitter account
"Secondly, he completely ignores the many times land reform failed. East Asia is not unique in its attempts at land reform. It was fairly common in Africa, Eastern Europe, etc. Ukraine and Romania had incredibly fertile soil and it's hard to think of regimes that eliminated their landlords harder."
There was a similar land reform in Ukraine during NEP, after less than 10 years the collectivisation policies were implemented, which were the bedrock of the pre-war rapid industrialisation in SU.
After SU collapsed land plots were transferred back to people but as every reform done at that time in Ukraine the gains from it went to big businesses. Now Ukrainian agricultural sector is dominated by oligarchs.
Basically, there were not much time when Ukrainian peasants were able to become small farmers as outlined by Studwell. Also by 90's Ukraine was urban - around 73% of people already lived in citied, and industrialized, so there is a lot of difference between 50's South Korea and most post-Soviet republics.
Regarding the controversy over different land reform outcomes in East Asia vs Western nations - some attention should be paid to differences in what is being farmed.
Rice farming is much more labour-intensive than wheat farming. Rice paddy irrigation requires the constant maintenance of fast-eroding dikes and canals. Because of said earthworks, high water levels, and the nature of the crop, mechanization has proven much slower in southern, rice-focused areas of China than in northern wheat-focused areas.
This 2003 paper explores these barriers to mechanization in Chinese rice farming:
https://agris.fao.org/agris-search/search.do?recordID=QR2004000098
This 2019 article reports a study finding most rice crops in China are still harvested by hand
https://phys.org/news/2019-02-mechanical-rice-production.html
We may, therefore, hypothesize that Western wheat farmers can more easily utilize economies of scale to increase crop yield than Eastern rice farmers, because:
a) Machines can be used at almost every stage of the furrowing-to-harvesting process.
b) The comparative technological simplicity of mechanization reduces its cost.
c) The countervailing harm to yields done by less attention-paid-per-plot is less intense for wheat than for rice, due to its reduced maintenance needs.
To put it another way:
If the countervailing costs of less attention-paid-per-plot outweigh the gains of mechanization in rice-farming areas, but not wheat-farming areas, we would expect land redistribution to increase yields in the former but not the latter.
This would explain the experience of England, whereby industrialization was spurred by landowners cutting their workforce whilst increasing crop yields sufficient to create a permanent food surplus – i.e. the opposite of what the East Asian experience would predict.
A good way to test this hypothesis would be to study the differential effects of land reform on crop yield in wheat-focused vs rice-focused parts of China. If anyone knows of such a study, let me know.
If we play the game of what these countries have in common (leaving out equatorial guinea as it is explained by oil)
1. European: Greece, Ireland, Portugal, Spain
2. The US has a national security interest: Israel, Japan, South Korea, Taiwan
3. Small islands that are ex-British colonies and have a big financial sector and are a trade hub: Hong Kong, Mauritius, Singapore