Steve Jobs and America's decline(economist.com)
economist.com
Steve Jobs and America's decline
http://www.economist.com/blogs/freeexchange/2011/10/death-steve-jobs
9 comments
>>the idea that all the most innovative people only exist in the United States (or even that people in the US are on average more innovative than others) is ridiculous
Its not ridiculous at all. For what its worth, it happens to be true at this point in time. Whether it will continue to hold given the poor fiscal health of the US is the crux of the debate.
When I look at my classmates and my peer group, the ones who stayed back in India have (unfortunately) gone absolutely nowhere. The ones who migrated to the USA have gotten multiple graduate degrees in STEM, work at some of the most innovative companies, contribute to technical literature, teach,...
I spoke to a former classmate who came to the US, got his Masters alongwith me and went back home.
"Dude, congratulations, your resume says you are now a Chief Scientist! So when did you complete your PhD. ? What did you study ? More CS ? Math ?"
The guy goes "What are you talking about ? I never studied anything beyond that Masters, and most of that I've forgotten. In India, you just hang around for a couple of years in technology, they make you a scientist. Hang around as a scientist for a couple more years, you are a chief scientist!"
So that's how that goes. I used to wonder when I saw these outsourcing bodyshops ( Infosys, Wipro, TCS etc ) having several Chief Scientists on their staff, as to what sort of "science" goes on at an outsourcing outfit. Now I don't.
In India, its all about 3 things: "ghar, gaadi, biwi". Google that phrase and you will understand the microcosm that is India. When the entire culture of a nation is built around the acquisition of a "house, automobile, wife", why would such a nation breed innovative entrepreneurs at the same rate as the US ? And that's preciely what you'll see if you go shopping for talent in India. The truly talented tech geniuses will give you their right arm for an F1/H1B visa to the USA, and the rest are too busy chasing "ghar, gaadi, biwi". Yes, there are a few exceptions, but that's what they are - exceptions.
Its not ridiculous at all. For what its worth, it happens to be true at this point in time. Whether it will continue to hold given the poor fiscal health of the US is the crux of the debate.
When I look at my classmates and my peer group, the ones who stayed back in India have (unfortunately) gone absolutely nowhere. The ones who migrated to the USA have gotten multiple graduate degrees in STEM, work at some of the most innovative companies, contribute to technical literature, teach,...
I spoke to a former classmate who came to the US, got his Masters alongwith me and went back home.
"Dude, congratulations, your resume says you are now a Chief Scientist! So when did you complete your PhD. ? What did you study ? More CS ? Math ?"
The guy goes "What are you talking about ? I never studied anything beyond that Masters, and most of that I've forgotten. In India, you just hang around for a couple of years in technology, they make you a scientist. Hang around as a scientist for a couple more years, you are a chief scientist!"
So that's how that goes. I used to wonder when I saw these outsourcing bodyshops ( Infosys, Wipro, TCS etc ) having several Chief Scientists on their staff, as to what sort of "science" goes on at an outsourcing outfit. Now I don't.
In India, its all about 3 things: "ghar, gaadi, biwi". Google that phrase and you will understand the microcosm that is India. When the entire culture of a nation is built around the acquisition of a "house, automobile, wife", why would such a nation breed innovative entrepreneurs at the same rate as the US ? And that's preciely what you'll see if you go shopping for talent in India. The truly talented tech geniuses will give you their right arm for an F1/H1B visa to the USA, and the rest are too busy chasing "ghar, gaadi, biwi". Yes, there are a few exceptions, but that's what they are - exceptions.
The USA has copied that innovation from India. Now we have "Data Scientists"
And of course we've had Vice Presidencies for anyone who can sign their own name in the sales profession and finance sector.
And of course we've had Vice Presidencies for anyone who can sign their own name in the sales profession and finance sector.
The statement "business leaders, entrepreneurs and workers were the most dynamic and innovative in the world." is completely true. You will be in denial if you do not accept that.
I'm not American and I accept it. If you go to Silicon Valley you will see more Indians, Chinese or European people than Americans.(engineering in USA have 60% foreigners)
There are economic "hubs" where people that do things well love to go as they meet other experts and learn a lot, and could make money doing what they love. Like it or hate it,but a lot of these hubs remain in America.
USA is only 4% of the population, but represents 50% of the economy of the world. If you are creative or innovative in Argentina maybe you could survive as you see only corrupt people can earn money, or you could travel to the USA and get a lot of money.
In South America you can not innovate because there is no middle class, as simple as this is. There is only super rich people that own properties the size of the state of California, or those that have very little. No market for you.
Something similar happens in Africa, when tribal leaders(or kings like Mohamed of Morocco) own anything as "fathers for the benefit of the tribe, or country".
In Europe and Asia population is old and society values "security" and innovators are not good considered if they fail just once(and innovators by definition fail a lot).
I'm not American and I accept it. If you go to Silicon Valley you will see more Indians, Chinese or European people than Americans.(engineering in USA have 60% foreigners)
There are economic "hubs" where people that do things well love to go as they meet other experts and learn a lot, and could make money doing what they love. Like it or hate it,but a lot of these hubs remain in America.
USA is only 4% of the population, but represents 50% of the economy of the world. If you are creative or innovative in Argentina maybe you could survive as you see only corrupt people can earn money, or you could travel to the USA and get a lot of money.
In South America you can not innovate because there is no middle class, as simple as this is. There is only super rich people that own properties the size of the state of California, or those that have very little. No market for you.
Something similar happens in Africa, when tribal leaders(or kings like Mohamed of Morocco) own anything as "fathers for the benefit of the tribe, or country".
In Europe and Asia population is old and society values "security" and innovators are not good considered if they fail just once(and innovators by definition fail a lot).
> USA is only 4% of the population, but represents 50% of the economy of the world.
According to the IMF, US GDP is actually about 23% of world GDP.
According to the IMF, US GDP is actually about 23% of world GDP.
>> the idea that all the most innovative people only exist in the United States (or even that people in the US are on average more innovative than others) is ridiculous, and stating it is just blind nationalism...
You couldn't be more wrong.
First, no one ever said "all" the dynamic people were in the US. The implied point was that the majority of them are. I believe that to be true for some very obvious, logical reasons.
The U.S. benefits from some unintended social and genetic engineering because of a few factors...
1. The U.S. has no ethnic culture (since Europeans supplanted the native population and then opened the doors to the rest of the world rather than embracing an "only European" ideal). So innovative people could more easily immigrate here provided there were advantages to doing so (which there were as I'll outline below). I'm not saying that couldn't happen elsewhere but a Frenchman who lives in England is still considered a Frenchman. A Frenchman who lives in America is considered an American and that inclusion makes people more likely to come here.
2. From our founding to the early 1900s the U.S. was far and away ahead of the world in recognizing and rewarding entrepreneurship. We didn't have an entrenched royalty or class system and democracy made sure laws benefited the populace in general rather than a ruling elite. This drew entrepreneurs to the U.S. and their descendants are likely still here (and in many cases inherited that dynamism either by nature or nurture)
3. From WWII to around the mid-1980s the U.S. was far and away wealthier than the rest of the world because WWII caused decades of damage to the European and Asian economies. Remember with the exception of a handful of planes attacking the West Coast there was no fighting done in the U.S. whatsoever. That means no reconstruction needed while the rest of the world was devastated. So again entrepreneurs (who are drawn to where the wealth is) came to the U.S.
4. The U.S. has a culture built around the idea that you can come here with nothing and become rich. That influences a lot of our laws and customs. For example, there's a reason why our tax rates are lower than a large portion of the world. So even today, when the advantages to starting a company in the U.S. are smaller than they've ever been, the U.S. tends to draw entrepreneurs to it.
So in the end it isn't nationalism it's just common sense.
You couldn't be more wrong.
First, no one ever said "all" the dynamic people were in the US. The implied point was that the majority of them are. I believe that to be true for some very obvious, logical reasons.
The U.S. benefits from some unintended social and genetic engineering because of a few factors...
1. The U.S. has no ethnic culture (since Europeans supplanted the native population and then opened the doors to the rest of the world rather than embracing an "only European" ideal). So innovative people could more easily immigrate here provided there were advantages to doing so (which there were as I'll outline below). I'm not saying that couldn't happen elsewhere but a Frenchman who lives in England is still considered a Frenchman. A Frenchman who lives in America is considered an American and that inclusion makes people more likely to come here.
2. From our founding to the early 1900s the U.S. was far and away ahead of the world in recognizing and rewarding entrepreneurship. We didn't have an entrenched royalty or class system and democracy made sure laws benefited the populace in general rather than a ruling elite. This drew entrepreneurs to the U.S. and their descendants are likely still here (and in many cases inherited that dynamism either by nature or nurture)
3. From WWII to around the mid-1980s the U.S. was far and away wealthier than the rest of the world because WWII caused decades of damage to the European and Asian economies. Remember with the exception of a handful of planes attacking the West Coast there was no fighting done in the U.S. whatsoever. That means no reconstruction needed while the rest of the world was devastated. So again entrepreneurs (who are drawn to where the wealth is) came to the U.S.
4. The U.S. has a culture built around the idea that you can come here with nothing and become rich. That influences a lot of our laws and customs. For example, there's a reason why our tax rates are lower than a large portion of the world. So even today, when the advantages to starting a company in the U.S. are smaller than they've ever been, the U.S. tends to draw entrepreneurs to it.
So in the end it isn't nationalism it's just common sense.
I think that perhaps the world is a much bigger place than you believe (and maybe this is endemic to the general nationalistic line of thinking that I'm objecting against).
The US has 4.4% of the world's population. How you expect that even with the 'social and genetic engineering' you describe the US could still have the majority, I don't know.
I'm not saying that there aren't a lot of innovative people in the US - just that there are greatly innovative people all over the world, and perhaps it's time people start to acknowledge that...
The US has 4.4% of the world's population. How you expect that even with the 'social and genetic engineering' you describe the US could still have the majority, I don't know.
I'm not saying that there aren't a lot of innovative people in the US - just that there are greatly innovative people all over the world, and perhaps it's time people start to acknowledge that...
No one is saying that innovation doesn't happen in other places in the world, or that the people there aren't brilliant. Only that by evidence of the size and output of the economy in the US, it is the most effective. That may not be true forever, and there have been a great number of words dedicated to making that argument, but it appears to be true today.
What worries me most about the thinking in the US right now is the xenophobia. If there is one thing I'm most proud of, as a citizen of the USA, it's that people want to come here. I want to welcome them with open arms. I want to work hard to make the US the "place to be" for starting a business.
What worries me most about the thinking in the US right now is the xenophobia. If there is one thing I'm most proud of, as a citizen of the USA, it's that people want to come here. I want to welcome them with open arms. I want to work hard to make the US the "place to be" for starting a business.
No one is suggesting that. What is suggested is that it doesn't really matter how innovative you are if you are a child soldier in Zimbabwe, in a place where the taxes are so high that very few can start a new business, or in a country that is so corrupt that only an official's cousins brother could get the necessary permits to do business. Therefore business leaders in the US are more innovative because there are fewer non-merit based restrictions.
The fact is the most successful people in the US were not born here. But ask yourself why didn't Brin, or Grove start companies back home? Mostly because those countries didn't provide the right environment to do so, and America does.
The fact is the most successful people in the US were not born here. But ask yourself why didn't Brin, or Grove start companies back home? Mostly because those countries didn't provide the right environment to do so, and America does.
Yes but the western world itself is less than a third of the world's population and no one would argue against it having the majority of so-called "dynamic" people. Without knowing how many people we're talking about (and neither of us do) you can't argue percentage of the population as a reason.
The one point I'd agree with though is this: there are probably tons of third world people who are just as entrepreneurial as people in the U.S. but who don't have the resources to do anything more than start a coke stand. But in terms of dynamic people who have the resources to start a company I still think the U.S. is in the lead
The one point I'd agree with though is this: there are probably tons of third world people who are just as entrepreneurial as people in the U.S. but who don't have the resources to do anything more than start a coke stand. But in terms of dynamic people who have the resources to start a company I still think the U.S. is in the lead
There might be a little confusion with semantics here. I don't believe any of us can argue that the US has't led MOST of the world in innovations that are adopted on a large scale.
There is a difference between being innovative and actually having the resources to profit from that innovation. I've seen ingenious solutions to problems in my travels, but due to the lack of marketing/funding/distribution/etc., these inventions/solutions are only adopted by the town the inventor lives in.
ed, sp.error.
There is a difference between being innovative and actually having the resources to profit from that innovation. I've seen ingenious solutions to problems in my travels, but due to the lack of marketing/funding/distribution/etc., these inventions/solutions are only adopted by the town the inventor lives in.
ed, sp.error.
There's so much wrong with this 'common sense' that I don't know where to begin.
Sorry, but this is just nationalist dogma with little basis in reality of the last 60 years.
Funniest bit is implying that entrepreneurship is heridatry!
Sorry, but this is just nationalist dogma with little basis in reality of the last 60 years.
Funniest bit is implying that entrepreneurship is heridatry!
I'm not sure about the hereditary bit (whether culture or risk aversion can b passed through genetics), but the culture bit has a lot of basis. Just look the the whole 'American Dream'. The US has been sold as a place where anyone can make it with some smarts, work, and perseverance. That attitude was ingrained in the country through its formation and then its expansion. Look at the silver rush in CO, gold rush in CA, oil boom in Texas, financial boom in NYC, and tech boom in SV. People have been coming to the US from all over the world to get rich since the country was formed.
One thing to remember is that the US is a relatively young country. It may be that all young countries have a disproportionately large number of risk takers and that over time that portion shrinks.
One thing to remember is that the US is a relatively young country. It may be that all young countries have a disproportionately large number of risk takers and that over time that portion shrinks.
Actually there's plenty of evidence to say entrepreneurship could be partially hereditary (or more to the point a genetic disposition to be intelligent and a genetic makeup that allows you to deal with stress through low blood pressure, a chemical makeup that gives you a calm disposition, and so on)
So do you have another point or do you just specialize in attacks?
So do you have another point or do you just specialize in attacks?
Sure:
1. Explain the economic powerhouses of Germany and Japan in the context of your 'wasn't bombed so more prosperous' theory.
2. Explain the White European Christian dominance of the US in the 'no culture' theory of the US.
3. Explain why if everyone coming to America is an entrepreneur and entrepreneurship is hereditary why there's so many poor people in the US compared to rich people. Did they breed it out of themselves or something?
4. Explain why Britain became the most prosperous and richest empire in the world even though apparently from founding to the early 1900s the U.S. was far and away ahead of the world in recognizing and rewarding entrepreneurship, which is exactly the period that Britain, not the US, rose to be the dominant economic power in the world. Hint, you've got your history wrong.
Remember you accused the original commentator that he 'couldn't be more wrong' without a single shred of evidence just generalisations of an idealized 'American Dream'. It's nationalism dude, sorry.
1. Explain the economic powerhouses of Germany and Japan in the context of your 'wasn't bombed so more prosperous' theory.
2. Explain the White European Christian dominance of the US in the 'no culture' theory of the US.
3. Explain why if everyone coming to America is an entrepreneur and entrepreneurship is hereditary why there's so many poor people in the US compared to rich people. Did they breed it out of themselves or something?
4. Explain why Britain became the most prosperous and richest empire in the world even though apparently from founding to the early 1900s the U.S. was far and away ahead of the world in recognizing and rewarding entrepreneurship, which is exactly the period that Britain, not the US, rose to be the dominant economic power in the world. Hint, you've got your history wrong.
Remember you accused the original commentator that he 'couldn't be more wrong' without a single shred of evidence just generalisations of an idealized 'American Dream'. It's nationalism dude, sorry.
There are two parts to these attitudes, and the largest problem is that people in the USA often conflate them. One part is satisfaction (and yes, pride) in real invention, innovation and achievement. I have no issue with this part. People in the USA have done much to warrant some pride. This shouldn't take anything away from people in other nations who have their own achievements.
The second part is the idea of American exceptionalism: that the USA is great because it's the USA. This is nauseating, indeed. It's also obviously harmful, since now "greatness" is a birthright rather than an achievement.
The second part is the idea of American exceptionalism: that the USA is great because it's the USA. This is nauseating, indeed. It's also obviously harmful, since now "greatness" is a birthright rather than an achievement.
American exceptionalism isn't just that the USA is great b/c it's the USA, but because it founded as an implementation of a set of moral ideals.
http://en.wikipedia.org/wiki/American_exceptionalism
As an American, I agree though, it is nauseating when politicians or citizens pull this card and use it to justify nationalism or other bad things and abuses. It cancels the very reasons for the idea of exceptionalism in the first place.
http://en.wikipedia.org/wiki/American_exceptionalism
As an American, I agree though, it is nauseating when politicians or citizens pull this card and use it to justify nationalism or other bad things and abuses. It cancels the very reasons for the idea of exceptionalism in the first place.
This is indeed nauseating, especially when you consider that the USA is not even in the top 10 in many human development measures. The reflexive tribalism you see on the right makes me think we must be number 1 in self esteem.
OTOH the U.S. has a much more diverse, wideranging population and geography than countries ahead of it in those measures (that I think) you're thinking of. Regions that would be different countries in Europe or Asia are all states unified under a federal system, which has its upsides and downsides.
Totally agree. Folks who migrate here keep the "greatness" "non-hereditary". I'm not sure how much longer such a thing will last though, as more opportunities continue to develop in their home countries.
It's only recently that most of us could have direct access to people in the rest of the world.
We're slowly waking up from our post-WW2 bender, but some people need more time than others. And others are deadly serious about American Exceptionalism. They really believe in it and won't be swayed by contrary evidence.
We're slowly waking up from our post-WW2 bender, but some people need more time than others. And others are deadly serious about American Exceptionalism. They really believe in it and won't be swayed by contrary evidence.
I'm from Sweden and I don't find much to object to there.
In Europe there are no global companies based on web technology, no Google, no Facebook, no Amazon. Previous tech booms have left little to show for it, I guess ARM is the shining example.
Some old companies have been pretty nimble and have been ccompetitive in new technology, like Ericsson and Nokia. But the landscape is utterly different from the US, and it is not for the better, there seem to be a glass ceiling for startups.
As long as Europe is so pathetic in tech, we don't deserve better than to read self-congratulatory stuff like that. Maybe it will even spur some competitive instinct...
In Europe there are no global companies based on web technology, no Google, no Facebook, no Amazon. Previous tech booms have left little to show for it, I guess ARM is the shining example.
Some old companies have been pretty nimble and have been ccompetitive in new technology, like Ericsson and Nokia. But the landscape is utterly different from the US, and it is not for the better, there seem to be a glass ceiling for startups.
As long as Europe is so pathetic in tech, we don't deserve better than to read self-congratulatory stuff like that. Maybe it will even spur some competitive instinct...
Hmm maybe you are just looking at the web and forget other industries?
Europe has a good tradition in the auto industry
I think SAS is also quite big and european
Also, innovation wise, last studies shown European banks lead innovation (Web access, ATMs, etc)
Green energy tech is also quite popular here (though I have no idea where the actual innovation comes from)
Europe has a good tradition in the auto industry
I think SAS is also quite big and european
Also, innovation wise, last studies shown European banks lead innovation (Web access, ATMs, etc)
Green energy tech is also quite popular here (though I have no idea where the actual innovation comes from)
Europe is not the same as America, that's correct. But if you actually look at innovation, there has been more than a few aquisition of Swedish companies. Just counting "Swedish" companies there's MySQL, Skype, C3 technologies, Marratech, Tradera and a lot of others.
This is good nationalism. If you start a myth that Americans are highly innovative and entrepreneurial, and that myth becomes embedded in the culture so everyone believes it, the result is that Americans are more entrepreneurial. If everyone believes that they are, they will be.
Yes, sometimes nationalism can be a fog that hides the truth, but it and other cultural beliefs can also be good for people.
Yes, sometimes nationalism can be a fog that hides the truth, but it and other cultural beliefs can also be good for people.
I read those lines differently: The US has an appeal for talented people worldwide (if you work hard, you will be successful) + 50 competing states each with their own government style so you can move without leaving the country + lack of trust in the government (less regulation) = economic liberalism. The economist always advocates this.
Why is it ridiculous? Is there some reason why innovative people would spread themselves evenly throughout the world?
It may or may not be correct, but it's hardly ridiculous. If innovative people attract each other, you'd certainly expect some places to have a greater than average number.
It may or may not be correct, but it's hardly ridiculous. If innovative people attract each other, you'd certainly expect some places to have a greater than average number.
True, some places will have a greater than average number. But the implication does not work the other way, that people from that place have a natural tendency for innovation. Nor the inverse, that because my parents were not on US soil when I was born does not preclude me from being innovative.
The claim is that the US has more innovative business leaders, not that innovation is something intrinsic to US-born people.
As I said: "If innovative people attract each other, you'd certainly expect some places to have a greater than average number." I'm implying that the US could have a disproportionate number of innovative business leaders because the innovative people in India or Greece leave and come to the US.
As I said: "If innovative people attract each other, you'd certainly expect some places to have a greater than average number." I'm implying that the US could have a disproportionate number of innovative business leaders because the innovative people in India or Greece leave and come to the US.
> I don't know exactly what they mean by 'dynamic', but the idea that all the most innovative people only exist in the United States (or even that people in the US are on average more innovative than others) is ridiculous, and stating it is just blind nationalism...
As someone from the heart of the U.S., I believe that creativity, intelligence and industriousness are likely to be evenly distributed throughout the world. What isn't evenly distributed are political, economic and cultural systems which encourage highly talented people to build new technologies and companies. The United States has been particularly good at producing this outcome - many would argue that's been the relative apogee among nations/cultures. Personally, I believe that on a per capita basis, it becomes hard to demonstrate that the U.S. is any more innovative than nations like Japan, Germany and Korea.
This is not intended to be nationalistic. We simply seem to have become optimized for this outcome. Other outcomes - economic equality, social welfare, work/life balance, overall happiness, (arguably - it's a slippery concept after all) are not emphasized as much. Consequently, few unbiased observers would place the U.S. at the top of the pack in those categories.
As someone from the heart of the U.S., I believe that creativity, intelligence and industriousness are likely to be evenly distributed throughout the world. What isn't evenly distributed are political, economic and cultural systems which encourage highly talented people to build new technologies and companies. The United States has been particularly good at producing this outcome - many would argue that's been the relative apogee among nations/cultures. Personally, I believe that on a per capita basis, it becomes hard to demonstrate that the U.S. is any more innovative than nations like Japan, Germany and Korea.
This is not intended to be nationalistic. We simply seem to have become optimized for this outcome. Other outcomes - economic equality, social welfare, work/life balance, overall happiness, (arguably - it's a slippery concept after all) are not emphasized as much. Consequently, few unbiased observers would place the U.S. at the top of the pack in those categories.
Isn't The Economist an English magazine, not an American one? I'm not saying the sentiment isn't irritatingly self-congratulatory, but it's weird that this view is coming from a European mag rather than an American one.
"Oct 6th 2011, 16:43 by G.I. | WASHINGTON"
Looks like they have writers in other countries.
Looks like they have writers in other countries.
Yeah, although oddly enough, G.I. (Greg Ip) is Canadian: http://www.economist.com/mediadirectory/greg-ip
Nauseating because...? It's a post-war truth, it happens at all times that the most powerful cities n states attract the most creative and impactful people. They do not just exist, as if, born superior, it's a process that involves a lot of external assimilation and national filtering.
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I'm from the USA and find most of my country to be pretty nauseating. People bragging about American innovation is just a brief dizzy spell that soon passes once I stop rolling my eyes.
That was the worst hook for an article that turned out to be fairly insightful I've seen in a while. The death of Steve Jobs, or the last flight of the Space shuttle, are significant mostly symbolically, they have little to do with any decline, real or imagined.
The premise in this article that I find worth talking about is that technological innovation has had more to do with the growing inequity in wealth distribution than globalization has. This is an interesting point, but I think it misses the mark. Technology and Globalization are both methods by which corporations increase efficiency. Efficiency combined with aggressive consolidation of corporations is what drives the wealth inequity.
The premise in this article that I find worth talking about is that technological innovation has had more to do with the growing inequity in wealth distribution than globalization has. This is an interesting point, but I think it misses the mark. Technology and Globalization are both methods by which corporations increase efficiency. Efficiency combined with aggressive consolidation of corporations is what drives the wealth inequity.
This doesn't make sense - you can see extreme inequality even in areas with little consolidation.
Consider Valley startups - the inequality there is overwhelming. To borrow Occupy Wall St language, the top 1% probably has more than [1] 100% of the wealth.
[1] A simple example showing how this could be possible: 99 startups have lost $1. 1 startup has earned $100. Net wealth = $1 and the top 1% have 10,000% of the wealth.
Consider Valley startups - the inequality there is overwhelming. To borrow Occupy Wall St language, the top 1% probably has more than [1] 100% of the wealth.
[1] A simple example showing how this could be possible: 99 startups have lost $1. 1 startup has earned $100. Net wealth = $1 and the top 1% have 10,000% of the wealth.
I am not convinced that technology is what changed the equation between management, workers, and investors at a large company. Sure, with globalization and automation and there is simply less demand for workers despite their increased output. But more importantly I think the ever increasing world capital grew faster than economic growth which means capital is chasing ever worse investments. Combine that with diversification and investors stopped keeping management in check which enabled them to drain the increased efficiency from technical improvements for their own gain.
America's "decline" is mostly a function of bad government policy the past 15 years or so that lead to massively wasteful over-investment of people and capital into finance and real estate.
Break up the banks, let the market (not the Fed) set interest rates, deregulate health care markets, and balance the budget.
Break up the banks, let the market (not the Fed) set interest rates, deregulate health care markets, and balance the budget.
I think you’re projecting what you want the problem to be on top of what the problem actually is (apologies in advance for the tl;dr factor below)
The economic crisis of the last couple years is not America’s problem. America’s problem is we became very successful a few decades ago and got very rich because of it. That wealth led us to create more and more jobs that “serviced” us. So our economy became service oriented while poor countries (primarily in Asia) were happy to take our manufacturing jobs.
As the article says “Designed by Apple in California, Manufactured in China”
The U.S. still leads in designing things but almost everything we design is manufactured elsewhere and the people in those other countries are putting together just enough wealth to send their kids to college. Meaning eventually we’ll start to see more design work out of Asia at which point we’re going to start losing a lot of our wealth and we’ll be left with a service economy that no longer has enough wealth to support itself.
Fixing this problem means competing on every level with countries like China. But we can’t do that because we don’t want to be like China. Foxconn could open a factory in Texas tomorrow and get enough Mexicans to staff it by the end of the week but our laws won’t allow them to pay the low wages they pay in China. These laws are based on a good instinct on our part but it’s an instinct born out of Arrogance.
“We are Americans so we can dictate what something is worth even if someone else is willing to manufacture it for less”
But the problem is we can’t dictate what something is worth. So China, who is willing to allow their people to be treated far more ruthlessly, always wins out. Until we come to terms with that and find some way to fix it we’ll still have a problem
(For the record I think automation through robotics might be the key to fixing this to a certain extent but that’s a whole different conversation)
The economic crisis of the last couple years is not America’s problem. America’s problem is we became very successful a few decades ago and got very rich because of it. That wealth led us to create more and more jobs that “serviced” us. So our economy became service oriented while poor countries (primarily in Asia) were happy to take our manufacturing jobs.
As the article says “Designed by Apple in California, Manufactured in China”
The U.S. still leads in designing things but almost everything we design is manufactured elsewhere and the people in those other countries are putting together just enough wealth to send their kids to college. Meaning eventually we’ll start to see more design work out of Asia at which point we’re going to start losing a lot of our wealth and we’ll be left with a service economy that no longer has enough wealth to support itself.
Fixing this problem means competing on every level with countries like China. But we can’t do that because we don’t want to be like China. Foxconn could open a factory in Texas tomorrow and get enough Mexicans to staff it by the end of the week but our laws won’t allow them to pay the low wages they pay in China. These laws are based on a good instinct on our part but it’s an instinct born out of Arrogance.
“We are Americans so we can dictate what something is worth even if someone else is willing to manufacture it for less”
But the problem is we can’t dictate what something is worth. So China, who is willing to allow their people to be treated far more ruthlessly, always wins out. Until we come to terms with that and find some way to fix it we’ll still have a problem
(For the record I think automation through robotics might be the key to fixing this to a certain extent but that’s a whole different conversation)
"The U.S. still leads in designing things but almost everything we design is manufactured elsewhere"
Not in terms of value. Depending on which estimate you believe, the U.S. is either slightly behind China in manufacturing (19.4% of world output compared to 19.8%) or slightly ahead.
http://www.ft.com/intl/cms/s/0/002fd8f0-4d96-11e0-85e4-00144...
http://shopfloor.org/2011/03/u-s-manufacturing-remains-world...
Not in terms of value. Depending on which estimate you believe, the U.S. is either slightly behind China in manufacturing (19.4% of world output compared to 19.8%) or slightly ahead.
http://www.ft.com/intl/cms/s/0/002fd8f0-4d96-11e0-85e4-00144...
http://shopfloor.org/2011/03/u-s-manufacturing-remains-world...
Foxconn could open a factory in Texas tomorrow and get enough Mexicans to staff it by the end of the week but our laws won’t allow them to pay the low wages they pay in China.
This is unlikely. Mexico is more than twice as rich (per capita) as China ($9k vs $4k gdp per capita). Why would people leave Mexico just to earn lower wages in Texas?
This is unlikely. Mexico is more than twice as rich (per capita) as China ($9k vs $4k gdp per capita). Why would people leave Mexico just to earn lower wages in Texas?
But Foxconn wouldn't have to pay all the fees and middle men involved with getting products from China to here. So they could afford to pay more because their product would need nothing more than a truck.
There are certainly niches where this might make sense. But the general trend has been for low wage jobs to leave Mexico and go to China. Mexico is a middle income country, closer to Greece or Poland than to China.
Don't get me wrong - I think there are great benefits to North American economic integration. It was only very recently that China supplanted Mexico as our #2 trading partner. I just don't think it's reasonable to expect Mexico to occupy the same niche as China.
Don't get me wrong - I think there are great benefits to North American economic integration. It was only very recently that China supplanted Mexico as our #2 trading partner. I just don't think it's reasonable to expect Mexico to occupy the same niche as China.
Inviting Chinese companies to the US to employ Mexicans at Chinese rates is the way to 'save America'?
I just defined the problem I didn't put forth a solution. But your indignation shows exactly why the problem is so significant.
Having said that I'm not saying it isn't the way to save America either. The problem right now is while Chinese adults are making low wages they're managing to put away enough money to send their kids to University. Which in turn is causing Universities to spring up in China. If those graduates stay in China they'll innovate there and almost inevitably steal some of the high level work done by Americans (such as technology design and engineering). Then we start to lose those jobs and the wealth starts flowing into Asia.
So the question is: Isn't it better for the U.S. to have the Mexican adult pay for his child to go to a U.S. University and innovate here?
Having said that I'm not saying it isn't the way to save America either. The problem right now is while Chinese adults are making low wages they're managing to put away enough money to send their kids to University. Which in turn is causing Universities to spring up in China. If those graduates stay in China they'll innovate there and almost inevitably steal some of the high level work done by Americans (such as technology design and engineering). Then we start to lose those jobs and the wealth starts flowing into Asia.
So the question is: Isn't it better for the U.S. to have the Mexican adult pay for his child to go to a U.S. University and innovate here?
I think its worth being aware that you are talking about Chinese adults working for low wages and _pulling_ _themselves_ _and_ _their_ _families_ _out_ _of_ _extreme_ _poverty_. And that is a good thing.
I'm not saying it's not a good thing. But it's an equally good thing if a Mexican family pulls_themselves_and_their_families_out_of_extreme_poverty. If you thought through my point rather than just emoting you would have realized that.
It's an equally good thing if a Mexican family escapes from extreme poverty, but there are far fewer Mexicans actually living in extreme poverty.
1-2% of Mexico lives on $1.25/day (PPP adjusted) compared to 16% of China. For $2/day, the numbers are 9% and 36%. 15% of Mexico and 45% of China lacks improved sanitation, 6% vs 11% for improved water supply.
All data taken from this crappy web form: http://databank.worldbank.org/ddp/home.do
1-2% of Mexico lives on $1.25/day (PPP adjusted) compared to 16% of China. For $2/day, the numbers are 9% and 36%. 15% of Mexico and 45% of China lacks improved sanitation, 6% vs 11% for improved water supply.
All data taken from this crappy web form: http://databank.worldbank.org/ddp/home.do
Probably not, but you have to accept the fact you can't go back to the time when American manufactured goods could compete in price with their Chinese counterparts while employing a similarly sized workforce.
And I wouldn't blame your past few federal governments either. This is a problem that has been steadily developing for more than half a century.
And I wouldn't blame your past few federal governments either. This is a problem that has been steadily developing for more than half a century.
The U.S. still leads in designing things but almost everything we design is manufactured elsewhere and the people in those other countries are putting together just enough wealth to send their kids to college.
It's possible that China got ahead of the US recently, but it hasn't been true. US manufacturing output still leads the world or is very close to it. What has happened is that jobs have disappeared because of automation. The robotics you talk of is exactly what has put the US manufacturing worker out of work.
It's possible that China got ahead of the US recently, but it hasn't been true. US manufacturing output still leads the world or is very close to it. What has happened is that jobs have disappeared because of automation. The robotics you talk of is exactly what has put the US manufacturing worker out of work.
People should be as keen to join the race to the lowest wages and most economically efficient conditions as they should be for trickle down economics. Countries like Germany and Japan compete on a manufacturing level without workers having to accept Chinese wages and conditions. So it is possible, it's just not the easy path to take.
Honest question - how do they achieve this? How is it they (Germany and Japan) are able to "compete on a manufacturing level without workers having to accept Chinese wages and conditions". Because it's generally framed as Americans needing to lower their standard of living / expectations in order to be able to compete. So how is it German and Japan are the exception? What are they doing differently?
The automation through robotics is causing technological unemployment and a further loss of jobs for the manufacturing class.
I can see how things will get more and more automated but I dont get how it can alleviate the plight of the american middle class.
I can see how things will get more and more automated but I dont get how it can alleviate the plight of the american middle class.
Its more complex than you give credit for..
And it snot just a USA trend..Europe faces this as well..
Basically, industries went horizontal rather than continue vertical integration. Horizontal promotes outsourcing whereas vertical does not.
Look at SpaceX as an example of vertical integration delivering lower costs satellite payload flights than NASA contractors with USA workers. Note you could replace USA with Europe, India, Russia, etc.
But we are facing a business culture fallacy and change setup. Its not gov policy as that will always be somewhat broken. Its business culture that needs to change and we as startup people have the power to change it.
When is the last time any YCombinator company submitted a startup idea whereas it was vertically integrated rather than horizontal?
And it snot just a USA trend..Europe faces this as well..
Basically, industries went horizontal rather than continue vertical integration. Horizontal promotes outsourcing whereas vertical does not.
Look at SpaceX as an example of vertical integration delivering lower costs satellite payload flights than NASA contractors with USA workers. Note you could replace USA with Europe, India, Russia, etc.
But we are facing a business culture fallacy and change setup. Its not gov policy as that will always be somewhat broken. Its business culture that needs to change and we as startup people have the power to change it.
When is the last time any YCombinator company submitted a startup idea whereas it was vertically integrated rather than horizontal?
Would you mind expanding upon your views regarding the deregulation of health care? More specifically, do you believe that provider-related antitrust laws have harmed the public since their emergence in the 1970s?
I don't think there's a single level of government where I live ('burbs of Chicago) that has a balanced budget. Perhaps I'm overly pessimistic, but I especially don't think the federal government ever will again.
It seems the article is really about top inventors of consumer hardware products and the rare case of a company environment that attracts them and allows them to flourish.
At any given time in history there are very few top inventors or really nice products in such a circumstance worldwide. Current examples I can think of are some companies in Northern Europe, Germany, and the US. There's not a huge number making really excellent things, but this is how it always has been.
As far as the specific example, much of Apple's current fame comes from the value added by Jonathan Ives, a British citizen who is only temporarily in the US because of his job, and who has said he doesn't really like living in the US. Much other value comes from the NeXT design, both the Mach flavor of Unix which someone else invented and wasn't paid for and Apple monetized, ObjectiveC which someone else invented and wasn't paid for and Apple monetized, and the NextStep/Cocoa libraries which NeXT did invent and was paid for and which Apple monetized.
At any given time in history there are very few top inventors or really nice products in such a circumstance worldwide. Current examples I can think of are some companies in Northern Europe, Germany, and the US. There's not a huge number making really excellent things, but this is how it always has been.
As far as the specific example, much of Apple's current fame comes from the value added by Jonathan Ives, a British citizen who is only temporarily in the US because of his job, and who has said he doesn't really like living in the US. Much other value comes from the NeXT design, both the Mach flavor of Unix which someone else invented and wasn't paid for and Apple monetized, ObjectiveC which someone else invented and wasn't paid for and Apple monetized, and the NextStep/Cocoa libraries which NeXT did invent and was paid for and which Apple monetized.
TIL that the vice president of the FED doesn't know about Moore's law.
"Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful," he said."You have to look at the prices of all things." "I can't eat an iPad," another said.
"Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful," he said."You have to look at the prices of all things." "I can't eat an iPad," another said.
Separate your perspective. Most likely they're just counting on your common D/R consent-voter not knowing about Moore's law.
As competition in the free market is all about finding ways to do things cheaper, most things should be continually less expensive. The Fed policy mandates the exact opposite, with the ensuing monetary expansion (+ over-encouraged consumer investment) driving the parasitic FIRE economy.
As competition in the free market is all about finding ways to do things cheaper, most things should be continually less expensive. The Fed policy mandates the exact opposite, with the ensuing monetary expansion (+ over-encouraged consumer investment) driving the parasitic FIRE economy.
Today you can buy a Pizza 2011 that is twice the cost of a Pizza 2000!
Did that article have any content, or was it rather intended to be an emotion piece? Like you can get all whiny eyed by reading it, yet you haven't really digested any information whatsoever?
The way out of this in america, and throughout the world, will be companies like heartland robotics ($5000 robot arm), cheap 3d printers, and hydro/aeropoinic mini-farms inside homes, and the computer vision software to tie it all together. We're headed for a post-scarcity society.
Keep dreaming. Raw materials are scarce, so everything else will be do.
The "way out of this in America" is that we all become slightly poorer, the Chinese all get a lot richer, and manufacturing starts coming back to the US.
The "way out of this in America" is that we all become slightly poorer, the Chinese all get a lot richer, and manufacturing starts coming back to the US.
How is that a dream? Post-scarcity has already hit the digital world, the material world isn't far off - the only limitation currently is in computer vision software.
The real problem isn't china, it's automation. The only solution other than increased welfare (which the current political system won't allow), is to make everyone self-sufficient through robots in the home.
Materials aren't scarce, if they were, the centralized production system would feel it too.
The real problem isn't china, it's automation. The only solution other than increased welfare (which the current political system won't allow), is to make everyone self-sufficient through robots in the home.
Materials aren't scarce, if they were, the centralized production system would feel it too.
The problem with this paradigm is that we would still have our centuries old near 100% employment model, where society works by having almost everyone working. In the world we are rapidly approaching, we won't need unskilled labor anymore and that renders a huge class of unemployed people who are not interested in pursuing higher education without income.
which is the point exactly, most people won't need to work, they will have the means of production inside their homes.
Boring article.
Do any people from the USA find these sentiments nauseating or is it just the rest of the world? I don't know exactly what they mean by 'dynamic', but the idea that all the most innovative people only exist in the United States (or even that people in the US are on average more innovative than others) is ridiculous, and stating it is just blind nationalism...