New Trends in International Trade

A new infographic from The Economist neatly shows the inversion taking place in the customary trade relationship between developed and developing countries (if such terms even still apply). It also shows the likely way developed countries will try get out of the current crisis they find themselves in: devalue and export. Of course, for countries in the eurozone it’s hard to devalue while remaining tied to an externally controlled currency union, but that’s another story. One thing to note is that the trend has been occurring since 1999, which means that economic contraction due to the current crisis cannot explain it. There’s something else at work. The very large and increasingly “wealthier” populations of developing countries are buying more stuff. And just as before the industrial revolution regional economic power was determined by population, it looks like this correlation is returning.

Major countries’ percentage share of World GDP over the last 500 years (1500-2000) - Sources: Vizualing Economics-Angus Maddison, University of Gronigen

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Roma in the Czech Republic and Slovakia

The flag of the Romani

If you’re Roma, you probably want to leave the Czech Republic. According to a new study of Romani children of Czech and Slovak nationality who migrated with their families to the UK, overall conditions in the host country far exceed, sadly, those found in their home countries. These children performed better in school and experienced far less racism than a control group of their peers. As has been well-documented, the Czech Republic’s institutional treatment of the Roma is deplorable. In 2007 the European Court of Human Rights found the country in violation of the basic right of Romani children to receive an education free from discrimination, and yet discriminatory practices still persist inside the country. Almost 30% of Romani children in the Czech Republic are sent to “special” schools as compared with roughly 1% of the larger “white” population. These special schools, allegedly for those with learning disabilities, are de facto segregated schools whereby the process of Czech-Romani integration and inter-community recognition is further retarded.

In case you’re thinking, well of course they do better in British schools, after all the sun never sets on her majesty’s educational system, think again. As The Economist points out, in many other respects Czech and Slovak schools are actually better than those in historic Albion. “Czech and Slovak kids on average easily beat their UK counterparts in subjects such as maths.” The difference lies in the simultaneously subtle yet profound forms of institutional racism perpetrated in Czech lands as well as in a general atmosphere of division and non-acceptance.

Though the study is fascinating and goes a long way to setting the record straight with regard to the scholastic abilities of Romani children (it’s the schools, not the children), one problem with the study, as I see it, is that the children studied had already immigrated to the UK. Thus it’s at least possible that these children come from families that value education more and are perhaps more interested in the possibility of upward mobility than other Romani families that haven’t left their home countries. These kinds of things are hard to measure, but should be noted nonetheless.

There are many factors, both micro and macro, that affect an individual’s or family’s propensity to migrate. In systematizing these things, researchers often talk about push and pull factors. The former involve those things about sending countries that increase the likelihood to emigrate while the latter, those things about receiving countries that increase inward immigration flows. And although the Czech Republic has lately become a net migrant-receiving country, it is clear that w/r/t the Romani, push factors still predominate. As the study notes:

All the parents interviewed during this study valued the overall atmosphere at school, their children’s feeling of being welcome there and their experience of equal treatment, equal opportunities, and the absence of anti-Roma sentiments and racism expressed by their children’s non-Roma peers and teachers, which they all said their children had experienced in various forms in the Czech Republic and Slovakia. They all said the prospect of their children’s education and employment was one of the most powerful driving forces behind their decision to move to the UK. Many of them thought it would take generations to change these practices and attitudes in Slovakia and the Czech Republic and some doubted whether they would ever change. All of them believed their children’s chances to succeed later on in life were much better in Britain than in Slovakia and the Czech Republic.

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The Loss of Vaclav Havel: More and More is Subtracted from Less and Less

Vaclav Havel, outside somewhere in 1989: from the

As Internet has noted, often with arresting beauty, Christopher Hitchens has finally bent to that which duly takes us all. And yet all the while he continued to write so eloquently about the experience of dying. The thing about death, unfortunately, is that it happens. As Hitchens measured his rapid metal and physical dissolution, he noted, in a moment of almost awkward sentimentality (for him, the wickedly-hilarious, scalpeler of truth):

These are progressive weaknesses that in a more “normal” life might have taken decades to catch up with me. But, as with the normal life, one finds that every passing day represents more and more relentlessly subtracted from less and less. In other words, the process both etiolates you and moves you nearer toward death. How could it be otherwise?

There’s something else to say about death. In the oft-triteness of truth, death is often terrifyingly sad. Would that Woody Allen were right and that we need not obtain immortality through our work, but instead through not dying. Or at least not dying in the way we usually do, as “etiolated” versions of formerly robust selves.

Which brings me to more sad news. Vaclav Havel, the great, polyphonous voice of freedom and former President of Czechoslovakia and the Czech Republic, has today too been taken by death.

In same way that watching a great athlete stutter through the last years of his career can be embarrassingly painful (for both you and him), watching Havel struggle recently to remain in absolute control of his former capacities has also been oddly unnerving. Not only do his expressions not cohere with the man you once knew him to be, but since that is undeniably the case, the man who did the knowing must too have changed, must too have taken a few more steps towards that most empty final state. This is not a particularly uplifting recognition. The death of an individual is always a kind of collective death. (It’s also strange, in that moment after death, that we do not know which tense to use. It seems disrespectful to consign someone so quickly to the horrible finality of the past-tense.)

Calling for the Artist

When I visited the Czech Republic almost a decade ago, I found it amazing that an artist, a playwright, was the President. As in, are you serious, your President used to write plays for a living? Of course his plays often touched on politics and on the unavoidable and repressive atmosphere in which he grew up, so politics wasn’t something he didn’t think about or didn’t constantly educate himself about. But still, the man was a playwright who became a President. And this fact, this revolutionary fact which was also a kind of evolutionary fact, seemed so reveling. Not only was Havel an artist playing at politics, but the nation which he represented needed and wanted him, the artist, to represent them. They did not want the lawyer, the general, the policy wonk with the PhD, they wanted the artist. And the artist chose not to cocoon himself in the quiet space where artists work. Instead, the artist went out and got to work creating a world.

I really do inhabit a system in which words are capable of shaking the entire structure of government, where words can prove mightier than ten military divisions.

– from a speech Havel gave in October, 1989

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Productivity Gains, Stagnating Wages and Plutonomy

Productivity and Wages in the US: from the Institute for Research on Labor and Employment, UCBerkeley

There were many proximate causes of the ongoing Great Recession. People talk about the growing propensity to borrow and lend, the unregulated and risky nature of new financial innovations, and of course the unanticipated and quite rapid implosion of the housing market. All these things are true but it’s never good to mistake proximate causes for underlying ones. Now I’m no doctor of economics, and I realize that exclaiming knowledge of underlying causes is always problematic, but it seems to me that one of the most important underlying causes of the 2008 financial crisis, which has now led to the sovereign debt crisis in Europe and a global contraction in general, has been the widening gap between productivity gains and wage levels in the US that first emerged around 1980. Since then most of the benefits of post-WWII growth has gone to the financial class, not the class of wage-earners. And so we have the kind of inequality we have today. It’s important to note that stagnating wages didn’t necessarily cause rising inequality, as Jared Bernstein reminds us:

Correlation is not causation, and it would be wrong to argue that rising inequality caused the flatter middle-class income growth, post-1979.  The literature has identified many factors that at least partially explain both of these developments …But the main point of this part of the analysis is that the post-1970s slowdown of real median family income growth is a) a key factor behind the middle class squeeze, and b) related to the increased inequality of income as the benefits of productivity growth eluded many in the middle class over the past few decades.

This rising inequality was due to a variety of things including productivity gains, the effects of globalization (off-shoring supply-chains and what not), the diminishing power of unions, and the rise of policies favoring the “holders of financial instruments over wage earners.”

Courtesy of the Center for Budget and Policy Priorities

Together, these phenomena applied downward pressure on wages. And just like the 1930s, rising productivity combined with falling wages can easily lead to plummeting demand and cause major problems. For a while the US economy was able to cope. Financiers leveraged up (or in the argot of the times, they innovated), credit markets boomed and Americans found ways to excessively borrow their way around relative poverty. But then the booming stopped.

Now, four years into this mess, the question is how to get out? I don’t have any answers; but I do think that regardless of where you stand on monetary loosening or tightening, fiscal austerity or stimulus, or whatever, the discrepancy between productivity gains and wages has to be acknowledged and dealt with. And you don’t have to enjoy reading Das Kapital to see this – flat wages are bad for everyone. If people don’t have money, they don’t buy the stuff/services they need/want and other people don’t profit from the sale of the stuff/services they create/produce/market/advertise/etc.

The global economy has been called, rightly, a plutonomy – and not just by your typical Marxist critic, the seminal paper examining today’s plutonomy was written by a Citibank analyst. The basic structure is like this: while the majority of humans are members of the cost-sensitive class, the plutocrat at the margins doesn’t really care about cost. And this insouciance makes him the ideal target for a company’s profit-growth. So we end up with all sorts of innovations on the luxury side of the market, where there are significant profit margins to be made, while the more general consumer is ignored.

Here’s the thing though, at a certain point it becomes in the interest of the plutocracy to make stuff more affordable to those at the middle and lower level of the production process. The consumer demand of the peasantry can’t forever be waved aside. And it shouldn’t be too difficult for these plutocrats to see. They are not your great grandfather’s aristocracy, they are actual workers themselves – only their compensation is exceptionally high. They could just continue to circulate goods, profits and investments amongst themselves, but the supply-chain they stand on is becoming increasingly unstable.

There are only so many Burkina Fasos left to run to in search of cheaper factors of production and richer margins of profit.

Of course, like the 1930s, it would be possible for America to stimulate itself out of this demand problem with some kind of works program (and, as in WWII, blowing up other countries works fine for this). But in the long run you’d likely want a program that addressed the social organization of production and the growing inability of most humans to enjoy the fruits of productivity growth.

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David Harvey and the Crisis of Capitalism

Here’s what social theorist/geographer/anthropologist David Harvey has to say about the current crisis:

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Regulating the Internet and Why Online Piracy Isn’t Stealing

Courtesy of Wikipedia.

Two bills currently being debated in Congress should worry advocates of user-generated content and free-speech protections: the Protect IP Act in the Senate and the Stop Online Piracy Act (SOPA) in the House. Among other things, these bills seek to hold Internet service providers, content-accumulating platforms (like YouTube, Facebook, Dropbox, etc.), and search engines accountable for the content hosted on their sites. According to Rebecca MacKinnon at the NYTimes:

The bills would empower the attorney general to create a blacklist of sites to be blocked by Internet service providers, search engines, payment providers and advertising networks, all without a court hearing or a trial. The House version goes further, allowing private companies to sue service providers for even briefly and unknowingly hosting content that infringes on copyright — a sharp change from current law, which protects the service providers from civil liability if they remove the problematic content immediately upon notification.

Not only does this seem like a terrible piece of legislation in that it apparently throws the burden of proof onto the defendant, as opposed to the plaintiff; but, as Slate points out, because the content-host as a single entity is held accountable, the punitive measures look very much like collective reprisals that punish the many for the “crimes” of a few. Injunction wouldn’t apply to copyright infringers per se, they would apply to the entire site or ISP hosting the content at issue. The whole site would be blocked and all the users that use the site legally would be silenced while some particular case was sorted out.

As the law stands now (the Digital Millennium Copyright Act), if I upload some form of copyright-protected content onto YouTube, I am the copyright infringer. As long as YouTube removes the material upon discovery or notification, it’s fine. (If they don’t then there are lawsuits and the rest of it.) In this way, YouTube can go about its business of providing a service without having to devote mountains of resources to trolling and screening every piece of content that gets uploaded onto its site. Were this legislation to pass, it’s likely Internet companies would become way more proactive in restricting all potentially illegal content. It would be much easier to preemptively restrict than to deal with all the lawsuits and lost revenue that would follow a government- or other third party-imposed firewall. This would amount to a de facto limitation of free speech.

Interestingly, in all this talk about copyright violations and Internet piracy, very few journalists have attempted to distinguish between actual theft and piracy and the kinds of stuff people do on Internet that gets called that. (Thankfully, at least one Great Power has brought this up.)

Theft is the act of stealing. Stealing is the act of taking something whereby the person doing the stealing gains something while the person being stolen from loses something. Piracy is the act of stealing at sea – and usually includes trespassing and physical intimidation and what not. In both cases, the victim is left without something he previously was with. This is obviously not the case w/r/t copyright infringement and online “piracy.” These latter crimes involve victims being denied benefits they theoretically would have received had they been able to sell the stuff and not have it disseminated without their permission. In the case of copyright infringement and online “piracy” the victim still has the thing that was copied. It’s not theft, it’s copying; and failing to recognize this is to ignore an important distinction. Theft is a zero-sum game, copying is positive-sum.

However, this isn’t to say that copyright protections aren’t important and shouldn’t be enforced. They should. While copying stuff might be a positive-sum game, it certainly leaves the copyee, if they disapprove of the copying, in a different psychological and possibly monetary state. Their rights have been violated and the adulation and or revenue that should have come to them was siphoned off somewhere else. The first amendment does not necessarily protect copying, and in fact, Article 8 section 8 of the US constitution explicitly “secur[es] for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

But again, copying isn’t stealing. As Great Power Yglesias (linked to above and linked again) says: “The difference between watching a movie with your friend and copying your friend’s Blu-ray is that one is legal and one is illegal. But in both cases you watch the movie without paying the copyright owner, and in neither case have you stolen anything from anyone.”

To be fair, the reason that the one act is legal while the other is illegal, is because the former is not copying and the latter is. But the point about stealing still holds.

A final thing to note is that copyright laws generally protect those in power who have access to lawyers and are established members of the elite. Lots of different kinds of innovation would occur without these sorts of laws – think about all the patent wars in silicon valley, for example. There’s always a tension between the rights of those who have already innovated and those with the potential to innovate further.

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It’s Hard to Take Pictures of Places You Can’t Get to

"Finally." Courtesy of 15sunrises

A friend of mine has an awesome website called 15 sunrises. His basic project is to travel around and take pictures of all sorts of ‘scapes (city, country, mountain, etc.) in all sorts of lights. He’s partial to sunrise, sunset, moonrise and moonset lights; but he’s no prude – he’ll shoot at other times too. Then he goes back to his apartment, gives the shots he likes a little copy and publishes them on his site. He hasn’t received an APOD yet, but these things take time.

My friend doesn’t have a car, so he has to get around on foot or use public transportation. Because he’s based in Prague, a city with a rather developed public transit system, this isn’t too much of a problem when he’s out snapping around his hometown’s cityscape. Problems start occurring, however, when he tries to get out of the city to shoot other ‘scapes.

Recently, he went up north to the Krkonose mountains that form the Czech Republic’s border with Poland. He was staying in a little cottage in a tiny town and every morning he woke up really early to get to this tiny town’s bus stop in order to take the bus up to whatever mountain perch he’d previously established possessed the correct coordinates to maximize the light or whatever of that morning’s sunrise.

"Pick me up." Courtesy of 15sunrises.

The problem with remote bus stops in tiny towns in areas far from urban centers though, is that buses don’t come very often. And when they do, because they’re traveling rural routes, the drivers don’t necessarily stop at all the prescribed stops unless they think there’s a good reason to do so. To make a long story short, the bus was late and when it came to the stop my friend planned to get off at, it barreled (or more accurately, probably, lurched) right by it, like a hacking old woman with a walker lunging her way onto a tram. And because the views at the next stop were nothing like those at his desired stop (photographers are choosy humans), he missed capturing the sunrise that morning altogether.

Now you could say that at least he familiarized himself more with the vagaries of rural travel, learned a few lessons, and will be a better man for it. Or you could say that he ought to just sell a few more pictures and buy a car. But I would say that the poorly developed infrastructure and inconvenient and inefficient patterns it exhibits negatively affect the kind of stuff my friend can produce.

In dismal-science speak, his worker productivity goes way down when he leaves the city.

"Venus the beautiful." It's hard to find this stuff in cities. Courtesy of 15sunrises.

This isn’t to say that the very real benefits of living in rural areas don’t matter. They do. It’s nice to breath decent air, move around at a quieter pace and not suffer from the kind of terrifying bouts of agoraphobia that cities often induce.

But there are very real drawbacks to living in rural areas too. Without developed infrastructural systems, not only is it difficult to get things done, like projects not related to the land and stuff. It’s also very difficult just to get around. Regional, district and even more local fractionalizations exist in rural areas simply because traveling to different places isn’t easy.

But the same principle that applies to rural travel between towns also applies to inter-city travel within countries and between them. Without developed inter-city transit systems, local economies become more insular and productive factors become more immobile, which is another way of saying that worker productivity levels decline. But it’s not just about homo economicus, it also concerns homo reasonableness. As connections between people decline and as more and more fractionalization starts occurring, the political and social costs rise dramatically as well. Provincial attitudes prevail and the idea of the other becomes, as opposed to an intriguing attractive force, rather an irreconcilable and repellent notion to guard against.

While one solution to all this could be better roads and more cars, this is not a very good solution. A better approach would be to devote more resources to developing public transportation systems within and between proximate and even not-too-proximate cities. I’m not suggesting governments build high-speed rail systems to connect cities with tiny towns in rural mountain regions, I’m suggesting that programs for high-speed intercity rail would do well to go along with programs for rural area integration through more reliable intra-regional bus and rail networks.

If this were the case, my friend would be able to take more of the kinds of pictures he would like to take. And he would be a happier and more productive man because of it.

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