> The Chinese government is worried, saying that the problem could affect social stability, and it has ordered schools, government agencies and state-owned enterprises to hire more graduates at least temporarily to help relieve joblessness. “The only thing that worries them more than an unemployed low-skilled person is an unemployed educated person,” said Shang-Jin Wei, a Columbia Business School economist.
Tough situation...subsidizing an excess middle class can't be great in the long term. But what's the alternative? Order people to go work in the fields?
People are more than bodies - they all have minds, too.
While the need for physical labor will continue to decrease, many things that require a human mind to do will still be in demand. The real question is, will we vote to allow those that choose to apply their minds the chance to actually try their ideas in reality?
Look at what's happening to Airbnb. What kind of message does that send - "come up with a great new idea, one that provides value to hundreds of thousands, work as hard as you can for years, and watch it get crushed by regulations?" That is the biggest threat to everyone that wants to earn a better life for themselves in the future, not the "rise of the machines," which has only made us more productive, richer.
Regulations are a major reason why everyone seems to focus on doing tech startups that don't get too far outside of computing. It's not just a random trend. When we let the best and brightest do their best, a lot more wealth will be created, and you'll see the standard of living start to increase again.
With respect, the other reason tech-startups don't go too far outside computing are because that's what we know. Most hackers might have some domain expertise outside computing, but usually not enough to start a complete business in their secondary field of knowledge.
I do not agree. Most hackers can learn the details of any domain-specific knowledge they want and many of them do so, especially those that are working in consulting. To be a good consultant and earn a reasonable monthly revenue, you have to able able to absorb domain-specific knowledge in a matter of days, or even hours and many people do so.
The reason for why we aren't going outside computing is precisely because we'd have to deal with stupid regulations and barriers that have been placed to not upset the status quo, whereas computing and the Internet is the most unregulated industry by far.
This is why those in power try their best to regulate the Internet and computing and why we get so upset whenever they try.
I think the exact opposite of what you posit is closer to the truth of things -- a more carefully planned economy would have resulted in better conditions. If China was straight up laissez faire capitalistic economy it would be a total mess right now.
Einstein died before many of these crucial developments either had taken place, or were widely known in the West. Also, he was a physicist, not a philosopher or historian. He had neither the actual knowledge about the world nor a solid grounding in the humanities to guide his thought in that essay you cite.
Before you say that someone has a "naive point of view," you might want to try reading just a little bit of history. And not just from Marxist/socialist authors. There are other perspectives out there, and you might find that they explain the facts of history better than your current view, if you only bother to look.
I'm in no way going to defend the Great Leap Forward, but governments can have policies that are better or worse irrelevant of ideology, and such policies can be developed and improved. In hindisight, despite the huge amounts of problems the Chinese society has (some of which are truly scary and may become emblems of future times), it cannot be denied that it is a country that has had a streak of massive, incredible growth and has hoisted hundreds of millions of people out of poverty. This does not contradict the fact that the same government had such massive failures in the past.
I abhor the current Chinese state, but I really, really doubt that Western Capitalism would have been half as effective, at the very least not without costing the Chinese a huge relinquishment of capital and corporations in the hands of foreign interests, not a favorable position to be in. You can't implement certain policies without having absolute control of some parameters.
Your making the assumption that a government could accurately predict what would happen within certain parameters and make good decisions based on that.
However, making long-term predictions on the evolution of an economic system is impossible, as the number of parameters you have to take into account is huge and the complexity growth is exponential for every new parameter you add to your equation and the variation is theoretically infinite. Mandelbrot's study of price changes in financial markets should shed some light there, if you're interested. Not only that, but those in power even with enough knowledge do not necessarily make the best decisions for their country if it goes against their own selfish objectives and that's just human nature.
This is one of those cases where (uninformed) theory is very different from practice. Yes, on paper communism was perfect and those that still defend it always come up with the excuse that "it wasn't properly implemented".
Also, China is special. China has always been a superpower. They invented paper. They invented gunpowder. They have probably beaten Columbus to discovering America. The area they occupy is bigger than Europe. They've got all the natural resources they need and plenty to spare for export. They have the world's biggest population. Why is it any wonder that China can still grow, in spite of their failures?
On the other hand, the biggest mistake one could make is to assume that what works for China can work for other countries.
If anything, to me it's a wonder how much smaller countries with no natural resources to speak of, like Japan, managed to stay ahead for so long, being a testament to how disastrous and inefficient the Chinese government has been over the course of hundreds of years.
You don't make any convincing or exceptionally novel points I'm afraid, it's the same old rehashing of poorly construed history data.
I mentioned this earlier but I'll say it again: It seems the free market is apparently doing a pretty lousy job, if we've come to a reality where two lucky dudes who were well connected could sell their photo-sharing app for a billion all the while a good half of the country risks getting financially decimated come an unforeseen disease or bad accident somewhere. You will agree with me that at least here in the US, the experiment of 'capitalism' is shaping to spell failure, no?
How do you come up with your "half the country" figure? Even before ACA kicks in, uninsured levels are nowhere near that high. And government disability benefits, not counting private benefits, are fairly generous.
Economic depressions are unavoidable, whether we are talking about socialism or capitalism, if you don't eliminate the root cause - money.
"Financially decimated" is being a little melodramatic. As far as economic depressions go, this is a pretty mild one and also, 2012 has been the year with the least hunger, least poverty and least disease in human history. In terms of warfare, we also live in a time of abnormal peace. All the stats we have show us that it never was a better period to be alive.
When speaking of controlled economies, I think your line of reasoning about China is pretty invalid. In many ways China's economy is more capitalistic than what you find in the U.S. China has cities were the public roads themselves have been paved by businesses that had no other means to get their employees to work. China is one of the few countries that allows the exploitation of children in sweatshops. In my opinion China is not succeeding because of its government's control, but in spite of it.
So I'm curious, besides an opinion by Albert Einstein and China, what else have you got?
I wouldn't feed the troll. My family ran away from a country with a planned economy. I'm getting ready to jump ship in the same fashion if they start "planning" the economy where we currently are.
the state should be funding huge R&D projects with these educated individuals, instead of priming them for "work in the industry". Think hardcore nuclear research to find methods for fusion, or better energy production. Think genetics research, think materials sciences and more efficient chemical processes, think hardcore robotics.
With this goal in mind, the education system should be taylored for basic sciences, and not on "practical" skills that could be learnt on the job. This would naturally gravitate the ciruculum towards teaching creativity, problem solving, not knowledge aquisition.
TLDR; i think they've been doing it all wrong, and wasted the time "educating" these now jobless people.
For the Chinese: much of what they need has already been invented elsewhere (so IP appropriation _is_ a highly rational activity). They need to be able to apply it.
Their bigger problem is going to be in providing energy, cleaning up pollution, and assuring other resources (water is also becoming very highly constrained in China) for a very large population. One that's much _less_ large than it could have been, but large all the same.
I would love to hear the perspective of a native chinese person here - a little hard to take the New York Times as an unbiased source given the tension there lately.
I have many chinese friends and many of them are pursuing Master's degrees - because a bachelor's degree just isn't enough help towards getting a good job. It seems for many of them to solution of diminishing advantage of education is simply even more education.
Given the poor education that most Chinese graduate school provided, it is really a big waste-of-life for many young guys pursuing it.
The good thing is that it only cost two years to get a master degree now. 10 years ago, I spent 3 years for it. I wish I had the courage to quit it that time.
It is always tough for new graduates to find a good job in recent years. Given the housing cost got really high in big cities like Beijing/Shanghai/Guangzhou, there is a so called "flee-away-from-tier-1-cities-campaign" word made up by new graduates.
When I graduated a decade ago, there are a lot of proud new graduates whom sincerely believed that they have a bright future ahead. But nowadays, most young people seems not thinking so anymore.
It is difficult to change your social status by education and hard-working. That is something really bad and it is more than faltering economy of this year, it is about the meta-rules of how society running. Most of the traditional Chinese dynasties failed because same kind of problems.
Public housing, allow villagers to sell their land to market directly... there is a lot of way to achieve it and many other countries have done it successfully before.
It is a technical issue which can not be solved because of corruption/inequality/unfairness under the current political system.
Political reform is needed, or a revolution may come instead sooner or later.
I'm a little skeptical a "revolution" will ever improve things (in the short term). Revolutions are generally costly in almost every way possible. China's growth and prosperity don't seem to justify one (at this point in time).
How do villagers sell their land now? I thought market sales were already being done?
So is this another issue in china that is a result of the "mid-level" corruption?
>I'm a little skeptical a "revolution" will ever improve things (in the short term). Revolutions are generally costly in almost every way possible.
I am not promoting the idea of revolution. In fact, I think it is bad for almost everyone. My point is that any wise man in the current administration should stop it before too late.
>China's growth and prosperity don't seem to justify one (at this point in time).
Maybe I am too pessimistic. Last year, the riot-control budgets( literally called stability-maintaining in China) is almost the same as the military expenditure.
>How do villagers sell their land now? I thought market sales were already being done?
By constitution law, in China, urban lands belong to government, and rural lands belong to villages, however, it is not allowed(by a policy made by government) for villages to sell their land to real-estate merchants directly, they can only sell lands to the government in a price made by the government. In this way, governments become the only provider of available lands, and they can charge as much as they want.
I was under the impression (I could definitely be wrong) that private sales were still occurring despite the constitution. (Government policy, peoples anti-policy?) ;-)
There are a few people buying those privately-built house(literally it is called small-property-houses in China) because it is much cheaper compared to market price.
However, there are some big flaws of those house:
1, It is not protected by law, the house can't be registered under buyer's name. It has been reported that some people living in those house was driven out by the government or the land owner.
2, As a buyer, you can not bind house-registry(namely hukou) with those house, so, children will not have the right to attend nearby school because those house are not belonging to any school district.
3, Also the land owner will be punished for building those kind of houses.
In all, although there are a few private-built house near to big cities like Beijing, generally it is not an option.
A note for folks who have not been to China before about the sheer scale of the "Tier 1/2/3" cities talked about here. When someone mentions Tier 3 in China, those are cities that are considered big enough to warrant calling a city, but too numerous to know all of them off the top of your head. A Tier 1 city for an American is like NYC, San Francisco, Seattle, etc. For a resident of the UK, Tier 1 = London; France = Paris; you get the idea.
But here is the catch. In America, a Tier 3 city can be in a top-100 list by population, but still be relatively ho-hum and if not unknown, not exactly in the headlines every day. Take the smallest 10 cities in a top-100 list, like Chula Vista, CA, and arbitrarily draw the line for Tier 3 there. These cities barely crack 200,000 in population. In China, I found out Tier 3 "ho-hum" cities (rank 90-100 by population) have no fewer than 600,000 population. That blew my mind when I learned that, and put China's rural-to-city migration into perspective.
Now consider this young work force migrating en masse to Tier 2 and Tier 3 cities due to pricing pressures in Tier 1 cities. If they have a critical mass of the right entrepreneurial factors in place, that's like over 100 Austin, TX (the brightest growth story the US can point to at the moment) popping up nearly simultaneously within the next 5-10 years. Pretty exciting times ahead.
From the article: "One response, endorsed by the State Council, is to urge more graduates to take jobs at small, private companies. But a generation of people who grew up under the government’s 'one child' policy has proved risk-averse and slow to join or set up new companies.
"'I would not work for private companies, that is not secure — only state-owned ones,' Ms. Yan said."
That search for what was called during the 1970s "the iron rice bowl"--a secure job in a state-controlled organization--makes me wonder how much more innovation can be promoted in China's economy. Desiring that kind of security in employment would never make a Silicon Valley happen.
Whenever we see very different behavior in other countries compared to that of our own, we should recognize that those people have most likely made that decision for very rational reasons. The decision may be grounded in reasons ranging from monetary to status-driven reasons, but people perceive their environment accurately and made the best decisions for themselves and their families. People in general are not blindly dumb or obtuse. The vast majority of the time, they are making sound decisions for their current and future prospects.
I used to think that the "US Way" was the best bar none no matter what the local situation or culture. Working in a different country and then observing the social and corporate dynamics from afar has made me realize that I was wrong.
If people in China desire government jobs, it really does mean that that is the best option for them.
No one (at least not in this particular thread) is calling them stupid. The statement was made that when people are risk averse (even if such behaviour is rational), not much innovation (or even a Chinese Silicon Valley) can happen.
this line of reasoning is basically what leads to the tragedy of the commons, or problems such as the paradox of thrift (http://en.wikipedia.org/wiki/Paradox_of_thrift), where everyone does what is best for themselves (which is fine in my books), but then leads to the overall decline of the system. The gov't needs to forcast these sorts of situations, and counter it before it becomes a problem.
I personally agree that it's fine for people to pursue their selfish means. Life is short and they have every right to maximize their ends, even if it means that the whole will come crumbling down in the not so distant future.
Governments often ask their citizens to "chip in" and help them right the ship. IMHO such governments are usually inept and each person is honestly better off pursuing an every man for himself strategy.
People in Greece rationally wanted government jobs. Until the entire economy imploded. People in the US rationally wanted jobs on Wall Street until the entire economic.y imploded. In any country very few people are entrepreneurs so anecdotal evidence about a few graduates is not necessarily evidence of problems. Huge numbers of new businesses have been created in China in recent years. Profit margins are low and it is very competitive. But things are changing fast so there are opportunities.
look at the average salary of worker bee at corporation X in China versus worker bee at government agency X in China. my money is on the government jobs paying better, too.
42 comments
[ 4.1 ms ] story [ 85.6 ms ] threadTough situation...subsidizing an excess middle class can't be great in the long term. But what's the alternative? Order people to go work in the fields?
While the need for physical labor will continue to decrease, many things that require a human mind to do will still be in demand. The real question is, will we vote to allow those that choose to apply their minds the chance to actually try their ideas in reality?
Look at what's happening to Airbnb. What kind of message does that send - "come up with a great new idea, one that provides value to hundreds of thousands, work as hard as you can for years, and watch it get crushed by regulations?" That is the biggest threat to everyone that wants to earn a better life for themselves in the future, not the "rise of the machines," which has only made us more productive, richer.
Regulations are a major reason why everyone seems to focus on doing tech startups that don't get too far outside of computing. It's not just a random trend. When we let the best and brightest do their best, a lot more wealth will be created, and you'll see the standard of living start to increase again.
The reason for why we aren't going outside computing is precisely because we'd have to deal with stupid regulations and barriers that have been placed to not upset the status quo, whereas computing and the Internet is the most unregulated industry by far.
This is why those in power try their best to regulate the Internet and computing and why we get so upset whenever they try.
Starting a basic retail store or a bar or even franchising an existing restaurant requires a lot more money than starting a software startup.
I think the exact opposite of what you posit is closer to the truth of things -- a more carefully planned economy would have resulted in better conditions. If China was straight up laissez faire capitalistic economy it would be a total mess right now.
Read Albert Einstein's take on this, http://monthlyreview.org/2009/05/01/why-socialism for why and how (long read, but I promise it's worth it).
http://en.wikipedia.org/wiki/Great_Leap_Forward
Einstein died before many of these crucial developments either had taken place, or were widely known in the West. Also, he was a physicist, not a philosopher or historian. He had neither the actual knowledge about the world nor a solid grounding in the humanities to guide his thought in that essay you cite.
Before you say that someone has a "naive point of view," you might want to try reading just a little bit of history. And not just from Marxist/socialist authors. There are other perspectives out there, and you might find that they explain the facts of history better than your current view, if you only bother to look.
I abhor the current Chinese state, but I really, really doubt that Western Capitalism would have been half as effective, at the very least not without costing the Chinese a huge relinquishment of capital and corporations in the hands of foreign interests, not a favorable position to be in. You can't implement certain policies without having absolute control of some parameters.
However, making long-term predictions on the evolution of an economic system is impossible, as the number of parameters you have to take into account is huge and the complexity growth is exponential for every new parameter you add to your equation and the variation is theoretically infinite. Mandelbrot's study of price changes in financial markets should shed some light there, if you're interested. Not only that, but those in power even with enough knowledge do not necessarily make the best decisions for their country if it goes against their own selfish objectives and that's just human nature.
This is one of those cases where (uninformed) theory is very different from practice. Yes, on paper communism was perfect and those that still defend it always come up with the excuse that "it wasn't properly implemented".
Also, China is special. China has always been a superpower. They invented paper. They invented gunpowder. They have probably beaten Columbus to discovering America. The area they occupy is bigger than Europe. They've got all the natural resources they need and plenty to spare for export. They have the world's biggest population. Why is it any wonder that China can still grow, in spite of their failures?
On the other hand, the biggest mistake one could make is to assume that what works for China can work for other countries.
If anything, to me it's a wonder how much smaller countries with no natural resources to speak of, like Japan, managed to stay ahead for so long, being a testament to how disastrous and inefficient the Chinese government has been over the course of hundreds of years.
I mentioned this earlier but I'll say it again: It seems the free market is apparently doing a pretty lousy job, if we've come to a reality where two lucky dudes who were well connected could sell their photo-sharing app for a billion all the while a good half of the country risks getting financially decimated come an unforeseen disease or bad accident somewhere. You will agree with me that at least here in the US, the experiment of 'capitalism' is shaping to spell failure, no?
"Financially decimated" is being a little melodramatic. As far as economic depressions go, this is a pretty mild one and also, 2012 has been the year with the least hunger, least poverty and least disease in human history. In terms of warfare, we also live in a time of abnormal peace. All the stats we have show us that it never was a better period to be alive.
When speaking of controlled economies, I think your line of reasoning about China is pretty invalid. In many ways China's economy is more capitalistic than what you find in the U.S. China has cities were the public roads themselves have been paved by businesses that had no other means to get their employees to work. China is one of the few countries that allows the exploitation of children in sweatshops. In my opinion China is not succeeding because of its government's control, but in spite of it.
So I'm curious, besides an opinion by Albert Einstein and China, what else have you got?
P.S. I'm not from the U.S.
With this goal in mind, the education system should be taylored for basic sciences, and not on "practical" skills that could be learnt on the job. This would naturally gravitate the ciruculum towards teaching creativity, problem solving, not knowledge aquisition.
TLDR; i think they've been doing it all wrong, and wasted the time "educating" these now jobless people.
See Joseph Tainter and Nicholas Rescher. http://onlinelibrary.wiley.com/doi/10.1002/sres.1057/abstrac...
For the Chinese: much of what they need has already been invented elsewhere (so IP appropriation _is_ a highly rational activity). They need to be able to apply it.
Their bigger problem is going to be in providing energy, cleaning up pollution, and assuring other resources (water is also becoming very highly constrained in China) for a very large population. One that's much _less_ large than it could have been, but large all the same.
The good thing is that it only cost two years to get a master degree now. 10 years ago, I spent 3 years for it. I wish I had the courage to quit it that time.
It is always tough for new graduates to find a good job in recent years. Given the housing cost got really high in big cities like Beijing/Shanghai/Guangzhou, there is a so called "flee-away-from-tier-1-cities-campaign" word made up by new graduates.
When I graduated a decade ago, there are a lot of proud new graduates whom sincerely believed that they have a bright future ahead. But nowadays, most young people seems not thinking so anymore.
It is difficult to change your social status by education and hard-working. That is something really bad and it is more than faltering economy of this year, it is about the meta-rules of how society running. Most of the traditional Chinese dynasties failed because same kind of problems.
Public housing, allow villagers to sell their land to market directly... there is a lot of way to achieve it and many other countries have done it successfully before.
It is a technical issue which can not be solved because of corruption/inequality/unfairness under the current political system.
Political reform is needed, or a revolution may come instead sooner or later.
How do villagers sell their land now? I thought market sales were already being done?
So is this another issue in china that is a result of the "mid-level" corruption?
I am not promoting the idea of revolution. In fact, I think it is bad for almost everyone. My point is that any wise man in the current administration should stop it before too late.
>China's growth and prosperity don't seem to justify one (at this point in time).
Maybe I am too pessimistic. Last year, the riot-control budgets( literally called stability-maintaining in China) is almost the same as the military expenditure.
>How do villagers sell their land now? I thought market sales were already being done?
By constitution law, in China, urban lands belong to government, and rural lands belong to villages, however, it is not allowed(by a policy made by government) for villages to sell their land to real-estate merchants directly, they can only sell lands to the government in a price made by the government. In this way, governments become the only provider of available lands, and they can charge as much as they want.
There are a few people buying those privately-built house(literally it is called small-property-houses in China) because it is much cheaper compared to market price.
However, there are some big flaws of those house:
1, It is not protected by law, the house can't be registered under buyer's name. It has been reported that some people living in those house was driven out by the government or the land owner.
2, As a buyer, you can not bind house-registry(namely hukou) with those house, so, children will not have the right to attend nearby school because those house are not belonging to any school district.
3, Also the land owner will be punished for building those kind of houses.
In all, although there are a few private-built house near to big cities like Beijing, generally it is not an option.
A note for folks who have not been to China before about the sheer scale of the "Tier 1/2/3" cities talked about here. When someone mentions Tier 3 in China, those are cities that are considered big enough to warrant calling a city, but too numerous to know all of them off the top of your head. A Tier 1 city for an American is like NYC, San Francisco, Seattle, etc. For a resident of the UK, Tier 1 = London; France = Paris; you get the idea.
But here is the catch. In America, a Tier 3 city can be in a top-100 list by population, but still be relatively ho-hum and if not unknown, not exactly in the headlines every day. Take the smallest 10 cities in a top-100 list, like Chula Vista, CA, and arbitrarily draw the line for Tier 3 there. These cities barely crack 200,000 in population. In China, I found out Tier 3 "ho-hum" cities (rank 90-100 by population) have no fewer than 600,000 population. That blew my mind when I learned that, and put China's rural-to-city migration into perspective.
Now consider this young work force migrating en masse to Tier 2 and Tier 3 cities due to pricing pressures in Tier 1 cities. If they have a critical mass of the right entrepreneurial factors in place, that's like over 100 Austin, TX (the brightest growth story the US can point to at the moment) popping up nearly simultaneously within the next 5-10 years. Pretty exciting times ahead.
I must admit that I am a little bit exaggerated in my original reply.
"'I would not work for private companies, that is not secure — only state-owned ones,' Ms. Yan said."
That search for what was called during the 1970s "the iron rice bowl"--a secure job in a state-controlled organization--makes me wonder how much more innovation can be promoted in China's economy. Desiring that kind of security in employment would never make a Silicon Valley happen.
I used to think that the "US Way" was the best bar none no matter what the local situation or culture. Working in a different country and then observing the social and corporate dynamics from afar has made me realize that I was wrong.
If people in China desire government jobs, it really does mean that that is the best option for them.
Governments often ask their citizens to "chip in" and help them right the ship. IMHO such governments are usually inept and each person is honestly better off pursuing an every man for himself strategy.