9 ms·
The long, slow death of global development
- eru 4y agoCompare https://noahpinion.substack.com/p/the-polandmalaysia-model https://noahpinion.substack.com/p/the-polandmalaysia-model
- rramadass 4y agoGreat Link! See also all the other articles on various countries named The Developing Country Industrialization series by the same author here: https://noahpinion.substack.com/p/the-developing-country-industrialization https://noahpinion.substack.com/p/the-developing-country-ind...
- sien 4y agoIndia has increased in GDP per capita from $3629 in 2006 to $6800 in 2018. That's a massive increase in GDP per capita for ~1.5Bn people. https://ourworldindata.org/grapher/gdp-per-capita-maddison-2020?tab=chart&yScale=log&time=2006..latest&country=BWA~Latin+America~Sub-Sahara+Africa~CHN~IND https://ourworldindata.org/grapher/gdp-per-capita-maddison-2... (edit) This is at Purchasing Power Parity, thanks to unmonk for pointing this out.
- ummonk 4y agoAs the article points out, PPP adjustment is misleading. Since GDP is disproportionately contributed to by higher income / higher COL urban areas, but PPP adjustment is made based on the average COL (thus mostly weighted based on rural areas), such PPP based calculations are grossly misleading. India certainly has had a substantial rise in GDP per capita, but the absolute prosperity is nowhere near $6800 GDP per capita.
- Robotbeat 4y agoWait a minute, average cost of living would be averaged the same way that GDP is averaged. So this is just cope for the fact that reality doesn’t fit with the piece’s argument.
- ummonk 4y agoNo, it isn't averaged the same way.
- sien 4y agoThe rise in Indian nominal GDP per capita is even higher than that at PPP. https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=IN https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location... In the year 2000 it was $US 442. It is now $2256 . A five fold increase.
- ummonk 4y agoMore specifically ~2.5 when adjusted for inflation: https://data.worldbank.org/indicator/NY.GDP.PCAP.KD?locations=IN https://data.worldbank.org/indicator/NY.GDP.PCAP.KD?location... But yes, the rise in nominal GDP per capita has indeed been very substantial (and in relative terms higher than that in PPP). It just shows a long way to go to achieve middle income status though.
- djha-skin 4y agoThat's an increase of about 5% per year over 12 years. Average inflation is typically 3%. So on average adjusting for inflation, India grew by 2% per year. This small number does not seem like something worthy of a headline.
- hotpotamus 4y agoGDP numbers are always supposed to be reported in inflation adjusted terms.
- Thorrez 4y agoSo In 2020 I'd say "Country Foo had a GDP per capita of $1000 in 2000", and in 2023 I'd say "Country Foo had a GDP per capita of $1100 in 2000"? That's confusing.
- ajuc 4y agoIf you don't compare values between years it doesn't matter. When you compare them you adjust them to common base year.
- eru 4y agoWell, unless you are talking specifically about nominal GDP, which is also very important in economics.
- esafak 4y agoAnd extreme poverty has plummeted from 40% in 2004 to 10% in 2019. https://ourworldindata.org/grapher/share-of-population-in-extreme-poverty?tab=chart&country=~IND https://ourworldindata.org/grapher/share-of-population-in-ex...
- qikInNdOutReply 4y agoEarth overshoot day is at july now. https://www.overshootday.org/ https://www.overshootday.org/ So we got another 40 years, till it reaches zero.
- eru 4y agoSeems a bit questionable.
- misssocrates 4y agoThere's an argument that the world of atoms stalled decades ago and most growth since then has been in the world of bytes. If that's true, why? What happened in the world of atoms?
- dividefuel 4y agoMy naive theory is that we're well into the diminishing return stages of the S-curves of many of our technologies. We need major breakthroughs that can start new S-curves.
- ch4s3 4y agoThis feels intuitively correct to me, but I’d have trouble clearly explaining why. I’m interested to see where bio-tech goes in the next ten years though.
- mcstafford 4y agoI'm a little curious, but haven't heard a word of what you're referring to. A quick search for 'atoms stalled' didn't result in anything that felt helpful. Do you have a link that would clarify?
- dontwearitout 4y agoI assume they mean "atoms" as in physical material. I think they're saying physical sciences are stalling out and computer science is responsible for most growth now. I'm not familiar with this term though, and disagree with the sentiment.
- Qem 4y agoIn other words, we expected flying cars, but then we got Facebook instead.
- marcosdumay 4y agoMarket consolidation happened. Our technology started favoring really large companies again, ending the era of innovation that was the late 19th and most of the 20th centuries. People just can't start from nothing and create something on the real world.
- IceHegel 4y ago> From the perspective of poverty statistics, Africa will assume particular importance: by far the continent with the worst economic performance over the last several decades, it is there that the most significant population growth will occur over the next century. The result, pending dramatic change, is a world in which the progress made against poverty over the last forty years will slow, stagnate, or even reverse. It has always struck me as strange that Africa as a continent would grow its population so much without corresponding development.
- hn_throwaway_99 4y agoWould have to search for it but read an article recently that, even in Africa, population growth is slowing faster than expected. It was basically saying that peak global human population would peak earlier than recently thought.
- dahfizz 4y agoThis is a well documented phenomenon. Poor people have more kids than rich people.
- pphysch 4y agoAfricans tried many times over the past centuries to establish stable sovereign states (a prerequisite to large-scale development), and each time they got brutally crushed by foreign powers. It's not for lack of trying.
- Robotbeat 4y agoThis argument, though, is pulled out of thin air. Population growth in Africa is slowing dramatically as it’s urbanizing, and it’s also dramatically developing. Even some of its poorest areas (with fundamental geographic challenges, like being landlocked, on top of a plateau without navigable rivers to the sea and without hood road or rail networks in neighboring countries) are doing pretty well. Rwanda, for instance, has grown a factor of 4 in real per capita gdp (PPP) from 2000 ($616/capita) to 2021 ($2460/capita). https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locations=RW https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locat... Literally 4 times the wealth per person! And the effects are not just due to a small number of people or raw money alone. The infant mortality rate has dropped from 110 per 1000 live births in 2000 to just 30 in 2021 and still falling. https://data.worldbank.org/indicator/SP.DYN.IMRT.IN?locations=RW&start=2000 https://data.worldbank.org/indicator/SP.DYN.IMRT.IN?location... …as its birthrate has dropped from 5.9 per woman in 2000 to 3.9 in 2020 (and still falling fairly quickly). https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locations=RW https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locat... There’s no reason to suspect this trend won’t continue as infrastructure is built up and these places further urbanize. In fact, some of the wealth effects are almost mechanical as fertility rates stabilize, because of the improvement in the dependency ratio. Fertility rate is going to fall in Africa and I’ve seen no good argument for why it wouldn’t. Every trend is in that direction and every obvious force as well.
- pphysch 4y agoInteresting that a journal called "American Affairs" is essentially rejecting the Washington consensus/neoliberalism and strongly imply that the neo-Westphalian/Chinese model is the future. We are truly entering a new era.
- Michelangelo11 4y agoAmerican Affairs is a very anti-globalist journal, kinda broadly aligned with Trump's foreign policy (but they abhor Trump's crassness, populism, etc.).
- IceHegel 4y agoThere are good people on both sides.
- jonstewart 4y agohttps://en.wikipedia.org/wiki/American_Affairs https://en.wikipedia.org/wiki/American_Affairs https://en.wikipedia.org/wiki/Julius_Krein https://en.wikipedia.org/wiki/Julius_Krein
- andrewmutz 4y agoAnyone can name their publication anything. This article was written by David Oks, who is the furthest thing from the Washington consensus. He was one of the high school kids who promoted Mike Gravel for president on Twitter in 2020: https://en.m.wikipedia.org/wiki/David_Oks https://en.m.wikipedia.org/wiki/David_Oks
- eru 4y agoAmerican political discourse has been against the Washington consensus and neoliberalism for quite a while now. Come to think of it, neoliberalism has been unpopular for quite a while now. It's a miracle the world is broadly still as neoliberal as it is. I guess politicians fear the economic fallout from giving in to populism more than they want the short term vote gains?
- baybal2 4y ago[dead]
- jackcosgrove 4y ago> the tradability of manufactured goods means that there are no such automatic limits to manufacturing growth This statement seems at odds with the rest of the piece. The problem with manufacturing as a development strategy (and I agree with the opening - it's the only proven development strategy) is that not everyone can manufacture. You'd have too many goods! I've always disagreed with the economic belief that demand is infinite and only constrained by supply. As others in this thread have alluded to, our material progress (as opposed to digital progress) began to slow down in the 1970s. I think part of this is that to a large extent people's material needs in developed countries were met by things like plumbing and electrification. I use developed countries here both as an example of economic trends at the frontier, and as the most likely consumers of industrial goods given their wealth. Of course that leaves the needs of 90% of people in developing countries unmet, but as the article explains China supplied those needs after 1979. Manufacturing is efficient and one factory worker can meet the material needs of 1+N consumers. The whole world can't work in factories because there isn't enough demand for all those manufactured goods. Just look at the global steel industry. A lot of people are too poor to engage in global trade, and manufacturers of any extraction will not give away their wares. Development, unlike the global phenomenon observed from 1945-1975, seems more like taking turns being the workshop of the world. 1980-2020 was China's turn.
- bruce343434 4y ago> one factory worker can meet the material needs of 1+N consumers. Non native speaker here from the Netherlands. What meaning is implied in your usage of 1+N?
- jackcosgrove 4y agoN being a positive number, maybe fractional. So one factory worker assembling sinks can supply sinks for five households. Of course there's a team of workers assembling the sinks, but you get the idea. In this example N=4.
- bruce343434 4y ago
- ETH_start 4y ago>>Other problems are more subjective; many have criticized the $2.15-a-day threshold (at 2017 purchasing-power-adjusted prices)—designed to reflect who would be poorest in the most impoverished countries, like Mali or Afghanistan, and not in even slightly richer countries like Angola or Pakistan—for being far too low to provide for sustenance or normal human health outcomes, and thus to measure anything meaningful about real graduation from poverty. This is mental gymnastics done to dispel evidence that goes against the cynical anti-capitalist ideology that is so in-vogue. The poverty line in question does, contrary to this claim, "measure [some]thing meaningful about real graduation from poverty". If the author contends that living at the $2.15-a-day threshold is an abysmal quality of life, then what does he imagine living at below that threshold to be like? Does he imagine that it's all indistinguishable anguish at those levels, and therefore that living on $2.50 a day is no improvement over living on $1.25 a day? Nothing could be further from the truth. At extreme levels of poverty, a 50% or 100% increase daily purchasing power is often the difference between life and death.
- jschveibinz 4y agoFrom the point of view of Koch, Halliburton and Bechtel, for example, I suppose this is probably true.
- ummonk 4y agoShould be noted that the previous governor of the Reserve Bank of India who was before that Chief Economist at the IMF is now going around criticizing the Indian government's nascent attempts to kickstart manufacturing instead of following the services-led growth model that he advocates. We went through two decades where many in the global intellectual class actively campaigned against industrialization, and with degrowth strategies for managing CO2 emissions being in vogue now, there is a risk that such counterproductive advocacy will continue, just as industrialization becomes increasingly harder for the reasons mentioned in the article.
- mdani 4y agoThe previous RBI governor is entering politics and joining the opposition, so his current opinions should be taken as political rather than purely academic.
- kelipso 4y agoI don't follow what he says but I very much doubt his current opinions are any different from before. I've been reading about India + service economy + how great service economies are + how India can skip the manufacturing phase of a developing economy and jump straight into service economy in mainstream media articles in both US and India since at least early 2000s.
- pkd 4y agoTo provide more context on this, Raghuram Rajan participated in a march across India led by the then leader of opposition. He has not in any official capacity joined the opposition.
- noduerme 4y agoI'm a layperson in these topics, but I've begun to suspect that degrowth is the new expression for what used to be called the "white man's burden", with global warming replacing classical Malthusian overpopulation fears. Particularly as it's applied by first world economies toward developing ones. I have no problem as a libertarian locking in first mover advantage, but doing it by accusing others of what you yourself are guilty of is disgustingly hypocritical. I've even come to miss the kind of hypocrisy that knows what it's saying and doing, as opposed to the kind that simply takes the status quo for granted as if it had existed forever.
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- Jeff_Brown 4y agoIt's hard to know how real stagnation is. Certainly since 1961 growth has been on a tear, rising more than 7 fold in low income countries[1], and 26 times for the world as a whole[2]. If you restrict attention to the window from 2014 to 2021, then growth in low income countries has been nil -- but the same is true from 1976 to 2001[1]. Rises in gdp per person are almost by definition technological, and the improvements in and the diffusion of tech are both hard to predict. It's clear, though, that growth in lower income countries has been slower. [1] https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=XM https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location... [2] https://data.worldbank.org/indicator/NY.GDP.PCAP.CD https://data.worldbank.org/indicator/NY.GDP.PCAP.CD
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- havblue 4y agoSo if the macroeconomic trends look bleak for the world, what's the microeconomic approach? Attempt to move to a location where there will be more economic growth? Have more kids? Buy gold?