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growth in manufacturing employment is not going to be the primary long-term solution to bringing down unemployment. That said, even though manufacturing and services are distinct categories of economic accounts, they are of course inter-related within the broader economy. However, claims that special treatment for manufacturing will reduce unemployment have a high hill to climb in terms of the simple math that follows from the small portion of the economy that manufacturing employment currently comprises. Productivity gains make that hill even steeper.
And of course, do not forget that from the perspective of employment rather than economic sectors, all jobs are service jobs.
On May 8, The Asia Foundation launched a new data visualization tool to help policy-makers and citizens explore the findings of the new 2012 Malaysia Business Environment Index (BEI), the only diagnostic tool designed to measure the business-friendliness of local governments in the country. The BEI collects a significant amount of data through a survey of 635 small- and medium-sized firms in 11 city and municipal districts across Malaysia. The BEI ranks these 11 districts against each other based on a 100-point scale, and scores the relative performance of each district along nine sub-indices designed to capture key elements of the local business environment. The new visualization tool allows policy-makers and the public to quickly compare how different districts rank, and explore the research data in greater detail. In addition, the full BEI report is available for download, along with the data compiled from the surveys and subsequently used to design the visualization tool. Data visualization is a tool The Asia Foundation is using increasingly to help synthesize large data sets and make them more accessible for broader analysis
Leading economists have long argued that the West’s greater reliance on markets resulted in faster and more robust economic growth. But viewing the state and the market in terms of their inherent conflict no longer reflects reality (if it ever did). Indeed, it is increasingly obvious that the threat to capitalism today emanates not from the state’s presence, but rather from its absence or inadequate performance.
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An efficient judiciary and effective policing are necessary for capitalism to thrive.
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More generally, the world’s thriving countries are those with strong and effective institutions, backed by legal frameworks that guarantee the rule of law. Latin America and Africa are not the only examples that prove the point. The European Union’s internal problems, and its ongoing sovereign-debt crisis, are clearly linked to the weakness of its institutions, and, on Europe’s periphery, it still confronts feckless democracies.
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manufacturing is not the nation’s only cutting-edge industry. Many of the most innovative firms are not manufacturers but service companies. Apple is very competitive. But so are the companies that design applications running on its iPhones and iPads. Hollywood studios and marketing companies are big exporters. These firms need highly trained workers and pay high wages.
Mr. Moretti says each job in an “innovation” industry, broadly understood, creates five other local jobs, about three times the number for an average job in manufacturing. Two of them are highly paid professional positions and three are low-paid jobs as waiters or clerks.
Innovation — not manufacturing —has always propelled this country’s progress. A strategy to reward manufacturers who increase their payroll in the United States may not be as effective as one to support the firms whose creations — whether physical stuff or immaterial services — can conquer world markets and pay for the jobs of the rest of us.
Innovation — not manufacturing —has always propelled this country’s progress. A strategy to reward manufacturers who increase their payroll in the United States may not be as effective as one to support the firms whose creations — whether physical stuff or immaterial services — can conquer world markets and pay for the jobs of the rest of us.
The full IPCC Special Report on Extremes is out today, and I have just gone through the sections in Chapter 4 that deal with disasters and climate change. Kudos to the IPCC -- they have gotten the issue just about right, where "right" means that the report accurately reflects the academic literature on this topic. Over time good science will win out over the rest
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- A few quotable quotes from the report (from Chapter 4):
- "There is medium evidence and high agreement that long-term trends in normalized losses have not been attributed to natural or anthropogenic climate change"
- "The statement about the absence of trends in impacts attributable to natural or anthropogenic climate change holds for tropical and extratropical storms and tornados"
- "The absence of an attributable climate change signal in losses also holds for flood losses"
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"Some authors suggest that a (natural or anthropogenic) climate change signal can be found in the records of disaster losses (e.g., Mills, 2005; Höppe and Grimm, 2009), but their work is in the nature of reviews and commentary rather than empirical research."
Technology tends to make people optimistic. But are the scientists being realistic about people without the mathematical, scientific and engineering skills, that are highly valued and compensated in today’s economy? What happens to people without those skills?
If I were a worker in Amazon’s warehouses and could eventually be given a pink slip and replaced by an orange robot, I don’t think I would be so cheerful about this new work force.
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those who are paving the way to a world with robots don’t see it that way. “Those who lose jobs to robots will have an incentive to acquire skills that are currently beyond the skills of robots — and there are many human skills that will not be surpassed soon by robots,” explained Colin Allen, co-author of the book “Moral Machines” and a professor of cognitive science at Indiana University.
These experts believe that jobs in creative fields, including musicians, writers and artists, will never be replaced by robots. No matter how smart robots are, they will also never be better than humans at physics or psychology.
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Lawrence H. Summers, the economist, former Treasury secretary and former Harvard president, explained that society has been down this road many times before. The rise of the industrial revolution gave way to fears of extensive job loss, as did the automation of agriculture. But, he said, although these “adjustments were in some cases painful,” people always find new work.
In the twin realms of politics and government, secrets are a tradable commodity.
In this market, knowledge really is power – or a function and a facet of power. To use an economic framework: secrecy, knowledge and power are all 'coin of the realm', the legal currency of a political system.
The word 'market' is used with intent, because applying an economic model shows the reality of what politicians, minders and senior bureaucrats actually do with secrecy and secrets. Secrecy can confer monopoly power on a pollie. And the market model also leads quickly to that key economic question – who profits? Various participants in this market will price secrets in different ways. Demand, supply and sales get complicated when you stir in government ministers, journalists and the military.
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The military believe secrets have an absolute value, while politicians view secrets as having relative value, according to the needs of the market and the size of the secret. Public servants are supposed to view secrets in the same way as the military (an imperative imposed by their customs, training and the law) but constant contact with pollies means senior bureaucrats can come to understand the benefits of trade, even if it is seen as black market activity.
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The military must believe that secrecy is an absolute value; if secrets leak, operations can fail and people can die.
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Companies must develop highly flexible business models that enable them to respond to new opportunities and threats.
They must make efforts to ensure a strong talent pipeline that will provide them with the skills and capabilities to thrive in constantly changing conditions. The recommendations in this report are by no means sure-fire prescriptions for success, but they will help companies steer safely through the murky terrain of today's global landscape.
A friend and I met up at a new bookstore and café in the centre of town, which has only been open for a month. The establishment is in the center of an area filled with bars, and the owner decided the neighborhood could use a place for people to convene and talk without having to drink alcohol and listen to loud music. After we sat down, we asked the waitress for a coffee. She thanked us for our order and immediately turned and walked out the front door. My friend explained that the owner of the bookstore/café couldn’t get a license to provide coffee. She had tried to just buy a coffee machine and give the coffee away for free, thinking that lingering patrons would boost book sales. However, giving away coffee was illegal as well. Instead, the owner had to strike a deal with a bar across the street, whereby they make the coffee and the waitress spends all day shuttling between the bar and the bookstore/café. My friend also explained to me that books could not be purchased at the bookstore, as it was after 18h and it is illegal to sell books in Greece beyond that hour. I was in a bookstore/café that could neither sell books nor make coffee.
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A number of contacts described their experiences trying to open a business or buy property, which involved high fees, several trips to different tax offices and months of navigating bureaucracy. This gets at the very heart of how Greece landed up in its current condition and why rapid change is unlikely. Entire professions such as notaries, lawyers, tax men, architects and inspectors have for years had automatic income in that they have formed the layers of bureaucracy involved in doing business in Greece. At least half of the MPs in Greek parliament hail from these industries, and consequently are incentivized to perpetuate the bureaucracy that impedes opening up, running or finding investment for businesses.
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Legislation in Greece has been set up on an ad hoc basis, with laws just layered over—and often contradicting—one another. No one has taken a holistic view of the system and consolidated it. Furthermore, if an investor were to need to turn to Greek courts, the case would not be heard for years. If the investor were foreign, the chances of a ruling in their favor would be extremely slim. It is hard to see how investment will return to Greece unless these issues are addressed, but the government is incentivized to obstruct progress in doing so. There is a lot of discussion among analysts of a Marshall Plan for Greece, but it is difficult to see German companies tolerating such an operating environment.
The tension between the globalization of modern business and the symbolism of American manufacturing reflects the difference between viewing manufacturing from an economic perspective (i.e., as a NAICS categorization) and through a political lens (i.e., as a powerful image of American ideals). Many analysts conflate the two.
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The aggregate number of people in the United States employed in manufacturing today is lower than at any time since before World War II, as shown in the graph below.
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The political appeal of manufacturing is largely symbolic.
Sustainable development is not a synonym for “environmental protection,” as Resilient People underlines. It’s about ensuring that today’s actions, particularly in the economic sphere, advance growth and social welfare but don’t undermine critical ecosystem services. Fundamentally, it recognizes that our demand for water, food, land, and energy should not come at the expense of future generations. We must respect the environmental limits, or expand them through technological innovation and creative adaptation.
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globalisation index, which measures the world’s 60 biggest economies according to their “degree of globalisation relative to their GDP”, based on five equally weighted categories — openness to trade, capital movements, exchange of technology and ideas, labour mobility and cultural integration; and a survey of 1,000 senior business executives worldwide, conducted in late 2011 by the Economist Intelligence Unit. It also incorporates GDP forecasts over the next four years.
Nothing illustrates the job-creating power of innovation better than the App Economy. The incredibly rapid rise of smartphones, tablets, and social media, and the applications—“apps”—that run on them, is perhaps the biggest economic and technological phenomenon today. Almost a million apps have been created for the iPhone, iPad and Android alone, greatly augmenting the usefulness of mobile devices. Want to play games, track your workouts, write music? There are a plethora of apps to choose from, many of them free.
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How do we think intelligently about innovation and its consequences when the relevant data doesn't even measure what is going on in the current economy. Are we trying to drive by looking in the rear-view mirror?
Those who decry the decline of U.S. manufacturing too often point at the offshoring of assembly for electronics goods like the iPhone. Our analysis here and elsewhere makes clear that there is simply little value in electronics assembly. The gradual concentration of electronics manufacturing in Asia over the past 30 years cannot be reversed in the short- to medium-term without undermining the relatively free flow of goods, capital, and people that provides the basis for the global economy. And even if high-volume assembly expands in North America, this will likely take place in Mexico where there is already a relatively low-cost electronics assembly infrastructure.
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The question that we should be asking is not how can we get Apple to hire more Americans, but rather, how do we get America to create more Apples?
On the one hand, we see that increasing productivity can kill jobs -- in today's manufacturing sector 177 American workers can produce the same output that required 1,000 workers in 1950. One the other hand, productivity is viewed as central to job creation
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Understanding the modern economy requires making sense of the easily confusing concept of productivity and how it relates to jobs and economic growth. [Total and especially labor] productivity growth does indeed kill jobs, but it creates jobs as well. Creating a virtuous cycle of total productivity growth is a key challenge of managing the 21st century economy.
India is now the leading opponent of a new comprehensive global-warming treaty, it became clear at the weekend after the first week of negotiations at the UN Climate Conference in Durban, South Africa.
The world's second most populous country has resolutely set its face against a fresh climate deal that at some stage would involve every country in the world cutting its carbon emissions in an effort to bring climate change under control.
The Indians are refusing to approve anything that might put a brake on their economy, now expanding with growth in 2010 estimated at 10.4 per cent. Its carbon emissions are growing at more than 9 per cent a year, the fastest of any major nation, and the country has shot up to become the world's third biggest carbon emitter, after China and the US.
But the Indians are relying on this growth to take hundreds of millions of their nearly 1.2 billion people out of poverty and they want nothing to do with curbing these emissions.
Politicians are masters at “passing the buck.” Everything good that happens reflects their exceptional talents and efforts; everything bad is caused by someone or something else.
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Depressions, recessions, contractions – call them what you will – occur because the private-sector spends less than it did previously. This means that its income falls, because spending by one firm or household is income for another.
In this situation, government deficits rise naturally, as tax revenues decline and spending on unemployment insurance and other benefits rises. These “automatic stabilizers” plug part of the private-sector spending gap.
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But if the government starts reducing its own deficit before private-sector spending recovers, the net result will be a further decline in total spending, and hence in total income, causing the government’s deficit to widen, rather than narrow. True, if governments stop spending altogether, deficits will eventually fall to zero. People will starve to death in the interim, but the budget will be balanced.
What the author is attempting to pass off as an objective characteristic of the "climate debate" proves to be just standard climate denier ad hominem – greens are humorless scolds, socialist-secular anticolonialist navel-gazers, self-righteous Chicken Littles undergoing a "millennarian meltdown" in which they "have lost all sense of proportion and hope."
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Notice how easily we slip into the conventional internet libertarian's assumptions about the world. Government action has become "enormous government coercion" (is a carbon tax more coercive than a property tax or a sales tax, or does he believe all taxation and regulation to be "enormous government coercion"? He doesn't say, but one suspects.) The people or the right side of that "lopsided empirical basis" have become "climate change warriors" – because while denying climate change "is just silly" proposing that we act on what we know is the moral equivalent of making war on our fellow citizens. And then we have this gem of tortured logic: "which explains many climate change warriors' antipathy to democratic principles on this point - easier to persuade 200 governments than all those people."
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Lobbying the government to act is now undemocratic. International treaties are undemocratic, too. (We are allowed to persuade people individually, provided we don't make them feel bad by "moralising" the issue.) One wonders how democracy ever recovered from treaties that banned ozone-depleting chemicals, or the use of chemical and biological weapons, or child labor, or those that created trade agreements.
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The global climate change debate has a lopsided empirical basis - in the economy of nature but not political economy - and this has contributed to a peculiar moralising trajectory. I have three main concerns with this: i) climate change has displaced other important concerns, for example of the 1 billion people living in unacceptable poverty; ii) a fixation on global CO2 levels alone distracts from what we can practically do, and even from caring about other aspects of the environment that we want to protect; iii) the debate has induced a kind of millenarian meltdown in which otherwise sensible people have lost all sense of proportion and hope.
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The science of climate change is not my target. It is clearly a fact that the world's regional climates are changing substantially and at unprecedented speed, and this is a result of greenhouse gases produced by human activity (in particular by the industrialisation of the West). Denying the science is just silly. But 'science' does not have the legitimacy or resources to tell us what we should do about climate change. We have to work that out for ourselves.
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In trying to tackle climate change by directly dealing with the causal mechanism of CO2 levels we have framed the situation as an enormous collective action problem - how to persuade 7 billion people to adopt the new morality of carbon rationing (and prevent free-riding). Everyone who thinks this through recognises that it is impossible to realise without enormous government coercion (severe rationing along the lines of China's one-child policy). That requirement explains many climate change warriors' antipathy to democratic principles on this point - it seems easier to persuade all 200 governments to be adopt carbon authoritarianism than to persuade all those people individually (e.g. James Lovelock). However even the government coercion approach fails - see the failures of every inter-governmental treaty, from Kyoto to Copenhagen - and the reasons are obvious.
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