Yanks Say: World Needs Less America But More Trade

The United States has the reverse Midas touch: everything it touches turns into, well, garbage alike its near-zero growth jokeonomy. After the fine job the crusaders did of remolding Afghanistan and Iraq in their own image--not full of promised freedom 'n' growth but lots of discord and infighting coupled with little economic growth--the average American has grown tired of wasting lives and treasure on foreign adventurism with nothing to show for. It's just as well since it has a host of worsening domestic problems. For starters, try bastardy, insolvency, obesity, stupidity...identify some undesirable attribute and odds are it's rising in America. 

So it's gratifying that a recent WSJ/NBC poll has nearly half of them saying the US should be less interventionist in world affairs--47% to be precise. Going abroad from a position of weakness has not done the US much good in terms of gaining other people's respect. After all, who aspires to emulate a downwardly mobile country? First sort out matters at home, then perhaps people will listen to you instead of having "close" allies turn you down flat. How does the song go? Nobody knows you when you're down and out. Instead of sticking their noses in everyone else's business NSA style, American citizens would prefer leaving the rest of us be:

But here's the curious thing: Americans are becoming less hostile to free trade globalization from recent phobic extremes, even if on the balance they still dislike it. Putting 2 and 2 together, my take is that Americans recognize they are no longer willing or able to take the lead in world affairs. OTOH, they do recognize the benefits of being open to trade. Fair enough: let others take the lead, especially developing countries, so these countries can take care of poor old, beaten down Uncle Sam in his sunset years.

The rest of us do not particularly like the American brand of inequality and unfairness writ large on the world stage via subprime globalization. Given the United States' demonstrated inability to do anything about this sorry situation--if the US cannot "save" itself, what more the world--the burden falls on us to fix the mess America played a starring role getting us into. If this is indeed the case, the fault for doing nothing will shift to us instead of doddering old Uncle Sam.

Bhutan, Gross National Happiness & Human Rights Issues

Oh my, I hereby declare April 2014 "Bash Bhutan Month." Having criticized the small country for catering to wealthier tourists via its minimum spend requirements to obtain a visa despite purportedly pursing anti-materialistic "gross national happiness," I offer another criticism along similar lines. Rest assured that I feel guilty pointing out Bhutan's flaws since it's but a small developing country. However, just as I regularly bash Yanqui blowhards over hoary American exceptionalism--us stupid colored people would be so much better off if we were more like the US--Bhutan also has it coming with all this "gross national happiness" jibba-jabba.

Like other countries, Bhutan has its ethno-religious minorities. Almost without exception, they bear grievances. Think of Tibetans in China, or Muslims in the Southern Philippines and Southern Thailand. In Bhutan, there are the Hindu Lhotshampa people who compose a fifth of the population but are not exactly treated on the same basis as the Buddhist majority. First, a bit of sordid history:

In the 1980’s Bhutan changed its citizenship laws, especially in relation to Lhotshampa citizenship. At the time the Lhotshampa comprised roughly on third of the population, posing a possible threat to political order. By 1990, government policies became more repressive for the Lhotshampa and they fled as refugees from the government’s actions or were expelled as their citizenship was proclaimed illegitimate. The Lhotshampa’s sudden expulsion left Bhutan with abandoned villages, an injured farming base, and international criticism. A few Lhotshampa still remain in Bhutan, yet face discrimination as a marginalized, minority ethnicity.

Anyway, to frame today's discriminatory measures, we begin once more with other countries' uncritical admiration of "gross national happiness" happy talk:

Many nations, including Japan and Canada, have expressed aspirations to emulate GNH, which shuns purely economic yardsticks like gross domestic product (GDP), on the assumption that the policy has resulted in Bhutan’s people being happier than elsewhere. But happiness goes hand-in-hand with human rights. So does Bhutan really have respect for human rights?

I was peripherally aware of Bhutan's minorities before; what I was unaware of was the extent of the discrimination against them. Indeed, there is even a caste system in place that limits their freedom of movement:

Among the main stakeholders in these [UNHCR] recommendations were the “Lhotshampas,” as Bhutan’s southerners are called. They are part of the nation’s ethnic Nepalese minority. While some of them have risen to become ministers, many others do not even have full citizenship rights.

The citizenship ID cards the Ministry of Home and Cultural Affairs issues to them contain seven categories. Category 1 is for “genuine Bhutanese citizens.” Category 2 is for southerners who left Bhutan once and then returned; 3 is for those who were not around when the 1988 census was held; 4 refers to non-national women married to Bhutanese men, and their children; 5 is for non-national men married to Bhutanese women, and their children; 6 is for legally adopted children. And category 7 would mean the card holder is a non-national.

Holders of cards in categories other than 1 and 4 normally do not get the security clearance required for a passport. They cannot get voter ID cards either, which mean they cannot vote. Worse, those who carry category 7 cards, or fall in that category – and there are significant numbers of them – cannot get admission into schools or get government or corporate jobs. They find it difficult to travel even within the country – they get a “route permit” for restricted domestic travel.

I hate to disabuse you of illusions, but Bhutan isn't quite a Magic Kingdom that's a true-to-life happiest place on earth. Like nearly every other country, it has issues with racism and discrimination against ethnic minorities. The reason why it gets the stick is because, unlike most other countries, it makes grandiose claims about making everyone happy. Just like American hypocrisy on strong dollar policy, Internet freedom or any sort of risible, self-serving happy talk they keep coming up with, Bhutanese leaders need to understand how the rest of us see it. In either case, don't drink that Kool Aid so readily.

To paraphrase Imelda Marcos, I guess some people's happiness matters more than that of others.

An Interview with Piketty

On NPR...and I chime in as well.

Do more lectures improve student performance?

Yes, finds a new experimental study, but the authors interpret the effects as modest in size.  One group of students in introductory microeconomics got a lecture twice a week (what the authors call the "traditional" format), and the other group of students got a lecture only once a week.  All the students had the same access to online resources and the same wonderful textbook. (You can guess which one.)  The results:

We find that students in the traditional format scored 2.3 percentage points more on a 100-point scale on the combined midterm and final. There were no differences between formats in non-cognitive effort (attendance, time spent with online materials) nor in withdrawal from the class.

Japan's Kei Cars & Idiotic US Trade Complaints

 Adorable Chuki feels bad when meanies call her a "non-tariff barrier" [sniff].

So the gifted orator (or BS artist depending on your POV) Barack Obama came to Japan, saw his nominal allies, and failed to conquer their hearts and minds concerning removing trade "impediments" to concluding the Trans-Pacific Partnership. Purported intra-industry trade barriers in automobiles reared their ugly head again, with the US complaining about Japanese certification of sub-660cc (that's below 0.66 liters) kei cars being a sore point. These vehicles enjoy tax and parking privileges, the latter being a key selling point in crowded Japanese cities. Supposedly, the Japanese market's preference for these tiny vehicles that constitute a third of all passenger vehicle sales constituted a "non tariff barrier" (NTB) to foreign auto sales. As US automakers love to point out, they have a miniscule market share in Japan, hence accusations of protectionism that have helped sink TPP.

My take on this matter is very, very simple. The real issue here is not Japanese "protectionism" against foreign automakers, but of foreign automakers' inability to adapt to the consumer preferences of Japanese motorists. Debates between the Japanese and their gaijin interlocutors revolve on this point, which can be answered in two ways:

Japan has no tariffs on auto imports. Japanese auto executives say the country's unique tastes are a big reason for global auto makers' failure to thrive in the world's third largest auto-buying country, after China and the U.S. Foreign auto executives say the country's preferential tax treatment for minicars and its unique safety and environmental regulations are nontariff barriers that protect the country from foreign competition...

In some ways, the auto industry's love of minicars here is reminiscent of Japanese smartphone makers, which geared features heavily toward Japanese consumers and struggled to make headway overseas. Their shortcomings led to the coining of the term "Galápagos" to describe the market, like the group of islands cataloged by Charles Darwin : uniquely evolved and ultimately at a disadvantage because of its isolation.

To me it's largely an application of the "when in Rome" principle: In automobiles, tastes vary globally, with variations changing depending on the market in question. For instance, Europeans are big on diesels that account for about half of all cars sold. Meanwhile, even with $100/bbl oil, Americans still love to buy hulking, gas-guzzling monstrosities. These are in part due to physiological considerations--they cannot physically help it. In OECD overweight league tables, blubberly Americans literally weigh in biggest of them all, whereas the Japanese hardly have any such people at the opposite end of the scale. In other words, jus' folks in the Jabba the Hutt/Larry Summers weight class have no chance of fitting into kei cars.

Consequently, Toyota and other Japanese automakers aren't dumb enough to sell kei cars Stateside. Instead they sell oversized, inefficient, gas-guzzling lardbuckets such as the bestselling Toyota Tundra in America. Is the Tundra a Toyota mainstay in any other auto market? Of course not since it was built to suit American tastes and girths. Why should anyone with half a brain be surprised to find American cars unsalable in Japan given that most are too big, consume too much petrol which is considerable more expensive in Japan, and are not even right-hand drive to begin with? Ironically, the only American concern that makes money off kei cars is Disney Pixar by marketing products bearing adorable Chuki's image: toys, backpacks, and what is undoubtedly an impressive array of licensed merchandise.

Bottom line: If Americans spent half as much time developing salable kei cars as they did bullying and hectoring Japanese authorities, they'd actually have some market share by now instead of next to none. If you want to achieve something, shut the #$%^ up and get to work. However, I guess that old-fashioned idea has long lost traction in downwardly mobile modern-day America which more often than not plans to get ahead through strong-arm tactics, subterfuge and legal machinations. What's more, I think Mother Earth would be far better off if the rest of the world preferred small, well-formed and cute kei cars for daily transportation compared to the monstrous, bloated and butt-ugly cars made in America.

Saying it's expensive to develop Japan-only cars is no excuse for multinationals. Heck, tiny British sports car maker Caterham sells less than 500 cars annually, but recently had a smash hit developing a kei car roadster, the Seven 160. It looks great and should appear in Cars 3:

Google Maps & Cartographic Discrimination Against Africa

Oh, the burdens of having ignorant Westerners relate to Africa--a continent that is largely a mystery to them. US television network CBS received much flak for playing Toto's hit "Africa" over mournful footage of Nelson Mandela's funeral. Aside from "Africa" being a composition of an LA band, Toto had never even been to the continent when it released the song back in 1982. Surely there are African performers of note known even to the least curious of Westerners such as Youssou N'Dour, Hugh Masekela, King Sunny Ade or Ladysmith Black Mambazo?

Whatever the case, the example of paying "tribute" to South Africa's deceased leader with "authentic" music is but one in a series of continuing slights against Africa by Westerners. I tend to view the matter on the more optimistic side: the CBS producers were not consciously belittling Africa, African music or African culture. Rather, their limited perspectives tend to present a bland, samey view of the World According to White People. Hence my criticism of much IPE produced by the hegemony of Western universities as "White PE." These scholars may not be trying to parade their ignorance so clumsily--save for a few--but their analysis tends to be limited since (as I've said) they usually represent "lots of monolingual white guys at American and British universities talking to each other and calling it 'international.'"

Today's Western offender du jour is Google. This California outfit is ostensibly about not being evil and observing proper lefty behavior about respecting other cultures. As it turns out, however, they too are guilty of slighting Africa in a way their predecessors have by using the Mercator projection of the world map. From James Wan (not the actor):

[O]ne particular model gradually surpassed all the others to become the world map that is now ubiquitous on classroom walls, in books and now even on Google Maps. For many people today, that projection − invented by the Flemish cartographer Gerardus Mercator in 1569 − is the world map.

The main reason Mercator's projection became so popular was because of its navigational usefulness; in his map, straight lines represent lines of constant compass bearing. However, in manipulating the map to ensure this feature, the sizes of countries become hugely distorted. In particular, the southern hemisphere appears much smaller than it is in reality.

For instance, in the Mercator projection (below), North America looks at least as big, if not slightly larger, than Africa. And Greenland also looks of comparable size.

But in reality, Africa eclipses both. As is apparent in the Gall-Peters equal projection map (below), you can fit North America into Africa and still have space for India, Argentina, Tunisia and some left over. Greenland meanwhile is one-fourteenth the size of the continent.

So Google stands accused of replicating prejudices that show the white man's lands are "bigger" than those of others. Is Google really being hypocritical in violating their so-called motto of "Don't Be Evil"? My guess is that it is again an unconscious decision stemming from not knowing any better being stuck behind computers all day and not really striving to understand other people, places or cultures. Wan then delivers the knockout blow that even if Google knew any better, they still would use the Mercator projection since there isn't anything much of (commercial) interest in the vast African continent from a moneymaking perspective:

Google relies on advertising for almost the entirety of its nearly $60 billion annual income. One way to think of Google's business model is that its massive advertising revenue allows it to offer its services free of charge. But another way to think of it is that the near monopoly the company achieves by providing its ubiquitous services for free gives it the dominance necessary to generate those ad dollars in the first place. Google's corporate motto may be 'Don't Be Evil', but it's bottom line is still 'Make A Profit'.

It is arguably this reality that has led Google to spend massive sums of money on developing Google Maps, but which also affects what is put in and what is left off its maps. "It is telling that some townships in South Africa are just blank spaces on the map," says [cartographer] Brotton...

[I]t is much harder to quickly highlight Google Maps' particularity because there are no real alternatives to which we can look. We can imagine that if all of Google's data and programming ability was suddenly in the hands of a Namibian agriculturalist, a Sahelian nomad or a Senegalese fisherwoman, the maps they would conjure up would be completely different. They might well prioritise soil types over Starbucks, wells over Walmarts and the state of land degradation over panoramic streetviews of American towns. But we can only imagine. As was the case a century ago, it is still just a small group of Western individuals with specific ideas of the world that have the resources to map the world [my emphasis].

And to think that all these years we've been fed a steady diet of white persons' biases by literally grinding Africa small. The cartographer Jerry Broton explains in his book that just as history is written by the victors, so are maps drawn by them to reinforce their biases. I'm saddened but not surprised, and hope this post makes some amends. On this matter we can (correctly) reference Toto:

I know that I must do what's right
As sure as Kilimanjaro rises like Olympus above the Serengeti
I seek to cure what's deep inside, frightened of this thing that I've become...  

UPDATE: It is true that some cartographers do not consider the Gall-Peters projection accurate either and prefer the Robinson projection or the even newer Winkel tripel projection. Fair enough, but keep in mind that both do the same thing as the Gall-Peters projection in rendering Africa significantly larger in relation to Western Europe and North America than the hoary Mercator projection.

Ranking the World's Top Outsourcing Destinations

 At the end of last year, "services globalization and investment advisory firm" Tholons released the 2014 edition of its annual outsourcing destination rankings. The rankings have received limited attention outside of business process outsourcing (BPO) hubs, so it's time I brought it to wider attention here. Because of its head start and agglomeration or clustering effects, India still dominates the list. That said, Manila has displaced Mumbai as the #2 rated destination by moving up a place, as has Krakow, Poland which overtook Dublin, Ireland to take #9. Call it the "Catholic Work Ethic" in action once more exemplified by Poland and the Philippines moving up the economic greasy poles in their respective regions.

Speaking of which, what is interesting to me is the emergence of BPO hubs in all regions. (Unfortunately but unsurprisingly Cairo, Egypt takes an 18 place hit due largely to political instability in that country. The entire list linked to above goes to 100 by the way.) To be sure, people are still more likely to deal with those they are more comfortable with. Hence Mandarin speakers congregate around BPO hubs in China which are relatively nearby and thus have similar working hours. A similar phenomenon occurs with Sao Paulo, Brazil and Santiago, Chile being prime Latin American destinations for BPO work. It's certainly a testable hypothesis that BPO work reliant on verbal communication--think contact centers--is more evenly distributed globally than other tasks that do not rely so much on linguistic facility.

Lastly, the criteria which Tholons uses to evaluate various destinations are described as follows, which have both quantitative and qualitative elements. At the end, I have also included slides depicting Tholons' use of these criteria...

[Q]uality and size of the labour market, costs related to conducting business activity in the BPO sector (office area, operational costs, maintenance costs etc.), business environment (investment incentives, investor cooperation), operational environment (transport, technical infrastructure, service accessibility), business risk (political, business, natural and social risk) and quality of life (e.g. healthcare, culture, leisure, free time). In the case of Kraków, the increase in the number and quality of services provided for the benefit of investors was emphasized (advisory services in accounting, finance and resource management).

What's funny to us in Southeast Asia is that ignorant people were surprised the "Flappy Bird" creator Dong Nguyen came from Vietnam when they have a well-established BPO industry there. Indeed, Nguyen's erstwhile day job was in outsourced programming (for tracking taxicabs). As far as these industries go: been there, done that, saw the movie, bought the T-shirt.