The Chinese value the appearance of working hard, not actual hard work. Cheating among Chinese students is pandemic. Chinese companies regularly publish misleading or outright fraudulent earning statements and quarterly reports. While the Chinese government seems to be taking steps to reverse these trends, it will take a long time to undo their culture of corruption. Contrast this with the American culture of honesty; fraud and cheating are national scandals, not the norm.
Second, the US currency is the world reserve currency because the world trusts that the US will keep paying interest on the debts. A trillion dollar debt is not actually that large, and this is reflected in the near-zero interest rates on treasury bonds. If there was a belief in the market that America would no longer be able to pay off the debts, interest rates would be sky-high. But the opposite is true. The national debt is just a talking point for people who don't understand economics. (The largest owner of American debt is...America!)
Finally, I am unsure what evidence there is that the US culture has moved away from innovation, risk-taking, etc. If anything, there are many more entrepreneurs today than there ever has been before; the maker movement, youtube celebrities, and startup culture is evidence of a growing number of people who are not employees of large corporations, but independent businesses.
A better question is why America became a super-power in the first place?
I think many of the assumptions of American exceptionalism are not root causes, as the majority of the reasons for why America, and the west in general, have risen to global domination are embedded in, how should I put it, conflict creation, and not conflict resolution. The west has benefited tremendously from the deliberate, and sometimes accidental ability to create conflict around the world, and gain profits from it including in China. This isn't some controversial claim, this is pure, and simple Nationalism, and enlightenment ideas of State.
However as the industrial dregs settle down, and as Imperial might whimpers, we're seeing the rise of countries that were left destitute in the past 150-200 years, regaining a sense of internal stability. The result of this new founded stability around the world unfortunately, or fortunately, creates a new world where the center is other than the west. Already India, and China are talking about a polycentric world that activity eschews the hegemony of the west, in favor for a more equal world, because let's face it the west is the 1%.
Even if we deny all that it would be very difficult to refute that America has in the past 100 years been an incredibly stable nation compared to the entire world, and coupled with an active participation in global economies. It was perhaps the only nation on the planet that was internally stable, and had a strong external presence. All other nations eventually declined, had internal struggles, or were just emerging as global economies. This alone gave America an unprecedented advantage over the last 100 years, and that advantage is slowly becoming meaningless as the entire globe is stabilizing.
Conflict creation for profit is something inherent to humans, not the West alone. We are predators, we eat bunnies, and because bunnies don't kill us in return, we think that it is ok.
For example, Spanish conquered South and Central America, but the people that lived there were not conflict free. In fact, if you compare Spanish with Mayans that will extract the heart out of their alive enemies, or their skin, Spanish were saints in comparison.
Spanish used the help of subordinates Indians to remove the people in power.
Let's not talk about China's History: it is probably as violent or more violent than the West's. For certain intrigues were way more sophisticated as central planning was way bigger.
We can mention Shaka Zulu, or Muslims in Africa.
The main difference was technology advancing so fast as to make non west people bunnies in comparison. Arrows against repetition rifles, or tanks and planes against horses.
China had only a few types of enemies prior to fighting Europeans - its historical rivals were never fully united and organised states. And it's not like China didn't embrace technology. They in fact did, and used guns and rifles to great effect against tribes in the northwest prior to European "harassment". The only technology they didn't foresee was the steamship, but there was no way to foresee that in the 1750's. It was in fact European organisation that made its military so superior to China's. With good leadership and training, Chinese weapons is sufficient to defeat European forces, sans steamship, http://en.wikipedia.org/wiki/Battle_of_Taku_Forts_(1859).
"The lack of training was a direct result of a serious lack of ammunition. Corruption seems also to have played a major role; many Chinese shells appear to have been filled with cement or porcelain, or were the wrong caliber and could not be fired. Philo McGiffin noted that many of the gunpowder charges were "thirteen years old and condemned."[2] What little ammunition was available was to be preserved for a real battle. Live ammunition training was rarely carried out."
And of course, corruption and ineffective organisation are qualities that states will gain over time - the longer a state is in power the more corrupt it will become, until one day it collapses.
Chinese technology is perfectly capable of defeating Europeans with superior technology in battle. http://en.wikipedia.org/wiki/Battle_of_Liaoluo_Bay
The key as always is organisation and leadership. Technology means naught without it.
Does this apply to highly intelligent horde AI that you order to annihilate an opposition with the wave of your hand?
I know this isn't based in current reality, but mark my words when I say that the country that produces the smartest and most effective AI weapons at a sufficient scale will be king.
We're already seeing the first retirements of humans in exchange for AI weapons.
I'm not talking about violence at all. The goal of a state is in fact to have a monopoly on violence. I'm not taking sides at all, just pointing out the history of the past couple hundred years.
China is like any other state, in fact it was literally the first instance of the Modern State that had centralized authoritative systems of governance that provided various facilities throughout the Empire, mandated by the emperor. Heck we have one of the first instance of the fiat currency being used in China, which in itself shows the internal stability of the Chinese state. Not to mention their vastly superior ability to mitigate famine throughout the country. Europe during all this lacked tremendously. For instance during the 18th century enlightenment era millions of people died due to famine, and other hunger related diseases in Europe, whereas in China during the same time period we see the Qing successfully provide millions of peasants with precious grains, and intelligently rationing them out through centralized sources. This was the norm in China. Compared that to the blunders of the later Qing, and infamous Mao. It's astounding how far China has come.
China being more violent than the West is bullshit. Both where at least equally violent. All states are violent. They require violence, and coercion. Well actually we can't really forgive the British literally starving the Indian population, by deliberately instating rules that caused millions of people to starve to death, while exporting record amounts of grains to Britain. Oh yes. The West wasn't that violent, or cruel...
The myth is that the West had technological superiority compared to other nations, and built their empire from that technology, but that really doesn't cut it. What the West was able to do is exploit that technology to create a new economic system, you know, globalization. Many nations had similar technologies, except the West's ability to politically maneuver regions in their own favor, and thereby exploiting that region to export trade goods back home is what actually made them incredibly successful. This export starved other nations, countries, and kingdoms, both literally, and metaphorically of various other prosperities. This exporting of goods is what drove the British, and the Imperial powers in general, and what produced a wealthy economy in those countries. Eventually draining away so much wealth from those regions that we see the effects to this day.
I'm not saying that West was either more, or less violent than any other nation in history, just pointing out what happened in the recent past, and what continues to happen even today.
Furthermore it's an assumption to think that conflict creation is inherent in human beings, because it's really not, and there are many instances of various government being satisfied in their own domains. China, and India being an example where incredible wealth meant a stable state, and that stability was satisfying to those population that actively pursuing conflict for even more wealth would be seen as idiotic. They knew they had more than enough. The West knew they were beggars, and so they conquered. The continued exploitation through conflict is not a preferred method of existence, as we are seeing with the USA.
> This exporting of goods is what drove the British, and the Imperial powers in general, and what produced a wealthy economy in those countries.
Deirdre N. McCloskey in her book 'Bourgeois Dignity: Why Economics Can't Explain the Modern World' does a pretty good job of explaining that this imperial trade (amongst other factors) doesn't do enough to explain why The West became wealthy.
To quote McCloskey: "What's wrong with such images? This: the world did not change by piling up money or capital. It changed by getting smarter about steam engines and wiser about accepting the outcome of innovation."
If imperialist trade is what caused British wealth to increase by a factor of sixteen or more since the 16th or 17th century, why didn't countless other states become modern-day wealthy during countless other imperialist expansions?
Nor did the Industrial Revolution do it. The printing press was invented in China (1041) some 400 years before Gutenberg (1450) caught on to the idea, and the Industrial Revolution didn't happen for another 300 year after that!
McCloskey's suggestion is that Bourgeois Dignity is what caused the change. That society came to dignify innovation. That average Jane Citizen came to be able to invent and bring to market innovation. Not only that, we now glorify the innovator, rather than prosecute them.
So it wasn't British imperialism that made Britain rich. Free trade does more to cause the wealth of nations than imperialism ever could. But free trade isn't enough either.
McCloskey argues it isn't Capitalism that is so important to modern wealth, because capitalism -the accumulation of capital- has been a thing since people have been gathering seeds.
As Sam says in his article it is Innovationism that made the modern world so extremely wealthy. That we are prepared to iterate so rapidly, ever more rapidly, and dignify those who do the innovating.
So I disagree that the imperial redistribution of wealth is what has caused 'those regions' to be affected to this day. As India embraced Innovationism -in manufacture, call centres, software development- we have watched it become increasingly more wealthy.
That is the old Imperial myth, that's as old as Imperialism itself. It's such a condescending perspective, as the countries from all around the world were just as inventive, and innovative with their technologies. What happened was very subtle. It was simply the fact that the already rich countries had no reason to expand, while European societies had every reason to expand, as their society was in complete tatters compared to Asia. The rise of European society wasn't just accepting innovation, while others declined innovation, no. Europeans just had more of an incentive to use that innovation for personal gains, while societies in Asia had every incentive to use that innovation for inner stability, and stay course for a non-expansionistic policy. I mean we have Europeans using gunpowder to blow each other up, while China used it for public entertainment, pacifying them, by utilizing it for fireworks. Not mention the Indians were better equipped with firearms compared to the Europeans. I mean India invented rockets at the very time the Imperial powers came in, so that right there throws out the idea that other societies were less inventive, or that invention somehow leads to wealth. They were simply more hesitant to utilize that invention to expand, as inner stability was more valuable to them.
Really I don't know how people can justify that idea. Steam engines don't give you wealth. Using the steam engines for the export of resources does. It was only with the railways that Imperial powers were able to export wealth from India. Not to mention the deliberate sabotage from within the country, by playing the political game very intelligently (the same thing happened in South America, and Africa). How can you ignore the deliberate deindustrialization of the India under that Raj? I mean you have state sponsored brutality such as chopping off the thumps of basket weavers, and making steel production illegal so that they can't practice their trade. Imperialism actively sought to close off, tax out, or straight make local industries illegal, thereby increasing wealth as the Imperial powers were able to sell more readily. The same thing happened with China, albeit indirectly, by deliberate sabotage.
How can you ignore the very idea of Nations, and Nationhood being a very corrosive force that has put ruthless competition at the basis of governance, on a scale never before seen?
Innovativeness does not even begin to cut it. I mean if you're going to argue on culture, then you're putting up a silly argument which says almost nothing, but definitely reiterate Europe's superiority in "culture", which is not a new argument. It's the same old argument that's been used by imperial powers to justify their ruthless conquest since the beginning. It isn't just inventiveness that made Imperial powers more powerful, but a shift in perspective that allowed them to both create the state, and utilize authoritative power for economic gains, coupling that with technology that allowed for global reach.
Just as European society was going through what China had gone through 2000 years ago, that being complete inner turmoil resulting in total war producing a centralized state. Just then it was blessed with unprecedented technological capabilities (that was in fact imported from all across the world), coupling that with the ideological stance which burgeoned due to constant conflict within European society. Ok. So here we have that "cultural" advantage, in that European society was just more ruthless than any other country in the world, not just more inventive. Invention means nothing, and does not produce wealth, it's the use of that invention that matters, and admittedly the Imperial powers did use invention to its fullest capabilities.
Asia in general was in a period of decline at that point, a slowing down, because we don't see the activity of Chinese, and Indian merchants in this period we instead see a recession, and any economist would tell you that this is completely normal for a society.
What wasn't normal for these societies, nor was expected, nor seen ever before in history, was an external force, that too coming from across the globe, that actively had the ability to exploit that recession. That force was able to exploit that recession in a way that allowed for the export of wealth by employing global technologies, and introducing a new set of state sponsored ideologies (soft power).
But you hit on a very interesting point, but don't follow it through to conclusion:
> What the West was able to do is exploit that technology to create a new economic system, ...
> Furthermore it's an assumption to think that conflict creation is inherent in human beings, because it's really not, and there are many instances of various government being satisfied in their own domains. China, and India being an example where incredible wealth meant a stable state, ...
A stable economy is not a Nash equilibrium, and therefore unsustainable (not necessarily, but ...). Those nations were defeated, because they settled in a non-Nash-equilibrium and they were destroyed because of that. The west created a new equilibrium and it absorbed the world.
This is not the fault of the west, or of anyone at all, any more than my wet coat is the fault of the rain. If you live in a non-Nash-equilibrium state you are one change of tactics by one of your friends or enemies (or pets, really) removed from extinction (or at least massive change).
These states would have been defeated and replaced sooner or later regardless of whether any individual player felt the need to do so. It was easy to do, just requiring the first domino to get pushed over. The west was there at the right time with a better system, no more, no less. And most of the destroying would have been done, not by western soldiers, but by people in those old systems who very likely enormously benefited from introducing the new system.
Of course, and so the same will happen today. Nothing has changed. There are no winners, or losers, just the eternal game.
I'm not saying these people were "better", or "worse" these were people, and so the coming chaos will reflect their humanity. The West shouldn't be afraid.
These are good points but I would disagree specifically that other nations want "a more equal world". My take is that they want to wear the crown next, not share it.
Well a more equal world is in the economic interests of those nation, because it will allow them far greater power than they currently have. However a multipolar world is not in favor of the US as it will mean that there's greater competition. Greater competition means that USA has decreased political capabilities, way less influence in geopolitical matters, and a decreased ability to "protect American interests", we can already see this happening to an extent.
BRICs banding together amongst each other to create economic prosperity is the only means for these countries to increase their living standards, and so cooperation is incentivized.
Competition is a zero sum game for these countries, and they know that.
As someone who spent more than half of his life in China, I'd have to agree with you, at least from an anecdotal perspective. Trust is hard to build in China. A lot of people care about making money but people scarcely think about creating value for the society. Wealth is synonymous with consumption. The worst part I think, is the 1) social stability is valued over social mobility 2) individuality is shunned rather than celebrated.
In America people are encouraged to pursue your desire, the mentality of "not giving a fuck" and do what you love is admired and regarded as a sign of courage. In China someone who questions the conventions is deemed as social outcast. People in China are more concerned with the appearance (having face) than trying to be innately satisfied.
Things may have changed over the last decade. But I think China still faces this tremendous cultural problem, despite the development growth.
As a Chinese, I agree with you. A lot of (let's say most of)Chinese people actually care more about making money than creating value for society. But, I think this is a short-term wave, especially starting from 1978. And in China, people need more money to establish safety of life since there are less social security and public welfare comparing to western countries. This could change when there are more social security program, more insurance, medical care. So, I don't think this is a "tremendous cultural problem".
Disclaimer: I came to the US when I was 12 and I have been living here for eleven years. I was born in Hong Kong, but I think I know quite enough about the mainland China. But please correct me if I am wrong.
As a Chinese, I think this is not short-term. I think it has to do with culture, how people were brought up. I don't remember the proper term for this, but people are pressured to make money. Call it peer pressure for all and from all sides.
It is expensive to live in China. It is very expensive to own a house. Here in NYC I can own a decent house in a very good neighborhood for $500,000 - $600,000. A software engineer with a couple years of experience and working for a decent company can afford the mortgage.
Here in America I help my parents with their mortgage (well after all I am also on the paper). But they are okay with me not paying, yet I do because I can afford to help them! But in China, people will talk shit behind your back and people look down on you if you don't help with mortgage or if you don't own a house. Every Chinese New Year you are expected to give out red envelope. $100? No way. You visit someone's place? Gift. I know we do that here in America too, but when was the last time you actually visit your uncle and give him a nice whiskey?
Here in America you can get married without even owning a property. Rental is fine. In China people like to own a house because a house is money. In the old days farm owners are like house owners today. Who cares if you worked as a government official? or whether you are literate or not if you don't own a farm or some livestock? Actually in China today there is a 70-year land-use right. You can own a piece of land for 70-year...
It has a lot to do with culture, how people were brought up. When everyone started to show off how well their children are doing, everyone are now suddenly in a race for better. Many couples have to break off because their parents believe the child deserves better.
But you have a great point about social welfare though. In China social welfare is very hard to get. In the U.S. you can move to CA and get tax benefit if you declare yourself as CA resident after a few months, but in China you can't just move to another province ("state"). Most workers in China work at another province and their children cannot get benefit there because their parents don't have the right "residency paper", let alone the complex over 100 different documents one has to get in one's life time.
It's not such a big deal; in Hong Kong, for instance, all property (with very very few exceptions) is leasehold land. The most common term is now 75 years. The city has been in existence long enough that many of the original leases have come up for renewal at least once. In the vast majority of cases, the government signalled far in advance (10+ years) that: (a) it would renew the leases, and (b) the terms under which they would be renewed.
Yes, it is a different system than freehold property in Europe and America, but that doesn't make it unworkable.
Well, you're basically asking more than a billion people to change their cultural value on a fundamental level that has been instilled starting 5000 years ago. I wouldn't casually put it aside as a minor issue that can be solved by social security.
Additionally, my impression is that "trust" vehicles like contracts don't hold the same weight that they do in places like the US. They get broken and tossed aside all the time and the legal recourse you can have is minimal.
Many of those cultural issues are caused by feedback loops, which are thought to be good, do not work in our system since very long time ago. Equilibrium in this system does not necessarily indicate the system at this stage is a good one. There is an old saying that is spot on: "兴，百姓苦，亡，百姓苦" (No matter whether it thrives or declines, average person suffers).
China's growth has long since been an organism that feeds on the back of the gorilla of US growth. If the US economy would hit a major recession, China would come crashing down with it. On the other hand, if the Chinese economy would have a major collapse, the US would suffer, but still be able to re-route core-value manufacturing processes to new countries (or back home).
I agree with your cheating note, many of the Chinese take great pride in stealing innovation and ripping off US intellectual property, to the point where anyone well-informed on the matter knows that they have their fingers in the networks of almost every major US Corporation, siphoning away hard-earned gains by our workers. I have further exposure to this through product manufacturing, where Chinese companies are well-known for ripping off blueprints from the US companies that outsource their manufacturing. Tools like Alibaba have only increased this sort of misbehavior exponentially.
What the US has that China often doesn't demonstrate are the intangibles in regards to honest work-ethic that produce genuine "value", rather than "value" based on a manipulated currency and outright lazy copy-catting. Once they demonstrate their self-sufficiency by doing honest innovation, then I'll credit them for a job well done. There's a lot of value in US-China relations, but they still have yet to prove that they could "hop off the back of the gorilla" and stand alone.
FWIW, the U.S. got its start as a major industrial power by a major act of industrial espionage. (Francis Cabot Lowell went over to England for two years, worked in the textile mills, memorized all the details of their workings, and opened the first textile mill in the U.S. in Waltham, MA.) Large-scale American industrial espionage continued throughout the rest of the 19th century. American goods had the same reputation for being cheap knock-offs of British innovations that Chinese goods do now.
I don't think this has anything to do with the respective cultures of either nations. Remember that China has a long culture of valuing knowledge for its own sake. Rather, it's rational for the firm that's behind to copy the firm that's ahead. The firm that is ahead has no such option available to it. That's also why it's never the best students that cheat off their peers - they have nobody to cheat from. China and the U.S. (in both periods of history) are just responding to the incentives available, as ambitious actors in their own right.
I dispute the assertion that American goods were considered cheap knock-offs by the end of the 19th century. By the mid 19th century, the "American Style" of assembly-line manufacturing with interchangeable parts was considered to be the most efficient form of manufacturing [1] and was thereafter adopted in Britain and the rest of Europe. This method was derived from various aspects of the English system and was not invented in America, though it was first widely adopted there. Though there are well-known examples of industrial espionage, American innovation in manufacturing can be attributed a combination of vast natural resources, dynamic social structure, and widespread generalist education (as opposed to the apprenticeship system of Britain at the time) [2].
I agree with pretty much all of what you said, and I also wanted to add a bit more along these lines. It's all pretty much anecdotal, so take it for what it's worth.
Engineers that I've worked with in China are wildly different from what I consider engineers in the US. They seem to be better at making a given process ruthlessly efficient, but they're not so great at creative problem solving--I suspect it's a cultural thing more than anything else, but that's just an opinion.
So I think that China is great at adding value in making things efficient and cheap from an operational standpoint, but I don't think they add a lot of new ideas, which are an outcome of creative thinking. Once there are countries more desperate for manufacturing money (South America region, maybe?), China will have a problem because the jobs will leave and they will have to find a way to generate value in other ways.
For now, they don't really own many brands that people know; they manufacture white-label goods, so to speak, but I can't think of any specifically Chinese name-brand goods that people buy because they are superior to anything we have in the US. Sure, a huge portion of stuff is made in China, but when was the last time something big was invented in China?
It fits with your initial point, that China is dependent on US ideas, whereas the US loves their low prices, but ultimately doesn't need them.
I think that 15 years ago that was true of Korean manufacturers, and look at them now. Hyundai was a brand that was fairly reliable, but was ridiculed in popular media. Now it's on par with Japanese brands and often considered premium. Also, Samsung went from making parts for everything to developing and marketing their own premium products. Chinese manufacturers can easily follow this same path and I think it is already happening.
The camera industry is a familiar example— both Canon & Nikon began by making copies of German Leica and Contax cameras, then tweaked them, then moved into innovative original designs. By the 70s or 80s, Canon and Nikon had surmounted their industry, while Contax was bought by a Japanese bit player and Leica was reduced to a niche luxury manufacturer.
http://www.canon.com/camera-museum/history/canon_story/1946_...http://www.kenrockwell.com/nikon/rangefinder/sp.htm
And yet, Japanese and Korean engineers still have problems with creativity relative to their western counterparts. A lot of that has to do with a hierarchical Confucian culture. Sure, they've mastered quality and efficiency, but some areas need more than that, namely software.
Except Korea and Japan aren't autocracies. They're just so much more flexible by having an open democratic process and open markets. The CCP is its own roadblock in China. Sure it can make special economic zones and play command economy with construction and development (lets ignore the ghost towns they have built for now), but that approach is self-limiting.
China won't liberalize the way Korea and Japan did after the war. They're very much in bed with complete political, economic, and cultural control. That means worse outcomes from a capitalist point of view. They can only manufacture US widgets and steal blueprints for so long. They really don't have a capitalist and innovators culture. Usually that's a temporary problem in western-style governments, but in an autocracy its fatal. Look at Putin's terrible oil-based economy. Autocrats can't play the open liberalization game because autocracy is naturally very, very conservative and controlling. Part of this game, if not the most important part, is giving up quite a bit political control and performing regulatory actions that hurt the top players like fighting corruption, preserving competition, protecting IP and property rights, helping labor movements go forward, and cleaning up the environment. Autocracies dont often do these things. If they did, they would probably cease to be autocracies.
> They really don't have a capitalist and innovators culture.
Have you ever read any of Bunnie's many articles about shanzhai? Sure, the big corps in China are state-controlled monoliths, but the grassroots level is seething with innovation and way more capitalist in a "red in tooth and claw" sense, unconstrained by silly Western ideas about intellectual property, health & safety, etc.
I completely disagree with your notion that U.S. is less interdependent than China. The exchange is clear: U.S. needs cheap Chinese manufacturing to proliferate its innovation, and in turn, China gets direct access to U.S. blueprints, and is able to leverage and improve upon them to produce their own products. This is basic economics, not a question of "who is genuinely innovating". American companies need cheap manufacturing as much as the Chinese needs technological know-how. Why? Because if no one buys "innovative" products (because of how much cheaper they get) then we wouldn't get that innovation in the first place.
China is huge but US imports are pretty well diversified at this point. Today we import a whole lot from Vietnam, India, Malaysia, etc.
It's mainly the consumer electronics sector that would be hit hardest. The lower-tech manufacturing has already moved away from China to a large extent.
I agree. In fact, it is almost like the market has figured out 'a way for both countries to work on what they're really good at' (paraphrasing TFA). "Governments that at least partially cooperate," on the other hand, I agree would be a welcome change.
I think the typical rhetoric of "China is bad because it steals innovation!" is usually misplaced. From China's perspective, there is nothing wrong with "stealing innovation," as this model has helped grow China's economy and lift millions out of poverty over the past few decades. The diffusion of information does not produce the same "value" as the production of information itself, but from China's perspective this diffusion certainly has its own value if it boosts the growth of native industry (which can one day hopefully enable China to produce more value from its own production of information).
From the American perspective, I think we tend to ascribe more value to hanging on to our innovation than is actually there. Hanging on to innovation will always provide a temporary advantage. The value of innovation is also dependent on the cost of preventing diffusion of the products of innovation. If the results of innovation are so valuable, companies should do more to prevent the outward flow of information, by locking up information systems and trying to hold on to as much of the involved human capital as possible. However, we do not do that as much as we should because there are other forms of "value" we can get by not locking up our innovation and human capital. In previous decades, Japan, Korea, and Taiwan have all followed practices similar to what China does today. The growth of native industries may have hurt America's ability to compete in these markets (and even in America itself), yet companies like Sony, Samsung and others have brought value directly to American consumers and encourage more innovation now that they actively compete with American companies in the innovation game.
To coin a proverb, "There is nothing wrong with stealing innovation until you steal the life from that which creates it."
China, culturally, does not innovate or foster the mindset of problem solving or collaboration that is visible in highly innovative - honestly innovative - environments. That's why, anecdotally speaking, several major science journals do not accept papers from Chinese higher education facilities, due to having to deal with far too many retractions. I'm only a bystander to this issue, but I know it's real and will take generations to correct.
I thought it was more like "there is nothing wrong with stealing innovation until its your own innovation that is stolen." As China climbs the tech ladder and have more to lose than win by stealing, I'm sure they'll become believers in IP.
There is already some bias in CS conferences with respect to Chinese submissions, which is why in blind review we take great care to "hide" our nationality (I'm not Chinese, but work in China and publish paper with Chinese). It really isn't fair, since there is some really good research going on in China, but it gets drowned out by a few bad apples.
Yeah, their ability to replace US/developed nation demand with internal demand in order to allow the RMB to float freely will be interesting. As it is now, a lot of their growth is based on government spending and some creative financial engineering with debt (similar to Fed and containment of toxic mortgage assets) and currency manipulation intended to create a huge domestic manufacturing base.
I think, complicating this, is the implicit social contract between the govt and the populace regarding economic growth and jobs. As flawed as the US system is, it is (purely IMO) a more fault tolerant - in a dynamic systems/perturbation sense - than Chinese society.
China's economy crashed big time in fact. They took on upwards of $30+ trillion in new debt in just six or seven years to continue faking the old levels of growth, trying to buy time. They pulled a Japan, at warp speed.
In other words, China took on nearly twice as much debt as they gained in GDP expansion over that time. Since the later part of the previous decade China has seen a plunge in the return on invested capital when it comes to GDP growth - the situation is so dire now, they have to add over $1 of new debt per $1 of new GDP they get out of it. The party is over. China is already the most indebted country on earth (while half a billion of their people live on $2 per day), and their pace of debt accumulation isn't slowing down. The outcome of that financially toxic situation is obvious.
To keep faking 7% growth, China has to take on $20 to $30 trillion in new debt in just the next five or six years. It's a scale of debt the world simply has never seen before.
This. The Chinese economy is driven by investment, not export (though that helps). Western investors think investing in China is a good idea - that's where the growth comes from. And they're not wrong - investment in China has paid off (for those that have managed to navigate its complicated business-politics).
> Contrast this with the American culture of honesty; fraud and cheating are national scandals, not the norm.
Fraud is basically the biggest national industry in the U.S. Just look at:
- The 30% of all medical spending that is wasted.
- The rise of for-profit colleges with super low graduation rates and even worse employment prospects. Same with law schools.
- The fact that the majority of people who graduate high school and college are functionally illiterate.
- The massive pharmaceutical settlements for faking safety/efficacy data, illegal marketing, bribing doctors, etc.
- The complete lack of food safety regulations and/or enforcement. E.g. a third of fish sold aren't even really the species that they are claimed as, 80% of supplements sold don't contain any of the ingredients they are claimed to have, etc.
- The crumbling of the train systems, city water systems, etc.
- The massive subsidies on fossil fuels that are causing climate change and destroying the oceans.
- The financial system
- The fact that the vast majority of science isn't replicable, or isn't accurate even when it is replicable.
Etc. The main reason corruption seems worse in China is because of the billion dollar propaganda campaigns that use schools and the media to systematically blind people to the underlying issues, and the fact that the vast majority of activists get arrested and threatened with life in prison if they ever protest again.
You're going to have to backup that claim that the majority of people that graduate from college are functionally illiterate. I call bullshit on that being true.
The American food system is one of the safest and most regulated on earth. You may disagree with some of its practices, but that does not make it unregulated nor unsafe. The claim that America has a complete lack of food safety regulations is laughable, you couldn't be more wrong.
America has always had for-profit colleges, and there's absolutely nothing wrong with that. They work perfectly fine. America has had by far the best university system for many decades and still does. The rest of the world has nothing like it.
Massive subsidies for fossil fuels? In fact the subsidies are not massive compared to the industry and dollar figures in question, even if those subsidies should not exist. If you want to talk per capita fossil fuels and the destruction of the environment from that, let's talk about Norway's output - that bastion of everything America is supposed to aspire to.
America merely contributes upwards of half of all global science and innovation. Given the immense output record the US possesses, you're going to have to do a lot better to discredit it than throw out an empty soundbite.
You're wrong in your claim that the majority of college graduates are not functionally literate.
2% of college graduates fall below a basic level of literacy.
14% of total adults fall below basic on prose; 12% on document; 22% on quantitative. The numbers of college graduates are vastly lower than those.
And further, digging into the data, I'd be willing to bet that half of those numbers of people that struggle on basic literacy - in english - do so because their primary language is either not english and or they have very little command of the language (first generation immigrants etc).
It is certainly interesting that the "National Assessment of Adult Literacy" report indicates that only 13% of adults can perform that sample task of "computing and comparing the cost per ounce of food items".
Same for comparing and contrasting two newspaper articles, which is probably even more relevant -- if you can't do that, then you're immediately disqualified from pretty much every profession that pays a living wage. And that's not even a very high bar, considering that newspapers are written at what's supposed to be a 6th - 8th grade reading level.
Sure, the bar of 'fully understanding' is ridiculous. People don't have 100% accuracy with anything. Most people would also fail the same measure if the document was spoken vs written so despite the name it has little to do with literacy.
Note: The bar for functional literacy includes banking paperwork which is intentionally designed to be confusing. If more people understood it they would rewrite it to be less clear. Also, your failure to understand what you linked precludes you from the ranks of 'functional literacy'.
PS: While high, you might reasonably interpret at least intermediate as an acceptable level for college graduates and that's well over 80%.
Talk about fraud. The site mentions "proficient" in quotes trying to make that sound like a low level of performance when in fact it is the highest rating on the assessment (2 spots higher than "Basic")!
I'm guessing the rest of your bullet points are a stretch as well (at least they seem like stretches and now we know you cite bogus sources).
> The complete lack of food safety regulations and/or enforcement.
There have been some major recalls due to food safety in the last 5-10 years(1).
In the last 5 years, the Food Safety Modernization Act was passed (2).
In the last 5 years, the "Egg Rule" was passed (3). "Over 15 months, FDA inspectors visited about 600 facilities nationwide that produce about 80 percent of the country's eggs to determine if they are in compliance with the Rule, which went into effect in July, 2010."
You can also find thousands of warning letters the FDA has written to companies over the last decade on their website (4).
I searched through the warning letters for "supplements" and found exactly 500. (5) The letters were issued for all kinds of reasons, from outrageous claims, to products not containing the advertised chemicals. (6)
I'm not going to argue the other points you list, but when it comes to the FDA, your assessment of "completely lacking in regulations and/or enforcement" was overreaching.
There's a billion people! You can't make any generalizations about "hard work". It's just overly broad stereotyping at that point.
Do Uighurs value hard work? Tibetans? Subsistence farmers? City-dwellers? I don't really know what people mean when they say that the Chinese "value hard work". Which Chinese?
By this standard, no one could ever say anything about "China" at all. Sam Altman says that the Chinese economy passed the U.S. Was that the Uighur economy? Tibetan economy? Subsistence farming economy? City-dwelling economy?
See how these questions add nothing to the conversation?
If the conversation is about China collectively, then it's not invalid to make other statements about China collectively. If you disagree with the parent's assertions about China, then let's hear it, but just pointing out that China is really big does not tell us anything we don't already know.
You're eliding two very dissimilar things. I'm not saying you can't group people and say quantitative things about them (like GDP). That would be stupid.
I'm saying I have no idea what a statement like "the Chinese value hard work" means. It is not testable or quantifiable, and it's genuinely meaningless. Now maybe you could publish some survey data that shows Chinese people more value hard work. That might add something to the conversation.
People don't treat populations and individuals as the same thing; the population is its own entity with its unique properties, and, obviously differences. The question is whether those differences are sufficiently exploitable. This is how policy works. If you are saying that you can't generalize over a population, you're saying that there are roughly zero between-population differences that are exploitable for strategic policy. Random things are unstrategizable.
I think that the Chinese and Japanese value hard work more than Americans and Canadians, and I think so because Americans and Canadians have an unfortunately true belief that intelligence is highly predictive of performance, and also that intelligence is not meaningfully improvable. On the other hand, I think that Chinese and Japanese people have the belief that effort is a far better explanation to performance.
The problem is that performance must surely be at least a combination of effort and ability; a depressed person may have the bodily ability to pick up the phone for their friends, but they might not care anymore.
I thus say this: if you go looking for studies on cross-cultural pedagogy, I claim that you're going to find that American and Canadian students are significantly more likely than Chinese and Japanese students to avoid harder challenges, to pursue easier challenges, to practice mastered over unmastered material, and to avoid a problem after poor marks. Does this speak to all work? Of course not. But it's a window into culture, rather than just comparing mean hours studied or worked between populations.
Indeed. People forget that China has twice the population of United States and European Union combined. It's often silly to treat them all as one uniform group.
I once had a friend say something about how the Chinese valued hard work. Then I asked him what cultures don't value hard work. He squirmed as he started ticking off a list of countries whose populations are predominantly black/Latino...
>The Chinese value the appearance of working hard, not actual hard work.
It's very interesting how deep this type of behavior is ingrained in their culture.
For example, western cultures have Aesop fables (e.g. Tortoise and the Hare) which tend to celebrate hard work and punish laziness. Eastern cultures have fables that tend to celebrate being clever or manipulative (e.g. The lion and The Rabbit).
It's also interesting to see how this plays out today. The Chinese Happy Farm (original Farmville) was a huge success in part because it allowed users to steal crops from their neighbors. This type of behavior is considered okay as long as you are clever enough not to be caught.
Lets not get crazy and read too deeply into things like how game mechanics reflect social values. You can maraud and raid in any popular iOS game for Americans as well, such as Clash of Clans.
This is textbook confirmation bias. You're ignoring the writings of every Chinese philosopher valuing hard work, the tendency for Chinese schools to value rote memorization--a very work-intensive activity--over creativity, the fact that American railroads were basically built by the Chinese, and the fact that you're likely reading this on a device made by hard-working Chinese hands. Your willingness to see East Asian culture as inherently underhanded because of an internet game is somewhat telling.
>western cultures have Aesop fables (e.g. Tortoise and the Hare) which tend to celebrate hard work and punish laziness. Eastern cultures have fables that tend to celebrate being clever or manipulative (e.g. The lion and The Rabbit).
Aesop fables valuing cleverness: The Clever Sheep, The Crow and the Pitcher, The Ass in the Lion's Skin, the Fox and the Sick Lion, the Fox and the Mask... there are others. Ancient Greek heroes are constantly clever and manipulative.
Well-known Chinese fables celebrating hard work and punishing laziness:
磨杵成针 (Grinding an Iron Pestle into a Needle)
Li Bai was fond of playing when he was young, so he was always absent-minded in classes. Today he would catch little birds on the hill, and tomorrow he would pick dates on that hill. One day, he saw an old lady sitting at the riverside when he was crossing the brook. The old lady was grinding an iron pestle without fear of tiredness. On seeing this, Li Bai laughed at her and said: "People who do this job are fools." The old lady answered kindly: "I am determined to grind the iron pestle into a needle even if the iron pestle is so thick and hard. "Li Bai took the iron pestle and felt tired after grinding it for a minute. Then he complained: "Oh, how long can I get it done? I quit." The old lady shook her head and sighed: "The pestle can be grinded into a needle, as long as you keep working hard." The old lady’s words moved him, and Li Bai remembered them by heart. From then on, he spared no pains to study, and eventually became a great poet.
精卫填海 (Jingwei filling the sea)
Originally the daughter of the emperor Yandi, Jingwei perished at a young age in the East Sea. After her death she chose to assume the shape of a bird in order to exact revenge upon the sea by bringing stones and small twigs from the mountains nearby over the sea in an effort to fill it up. Jingwei has a short dialogue with the sea where the sea scoffs her, claiming that she wouldn't be able to fill it up even in a million years, whereupon she claims that she will then proceed to take ten million years, even one hundred million years, whatever it takes to fill up the sea so that others would not have to perish as she did.
守株待兔 (waiting by a tree stump for rabbits)
In the Spring and Autumn Period, a farmer in the State of Song was one day working in the fields, when he saw a rabbit bump into a tree stump accidentally and break its neck. The farmer took the rabbit home, and cooked himself a delicious meal. That night he thought, "I needn't work so hard. All I have to do is wait for a rabbit each day by the stump." So from then on he gave up farming, and simply sat by the stump waiting for rabbits to come and run into it. The saying satirizes those who wait for strokes of luck instead of working.
Please don't project your confirmation bias onto me. How you got that from one comment is more than just a bit absurd, especially considering I said most, not all, so there are definite outliers as you mentioned.
I also specifically said eastern cultures, which are not limited to Chinese, and the example I gave is in fact a Panchatantra fable, making it Indian in origin, not Chinese. But don't let that stop you from making assumptions and blasé accusations with your alt Hacker News account.
This is not my alt account. I'm just not that active. These are not outliers, you are simply incorrect. If you believe your assertions to be anything but assumptions and blase accusations of entire cultures, I'd be happy to read your published work on the matter.
I don't understand economics enough to address the point on debt, but I have to comment on that:
> American culture of honesty; fraud and cheating are national scandals, not the norm
Wait what. Fraud and cheating are sometimes national scandals if media bothers. But there's absolutely no honesty. Corporations lie and steal. Journalists lie. Startups... well, things like astroturfing, lying to users, tricking them into doing things that are harmful to them, "growth hacking", etc. are not only tolerated but encouraged.
Call it selection bias, but I don't see much of this "culture of honesty" anywhere in the western world, and especially not in the United States.
I would argue that the very notion that cases of fraud and dishonesty make such large media headlines underscores the American culture of honesty the OP is referring to.
Brian Williams was just suspended for six months without pay for lying about a single news story more than a decade ago. From a business perspective, NBC knows their viewers won't take them seriously if they keep a potentially dishonest news anchor on the air.
I agree that fraud and otherwise unethical behavior is still pretty present in the American system, but there's at least a cultural understanding that these things are bad; this, of course, presupposes that A) you can prove that the behavior was either fraudulent or unethical, and B) that the perpetrator was caught.
>Brian Williams was just suspended for six months without pay for lying about a single news story more than a decade ago. From a business perspective, NBC knows their viewers won't take them seriously if they keep a potentially dishonest news anchor on the air.
Interesting. I see the fact that he wasn't fired and permanently publicly disgraced, unable to ever work in journalism again, as evidence that the American culture of honesty is a farce.
We signal that it's bad, but when we catch people cheating and lying, we give them a slap on the wrist. The message is, "Lie, cheat, but don't get caught. And if you do, you'll get off easy."
Americans tend to under-estimate the country we live in, or conversely, over-estimate the competition. I lived in and ran a Startup in Thailand for 7 years, and therefor learned this lesson the hard way.
I agree with your assessment. There is a research firm, Muddy Waters, that specializes in exposing fraudulent companies, and from what I understand, they are doing very well. This article is devoid of the 'counter points' that I see brought up regularly (sometimes too much, or too hyperbole oriented) over at ZeroHedge. That site is by far the other side of the coin to this article, such as the following postulation:
The McKinsey graph on China tells it all. For the moment, forget about leverage ratios, debt carrying capacity and all the other fancy economic metrics. Does it seem likely that a country which is still run by a communist dictatorship and which was on the verge of mass starvation and utter impoverishment only 35 years ago could have prudently increased its outstanding total debt (public and private) from $2 trillion to $28 trillion or by 14X in the short span of 14 years? And especially when half of this period encompassed what is held to be the greatest global financial crisis of modern times
And don’t forget that most of this staggering sum of debt was issued by a “banking” system (and its shadow banking affiliates) which is bereft of any and every known mechanism of financial discipline and market constraints on risk and credit extension. In effect, it is simply a vast pyramidal appendage of the Chinese state in which credit is conjured from thin air by the trillions, and then cascaded in plans and quotas down through regions, counties, cities and towns.
> you don't understand how reserve currencies work
You seem to be making a statement of fact about the contents of the author's mind. Do you really have a way of knowing for sure whether the author understands reserve currencies (or anything else)?
> and your conclusions are wrong
I don't think the author could be "wrong" about his opinions, so maybe you're talking about his predictions? If so, I don't understand why you're making a statement of fact that his predictions definitely don't agree with what will actually happen, because that would seem to require knowledge of the future.
Is it possible that you can't be sure whether or not the author understands reserve currencies, and that you can't be sure what will happen in the future, and that you and the author just have different opinions about complex topics?
In addition this whole thing is anchored on continued growth. At some point there isn't going to be any growth left, specially as pop. growth rates decline and the third world begins toward economic equilibrium. You can't grow forever, at a global scale. At some point, thirty or forty years from now the growth we depend on for economic viability (as a society) is not going to be there. A new model will have to emerge. The so called neo liberal economic system depends on growth... But its not going to be there forever, as Japan has learnt.
You bring up a good point, namely, on a fixed sized planet how can we have growth forever?
I have some hopes that society on a planetary scale will learn that materialism is bullshit and that we are manipulated by clever advertising and pro consumerism messages in movies, etc. Notice how many characters in movies drive over the top expensive cars - just as one example. Same with houses way larger than a family needs for comfort and a happy life.
One thing that I do admire from the article is that Americans do worry about the future in a good way even they still have big advantages. This is a key trait most contemporary Chinese are somewhat lack of. And this alone can tell a lot. For this purpose, it does not matter which competitor the op chose to mention in this article.
There is a fair amount of casual broad-stroke stereotyping, armchair economics and calls to patriotism in this post and throughout the replies that I don't find very appealing. I have seen this type of post increasingly often and it's starting to worry me. Is this the type of community that HN attracts?
Rampant fraudulent reporting from Chinese officials regarding fishing quotas threw off the global catch totals for years. Until they realized that the Chinese officials were lying (due to raises and payments based on meeting quota) the true scope of global fishery loss wasn't understood.
I'd echo the comment of the appearance of working hard, not actual hard work. I managed a group in China for a few years and they come in at the listed start time and exit and the listed end time in the job description. They're precise, I'll give them that. But are they harder workers? No, I don't think they are. They work differently than Americans (if that is your sphere of knowledge) and maybe that's where the misinterpretation is coming from.
These lazy orientals built the largest high speed rail network in the world in less time than it'd take a US rail bill to even get through Congress. They launched their first space station in 2011 (albeit a minimal one) and are planning a manned moon mission, following their first successful lunar lander in 2013 Starting from a space program that was basically nothing 15 years before. Corruption and fraud are rampant in the BIC (Russia is out of the picture, let's face it) nations but I think it's part of nascent country's development. And let's not forget, Steve Jobs was a huge fan of "great artists steal" quote by Picasso.
P.S. Your characterization of 1 billion people as all knockoff makers is dangerously close to the idea that Chinese are mere "culture bearers," while Westerners are the "culture creators," as said by a great mid 20th century ethnologist. Please don't let HN decay into right wing moonbattery, as most anonymous communities do.
There was a time when the United States had loose labor and environmental protections. Combine loose labor and environmental protections with an almost complete lack of respect for personal liberty and property rights and it sure is easy to get things done.
P.S. The population of China was 1.357 billion as of 2013.
"Cheating among Chinese students is pandemic."
Care to give some reference and more clarification (Chinese students where? in US? China?) to back this up? Sounds similar to me to the same narrative as "Asians get good scores because they cheat." I'm appalled when I first heard about this, do people really believe that? or is it just an easy excuse for "non-asians-not-getting-good-scores", to feel good about themselves?
[Edit] I'm not questioning your comment about Chinese companys' practice, just feeling that sentence about "those cheating Chinese students" out of place.
[Edit] Interesting, just got my 1st downvote on HN, ever. Scratching my head now....what's the downvote for? Asking the OP to back up his own claim is offending or what?
I live in China. I know a black American guy who used to take IELTS exams for Koreans when he lived in Korea. Please think of how flagrantly obvious this was. The Korean students in question had powerful parents but it's still indicative. The entire country of South Korea has had the SAT canceled on at least one occasion when the exam papers were leaked. My girlfriend's friend was dating a guy who sold SAT answers at one stage. As to the culture of cheating my friend's wife sat an English proficiency exam for her cousin that said cousin needed to graduate ~community college as a kindergarten teacher. Those are things that are a matter of public record or personal experience.
There's more in this line from Ed at educationrealist.wordpress.com though I can't speak to their reliability. According to them there are massive threads on college confidential where people reconstruct SAT exams.
Cheating on tests is really common in China and Korea.
Thanks for the reference, at least you cared to search and show it!
10% of 25,000 for that particular exam does sound a lot, and that's probably why it made national news in the first place. Does it mean 10% of all Chinese students (in China) cheat? Is it a proof that "Cheating among Chinese students is pandemic."? Definitely Not. I can find way more examples where 0% of Chinese students cheat in national level exams (actually, I probably can't, because "nobody cheated in the exam" won't make the news). Does that mean "Chinese students never cheat."? Of course not either. I'm not trying to be the PC police here, but I'm just baffled that a sweeping claim like that got used as the basis of OP's thesis and everybody seems to be agreeing with it. I thought HN's audience could do better than that...
Yeah, this is why I didn't bother constructing a more robust argument showing the clear trend. Consider that you may be unwilling to entertain the possibility that this phenomenon actually exists.
What "trend" are you referring to? "Cheating among Chinese students is pandemic." is the trend? So it used to be not "pandemic" but has become more and more so recently? That would actually be very interesting to read if not merely backed up by some hand waving stats or anecdotal evidences.
The Chinese value the appearance of working hard, not actual hard work. Cheating among Chinese students is pandemic. Chinese companies regularly publish misleading or outright fraudulent earning statements and quarterly reports. While the Chinese government seems to be taking steps to reverse these trends, it will take a long time to undo their culture of corruption. Contrast this with the American culture of honesty; fraud and cheating are national scandals, not the norm.
Second, the US currency is the world reserve currency because the world trusts that the US will keep paying interest on the debts. A trillion dollar debt is not actually that large, and this is reflected in the near-zero interest rates on treasury bonds. If there was a belief in the market that America would no longer be able to pay off the debts, interest rates would be sky-high. But the opposite is true. The national debt is just a talking point for people who don't understand economics. (The largest owner of American debt is...America!)
Finally, I am unsure what evidence there is that the US culture has moved away from innovation, risk-taking, etc. If anything, there are many more entrepreneurs today than there ever has been before; the maker movement, youtube celebrities, and startup culture is evidence of a growing number of people who are not employees of large corporations, but independent businesses.