What Fueled the 'East Asian Miracle'? | Hacker News Reader

What Fueled the 'East Asian Miracle'?

theatlantic.com

25 pointsaarghh24 comments

This starts in the 50s and and seems they argue for Land Reform. Maybe that was part of it. But I say these are far better reasons:

1. A local government friendly to the US. Gov type did not matter.

2. US Workers starting to want medical benefits, by the late 60s, hardly anyone would take a job without benefits. This includes sick time.

3. Environment Controls starting in the 60s. I think this is a big one.

4. High Wages in the US

5. Improved intercontinental flights and cheap shipping. I think in the 60s the US merchant was quickly being outsourced to cheap countries.

6. An of course corporate greed and the rush to make Wall Street happy.

You just need to look at ROC in the 90s, lots of companies started moving manufacturing there because Japan and Taiwan was getting too expensive.

Now I think they are slowly moving out of ROC to places it SE Asia like Vietnam.

Extrapolate and combine 1,2,3,4,6: a government friendly with a rich post industrial nation that focuses on financialization as an end unto itself.

(that last trait is a bit more contentious than the former ones)

PRC?

ROC is Taiwan I believe.

Yes, I meant PRC :)

Your argument lays out a number of push factors as to why firms left the US, but there are numerous locales that are and were cheaper than the US. This article is about what cause industry to flourish in East Asia specifically.

None of the bullet points you laid out are specific to East Asia.

I think that's kinda the point. It's not EA specific but general economic forces with a large difference in development.

There’s nothing really general or abstract to what OP was stating though. Their argument is essentially “it has nothing to do with anything that East Asia did, it was essentially random that they ended up being the place where industrial development expanded to next” which doesn’t seem to be a strongly evidence based position in my view.

Where you twice mention ROC, I think you instead meant PRC.

ROC is Republic of China, which is the government that started in 1911 and currently has its actual seat of government in Taipei, ruling over all of Taiwan province and some parts of Fujian province (Kinmen, Matsu). On paper, ROC still claims all the other provinces of China.

PRC is People's Republic of China, which is the government that started in 1949, currently has its seat of government in Beijing, and rules mainland China and most of Fujian province. On paper, PRC claims all provinces of China, including Taiwan province as well as the parts of Fujian province that are currently part of ROC.

Western outsourcing to ROC occurred much earlier than the 90s.

Correct, that is what I get typing this and running a test on a change I made at the same time :)

I'm guessing the article never once mentions a 106 average IQ.

I wish trends like the Flynn effect (rise in IQ in most of the world throughout the 20th century, including China [0], Japan and Korea [1]) had more concrete answers by now. AFAIK we still don't have any answers beyond conjectures. To me, having a better understanding of this is vital, because IQ is currently in decline in many developed countries, even when you account for immigration and demographic/race changes. Something in our environment is causing a reverse Flynn effect [2] [3], we don't know what it is, and not enough people seem to care.

[0] - https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3834612/

[1] - https://www.sciencedirect.com/science/article/abs/pii/S01918...

[2] - https://www.nbcnews.com/think/opinion/iq-rates-are-dropping-...

[3] - https://www.pnas.org/doi/pdf/10.1073/pnas.1718793115

From the title, and skimming over this article, I notice an irony: the analysis is "short" by Eastern standards

They're only talking about the last 100-200 years. That's significant on the American time scale, but insignificant on a Chinese one.

It's interesting to me that older cultures like the Chinese, Japanese, and the Maya view history as cyclical, while Americans tend to have more a narrative of "linear progress", or even "manifest destiny" (a term I heard in grade school but probably didn't really understand until being an adult)

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I think Ray Dalio's explanation is the most concise and takes into account the cyclical nature of history (and wow this video has 55 M views now)

https://www.youtube.com/watch?v=xguam0TKMw8

Roughly speaking, [edited] China and India likely had most of the world GDP for more than 1000 years [1] ... you can think of it as a miracle for them to rise again, or just part of a cycle.

And there are absolutely cycles in history, just ones that are longer than any "news" article tends to talk about

I also think Americans are now waking up to a cyclical view. Everyone is talking about how this is the "first" generation to make less money than their parents, or the "first" to have shorter life span

But it's only "first" if you don't recognize the cycles! That's understandable because of America's history, but it is a limited analysis

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[1] edit: I looked deeper into this, and I agree it's flimsy, as mentioned below. But I think the larger point still stands -- it's a only a "miracle" if you're looking at a certain time frame, and n=1

The problem with cyclical view appears as soon as one tries to review the underlying causes why this movement happens. You can have rises, prosperity, overshoots, bad habits, slowdowns and depressions coming one after another in a mostly closed system. Or you may consider a system which can be affected by externalities, those which can be so powerful as to cause opium depression or technology copying rise. It's a little like pendulum with external forces, which dictate what's the actual behavior of the pendulum is - disregarding its own internal properties.

It's true, but really it's both ... there is "progress" and there are also cycles. Dalio explicitly superimposes them on each other

I don't think I believed this until 2017 or 2020 or so, but it seems clear that the USA is on a natural downcycle and probably will be for several decades

I think the causes are pretty well laid out in the book - basically having the global reserve currency is kind of an unfair advantage, and it leads the population to become decadent and unproductive, it leads to institutional decay, etc.

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That brought to mind the tweet/slogan "what if your whole personality depends on low interest rates?", and now I see that something similar was discussed on Hacker News too:

https://news.ycombinator.com/item?id=33946342

Basically people live in a particular part of a cycle, which lasts longer than their lifetimes

(but there are also non-cyclical changes / progress, and yeah there are big flaws with trying to go back 1000 years)

> Roughly speaking, China had the largest GDP in the world for more than 1000 years

For a continuous duration of nearly 1700 years from the year 1 CE, India was the world's largest economy, constituting 35 to 40% of the world GDP.

https://en.wikipedia.org/wiki/Economy_of_India

Yes, yes, we know that China and India are becoming extremely nationalistic and like to use their tendencies for historical revionism to find justifications for their new found imperialism. Still I’m not convinced we actually need a fight of propagandists here.

OK I tracked down that claim to Michael Cembalest of JP Morgan, in a 2012 article

https://archive.is/kQNT4#selection-1577.155-1581.525

https://archive.is/Z2qEu

Although there are problems with the analysis that are mentioned in both articles:

A major caveat: If you looked at the chart in any depth, you probably noticed a big problem with it. The time periods between data points aren't equal -- in fact they are not close at all

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So, one way to read the graph, very broadly speaking, is that everything to the left of 1800 is an approximation of population distribution around the world and everything to the right of 1800 is a demonstration of productivity divergences around the world

But the analysis for China is equally flimsy, so I edited my comment to say "China and India" and "likely"

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TBH now that I see this data, I think both claims are a little flimsy. I was more referring to Dalio's analysis, which covers the last 500 years only, and probably got a few claims mixed up.

For some reason Dalio does not include India much in his analysis -- it is mostly focused on China, the Netherlands, Great Britain, and the USA. That could be his bias, or perhaps a definitional issue with what counts as "India" (and similarly what counts as "China"), which is a difficult question over 500-1000 year time frames

Estimating economy sizes and growth before a couple hundred years ago is at best an exercise in educated guessing.

Was India even a country before 1700? It's like saying "Asia was the largest economy"

In a pre-industrial economy, size of your economy was dependent on a) having a lot of peasants, b) having a lot of reasonably fertile soil.

China and India between them counted for at least half of humanity during that period, and probably more. No wonder they were the largest economies.

You are forgetting..

c) Having lots of ships, sailors and powerful army (many in Europe)

d) Being a trading hub (Italy)

e) Having access to lots of valuable metals, salt, gold (richest person in history was Mansa Musa, King of Mali)

Statistical outliers like very rich kings or ports do attract attention, but there was no way to avoid low productivity of agriculture overall. At least 80 per cent of the population had to tend the crops, which lowered the average GDP of entire regions / countries.

That’s not true, India had the largest GDP for the vast majority of human civilization.

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