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Newer != more advanced. ~20 years ago I remember people arguing that Latin American telecommunications infrastructure was "more advanced" than in the U.S. simpl

by wahern 6y ago

Newer != more advanced. ~20 years ago I remember people arguing that Latin American telecommunications infrastructure was "more advanced" than in the U.S. simply because per capita cellular usage was greater. If you Google that claim today, it's still being made regarding Latin America vs Canada. But what those figures actually represent is that their wired infrastructure is poor and unreliable in Latin America. The degree to which an economy is "advanced" has more to do with institutional systems and processes, not whether they're using the latest tech. Often times the latest tech papers over institutional deficiencies, but only superficially. Mobile payment platforms have been ubiquitous in Africa for many years, but nobody would say that Africa's banking system is "advanced" or that it's capable of supporting the needs of an advanced financial sector. They became ubiquitous in Africa first precisely because of institutional deficiencies. Mobile payments solved some of the most visible consequences, but by itself it didn't go very far in addressing the underlying problems. Sure, it's easy to pay a vendor for lunch or a pair of sneakers using your phone, but what matters infinitely more is how safe and reliable it is to secure a $2,000,000 LoC to help bring your factory online. Old systems in older economies persist because they work, or at least work well enough. If China overtakes the U.S. in technology dominance, it's because they've spent 30 years studying, copying, and improving upon American legal, financial, and business management systems. Notwithstanding the fact that they are serving the interests and demands of the Communist Party, which often puts them in a lose-lose scenario, China's economists and policy advisers understand the systems of modern capitalism better than most of their Western counterparts.

scarmig 6y ago
There are some philosophical questions involved about what is "advanced": is it purely a matter of timeliness? Of what requires a more sophisticated set of institutions to sustain? Who has more advanced weaponry: a civilization with barely functioning firearms, or one with arcane but sophisticated metallurgy to forge durable, sharp swords? Comparing consumer payment infrastructure in the US and China, there is really no comparison. For me, in cost, convenience, and security (against the threat models I'm concerned with), China wins on every factor, by significant margins. Except opening a bank account. A month after I moved to China, I got a fraud notification. From what? It turned out a gas station in Oakland had a skimmer. I'm told stuff like that simply can't happen in China (which I take with a grain of salt, but I have a hard time imagining what fraud vectors there are).
- dirtyid 6y ago
  Chinese banking security confuses me, internet explorer activex plugins for much too long but also fairly rigorous protection. I don't know anyone whose been defrauded via the banking infrastructure itself. At least it seems like not a issue compared to credit card fraud in the West. Was blown away I could still swipe and sign credit cards a few years ago in the US.
  - skinnymuch 6y ago
    For an anecdote. I don’t know anyone in the US that has had serious fraud happen. At most one or two items purchased as fraud.
Udik 6y ago
> Notwithstanding the fact that they are serving the interests and demands of the Communist Party, which often puts them in a lose-lose scenario Not sure what you mean by this. The quality of life of people in China improved in the past 30 years much more than Americans quality of life did (some would argue that the latter even decreased). The CCP has really worked exceptionally well for the people. It might change, the fact that they don't have a democracy and Xi Jinping removed its own term limits exposes them to the risk of getting stuck with a bad or even terrible leadership. But so far it has worked remarkably well.
- mardifoufs 6y ago
  Yes, but that's only if you ignore what the CCP did before the past 30 years. Of course China has had a much higher growth rate, they started from pretty much rock bottom in huge part because of the CCP's policies before the 1980s.
  - Udik 6y ago
    Sorry, but the GP's statement was declined in the present. In the present, and for the past 30/40 years, the CCP has done a great job for the people of China. So much so the US are freaking out because they're afraid of losing their leadership.
  - moreorless 6y ago
    I don't know if our government policies and past acctions, assuming you're a fellow American, are any better. I am not just talking about the current administration.
- skinnymuch 6y ago
  You picked a time period post Great Leap and the few decades after that.
  - Udik 6y ago
    I picked the last 40 years up to the present. Seems a decent length of time to me.
paganel 6y ago
> Mobile payment platforms have been ubiquitous in Africa for many years, but nobody would say that Africa's banking system is "advanced" I'm not a fan of mobile payments myself but I would say that compared to the US most of Africa's mobile payments are indeed more advanced, yes. If I understand correctly many poor people in Africa are de facto banked (as long as they have a mobile phone, which has become pretty achievable right now), while a very large proportion of the US poor population is de-facto non-banked, with all the extra financial hardships that that situation entails.
- gruez 6y ago
  AFAIK the reason why poor people are unbanked in America is because they can't afford the fees/minimum balance associated with the account. I fail to see how switching from $0.50 bank cards to phone apps is going to make banking more affordable.
  - paganel 6y ago
    Afaik exchanging money through mobile phone apps in Africa doesn’t involve actual banks, that’s why I used the expression “de facto banked”. The money-exchange system is totally different, more advanced if you look at it from the poor people’s perspective. You’re probably correct though, this could never happen in the US because of regulatory capture (by the banks, mostly, but not only).
- moreorless 6y ago
  > it's because they've spent 30 years studying, copying, and improving upon American legal, financial, and business management systems. My goodness. American exceptionalism at its very finest. You honestly think that Eurorpean, Asian, and other countries have nothing to offer? Not everything great is from American. We need to get over ourselves and realize that we're not at all that exceptional. Do we do certain things better? Absolutely. Do we do certain things worse and have a lot to learn from others? You can bet your last dollar.
  - paganel 6y ago
curiousgal 6y ago
> Mobile payment platforms have been ubiquitous in Africa Define "Africa".
LargoLasskhyfv 6y ago
>> Old systems in older economies persist because they work, or at least work well enough. Until the next bubble bursts...what works then is YOU, because YOU pay for too big to fail.

by wahern 6y ago

scarmig 6y ago

There are some philosophical questions involved about what is "advanced": is it purely a matter of timeliness? Of what requires a more sophisticated set of institutions to sustain? Who has more advanced weaponry: a civilization with barely functioning firearms, or one with arcane but sophisticated metallurgy to forge durable, sharp swords? Comparing consumer payment infrastructure in the US and China, there is really no comparison. For me, in cost, convenience, and security (against the threat models I'm concerned with), China wins on every factor, by significant margins. Except opening a bank account. A month after I moved to China, I got a fraud notification. From what? It turned out a gas station in Oakland had a skimmer. I'm told stuff like that simply can't happen in China (which I take with a grain of salt, but I have a hard time imagining what fraud vectors there are).

dirtyid 6y ago
Chinese banking security confuses me, internet explorer activex plugins for much too long but also fairly rigorous protection. I don't know anyone whose been defrauded via the banking infrastructure itself. At least it seems like not a issue compared to credit card fraud in the West. Was blown away I could still swipe and sign credit cards a few years ago in the US.
- skinnymuch 6y ago
  For an anecdote. I don’t know anyone in the US that has had serious fraud happen. At most one or two items purchased as fraud.

Udik 6y ago

> Notwithstanding the fact that they are serving the interests and demands of the Communist Party, which often puts them in a lose-lose scenario Not sure what you mean by this. The quality of life of people in China improved in the past 30 years much more than Americans quality of life did (some would argue that the latter even decreased). The CCP has really worked exceptionally well for the people. It might change, the fact that they don't have a democracy and Xi Jinping removed its own term limits exposes them to the risk of getting stuck with a bad or even terrible leadership. But so far it has worked remarkably well.

mardifoufs 6y ago
Yes, but that's only if you ignore what the CCP did before the past 30 years. Of course China has had a much higher growth rate, they started from pretty much rock bottom in huge part because of the CCP's policies before the 1980s.
- Udik 6y ago
  Sorry, but the GP's statement was declined in the present. In the present, and for the past 30/40 years, the CCP has done a great job for the people of China. So much so the US are freaking out because they're afraid of losing their leadership.
- moreorless 6y ago
  I don't know if our government policies and past acctions, assuming you're a fellow American, are any better. I am not just talking about the current administration.
skinnymuch 6y ago
You picked a time period post Great Leap and the few decades after that.
- Udik 6y ago
  I picked the last 40 years up to the present. Seems a decent length of time to me.

paganel 6y ago

> Mobile payment platforms have been ubiquitous in Africa for many years, but nobody would say that Africa's banking system is "advanced" I'm not a fan of mobile payments myself but I would say that compared to the US most of Africa's mobile payments are indeed more advanced, yes. If I understand correctly many poor people in Africa are de facto banked (as long as they have a mobile phone, which has become pretty achievable right now), while a very large proportion of the US poor population is de-facto non-banked, with all the extra financial hardships that that situation entails.

gruez 6y ago
AFAIK the reason why poor people are unbanked in America is because they can't afford the fees/minimum balance associated with the account. I fail to see how switching from $0.50 bank cards to phone apps is going to make banking more affordable.
- paganel 6y ago
  Afaik exchanging money through mobile phone apps in Africa doesn’t involve actual banks, that’s why I used the expression “de facto banked”. The money-exchange system is totally different, more advanced if you look at it from the poor people’s perspective. You’re probably correct though, this could never happen in the US because of regulatory capture (by the banks, mostly, but not only).
moreorless 6y ago
> it's because they've spent 30 years studying, copying, and improving upon American legal, financial, and business management systems. My goodness. American exceptionalism at its very finest. You honestly think that Eurorpean, Asian, and other countries have nothing to offer? Not everything great is from American. We need to get over ourselves and realize that we're not at all that exceptional. Do we do certain things better? Absolutely. Do we do certain things worse and have a lot to learn from others? You can bet your last dollar.
- paganel 6y ago

curiousgal 6y ago

> Mobile payment platforms have been ubiquitous in Africa Define "Africa".

LargoLasskhyfv 6y ago

>> Old systems in older economies persist because they work, or at least work well enough. Until the next bubble bursts...what works then is YOU, because YOU pay for too big to fail.