Chinese worker in Trinco
Yesterday I wrote something in the Leader about how societies can collapse, including Sri Lanka if it follows the Chinese model, or China itself. “In his study of how complex societies collapse, anthropologist Joseph Tainter found a pattern. Civilizations from the Mayans to the Romans tended to follow a curve of development, a curve that often turns into a cliff. Essentially, they find a good resource and begin to grow. In order to manage this growth, they become more complex. As this resource runs out, that complexity becomes a burden and the society collapses.”
The article then concludes: “If people are given opportunities, however, their innovation can give the country a second wind. There is no more land, the colonials took much of the natural resources, but there are always more people. Indeed, this is what much development along the Chinese model tends to forget. For all of China’s vaunted growth, they are essentially still catching up to the West and haven’t done anything spectacularly new.
In the same way, all the projects were are promoting here have already been done in the West. We get good returns on them now, but those returns will inevitably decline. At some point we will run into the same problems that Western civilizations are running into now, and we may not have a base of innovative people to come up with new solutions. That type of game-changing thinking takes investment in education and free markets and, crucially, an investment in freedom to think and work and live. That freedom is, essentially, the resource that all of this technology we copy came from, and it’s something that Sri Lankans have in increasingly short supply.”
Then, just today I read this in the NYTimes
To continue growing rapidly, China needs to make the next transition, from sweatshop economy to innovation economy. This transition is the one that has often proved difficult elsewhere. Once a country has turned itself into an export factory, it cannot keep growing by repeating the exercise. It can’t move a worker from an inefficient farm to a modern factory more than once. It cannot even retain its industrial might forever. As a country industrializes, workers will demand their share of the bounty, as has started happening in China, and some factories will start moving to poorer countries. Eventually, a rising economy needs to take two crucial steps: manufacture goods that aren’t just cheaper than the competition, but better; and create a thriving domestic market, so that its own consumers can pick up the slack when exports inevitably slow. These steps go hand in hand. Big consumer markets become laboratories where companies know that innovations will be tested and the successful ones richly rewarded. Those products can then expand into countries with less mature consumer markets. Look at the telephone, the personal computer and the iPhone and iPad, all of which were designed in the United States and are now sold around the world.
Today’s China cannot claim any such achievement, a fact that weighs on Chinese policymakers. They worry about the country’s ability to innovate and, in particular, about the quality of its education system.
which is what I’m saying.