Take nothing for granted

"When the first beam of sunshine strikes on African grassland every morning, all animals will wake up and strive to run its fastest to survive : predators have to outrun preys to hunt for life, and preys have to outrun predators to escape death... " I told Jeff that I would begin an article like this, when I found it perplexing that some Americans furiously resist globalization because, for one, cheap Chinese labors take "their" jobs.  "Why do Americans think that they deserve a better life than their Chinese peers if they cannot produce more at a lower cost?" I felt a bit angry.  As a privileged and spoiled species, humans often forget that all beings have to fight and compete for a living, or using the civilized wording, work hard for a living.  Survival is not supposed to be easy for anybody, any species.  Living only on what ancestors created can be a short-term privilege for humans, but surely a slow suicide after all.

Just finished watching a documentary on DVD "Nature's most amazing events" by Discovery Channel.  Most amazing and touching, indeed.  It includes three episodes : The Great Melt, The Great Salmon Run, and The Great Migration.  The first in Arctic, second in Northern Pacific (British Columbia and Alaska), and the last in East Africa.

East Africa, Serengeti, the short-grass plains attract 3 million of grazing animals to migrate in December and out in May.  This herd of grazers, such as wildebeest, zebra, antelope, often stretching 25 miles long, travels for more than 1000 miles, following the rumbling storms to find fertile grassland to feed and calve.  During their journey, there are lurking threats everywhere from top predators such as lions, cheetah, crocodiles, who pretty much rely on the herd to survive and raise cubs.

You think it's cool to be a lion, no?  You'll be surprised that the king of animals actually suffers most and the survival rate of cubs is very low.  The movie followed the fortune of an Ndutu pride (i.e. a group of lions) for seven months from the dry season to the most prosperous one.  It is in fact appalling to witness the conditions those cubs were in during a dry season when there were few preys around. They were little more than skin and bones, waiting on the bare ground ravaged by fire and scorched by sun.  They got mange, and their skins were falling apart.  Some of them were limping.  There seemed to be little chance for them to survive.  The litter of 7 cubs dwindled to only 4, and then 2 in the end.  It was shocking.  And then they all disappeared.  When eventually the lioness and the surviving cubs marched into the horizon on the again-green grassland near the herd, I felt the triumphant excitement too, resonating the feeling of the cameraman - yes, they survived an eventful year of sickness, drought, fire, and volcanic eruption

At an equally stunning scale, every May to July, half a billion salmon will return home in British Columbia and Alaska, even Cali, after 4 years in sea, to lay eggs in fresh waters 2000 miles away!  I never imagined laying eggs would be a big deal for fishes.  Now I am filled with admiration.  Their journey is no less dramatic and arduous than described in one of the four greatest ancient Chinese literature "Journey to the West".  Long distance travel, upstream swimming, clearing the falls (like human jumping over a 4-story building); when it's too dry they get stuck in shallow water or stuck in a pool without able to move forward and, in turn, plague; when there's too much rain they have to battle strong torrents; as their kidney and other organs adjust to sudden change of water, they stop eating and even drinking., so they are eventually killed by the very water that draw them home, after swimming up stream and spawn; not to mention a full spectrum of coastal predators relying on Salmon Run to survive : grizzly bears, wolves, bald-headed eagles, steller sea lions, killer whales, salmon sharks, so on and so forth.  In the end the toll of this long journey is that for a thousand hatched, only 4 make it back to home.

A digression : why Pacific salmon take this epic run still remains a mystery.  Atlantic salmon come back to spawn every year and do not die after that.  Also how they find way home is largely unclear.  Only recently scientists found small particles of Iron in their brain, which are like compass and help it steer the magnetic lines of earth, showing them exactly where to go.

Salmon have to take such an ordeal to reproduce, well, it's definitely not easy for a grizzly bear to make it through either : half of the grizzly cubs do not even survive the first year.  Every year the grizzly will be hungry for more than half of the year, either hibernating or feeding on grass and berries.  By the end of the hunger, its head appears funnily sadly too big and body too small.

Every summer the Arctic will welcome many migrants who come to feed and reproduce, most of which travel more than 600 miles one way, such as Narwhal whales (a.k.a. the arctic unicorn, named after its strange spiral tusk, the most secretive and elusive animals in the world's oceans), Beluga whales, sea birds such as guillemot, etc.  Also there are locals such as polar bears and polar foxes.  The challenges that polar bears facing are well known.  Even for polar foxes, often 2 out of 8 cubs will get fatten enough from the abundance that a short summer can offer to survive the winter.

These are fascinating stories to learn.  What's more, I was reminded once again that nothing should be taken for granted, including survival.  One may argue that it's their instinct, nothing lofty.  True.  Food, shelter, survival, and reproduction are just an instinct.  But since when we lost our very basic instinct, and got reduced to a bitter and sour and cynic whiner?

From what Jim Rogers talks about China and India

* Related post : China vs India : who has a better chance for economic growth

In the article Jim Rogers Talks About Inflation, China, Commodities, Unrest and India, Jim Rogers was enthusiastic about China boom as ever, while being pessimistic about India :

Q. What do you make of India?

A (Jim Rogers). I am not optimistic. I’m short India, as a matter of fact. I can go on and on about the shortcomings of India and how people don’t understand India, but the one fact is that India now has now a 90% debt to GDP ratio, which, for some reason, the bulls either don’t know or ignore. As you probably know, the studies show that when a country gets to 90% to GDP it’s very difficult to grow very rapidly because everything you’re doing is paying off the debts of the past. So no matter how productive and dynamic you are, you’ve still got a big burden. So for that and all the other reasons, I’m less optimistic about India then most people. It’s a phenomenal country to visit, but boy, it’s tough to do business there. Even for Indians, it’s tough to do business there.

India's high debt/GDP ratio came as a surprise for me, and Jim certainly has a good point on that.

What might surprise many is that he found tough to do business in India, not only tough for himself, but also for Indians.  And he did not mention this problem when speaking of China.  The ironic thing is that Indian constitution declares that India is a democracy and that instantly convinces many westerners (for example many of my western friends) that it's easier to do business in India than in China, as democracy equals rule of law, doesn't it.  Does it really?

Well, Jim Rogers' comments are really not surprising for me.  I've heard Indians talking about the lack of rule of law in India.  I am still not in a position to make this call due to my lack of research.  However, I know how not difficult to start business in Shanghai as I worked on starting up a company there.  I remember about 10 years ago before I came to US, Pudong (the east part of Shanghai, the newly developed hi-tech industrial area) promised a simple registration procedure for start-ups which would take no more than 2 weeks.  Things might be more complicated for foreigners, due to currency exchange issue and potentially local industry protectionism too, and one would have to find a Chinese partner.

China is surely facing sundry challenges as well, among which corruption seems particularly a pain in the neck.  Corruption no doubt indicates weak rule of law.  When being limited by a regulation, a Chinese is more likely to endeavor to circumvent it than to try to create the necessary conditions to conform to it.  Well, China is certainly not alone when it comes to having a culture of corruption.  A few months ago I heard on a radio show about an interesting study on "cultures of corruption" (table on page 20) of how likely foreign diplomats, grouped by nations, are to pay parking tickets in NYC, thousands of miles' away from home.  In terms of average unpaid violation per diplomat per year from 1997-2002, China ranks 65 out of 146 nations studied, and India is slightly better, 79.

In my old "China vs India" post, I already mentioned that whether democracy necessarily helps economic development is debatable.  Hans Hoppe's book - democracy the god that failed - claims that democracies can be a worse form of government because people will elect those who will redistribute the wealth and make the country impossible to do business. (Thanks Jeff for the reference)

On a different note, India does not seem to have the most harmonious relationship among people : different languages, religious divide, and legacy caste system.  This could be worrisome and even get escalated to be a political risk.

China vs India : who has a better chance for economic growth

I would never have written such a post had I not come across a post on a forum (gplus.com) listing 10 advantages that India has over China for 21 century economic growth.  So the following text is an adaptation of my response to that list.


Out of the list, I find only 3 worth discussing, although they are still not the fundamental drive of competency, according to my opinion :


1) India's resource consumption has decreased for every incremental dollar of GDP since 1991 (as against China, which was using three times more resources per dollar of GDP than India).
2) India is in a very sweet demographic spot, being the youngest country in the world: half a billion Indians are less than twenty- five years old, giving it a unique 'demographic dividend' among peers.
3) Its judicial system is robustly based on English common law. It's a genuine, albeit imperfect, democracy.


My response :


1. Cost of GDP. A quick look at the composition of both countries economy will tell you that India is focused on service (Service : fluctuating around 50% of GDP; industry : around 25-30% of GDP, and employs less than 20% of the workforce; agriculture : around 30%, but employs 60% of the workforce) while China has a more balanced distribution between service and industry (service : industry : agriculture = 43 : 47 : 10). Of course a call center will incur lower cost than a steel company. In case of the tail risk that the west alienates both countries, guess who will survive better?

2. Demography.

-Younger population is good, as long as they produce enough to reach beyond supporting themselves. If a big portion of them are hungry and (semi-) unemployed, it's hard to justify glorifying a big (young) population. In that, as the only-child in my family, I personally respect China for making a responsible sacrifice, while India cannot feed its biggest population.  If a bigger young population is unconditionally advantageous, come on, it's not like Indians are better at giving birth than Chinese are.  Not to even mention that China has more natural resources such as land and water to accommodate a bigger population.

-As a direct benefit of a one-child policy, the new generation of Chinese has a astronomically better opportunity in terms education and health than the older ones. Needless for me to prove that it's productivity that matters, not population. A smaller educated and healthy population might be more collectively productive than a bigger but uneducated and under-nutrition-ed one.

-Assume everything goes well in China : economy is booming, and opportunities ample for young people. Hey, maybe young Indians and other young Asians want to immigrate to China. We have been seeing more and more young Indian faces already in Beijing and Shanghai - people "vote with feet". Assuming there is not such a splendid future, many people do not have a job anyway, and it's safer to have a lot of old "unemployed" than young ones.

-a 60 years old today is not the same as a 60 years old in 20 years. Many 60 years olds might want to work in 20 years.

-With technology advance, fewer people need to work, people need to work for fewer hours, and work is less labor intensive.


3. Whether democracy is superior in terms of promoting production, it's in fact quite debatable. What matters for economic boom, I think, is economic freedom. They might be correlated, but not the same (Singapore is a good example).

Both nations' recent development are very respectable, and obviously both are not without problems. There is a huge essay I can write about this topic but I can comfortably drop most of my arguments because I think they, as well as most of the above, are just scratching the surface of the problem. I think the most fundamental (economic) competition edge for any nation relies upon economic freedom (including but not limited to rule of law) and education, with the former significantly depending upon the latter. Both India and China cannot boast on either. So if there is a race between India and China, it's a race of education. Just like neither big nation can organize a competent soccer team, population also does not correlate with economic success; a disorganized and disengaged big population only creates chaos - a younger population creates a more severe chaos in that case, for the obvious reasons.

The Experience Economy

It could be that in an industrial economy people develop a materialist mind-set and believe that improving their income is the same thing as improving their quality of life. But in an affluent information-driven world, people embrace the postmaterialist mind-set. They realize they can improve their quality of life without actually producing more wealth. ...
...
Many of this era’s technological breakthroughs produce enormous happiness gains, but surprisingly little additional economic activity.
...
For the past few decades, Americans have devoted more of their energies to postmaterial arenas and less and less, for better and worse, to the sheer production of wealth.
During these years, commencement speakers have urged students to seek meaning and not money. Many people, it turns out, were listening.

[Full Article : http://www.nytimes.com/2011/02/15/opinion/15brooks.html?src=me&ref=homepage]