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September 20, 2018

The Chinese eradication of extreme poverty in one generation

Filed under: China,Economics — Razib Khan @ 4:45 pm

There have been write-ups in the media of the decline of extreme poverty due to a World Bank data release in the past few days. This is kind of a pretty big deal, and one of the reasons that books like Enlightenment Now are still worth writing: much of the American public is unaware of the “good news.”

But as made clear in the graphic in The Wall Street Journal, this is to a great extent a regional story. In particular, it is the story of the near eradication of extreme poverty among the ~20% of the world’s population that is Chinese.

As the chart makes visible, the “Third World” or the “Global South” OR “Developing World”, whatever you call it, is very economically diverse. Was very economically diverse. In 1990 most of the world’s extreme poor lived in East Asia. Overwhelmingly in China. Outside of Sub-Saharan Africa and South & East Asia extreme poverty, using this definition, was actually not that common. Latin America, the Middle East & North Africa, and the post-Soviet world, suffered by comparison to North America and Western Europe.

People who traveled widely across the “Third World” knew this. In the 1980s and 1990s one of my uncles was an engineer, and later officer, for an Iranian oil tanker, and so traveled across the Middle East. He eventually wrote a peculiar book on poverty in Bangladesh after he retired, and in it he recounted how clear and distinct the differences in acute poverty were when he compared Iran with his homeland.

To give you a different general sense, I pulled the World Bank data and focused on a few large nations of diverse profiles. And, rather than looking at just the % below a very low poverty threshold ($1.90 per day), I increased the threshold ($5.50) and focused on the poverty gap. While the poverty headcount just tells you what % of the population falls below the threshold, the poverty gap is measuring the average distance below the threshold. In other words, it is measuring intensity of poverty.

What you can see above is that China went from having the highest poverty gap to the lowest in 25 years. But the story isn’t just about China. Fifteen years ago Vietnam had just as much extreme poverty as Bangladesh, but today it is in the same range as China. In the 1990s we talked a lot about the “Asian Miracle.” But that was minor leagues. The real miracle has occurred in the 21st century.

But it wasn’t really a miracle at all. Nations such as Vietnam and China (and earlier Japan and Korea) had relatively high literacy rates, and a tradition of meritocratic advancement, long before contact with European colonialism. Before Communism. With high native human capital resources to begin with, they were poised for lift-off before they ever made it down the runway.

My wife happens to know a Chinese man who is now a professor of science at an American Research I University. Because this is someone we know, aspects of his life history have slowly emerged. In short, he grew up in a very poor peasant household in rural China. And not one that had just recently fallen down the class ladder from what we can tell.

Today he is a professor doing rigorous science, who has achieved an upper middle class American lifestyle. My horizons may be narrow, but I have never met a South Asian in the United States who has come from an analogous background of such grinding deprivation. I know they exist. But in general South Asian peasants in deep deprivation, the children of landless laborers and the like, do not seem to have the opportunity or expectation that they could become researcher professors in the United States.

Finally, Communism. It is strange today, though perhaps not, that much of the younger populace of developed nations are beginning to look with eagerness toward some sort of inchoate socialism. And yet here you have more than a billion who sloughed off the dead hand of command socialism, and in the process eradicated extreme poverty.

I understand the qualms about Chinese authoritarianism. I’m well aware that some elements of China’s economic growth are unlikely to be sustainable. Perhaps there will be a correction. Almost certainly there has to be one. But we can’t forget what the very recent past was like. We shouldn’t shrug off the miracle of anti-poverty that has occurred in East Asia.

To Americans, and Mexicans as well, 1990 wasn’t a different land. But in the past generation nations like China and Vietnam have transformed themselves in ways that we can’t even imagine.

Upward nobility in India by geography

Filed under: Economics — Razib Khan @ 12:15 am


The above figure is from Intergenerational Mobility in India: Estimates from New Methods and Administrative Data. Since everyone is talking about the caste results, I wanted to highlight geography.

July 25, 2018

East Bengal/Pakistan catches up to West Bengal/Pakistan

Filed under: Economics — Razib Khan @ 9:48 pm


Today I was looking on the internet to get some more information on the Pakistan election. Honestly, I don’t have a strong opinion….

But by chance, I ended up stumbling on articles like this, When East overtakes West:

…a recent article, “East overtakes West,” in The Economist has thrown a spanner in the works. The east is the erstwhile East Pakistan and the west is today’s Pakistan. It shows that the GDP per capita of Bangladesh is $1,538 and that of Pakistan lags behind at $1,470. This is the result of a GDP growth rate of over six per cent per annum in the past 12 years. One-third of the GDP is contributed by industry and the value-added garments exports are larger than India and Pakistan put together.

The truth is that Bangladesh’s better statistics in some measures are due to demographics. Per capita values will change in opposite directions if nation underestimated its population (as Bangladesh did), and another nation overestimated its population (as Pakistan did). Using PPP corrections and such Pakistan is still a more prosperous land per person. But it’s getting close. The trendline is definitely pointing in one direction. A piece at Brookings asks “Why is Bangladesh booming?” The author notes:

Once one of the poorest regions of Pakistan, Bangladesh remained an economic basket case—wracked by poverty and famine—for many years after independence in 1971. In fact, by 2006, conditions seemed so hopeless that when Bangladesh registered faster growth than Pakistan, it was dismissed as a fluke.

But I’ve always thought that the infant mortality and life expectancy statistics in Bangladesh were things that were more important to be proud of (and on this score Bangladesh does indisputably better than Pakistan). And curiously, on this measure, Bangladesh does even better than India! But to a great extent, that’s not a fair comparison, as India is a coalition of regions, while Bangladesh would just be a very populous Indian state.

More comparable is West Bengal. Bangladesh and West Bengal look to be at parity in terms of life expectancy and per capita GDP. And metropolitan Dhaka and Kolkotta now have about the same population, at ~15,000,000.

We live in interesting times.

June 30, 2018

The decline in South Asian poverty

Filed under: Economics — Razib Khan @ 12:47 pm

It has long been asserted that South Asia may make average strides economically, but it is still in absolute terms the locus of most of the world’s grinding poverty. This may not be true much longer. In particular, some estimates now suggest that India is no longer the world’s “leader” in extreme poverty in absolute terms. From Brookings, The start of a new poverty narrative:

According to our projections, Nigeria has already overtaken India as the country with the largest number of extreme poor in early 2018, and the Democratic Republic of the Congo could soon take over the number 2 spot (Figure 1 below). At the end of May 2018, our trajectories suggest that Nigeria had about 87 million people in extreme poverty, compared with India’s 73 million. What is more, extreme poverty in Nigeria is growing by six people every minute, while poverty in India continues to fall. In fact, by the end of 2018 in Africa as a whole, there will probably be about 3.2 million more people living in extreme poverty than there are today.

Bangladesh has been making progress as well, from the World Bank:

Bangladesh has made remarkable progress in reducing poverty, supported by sustained economic growth. Based on the international poverty line of $1.90 per person per day, it reduced poverty from 44.2 percent in 1991 to 13.8 percent in 2016/17. In parallel, life expectancy, literacy rates and per capita food production have increased significantly. Progress was underpinned by 6 percent plus growth over the decade and reaching to 7.3 percent in 2016/2017, according to official estimates. Rapid growth enabled Bangladesh to reach the lower middle-income country status in 2015. In 2018, Bangladesh fulfilled all three eligibility criteria for graduation from the UN’s Least Developed Countries (LDC) list for the first time and is on track for graduation in 2024.

Here’s GDP for South Asian countries in 2005 dollars:

I left Bangladesh in 1980. Not too long after I was born. I went back to visit in 1989 and 2004. In relation to 1980, per capita GDP was 1.15x. in 2004 it was 1.6x. In 2016 it was 2.9x. So over the past 14 years there’s been a 2x increase in GDP per capita in Bangladesh! The equivalent figure in the United States is 1.1x.

The decline in South Asian poverty

Filed under: Economics — Razib Khan @ 12:47 pm

It has long been asserted that South Asia may make average strides economically, but it is still in absolute terms the locus of most of the world’s grinding poverty. This may not be true much longer. In particular, some estimates now suggest that India is no longer the world’s “leader” in extreme poverty in absolute terms. From Brookings, The start of a new poverty narrative:

According to our projections, Nigeria has already overtaken India as the country with the largest number of extreme poor in early 2018, and the Democratic Republic of the Congo could soon take over the number 2 spot (Figure 1 below). At the end of May 2018, our trajectories suggest that Nigeria had about 87 million people in extreme poverty, compared with India’s 73 million. What is more, extreme poverty in Nigeria is growing by six people every minute, while poverty in India continues to fall. In fact, by the end of 2018 in Africa as a whole, there will probably be about 3.2 million more people living in extreme poverty than there are today.

Bangladesh has been making progress as well, from the World Bank:

Bangladesh has made remarkable progress in reducing poverty, supported by sustained economic growth. Based on the international poverty line of $1.90 per person per day, it reduced poverty from 44.2 percent in 1991 to 13.8 percent in 2016/17. In parallel, life expectancy, literacy rates and per capita food production have increased significantly. Progress was underpinned by 6 percent plus growth over the decade and reaching to 7.3 percent in 2016/2017, according to official estimates. Rapid growth enabled Bangladesh to reach the lower middle-income country status in 2015. In 2018, Bangladesh fulfilled all three eligibility criteria for graduation from the UN’s Least Developed Countries (LDC) list for the first time and is on track for graduation in 2024.

Here’s GDP for South Asian countries in 2005 dollars:

I left Bangladesh in 1980. Not too long after I was born. I went back to visit in 1989 and 2004. In relation to 1980, per capita GDP was 1.15x. in 2004 it was 1.6x. In 2016 it was 2.9x. So over the past 14 years there’s been a 2x increase in GDP per capita in Bangladesh! The equivalent figure in the United States is 1.1x.

May 10, 2018

The bourgeoisie baby blues

Filed under: Economics — Razib Khan @ 8:03 pm


There are those instances when you see a plot that resonates with your experience so much that you don’t need to say anything. You just share it. Those who know, know. Those who don’t know, won’t know until they are in a position to know.

Median household income in the United States today is $59,000. “Household” is a broad category. All families are households, but not all households are families. The median family income is $72,000. If the plot above is correct households in the bottom 25% and somewhere in the top 1% are above demographic replacement. The 1% cut-off is $430,000, and from what I can tell poking around the households making $1,000,000 per year are probably the 0.1%. In other words, between the 75th percentile and 0.10% percentile Americans are below replacement in total fertility.

There is a particular trough between $50,000 and $250,000. From the core of the middle class into the heart of the upper middle class.

From $50,000 a year household income of $250,000 a year may look comfortable, but these are the children of Epictetus. The modern world is filled with those who lack freedom but live with some modicum of comfort, as well as avenues for leisure and self-cultivation. But freedom is reserved for capital, in particular, those with a lot of liquid capital.

It is a truth universally acknowledged that a slave with a substantial income remains but a slave at the end of their days. Their comforts persist only at the sufferance at of those who have inherited or grasped their freedom.

 

April 2, 2018

When America is no longer the world

Filed under: Economics — Razib Khan @ 1:38 am

On this week’s Slate Money the author of The Big Picture: The Fight for the Future of Movies, was a guest. I’m not going to be reading this book, but it seemed interesting. Basically, he suggested that the reason franchise movies, and in particular comic book films, were taking over is that television has taken over niches such as period dramas. The comparative advantage of the movie theater is in big-budget action & special effects spectacles, and audiences enjoy revisiting “shared universes” so much that they’re far less risky than singletons.

This shouldn’t be surprising, there’s a reason that standalone fantasy books are not notable.

An issue that is discussed on the podcast is the fact that international blockbusters tend to be American. China tried to produce something that would be exportable to the USA with The Great Wall, but it was a bust.

It strikes me that when American movies no longer dominate internationally, that’ll be a good sign that true dusk is coming to our time as the global hegemon.

December 4, 2017

The supply chain in lieu of the welfare state

Filed under: Economics — Razib Khan @ 8:44 pm

The Wall Street Journal, of all places, has a fascinating human interest piece on Dollar General which is dense with insight, How Dollar General Became Rural America’s Store of Choice:

The local Dollar General store, built on a rural highway and surrounded by farmland, sells no fresh meat, greens or fruit. Yet the 7,400-square-foot steel-sided store has most of what Eddie Watson needs.

Dollar General Corp.’s 14,000 stores yielded more than double the profit of Macy’s Inc. on less revenue during its most recent fiscal year. And its $22 billion market value eclipses the largest U.S. grocery chain, Kroger Co., which has five times the revenue.

The more the rural U.S. struggles, company officials said, the more places Dollar General has found to prosper. “The economy is continuing to create more of our core customer,” Chief Executive Todd Vasos said in an interview at the company’s Goodlettsville, Tenn., headquarters.

Dollar General’s typical shopper “doesn’t look at her pantry or her refrigerator and say, ‘You know, I’m going to be out of ketchup in the next few days. I’m going to order a few bottles,’” said Mr. Vasos, the company’s chief executive. “The core customer uses the last bit of ketchup at the table the night prior, and either on her way to work or on her way home picks up one bottle.”

Camouflage is a proven winner. This year, Dollar General became the exclusive seller of dog food from the camouflage-gear brand Mossy Oak. “Even off-brand camo does well here,” said the Evensville store manager Justin Ray, who has a display of camouflage merchandise, including pacifiers and pet toys.

The supply chain in lieu of the welfare state

Filed under: Economics — Razib Khan @ 8:44 pm

The Wall Street Journal, of all places, has a fascinating human interest piece on Dollar General which is dense with insight, How Dollar General Became Rural America’s Store of Choice:

The local Dollar General store, built on a rural highway and surrounded by farmland, sells no fresh meat, greens or fruit. Yet the 7,400-square-foot steel-sided store has most of what Eddie Watson needs.

Dollar General Corp.’s 14,000 stores yielded more than double the profit of Macy’s Inc. on less revenue during its most recent fiscal year. And its $22 billion market value eclipses the largest U.S. grocery chain, Kroger Co., which has five times the revenue.

The more the rural U.S. struggles, company officials said, the more places Dollar General has found to prosper. “The economy is continuing to create more of our core customer,” Chief Executive Todd Vasos said in an interview at the company’s Goodlettsville, Tenn., headquarters.

Dollar General’s typical shopper “doesn’t look at her pantry or her refrigerator and say, ‘You know, I’m going to be out of ketchup in the next few days. I’m going to order a few bottles,’” said Mr. Vasos, the company’s chief executive. “The core customer uses the last bit of ketchup at the table the night prior, and either on her way to work or on her way home picks up one bottle.”

Camouflage is a proven winner. This year, Dollar General became the exclusive seller of dog food from the camouflage-gear brand Mossy Oak. “Even off-brand camo does well here,” said the Evensville store manager Justin Ray, who has a display of camouflage merchandise, including pacifiers and pet toys.

November 28, 2017

The Elephant, dragon and eagle

Filed under: Asia,China,Economics,India — Razib Khan @ 12:24 am


The relationship between China and India is clearly one-sided: India is obsessed with a China which is approaching lift-off toward becoming on the verge of a developed nation within a generation (certain urban areas are already basically developed, albeit not particularly wealthy in comparison to Hong Kong or Singapore).

Often when I see interviews with regular Chinese about their opinions of the other country the fixation is upon the manifest Third World nature of India, which seems to be changing much more slowly than their own nation. For me GDP is less important that vital statistics like child mortality or life expectancy. And it is in these sorts of statistics where you see the gap opening up between the two nations. India is developing…. but China is leading, and converging faster with developed nations.

It is in this context that this piece in The New York Times jumped out at me, Amazon, in Hunt for Lower Prices, Recruits Indian Merchants:

While Amazon.com has sellers hailing from many countries, Mr. Cheris said that India and China are the two most important places for Amazon to recruit new merchants since both nations are sources of cheap manufactured goods.

Unlike China, where local companies dominate e-commerce, India is also a huge domestic market for Amazon. Although most of India’s commerce is conducted offline, Indians are coming onto the internet at a rapid clip through their smartphones. Amazon’s chief executive, Jeff Bezos, views India and its 1.3 billion residents as vital to his company’s future, and he has vowed to spend at least $5 billion building up his India operations.

a, I was aware that Amazon really hadn’t gotten any traction in the Chinese market. I did not know that Amazon was so competitive in India, though Flipkart is still dominant there.

The story outlined seems to be part of a bigger trend whereby India is on a very different path from China in its relationship to the rest of the world. China’s economy is big enough and insular enough that it sees the world as either an export market or a source of commodities. It is quickly taking back its place of old as a lumbering hegemon. India, in contrast, seems to be developing a more integrative relationship with large economies such as the United States, despite its command and regulatory economy legacy.

Of course, the India-USA relationship is nothing like “Chimerica” in terms of magnitude, but the Sino-American relationship strikes me as very transactional. Despite the recent tendency of Indian society to espouse a stronger Hindu nationalist line, which is at odds with the West, it seems that there is more cultural exchange between elite Indians and Western societies in the deep sense of values, than has occurred with the Chinese and the West. And, yoga and aspects of spirituality notwithstanding, most of the cultural exchange seems to be toward cosmopolitan elites Indians assimilating to global values which draw from the mode of the West.

Ultimately all of this seems to have geopolitical implications. I’m assuming smarter people than me are keeping track of these trends….

September 27, 2017

The Asian world

Filed under: Asia,Economics — Razib Khan @ 10:52 pm


We live in interesting times. The world system is slowly shifting back to the historical norm. That norm being that most people and economic production would occur in Asia.

The book When Asia Was the World chronicles period the between after the fall of the Roman Empirea and on the cusp of the European Age of Discovery. It prefigures a world of interconnections which don’t necessarily loop back to the West. It is strange on Facebook seeing my cousins on Bangladesh joining the international economy, but that economy not necessarily having the United States at its center and fulcrum. We are still the biggest player…but we are not necessarily an indispensable player.

A story in The New York Times brings this to mind, IBM Now Has More Employees in India Than in the U.S.:

Today, the company employs 130,000 people in India — about one-third of its total work force, and more than in any other country. Their work spans the entire gamut of IBM’s businesses, from managing the computing needs of global giants like AT&T and Shell to performing cutting-edge research in fields like visual search, artificial intelligence and computer vision for self-driving cars. One team is even working with the producers of Sesame Street to teach vocabulary to kindergartners in Atlanta.

This is as much a social story as it is a matter of economics. A new global class is organically developing along the scaffolds provided by international corporations. This class, dare I say caste, is beginning to supersede the importance of the Tribes which Joel Kotkin wrote about in the early 1990s.

And no matter what Thomas Friedman and Francis Fukuyama tried to tell us, I’m not quite sure that the global cosmopolitan culture will reflect the mores and preoccupations of the Western post-materialist elite. To be entirely frank I’m not totally sure that this is a bad thing, either.

We can look at economic projections all we want. But the protean and unpredictable nature of cultural changes is really where the action is going to happen in the next few decades, as Islamic revivalism begins to fade and burn itself out.

September 18, 2017

Childhood goes into bankruptcy

Filed under: Economics — Razib Khan @ 11:05 pm


Toys ‘R’ Us, Crippled by Competition and Debt, Files for Bankruptcy. This is supposedly restructuring. But do classic toy stores have a future? I know FAO Schwarz closed a few years ago.

Remember video stores? Probably not.

September 10, 2017

Amazon will go to Denver

Filed under: Amazon,Economics — Razib Khan @ 9:11 pm

Lots of discussions last week in the office about where Amazon will locate its second headquarters. After looking at the criteria the consensus converged on Denver. The Upshot did a similar analysis…and settled on Denver as well.

The huge downside of Austin is its deficits in transportation. Its airport is relatively modest. The mass transit is minimal. And traffic congestion is horrible.

June 22, 2017

Nearly 20% of McDonald’s will have electronic kiosks by the end of 2017

Filed under: Economics — Razib Khan @ 9:56 pm


McDonald’s hits all-time high as Wall Street cheers replacement of cashiers with kiosks:

Andrew Charles from Cowen cited plans for the restaurant chain to roll out mobile ordering across 14,000 U.S. locations by the end of 2017. The technology upgrades, part of what McDonald’s calls “Experience of the Future,” includes digital ordering kiosks that will be offered in 2,500 restaurants by the end of the year and table delivery.

There are 14,500 locations. Right now 500 stores have kiosks.

June 17, 2017

Amazon purchases whole foods and the distribution channel comes to you

Filed under: Amazon,Economics,Whole Foods — Razib Khan @ 8:07 am

The purchase of Whole Foods by Amazon has sent grocery store stocks into tailspin. Could Amazon do to Safeway and Korger what it did to Borders and Barnes & Noble?

Some people have observed that the purchase impacts the nascent grocery delivery sector more than the established supermarkets. That was my first thought. For me Saturday used to involve a trip to Whole Foods. But not anymore. Basically I use Instacart. (I can’t use Amazon Fresh because it doesn’t delivery to where I live. For now….)

Because Amazon is such a monster of a company people are talking about grocery stores as the underdog in this new war. But the reality is that what we think of “grocery store” is something far different from what someone in 1900 would have imagined. Americans today assume that the supermarket is synonymous with groceries. But supermarkets as institutions are economic innovations which date to the 20th century. The rise of the sector by showcasing its pioneering firm is detailed in The Great A&P and the Struggle for Small Business in America. As the title makes clear the rise of supermarkets resulted in a massive creative destruction in the American economy and culture.

Before A&P reimagined the profession being a grocer was a way for working class men to have a job that could support a family and give them some independence. But as the supermarkets cannibalized small grocers, men who had run their own businesses became employees in large corporations. Entrepreneurs became clerks. Creative destruction also worked so that eventually A&P was marginalized by new-model supermarkets that catered to suburban families. Today Walmart and Whole Foods have been attacking the low and top ends of the market and squeezing out smaller players.

Walmart’s battle from the bottom-up seems to have beaten Whole Foods’ premium strategy. Amazon’s purchase makes sense since Whole Foods has some assets major it can bring to the battle, but Walmart scale just too much for them to tackle.

As we all know the retail sector is changing. Half of millennials now buy groceries online at least some of the time. Malls are closing as their anchor department stores struggle. Where would a modern day Tiffany do her tour? Obviously it’s YouTube.

But that doesn’t mean that people won’t venture out. Upscale retail plazas are replacing the role of malls. Independent bookstores are still around, while Borders is gone and Barnes & Noble is a shadow of what it was. The positive aspect of the death of bricks and mortar retail is that we spend less time out and about on errands. Rather, we go out to eat at a restaurant, or meet friends in the park or at a bar. The downside is a smaller and smaller set of firms are dominating the supply chains between producers and consumers. I think Amazon will be targeted by antitrust considerations in the 2020s.

May 30, 2017

The material over the ideological

Filed under: Economic History,Economics,History,Max Weber — Razib Khan @ 11:42 pm

I come not to praise or bury Max Weber. Rather, I come to commend where warranted, and dismiss where necessary.

The problem as I see it is that though a meticulous scholar, Max Weber is the father of erudite sophistry which passes as punditry. Though he was arguably a fox, his genealogy has given rise to many hedgehogs.

Weber is famous for his work on relating the Protestant ethic and capitalism (more precisely, Calvinism). In general I think Weber is less right than he is wrong on this issue. But the bigger problem is that Weber’s style of interpretative historical analysis also has spawned many inferior and positively muddled imitators, whether consciously or not.

To my mind the problems with Weber’s sweeping generalizations, interpretations, and inferences, are clearest on the topic of China. His assertions on the nature of the Chinese mind informed by Confucianism, and how it would relate to (and hinder) modern economic development are very hit or miss.

By the end of the 20th century things had changed in terms of the perception of how Confucianism might relate to capitalism. In the 1990s Paul Krugman famously argued that the East Asian economic miracle did not have to do with a particular model or cultural genius, but simply increases in capital investment and labor force participation (factor inputs). This was too stylized a fact. Though growth has slowed, I think it is undeniable that East Asian economic modernity is here to stay.

And some of that may be attributable to Confucianism in a distant causal sense, because the cultural sensibility does encourage the development of broad-based literacy through self-cultivation. In Strange Parallels Victor Lieberman notes the contrast between Vietnam, with its more Sinic cultural orientation, and the rest of Southeast Asia, with their Indic Theravada Buddhist cultures.

The Vietnamese elites’ orientation toward Confucianism meant that there was stratification in society, as there were constant upward and downward movements across class. The chasm between the Confucian literati and the peasantry was large. In contrast in Cambodia popular religion was relatively unifying due to its accessibility. But it is notable to me that Vietnam in particular is often perceived by those who travel in Southeast Asia to be an industrious and striving nation.

So yes, culture may matter. But simple economic forces, and material conditions, are incredibly important, and our understanding of their origins are more mysterious than we’d like to think.

This is on my mind because of the recent evidence of the power of the slave trade in the Islamic world. Islam gets a bad rap in relation to slavery. This is justified, as Muslim nations have been, and are, the most prominent perpetuators of institutional chattel slavery* in the modern and near-modern world. But it is also correct that in many ways de jure Islamic law gave slaves a degree of dignity and human rights which would not have been called for in Classical antiquity. Though the reality is slaves were often part of the Roman familia in many cases, ultimately they were still human tools, to be abused and disposed as one would domestic animals.

But the genetic data seem clear that African slavery increased greatly during the Islamic period, resulting in a much more human agony, as so many of the slaves died en route (males who were to be eunuchs had a high mortality rate as they had to be castrated before entering Muslim lands). This had nothing to do with the cruelty of Islam per se, but the overall development and advancement of the Eurasian oikoumene, and the role of African slave labor in its post 1000 A.D. economy.

In fact one might argue that the unity of the Islamic world, and its relatively uniform legal and cultural superstructure after the collapse of its political unity, was a factor in fostering the rise of the global slave trade. That is, Islam generated asabiya, social solidarity, within the group, but this ultimately was to the detriment of those who were outside of the group.

A similar story can be told about the New World slave trade. It flourished in the wake of the Reformation and the Renaissance, and just as European society was undergoing a cultural revolution which would usher in modernity. If one looked at the nature of European society in the 17th century, and its increasing moralism, and focus on personal piety, probity, and humanity, would we predict the expansion and scaling up of the European slave trade? No.

That dynamic was driven by economics (in the American case, the triangle trade).

Similarly, the mortality rates of slaves varied greatly by locale and the what they cultivated. The sugar islands were death traps. The rice farmers of coastal South Carolina lived relatively stable lives, even comparable to serfs. Those who grew tobacco were somewhere in the middle. All were under English jurisdiction. The mortality of Brazilian slaves was high, but nominally Roman Catholic jurisdictions were subject to more humanitarian codes. But the primary determinants of mortality, of humanity, were economic. Material, even if ideological variables had an impact on the margin (Rodney Stark has argued that the French legal system was more humanitarian in Louisiana, and one can see this in various vital statistics).

Obviously ideological and material forces interact and influence each other. My point here is to observe that too often public commentary gets caught up on the idea of the great idea driving history. But once we have some distance it is often obvious that on the proximate scale many of the patterns we see are constrained, driven, and conditioned, on material forces and parameters.

And yet ultimately those material forces through gains in productivity relax tight the pressures which constrain ideologically driven change and revolution. Slavery for example was long considered an institution that would always be with us in some form, but over the past few thousand years most societies have frowned upon it. Slave societies, whether ancient Roman or in the antebellum South, develop an unhealthy paranoia. With modern technologically driven economic growth the possibility of a post-slave economy seemed plausible, and opened the window for a practical abolition.

And here we are!

* I said “institutional chattel slavery” specifically to head off annoying nit-picking comments. Please don’t.

May 6, 2017

Economic downturn in 2018?

Filed under: Economics,Recession — Razib Khan @ 12:49 am


We’re Getting Awfully Close to Full Employment:

The headline numbers for April are terrific. The economy added 211,000 jobs in April, and the unemployment rate fell to 4.4 percent. That is not just the lowest jobless rate in a decade; it also matches the lowest level reached during the mid-2000s expansion. The last time it was lower was May 2001, 16 full years ago.

A caveat is warranted, as labor force participation of prime age works (25-54) is still a few percentage down from its 2001 peak. This is not surprising, as I take the end of work seriously as a thesis. But, I have to admit that in 2008 we’d probably be surprised that nearly a decade of very modest economic growth on a yearly basis has led us here.

I remember listening to commentators in the dark years right after the financial downtown explaining how many quarters of job growth would be needed for us to reach ~4 percent employment. It just seemed implausible to them at that time, and I have to say that I probably agreed with them on some level. But here we are.

But whenever there is exuberance about full employment and trillion dollar companies I start to wonder if perhaps we’re living before the fall. Are we going to go into a recession soon? I suspected something was off in the spring of 2007…though my pessimism in 2012 didn’t seem to pan out.

April 16, 2017

In a hopeless world hope is better than resignation

Filed under: Economics,Economy — Razib Khan @ 11:59 pm

There’s really nothing one can say anymore about what Hugo Chavez did to his country, No Food, No Medicine, No Respite: A Starving Boy’s Death in Venezuela. But now in France a left-wing politician is on the rise who praises Chavez, Left-Wing Politician Shakes Up France’s Presidential Race:

That man is Jean-Luc Mélenchon, admirer of Fidel Castro and Hugo Chávez, sworn enemy of NATO and high finance, and candidate of his own “France Unsubjugated” movement, who has been drawing tens of thousands to his rallies, especially the young, as he did here Sunday at Toulouse on the banks of the Garonne River. They came to hear a veteran French politician give them a dousing of old-fashioned Robin Hood-revolutionary rhetoric, with promises to tax the rich hard, give to the poor and start a “citizen revolution.”

There is a serious chance that this will be the next president of the French republic. This man, who has no problems being called a Communist. If there is one political system where the experiment has been done, it is command economy socialism. There may be cases of market failure where the state needs to intervene, but by and large an economy dominated by the state has not done good for the common man.

And yet the reality is what alternatives are the people being given? They are looking Left and looking Right, because they want hope that the future will have some of the promise that the past had. Sober realistic centrists with broadly liberal views only offer them only hard truths.

Truths such as this: Evidence That Robots Are Winning the Race for American Jobs. The far Left anti-capitalist program in economics really doesn’t offer a long run path to prosperity. But capitalism itself only leads to individual and broad-based prosperity as a side effect of market logic. If returns to capital could accrue without labor inputs, then that would be even “better.”

September 8, 2012

The Europes

Filed under: Culture,Economics,Europe,geography — Razib Khan @ 9:48 pm

Planet Money recently did a report on the difficulty of maintaining high economic productivity in southern Italy. I won’t rehash the specifics of the story, but, I think it is important to get a visual sense of just how large the contrast between the south and north of Italy is. Too often we speak of nation-states. Nation-states are real, and they are important, but they are often not comparable. Just like comparing the USA to Sweden is only marginally informative, so comparing a small nation like Ireland to a more substantial one like Italy is deceptive. Here is a 2008 regional GDP map with sub-national breakdowns. Though some of the values are certainly lower now (basically, everything outside of Germany and Sweden), the relationships still hold.

There has been a gap between the north and south of Spain and England, as well as the west and east of Germany, but none of these are of the same magnitude of what you see in Italy (for one, southern Italy is much more populous than eastern Germany).  Sicily and the southern provinces are the poorest regions of western Europe. In contrast, the area ...

August 18, 2012

The economic correction

Filed under: Economics — Razib Khan @ 9:50 pm

Finally the social bubble seems to be bursting. Do remember that in 2000 there was backlash against Amazon as well, and it’s still around. Still, global oil demand level is low. Most people seem to agree that some of the “fixes” to the 2008 financial crisis were only band-aids, and the fundamental structural problems were put off for another day. Is that day now? Pessimism is cheap, but if you feel it, why not share it? I mused about a possible recession in May of 2007, and some of the comments were kind of funny and tragic. I’ll quote, with names removed to protect the guilty:

They’re practically glorified hiccups nowadays. I don’t get what the big deal is.

In a word, no. Unless you’re talking houses here in the Bay Area, but the “recession” is more like a return to a normal, vanilla market. All the economic signs I see look good. Krugman’s cat must be hurting.

The economy has been generally good, unemployment has been relatively low throughout. And so no, I don’t see the looming failure ecomomically.

I doubt it. People often react to one aspect of the economy without looking at the larger picture. Yes, there was an overextension ...

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