ECONOMICS as factor in environmental impact of human populations

[Martin]

this subforum is concerned, among other things, with the human population and its impact on the global environment (thus indirectly on the ecology and habitats of wild species)

 

should ECONOMICS be split off from this as a separate topic, or should it be integrated into this mix?

 

what do you think?

 

Economics is a really important science and there is no specific spot for it in the SFN menu. If you isolate it from biology or compartmentalize it, say, with politics, what kind of thinking does this encourage?

 

The way I look at it, Economics is one of the major factors that determine the growth of human populations and the kinds of impacts they have on the environment (local environment, climate, oceans, resources, natural habitats, you name it).

 

But you might have a different viewpoint of how the science of economics fits into the picture. Anyway make of this whatever you want.

I will find something to post here, but I would prefer if other people have some Econ stuff to post (my main interest is in physics and cosmology, not Econ)

[Mokele]

I'd say economics should be split into a different forum than this one. While it does have applications and impacts on ecology and suchlike, so do thermodynamics (global warming, level of solar radiation affecting productivity of an ecosystem) and astronomy (big death-rocks from space), and I wouldn't suggest those be subsumed in here either. The way I see it, the chief concern of economics isn't terribly compatible with this sub-forum, thus warrants it's own forum. Of course, that's not to say that integrations of the two would not be good, but I do think it would be a bit of an odd grouping as you suggest it.

 

Mokele

[Martin]

an important economic fact is the rise of the Chinese economy

how do we think about this?

someday Chinese corporations will own a share of the worlds forests---timber rights---just as US and European corporations do today.

I wonder if we can think of any reason Chinese-controlled global corporations should behave any more responsibly than their predecessors?

As we buy Chinese manufacture we transfer capital goods (which means jobs) and control over resources to the Chinese.

 

China's educational system produces engineers and scientists at a rate several times that of the US. So we can expect the lead in a number of high tech industries to shift to asia. More stuff will be invented and designed there. So their industry will rise in terms of value-added-in-manufacturing (VAM). The most recent case of this was when a Chinese company started to manufacture the MRI scan instruments that hospitals use. This is very expensive medical imaging technology, which our hospitals may soon be buying from China (because good or adequate quality at lower price).

 

By running a trade deficit with China, we are essentially trading jobs for goods. We get the finished goods and in exchange they get more manufacturing equipment, investment, experience, and plain old jobs including the good ones. The rapid growth of the China economy in the past decade has been paid for, in some sense, by the American consumer and by consumers in other countries where there was a market for Chinese manufacture.

 

OK so that's how the Market works. There is no reason to complain is there? People make free decisions and what happens happens. China is a billion people who are getting to be as rich and powerful and at least as well-educated as Americans and they may, in time, find that they need to cut down your forests to make their furniture and they may need your oil to make their chemicals and plastic and fertilizer, or to run their snow-mobiles and SUVs and passenger jets or whatever. So they will buy it, as Americans have done in other cases, or use a combination of their wealth and their military power (which will be comparable to their educational level and economic power) to get what they think they need.

 

So the question in my mind is how to think about this. We certainly do not want to let it scare us. Partly we need to think about it so that WE WILL NOT BE SURPRISED. There always seems to be trouble when groups of people are surprised---and when they SUDDENLY discover that things are not how they always have been or were expected to be. It is usually better to have seen something coming than to have it appear suddenly and unexpectedly.

 

So that is why I was interested by this interview between the German weekly magazine Der Spiegel and a guy named Lee Kuan Yew who has guided the successful development of Singapore for something over 30 years. I think Lee Kuan Yew is an autocrat and I don't know how long he has been bossing Singapore, or whether there are unsavory sides to this, but I think he is SMART and PRAGMATIC and looks ahead realistically and Singapore has prospered on his watch and, perhaps more important, Singapore stands to be ONE OF THE MOST IMPACTED by China economy growth.

 

have to go, back later

[Martin]

OK so Lee Kuan Yew is kind of an expert in being impacted by China economic development (something that is being felt strongly in India and in Europe too, but Singapore is closer to the epicenter). So since we are all going to be impacted by this over the next century we should probably pay attention to what he has to say. So here is this interview he had with Der Spiegel

-------------------------quote---------------------------------

In case anyone is interested in the 21st Cent role of China in world economy here is an interview with a smart realistic guy:

 

DER SPIEGEL INTERVIEW WITH SINGAPORE'S LEE KUAN YEW

 

"It's Stupid to be Afraid"

 

Singapore's first-ever prime minister, long-time government head and current political mentor Lee Kuan Yew talks about Asia's rise to economic power, China's ambitions and the West's chances of staying competitive.

 

SPIEGEL: The political and economic center of gravity is moving from the West towards the East. Is Asia becoming the dominant political and economic force in this century?

 

Mr. Lee: I wouldn't say it's the dominant force. What is gradually happening is the restoration of the world balance to what it was in the early 19th century or late 18th century when China and India together were responsible for more than 40 percent of world GDP. With those two countries becoming part of the globalized trading world, they are going to go back to approximately the level of world GDP that they previously occupied. But that doesn't make them the superpowers of the world.

 

SPIEGEL: Their leading politicians have publicly discussed the so-called "Asian Century".

 

Mr. Lee: Yes, economically, there will be a shift to the Pacific from the Atlantic Ocean and you can already see that in the shipping volumes of Chinese ports. Every shipping line is trying to get into association with a Chinese container port. India is slower because their infrastructure is still to be completed. But I think they will join in the race, build roads, bridges, airports, container ports and they'll become a manufacturing hub. Raw materials go in, finished goods go out.

 

SPIEGEL: You've been the leader of a very successful state for a long time. Returning from your time in China, are you afraid for Singapore's future?

 

Mr. Lee: I saw it coming from the late 1980s. Deng Xiaoping started this in 1978. He visited Bangkok, Kuala Lumpur and Singapore in November 1978. I think that visit shocked him because he expected three backward cities. Instead he saw three modern cities and he knew that communism -- the politics of the iron rice bowl -- did not work. So, at the end of December, he announced his open door policy. He started free trade zones and from there, they extended it and extended it. Now they have joined the WTO and the whole country is a free trade zone.

 

SPIEGEL: But has China's success not become dangerous for Singapore?

 

Mr. Lee: We have watched this transformation and the speed at which it is happening. As many of my people tell me, it's scary. They learn so fast. Our people set up businesses in Shanghai or Suzhou and they employ Chinese at lower wages than Singapore Chinese. After three years, they say: "Look, I can do that work, I want the same pay." So it is a very serious challenge for us to move aside and not collide with them. We have to move to areas where they cannot move.

 

SPIEGEL: Such as?

 

Mr. Lee: Such as where the rule of law, intellectual property and security of production systems are required, because for them to establish that, it will take 20 to 30 years. We are concentrating on bio medicine, pharmaceuticals and all products requiring protection of intellectual property rights. No pharmaceutical company is going to go have its precious patents disclosed. So that is why they are here in Singapore and not in China.

 

SPIEGEL: But the Chinese are moving too. They bought parts of IBM and are trying to take over the American oil company Unocal.

 

Mr. Lee: They are learning. They have learnt takeovers and mergers from the Americans. They know that if they try to sell their computers with a Chinese brand it will take them decades in America, but if they buy IBM, they can inject their technology and low cost into IBM's brand name, and they will gain access to the market much faster.

 

SPIEGEL: But how afraid should the West be?

 

Mr. Lee: It's stupid to be afraid. It's going to happen. I console myself this way. Suppose, China had never gone communist in 1949, suppose the Nationalist government had worked with the Americans -- China would be the great power in Asia -- not Japan, not Korea, not Hong Kong, not Singapore. Because China isolated itself, development took place on the periphery of Asia first.

 

SPIEGEL: Such a consolation won't be enough for the future.

 

Mr. Lee: Right. In 50 years I see China, Korea and Japan at the high-tech end of the value chain. Look at the numbers and quality of the engineers and scientists they produce and you know that this is where the R&D will be done. The Chinese have a space programme, they're going to put a man on the Moon and nobody sold them that technology. We have to face that. But you should not be afraid of that. You are leading in many fields which they cannot catch up with for many years, many decades. In pharmaceuticals, I don't see them catching up with the Germans for a long time.

 

SPIEGEL: That wouldn't feed anybody who works for Opel, would it?

 

Mr. Lee: A motor car is a commodity -- four wheels, a chassis, a motor. You can have modifications up and down, but it remains a commodity, and the Chinese can do commodities.

 

SPIEGEL: When you look to Western Europe, do you see a possible collapse of the society because of the overwhelming forces of globalization?

 

Mr. Lee: No. I see ten bitter years. In the end, the workers, whether they like it or not, will realize, that the cosy European world which they created after the war has come to an end.

 

SPIEGEL: How so?

 

Mr. Lee: The social contract that led to workers sitting on the boards of companies and everybody being happy rested on this condition: I work hard, I restore Germany's prosperity, and you, the state, you have to look after me. I'm entitled to go to Baden Baden for spa recuperation one month every year. This old system was gone in the blink of an eye when two to three billion people joined the race -- one billion in China, one billion in India and over half-a-billion in Eastern Europe and the former Soviet Union.

 

SPIEGEL: The question is: How do you answer that challenge?

 

Mr. Lee: Chancellor Kohl tried to do it. He did it halfway then he had to pause. Schroeder tried to do it, now he's in a jam and has called an election. Merkel will go in and push, then she will get hammered before she can finish the job, but each time, they will push the restructuring a bit forward.

 

SPIEGEL: You think it's too slow?

 

Mr. Lee: It is painful because it is so slow. If your workers were rational they would say, yes, this is going to happen anyway, let's do the necessary things in one go. Instead of one month at the spa, take one week at the spa, work harder and longer for the same pay, compete with the East Europeans, invent in new technology, put more money into your R&D, keep ahead of the Chinese and the Indians.

 

SPIEGEL: You have seen yourself how hard it is to implement such strategies.

 

Mr. Lee: I faced this problem myself. Every year, our unions and the Labour Department subsidize trips to China and India. We tell the participants: Don't just look at the Great Wall but go to the factories and ask, "What are you paid?" What hours do you work?" And they come back shell-shocked. The Chinese had perestroika first, then glasnost. That's where the Russians made their mistake.

 

SPIEGEL: The Chinese Government is promoting the peaceful rise of China. Do you believe them?

 

Mr. Lee: Yes, I do, with one reservation. I think they have calculated that they need 30 to 40 -- maybe 50 years of peace and quiet to catch up, to build up their system, change it from the communist system to the market system. They must avoid the mistakes made by Germany and Japan. Their competition for power, influence and resources led in the last century to two terrible wars.

 

SPIEGEL: What should the Chinese do differently?

 

Mr. Lee: They will trade, they will not demand, "This is my sphere of influence, you keep out". America goes to South America and they also go to South America. Brazil has now put aside an area as big as the state of Massachusetts to grow soya beans for China. They are going to Sudan and Venezuela for oil because the Venezuelan President doesn't like America. They are going to Iran for oil and gas. So, they are not asking for a military contest for power, but for an economic competition.

 

SPIEGEL: But would anybody take them really seriously without military power?

 

Mr. Lee: About eight years ago, I met Liu Huaqing, the man who built the Chinese Navy. Mao personally sent him to Leningrad to learn to build ships. I said to him, "The Russians made very rough, crude weapons". He replied, "You are wrong. They made first-class weapons, equal to the Americans." The Russian mistake was that they put so much into military expenditure and so little into civilian technology. So their economy collapsed. I believe the Chinese leadership have learnt: If you compete with America in armaments, you will lose. You will bankrupt yourself. So, avoid it, keep your head down, and smile, for 40 or 50 years.

 

SPIEGEL: What are your reservations?

 

Mr. Lee: I don't know whether the next generation will stay on this course. After 15 or 20 years they may feel their muscles are very powerful. We know the mind of the leaders but the mood of the people on the ground is another matter. Because there's no more communist ideology to hold the people together, the ground is now galvanised by Chinese patriotism and nationalism. Look at the anti-Japanese demonstrations.

 

SPIEGEL: How do you explain that China is spending billions on military modernisation right now?

 

Mr. Lee: Their modernisation is just a drop in the ocean. Their objective is to raise the level of damage they can deliver to the Americans if they intervene in Taiwan. Their objective is not to defeat the Americans, which they cannot do. They know they will be defeated. They want to weaken the American resolve to intervene. That is their objective, but they do not want to attack Taiwan.

 

SPIEGEL: Really? They have just passed the aggressive anti-secession law and a general has threatened to use the nuclear bomb.

 

Mr. Lee: I think they have put themselves into a position internationally that if Taiwan declares independence, they must react and if Beijing's leadership doesn't, they would be finished, they would be a paper tiger and they know that. So, they passed the anti-secession law to tell the Taiwanese and the Americans and the Japanese, "I do not want to fight, but if you allow Taiwan to go for independence, I will have to fight." I think the anti-secession law is a law to preserve the status quo.

 

SPIEGEL: Another critical point in Asia is the growing rivalry between China and Japan.

 

Mr. Lee: It's been dormant all this while, right? But I think several things happened that upped the ante. They possibly coincide with the policy of Japanese Prime Minister Junichiro Koizumi. There is this return to "we want to be a normal country." They are sending ships to Afghanistan to support the Americans, they sent a battalion to Iraq, they reclaimed the Senkaku islands, and most recently, they joined the Americans in declaring that Taiwan is a strategic interest of Japan and America. That raises all the historical memories of the Japanese taking away Taiwan in 1895. Then they're applying to be a permanent member of the Security Council. So, I think the Chinese decided that this is too much. So, they have openly said they will object to Japan becoming a member of the Security Council.

 

SPIEGEL: Well, the United States said the same to Germany.

 

Mr. Lee: Exactly. So, the whole process is trying to define the position for the next round, maybe in 10 to 15 years, by which time the world will be a different place.

 

SPIEGEL: Can the Chinese convince their North Korean ally Kim Jong-Il to get rid of his nuclear program?

 

Mr. Lee: North Korea is a riddle wrapped up in an enigma. The leaders in North Korea believe that their survival depends upon having a bomb -- at least one nuclear bomb. Otherwise, sooner or later, they will collapse and the leaders will be put on trial like Milosevic for all the crimes that they have committed. And they have no intention of letting that happen.

 

SPIEGEL: Who can stop them? The Americans?

 

Mr. Lee: Yes, but at a price, a heavy price.

 

SPIEGEL: Could the Chinese do it?

 

Mr. Lee: Possibly. By denying food, denying fuel, so they would implode. But will the Chinese benefit from an imploded North Korea? That brings the South into the North. That brings the Americans to the Yalu River. So, the North Koreans have also done their calculations and know that there are limits.

 

SPIEGEL: So Kim is in a strong position?

 

Mr. Lee: If I were Kim I would freeze the programme, tell the Americans you can inspect, but if you attack me, I will use it. That leaves the Americans with the problem of checking and verifying and intercepting ships, aircraft, endless problems.

 

SPIEGEL: Would that save Kim's regime?

 

Mr. Lee: In the long run I think they will implode sooner or later because their system cannot survive. They can see China, they can see Russia and Vietnam, all opening up. If they open up, their system of control of the people will break down. So they must go.

 

SPIEGEL: If the six party talks fail, do you foresee an arms race in Eastern Asia?

 

Mr. Lee: If the nuclear program is frozen, there won't be an arms race. Eventually, it is not in China's interests to have an erratic Korea nuclear-armed and a Japan nuclear-armed. That reduces China's position.

 

SPIEGEL: Many Americans fear that China and the US are bound to become strategic rivals. Will this become the great rivalry of the 21st century?

 

Mr. Lee: Rivals, yes, but not necessarily enemies. The Chinese have spent a lot of energy and time to make sure that their periphery is friendly to them. So, they settled with Russia, they have settled with India. They're going to have a free trade agreement with India -- they're learning from each other. Instead of quarrelling with the Philippines and the Vietnamese over oil in the South China Sea, they have agreed on joint exploration and sharing. They've agreed on a strategic agreement with Indonesia for bilateral trade and technology.

 

SPIEGEL: But the Americans are trying to encircle China. They have won new bases in Central Asia.

 

Mr. Lee: The Chinese are very conscious of being encircled by allies of America. But they are very good in countering those moves. South Korea today has the largest number of foreign students in China. They see their future in China. So, the only country that's openly on America's side is Japan. All the others are either neutral or friendly to China.

 

SPIEGEL: During your career, you have kept your distance from Western style democracy. Are you still convinced that an authoritarian system is the future for Asia?

 

Mr. Lee: Why should I be against democracy? The British came here, never gave me democracy, except when they were about to leave. But I cannot run my system based on their rules. I have to amend it to fit my people's position. In multiracial societies, you don't vote in accordance with your economic interests and social interests, you vote in accordance with race and religion. Supposing I'd run their system here, Malays would vote for Muslims, Indians would vote for Indians, Chinese would vote for Chinese. I would have a constant clash in my Parliament which cannot be resolved because the Chinese majority would always overrule them. So I found a formula that changes that...

 

SPIEGEL: ... and that turned Singapore de facto into a one party state. Critics say that Singapore resembles a Lee Family Enterprise. Your son is the Prime Minister, your daughter-in-law heads the powerful Development Agency...

 

Mr. Lee: ... and my other son is CEO of Singapore Telecoms, my daughter is head of the National Institute for Neurology. This is a very small community of 4 million people. We run a meritocracy. If the Lee Family set an example of nepotism, that system would collapse. If I were not the prime minister, my son could have become Prime Minister several years earlier. It is against my interest to allow any family member who's incompetent to hold an important job because that would be a disaster for Singapore and my legacy. That cannot be allowed.

 

The interview was conducted by editors Hans Hoyng and Andreas Lorenz.

 

Translated from the German by Christoper Sultan

 

-----------end quote------------

 

thanks to Steve Hsu and the Information Processing blog for relaying this

____________

[Martin]

I didn't see your earlier post till just now.

 

I said before it is really up to you (as someone concerned with environment, ecology, biological science) what you want to do.

 

maybe no economics place is needed SFN and if it is needed maybe it fits somwhere else.

 

Personally, I see a tragic connection between understandable human economic aspirations and the world's other species. I see tigers going extinct and chimps becoming bushmeat and the oceans stripped essentially because of economics.

 

Again, just as a personal comment, I see economic forces bringing rural people into semi-urban barrio circumstances and an increasing disregard for the value of human life.

So I look at global economy and global environment as one unified problem.

 

However I've done what I said I would and put together a sample Econ thread. I will not interfere any more, but will just go back to my main interests. I'm easy whatever develops here.

[Mokele]

Just to clarify, I think an econ thread or even forum would be nice, especially since I wouldn't mind learning something on the subject myself. Just that it's probably not well placed in this sub-forum (though I'd definitely enjoy more issues of economy meets conservation; look up crocodile farms for an interesting success story on that front).

 

Mokele