James McCormick

Naim, Moises, Illicit: How Smugglers, Traffickers and Copycats are Hijacking the Global Economy, Doubleday, 2005, 340pp.

[cross-posted on Albion’s Seedlings]

Moises Naim, editor of Foreign Policy magazine, has written an outstanding summary of the flip side of the post-Cold War economic boom. Think of it as the antithesis of Jim Bennett’s book … a “The Global Criminal Affluenza Challenge: How an Army of Fagins Leverages High-Yield Crime while Civil Society Implodes in the 21st Century.”

The author asks a provocative question. What if we looked at global crime from a purely economic perspective?

What industries would form the MisFortune 500? What criteria would criminals use for market development? How would criminal enterprises adapt to the new technological realities (which are also challenging legitimate business)? In other words, setting morals and laws and national sovereignty to one side, how is crime coping with globalization?

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Mokyr, Joel, The Gifts of Athena: Historical Origins of the Knowledge Economy, Princeton University Press, 2002. 359 pp.

[cross-posted on Albion’s Seedlings]

I first became aware of Professor Mokyr (Northwestern University) when I stumbled across his book The Lever of Riches: Technological Creativity and Economic Progress (1992) during a period of economic history reading late last year. The book was quite strong on the details of technology in the ancient world and Industrial Revolution but virtually skipped the period that Professor Alfred Crosby had considered crucial to the change in mentality in the West (1275-1325 AD in northern Italy) in his book The Measure of Reality. My reading program at the time was meant to fill in the details of the period after the peak of the Italian republics. Instead, it highlighted the fact that science and industry were a rather murky transnational undertaking that didn’t, by itself, lend much assistance to sorting out Anglosphere history. Was England unique, merely lucky, or simply the first? Lever of Riches was fascinating but steered clear of many of the social and political questions that might explain why the economics of the period were so unusual. Economic historians now believe that, before 1850, the contribution of “formal” science to technology remained modest. There was a long period of very modest economic growth in England before Industrial Revolution allowing a rising population between 1760 and 1815 without a decline in per capita income. Income per capita edged up very slowly before 1830. Real wages barely nudged up before mid-1840s. And the switch to mineral economy (as an industrial power source) had been proceeding for centuries before 1750. What was the source of the evident dramatic change that people quite naturally want to call a Revolution?

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Chua, Amy, World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability, Doubleday (2003) 340 pp.

In a post earlier this year, Jim Bennett outlined both his concerns and his appreciation for Amy Chua’s book “World on Fire.”

Unlike Jim, I was less convinced that she was offering a “one size fits all” model but very much inspired by the utility of her model for understanding the relationship of the world to the United States and the Anglosphere. The US, and its occasional allies, are locked in a passionate love-hate relationship with the rest of the world — a discussion fought now on television that often appears deranged or infantile yet is driven by very real concerns and anxieties. There’s hypocrisy and cant aplenty on both sides of the argument as far as the eye can see. And it is the “do as I say, not as I do” conundrums facing the Anglosphere that will drive new and focused solutions — new legal structures, new ethical propositions, new responses to weapons of mass destruction and hyper-destructive individuals, new balances between individual and social rights, new clarity and, one assumes, a newly-minted sense of self-preservation.

Much of the reading I’ve been doing over the last year has focused on national productivity figures (cf. Lewis’s The Power of Productivity) and on the EU’s response to the increasing GDP per capita gap between it and the US (The 2000 Lisbon Agenda). To summarize: the United States (with 300 million people) has roughly 30% greater GDP per capita (purchasing price parity) than all other nations over 10 million in size. Canada (at roughly 78% of the US standard and 30 million people) is the only exception. US GDP percentage growth also leads its large industrialized competitors. My reading focus has been on the solutions offered by serious people around the world to close the gap or find a way to accommodate the gap within a successful sustainable social model. At the same time, I’ve been watching the figures, and discussion, on higher education and the “scientific wealth of nations.” In many ways, however, the responses and strategies put forward to catching up with the US, by both the industrialized and industrializing world, have been eerily parallel to those documented in the past by Chua for nations who have struggled to cope with free markets and democracy over the last forty years. There’s a lot more finger-pointing and bad-mouthing than concrete progress.

To quote Chua (p.6):

This book is about a phenomenon – pervasive outside the West yet rarely acknowledged, indeed often viewed as taboo – that turns free market democracy into an engine of ethnic conflagration. The phenomenon I refer to is that of market-dominant minorities: ethnic minorities who, for widely varying reasons, tend under market conditions to dominate economically, often to a startling extent, the “indigenous” majorities around them.

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Harrison, Lawrence E., The Central Liberal Truth: How Politics Can Change a Culture and Save It from Itself, Oxford University Press, 2006, 272 pp.

[cross-posted on Albion’s Seedlings]

To my mind, the Anglosphere discussion is part and parcel of a resurgence in interest in cultural matters after both communism, and vast amounts of post-WW2 Western international aid, failed to provide dramatic economic successes in the poorest parts of the world. The events of 9/11 have highlighted the disparities across the planet, their seeming intractibility, and the view that the rich part of the planet should be solving the problem.

Recently, I reposted a book review of Lewis’s Power of Productivity, which noted that only a single large nation has moved from relative per capita economic poverty to economic prosperity (“being rich”) in the twentieth century — Japan. And Japanese history in the 20th century was hardly without its tragedies. Accordingly to the current numbers, we aren’t likely to see another sizable country make the leap to notable GDP per capita prosperity any time soon. If the 20th century, despite a massive increase in global GDP, has essentially kept every nation running in place, what can be done to give nations with low or medium prosperity an effective boost?

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Lewis, William, The Power of Productivity: Wealth, Poverty, and the Threat to Global Stability, U of Chicago Press, 2004. 339 pp.

[cross-posted on Albion’s Seedlings]

Preliminary headlines on the upcoming riot season in Paris are starting to appear, recalling the difficulties that European countries face in boosting their economic performance: reducing unemployment and increasing economic growth. Fareed Zakaria’s article in the Washington Post earlier in 2006 entitled the Decline and Fall of Europe is a quick and readable summary.

Zakaria quotes a particularly interesting OECD report called “Going for Growth” that shows Europe, rather than catching up to America in per capita GDP, has in fact been falling behind over the last 15 years. Efforts to catch up, while noteworthy and politically difficult, have essentially failed. When the GDP figures are adjusted by purchasing power parity (PPP), from country to country and around the world, we end up with shocking tables like the following:

Source: CIA World Factbook

and this:

Source: Adapted from Lewis, The Power of Productivity, 2004.

The United States doesn’t simply lead the world in GDP per capita (PPP adjusted). It is in a class (fully acknowledging its size) entirely by itself. Adding 1 million net citizens every nine months (one every 13 seconds), America is extending its lead in prosperity over not only poor and moderately wealthy nations, but over virtually all of its erstwhile companions on the “heights” of Mount Prosperity. Next-door neighbour Canada is the only eight digit population close to the US, coming in at 78% of US per capita GDP (PPP adjusted).

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