Rating: 
Summary: A somewhat timid picture (part 2)
Review: ...This is an entertaining book on international economics, though perhaps for the wrong reasons.
Rating: 
Summary: Logical and important.
Review: A thorough and logical overview of economics and globalization, with predictions as well as prescriptions to manage potential problems. Although the predictions may or may not come true, the book is important because it allows readers the opportunity to understand in a clear, readable and factual manner, the issues we face as a "world economy". If you want to read only one book which explains globalization, the rationale behind government run fiscal policies, the impact of trade deficits, and changing roles of governments and the world bank, this is a great one.
Rating: 
Summary: Per capita GDP
Review: At no point did the Soviet Union achieve a per capita GDP anywhere near that of the United States. Even today Russia's per capita income in PPP is less than 30% America's per capita income - much less in nominal GDP. Yet the USSR was a great power. When China becomes the world's largest economy, its per capita income doesn't matter simply because no international institution can change its rules without Chinese consent. Nor can Washington ignore China simply because of China's low per capita income. No military domination is required. As for Pawley's ethnic slur, what else can I expect from someone from South Africa?
Rating:
Summary: Mindboggling statistics (2)
Review: China in fact has 135 million main telephone lines, compared to India's 28 million - almost 5 times as many for a population only 1.3 times India's. Since the Internet is often carried through phone lines, China is clearly poised for an explosive growth in Internet use while India must first work harder on getting a dial tone. Thurow is completely ignorant about China. Not just partially ignorant, but completely ignorant. On the few things he happens to be right, such as China's needs for better infrastructure, this is just common sense and applies to just about every developing country on Earth. The notion that not having been completely colonized by European powers left China at a "disadvantage" in infrastructure would have been laughable if Thurow's books had been less widely read: By this logic, Japan should have no infrastructure at all. As for Thurow's criticism of China's export strategy, he is right to the extent that this cannot be China's basis for economic growth forever - sooner or later the American consumer will run out of money (like the Japanese and Germans) for Chinese products. But what this export strategy is doing for China is that it is creating a genuine industrial base (on top of what it had before 1978, chiefly with heavy industries) that is consumer-oriented, as well as building a growing middle-class for which a workable banking and legal system (that respect private property) can now exist. China is roughly at the point where America, in the post-bellum industrial boom, once was when it received massive FDI and technical know-how from Europe, especially Britain. Eventually China must produce for Chinese customers rather than for foreigners - exactly what happened in America after the two world wars. But the American economy did not stop growing after that because its own consumption led to massive demands, more than making up for the (temporary) loss of foreign markets.
Rating:
Summary: Mindboggling statistics (2)
Review: China in fact has 135 million main telephone lines, compared to India's 28 million - almost 5 times as many for a population only 1.3 times India's. Since the Internet is often carried through phone lines, China is clearly poised for an explosive growth in Internet use while India must first work harder on getting a dial tone. Thurow is completely ignorant about China. Not just partially ignorant, but completely ignorant. On the few things he happens to be right, such as China's needs for better infrastructure, this is just common sense and applies to just about every developing country on Earth. The notion that not having been completely colonized by European powers left China at a "disadvantage" in infrastructure would have been laughable if Thurow's books had been less widely read: By this logic, Japan should have no infrastructure at all. As for Thurow's criticism of China's export strategy, he is right to the extent that this cannot be China's basis for economic growth forever - sooner or later the American consumer will run out of money (like the Japanese and Germans) for Chinese products. But what this export strategy is doing for China is that it is creating a genuine industrial base (on top of what it had before 1978, chiefly with heavy industries) that is consumer-oriented, as well as building a growing middle-class for which a workable banking and legal system (that respect private property) can now exist. China is roughly at the point where America, in the post-bellum industrial boom, once was when it received massive FDI and technical know-how from Europe, especially Britain. Eventually China must produce for Chinese customers rather than for foreigners - exactly what happened in America after the two world wars. But the American economy did not stop growing after that because its own consumption led to massive demands, more than making up for the (temporary) loss of foreign markets.
Rating: 
Summary: "Globalization can be shaped."
Review: Dr. Thurow's analysis of globalization and the "third industrial revolution" is acessible and lucid. The lack of any serious alternatives to capitalism at this moment in history and the trend towards a global economy pose different problems for different nations, cultures, and businesses around the world. But the situation is pregnant with opportunities for prosperity and also mitigating the inevitable recessions, inequalities, and dislocation that comes with capitalism. Thurow states that globalization, being a man-made phenomenon, can be shaped.
Many interesting and practical suggestions for first, second, and third world countries are presented. He also discusses problems (e.g., intellectual property) that need to be worked out to help the global economy prosper and avoid disasters.
People opposed to globalization might be interested in finding out why their opposition to globalization might harm the very people they want to help. A better solution might be to mitigate the downside of globalization just as capitalist countries in the 20th century learned how soften the harsher side of capitalism.
Very well written!
Rating:
Summary: Tower of Babel - 21 st Century model
Review: Globalization is here to stay. You have three options - accept it, reject it or shape it. The author suggests the third option. With the demise of communism in the last decade of the twentieth century, capitalism is the only remaining vehicle of economic development that appears to have succeeded in creating prosperity in the developed world. Globalization in the context of the third industrial revolution led by knowledge based industries is the spread of capitalism across boundaries. Capitalism has three basic traits as outlined by the author - greed, optimism and herd mentality. It is this combination that drives capitalists to establish global supply chains - produce where it is cheap and sell where it is attractive; and everyone has something to sell. Globalization is driven by businesses and not by national governments. While governments can play a catalytic role in attracting businesses, it is business that fuels the engine of growth. The distribution income and wealth has never been so skewed in the history of mankind. While just a couple of hundred years ago the per capita incomes across nations was almost uniform, and perhaps uniformly low, today the top 20 percent of the nations control 80 percent of the planet's wealth, and this disparity is increasing. While America with over 32 percent of global GDP in dollar terms is the locomotive of global growth, the author emphasizes the urgent need to kick start two other big locomotives- Europe and Japan, that can pull the global economy faster into prosperity. The American locomotive is now struggling with a huge trade deficit and a overvalued dollar. It can stop. Europe and Japan are shut. It is this scenario of no locomotive in action that threatens to bring global economies to a halt, and into a recession. The third world countries will be hit hard should this happen. There are conflicting interests between the developed world and developing countries when it comes to some vital issues on global prosperity. Capitalism aims at rewarding intellectual properties, and there is no limit to such rewards. Capitalism ignores human aspects. On the other hand there are billions of poor people in developing countries for whom a square meal a day is a luxury. They just cannot afford health care and drugs at international prices. Governments in these countries need to find a way for providing health care though it may not satisfy the prices demanded by global pharmaceutical companies. Intellectual property is important but human life is priceless. Similarly when it comes to agriculture, developed nations protect and subsidize their farmers, which denies a huge opportunity for developing countries to export their production and earn higher incomes. Singapore and Taiwan receive accolades as models of globalization and growth in Asia. The picture on china is mixed. Growth statistics projected by China are shown as suspect in accuracy and bordering on intentional exaggeration. Despite attracting huge FDIs, China has inherent weaknesses in her banking system and continued government support to inefficient State Owned Enterprises weakens it further. Growth is confined to certain pockets and has not reached large provinces in the interior. China's bet on an export led economy is also not sustainable according to the author. The IMF and the World Bank are heavily criticized for their outdated policies. The author is in agreement with some observations by Prof. Joseph Stiglitz in his book " Globalization and Its Discontents" on this aspect. The chapter on the role of a Chief Knowledge Officer for companies and governments is not convincing and there appears to be a lack of continuity with other chapters. Strategic planning in the perspective of a global economy based on knowledge assets is of course very clear, but strategies for managing knowledge in that scenario is a huge topic by itself. The book starts by drawing an analogy between globalization and the construction of the tower of Babel. According to mythology, the Lord came down, saw the tower and decided to scatter the men who built the tower across the globe and confused the languages of all the earth so that they may not understand each others speech. Hope this time the Lord is pleased by the new tower and shall bless humanity with all prosperity into posterity. This is the tower of the twenty first century. This book is a call upon all nations to join in this exciting journey. There is no guarantee for success. " Those who leap sometimes lose, but those who do not leap always lose. Fortune favors the bold."
Rating:
Summary: Mindboggling statistics
Review: Here is an interesting thought by Thurow, from p. 210: "Because of its history, China has less infrastructure (communications, transportation, and electrification) than have even smaller, poorer countries such as India. China is three times as large as India yet has 20% fewer miles of railways." Here are the figures from the CIA World Factbook: Railways (km): India, 64,000; China, 72,000
Airports: India, 334; China, 500
Main telephone lines: India, 28 million; China, 130 million
Cell phones: India, 3 million; China, 65 million
TV broadcast stations: India, 562; China, 3,240
Internet users: India, 7 million; China 46 million
Electricity production: India, 533 billion kWh; China, 1.4 trillion kWh China clearly beats India hands down with infrastructure, except in the mileage of highways, which India has twice the figure. But this does not take into account the quality of India's highways, which is often dreadfully poor (though good enough for donkeys and cows). Thurow's out-of-whack statistics are equally matched by his explanation why he thinks China's infrastructure is poor: China, unlike Inida, was not a real European colony! By this incredible reason, Africa should have excellent infrastructure, having been thoroughly colonized by Europeans in the 19th century! This one example should be enough to give one pause, not only about Thurow's odd way of analysing his data but also about data themselves. Ironically, Thurow is skeptical about China's official statistics. "Published annual growth rates of 9.7% grossly exaggerate Chinese success in the decade of the 1990s." (p. 207) Based on things like electricity consumption, the figure ought to be about 5%, Thurow suggests. But...."Even a 5% growth rate will be difficult to match in the years ahead." (p. 208) Gregory Chow is America's leading expert on the Chinese economy, the former chief of Princeton's econometrics program, a professor emeritus of economics at Princeton, and a member of the American Philosophical Society (a high honor for distinguished scholars). In his book, "China's Economic Transformation" (Blackwell, 2002), Chow states: "During the two decades of reform [1979-1998], economic growth took place at a phenomenal rate of 9.6 percent per year on average." (p.62) In the chapter in which this sentence appears, he explains what happened to maintain this rate of growth. As for Thurow's forecast that even a 5% is hard to sustain, Chow suggests various possibilities, the most realistic of which is thus: 2001-10: 6.9%; 2010-20: 5.5%; 1996-2020: 6.6% (p. 103) Since China is currently growing at 8% according to official statistics (9-10% according to Western analysts, who now see China as UNDER-REPORTING growth), with very low inflation into the bargain, Chow's forecast is on track if slightly pessimistic. The notion that China cannot maintain even a 5% growth is absurd. If China managed a near 10% growth in the last two decades, as Chow claims, it is hard to conceive how China should have trouble sustaining 7% for the years until 2020, a figure which Jiang Zemin recently declared to be the chief goal for the Chinese economy to reach for the next two decades. (He called for a quadrupling of the economy from 2000 to 2020, from $5 trillion to $20 trillion in 2000 dollars, which is what a 7% a year growth can do precisely.) 7% per year can quadruple China's current $6 trillion economy (in 2004) to $24 trillion easily. As for Thurow's belief that things like electricity consumption are better measures of real GDP growth, perhaps he should be reminded that China's electricity consumption, oil and gas consumption, and the like are growing at faster-than-GDP-growth rates. To use one example, China's 2002 industrial production growth rate was 12.6% (CIA), while its oil imports for the first 10 months of 2003 are up 30% from the year-earlier period. (Wall Street Journal, Dec 3, 2003, frontpage) As for his claim that few foreign firms make money selling products to the Chinese customer (p. 213), Thurow should read more newspapers: As reported in today's Wall Street Journal, GM sold 46% more cars in China than last year, while GM's American sales slipped. Large corporations do not knock one another over in their rush to China if they think this is a money-losing strategy. Even Warren Buffett is investing in China now.
Rating:
Summary: China peanuts?
Review: I share very few of the author's views on China, having lived in this part of the world for some years. The 6th largest economy is on track to become the 2nd or 3rd largest economy in 20 years.
Rating:
Summary: China peanuts?
Review: I share very few of the author's views on China, having lived in this part of the world for some years. The 6th largest economy is on track to become the 2nd or 3rd largest economy in 20 years.
|
