The China Fall?

The past few years have been a fascinating time to watch China’s mighty rise. However, the notion that they’re going to become the most powerful nation in the world over the next few years has always seemed ridiculous to me.

Recently I’ve noticed quite a few signs that suggest I’m not alone.

A few weeks back I had lunch with an alum of my grad school whose moved to Vancouver because it offers such a better life than China. He spoke of the boom there as being over and that everyone wants to get out in the next two years before a crash occurs.

But the malaise may be deeper that just an economic crash. Today’s NY Times includes this fatalistic gem (from What Keeps The Chinese Up At Night)

Their [locals in Chongquin] wishes and worries were candid, heartfelt and startling: people had lost their optimism and were yearning for security and freedom from anxiety. Income is a primary worry for those who have lost their jobs or land. Pensions and social welfare payments are almost nonexistent. People struggle to pay for education. They can’t afford medical treatment; clinics and hospitals require patients to pay cash in advance. A serious illness can spell financial ruin for an entire family.

China’s one-child policy has turned family life from a source of solace to a font of anxiety. Parents now get just one chance for a child to succeed and to support them in their old age. Single children carry an unbearable burden of parental and grandparental expectations.

In sum, a spiritual hunger has taken hold even as physical hunger has receded. Anxiety and resentment are turning people inward; the Chinese are being consumed by anomie, a listless sense that life has little meaning.

And following along with From Peter Thiel’s CS183 – nominally about startups but really about so much more – includes this even more fatalistic passage:

In a strange way, China falls squarely in the determinate pessimistic quadrant. It is the opposite of the U.S.’s optimistic indeterminacy. The China view is that there is indeed a calculus as to what to do to improve things for society. Things are determinate. But when you go through that calculus, there’s no cause for celebration. China will get old before it gets rich. It is forever destined to be a poor version of the U.S. It can and will copy things. But there’s not enough time to catch up, even if it executes perfectly. This explains why you end up with all these things that seem draconian from a more optimistic perspective; e.g. the one child policy, massive environmental pollution, and thousands of people dying in coal mines each year. The fundamental view is pessimistic, but in a very determinate, calculated way.

Another clue is found in a recent blog post by David Eaves:

 He contrasts that with the “Generation 90,” those now in mid teens to mid twenties and he sees a generation with small dreams and growing frustration. Forget about access to the top international universities in the world. Indeed, forget about access to top Chinese universities. Such opportunities are now reserved for the super rich and the super connected. What many have felt was a system that was relatively meritocratic is now flagrantly not. According to Anti, the result is that Generation 90 does not have big dreams. Forget about become a world class scientist, founding a leading company, leading an interesting organization. Many do not even dream of owning an apartment. This evolution (devolution?) in moods was summed up succinctly in a poster Anti saw at a demonstration a few months earlier which nihilistic read “We are Generation 90: Sacrifice Us.”

They agreed with Anti. Here I was, in the nation’s capital, sitting in an upper middle class restaurant, with a vibrant, intelligent, bilingual group of young Chinese. This is a group that would easily fit in the top 5% in terms of education, opportunity and income, and most probably in the 1%. And they felt that opportunity for their generation were limited. Their dreams, were more limited than the generation before them.

I’ve been telling anyone who’ll listen that China’s on an inexorable rise – but it doesn’t necessarily end at number one. It’s going to be interesting to see how this movie ends.

Update: a buddy of mine sent me another great article similar to the above, this time from The Prospect:

The domestic Chinese lower education system does not educate. It is a test centre. The curriculum is designed to teach children how to pass them. In rural China, where we have lived for seven years, it is also an elevation system. Success in exams offers a passport to a better life in the big city. Schools do not produce well-rounded, sociable, self-reliant young people with inquiring minds. They produce winners and losers. Winners go on to college or university to take “business studies.” Losers go back to the farm or the local factory their parents were hoping they could escape.

I pity the youth of China that cannot attend the international schools in the cities (which have to set limits on how many Chinese children they accept) and whose parents cannot afford to send them to school overseas, or do not have access to the special schools for the Party privileged. China does not nurture and educate its youth in a way that will allow them to become the leaders, inventors and innovators of tomorrow, but that is the intention. The Party does not want free thinkers who can solve its problems. It still believes it can solve them itself, if it ever admits it has a problem in the first place. The only one it openly acknowledges, ironically, is its corruption. To deny that would be impossible.


I recently finished reading Bill Bishop’s The Big Sort. It’s a “big ideas” book and something of a road map to help you understand why the world (or at least America) is what it is today. The book begins with an insight: the 1976 Presidential election was highly competitive and only 26.8% of Americans lived in a ‘landslide county’ – where the margin of victory was at least 20%. However, in 2004, that number had reached 48.3% (and steadily increased each election from ’92-’04, despite all of them being competitive).

So why did this happen?  Well, a big part is geography.  Economic specialization has led geographic segregation.  This should scare you as there is substantial evidence that people who are in groups will polarize (see Stanley Schacter, Muzafer Sherif, James Stoner, etc.).  There are two reasons why this happens: first, when people spend all their time with a group, they only hear the same ideas and it becomes self-reinforcing.  The other is that when you’re in a group, adopting a position a little to the extreme of the group can be a way to ingratiate yourself.  A similar slippery slope; this is okay for your Little League, but it’s the stuff wars are fought over when it’s politicians doing so.

In politics, this lack of dialogue is reinforced by how politicians live in Washington.  In 1990, Rick Santorum made an issue of the incumbent Congressman’s house – he’d bought a house in DC to keep his family together – and promised that, if elected, he would spend less time in Washington.  Now Senators and Congressmen frequently live with other party members and spend so little time in Washington that they don’t socialize (and thereby talk) with their peers in opposite parties.

However, it’s not as simple as that. As the same time as this economic specialization has occurred, there has been a corresponding decrease in the role of traditional American institutions: Elks, marriage, the Presbyterian Church, the daily newspaper, arguably the federal government and the Democratic party (think the New Deal).

In fact, 1965 turns out to be the Annus Horribilus for trust in America.  The year started with the creation of Medicare and Medicaid plus many of Johnson’s Great Society programs (the War on Poverty) and the Justice Department ordering desegregation.  It saw Bloody Sunday in Selma.  The year ended with the escalation of the Vietnam War, the first stirrings of anti-war protests and then the Watts riots.  One hell of a year and a massive shock to the system resulting in a massive drop in people’s faith in old institutions.

This shock in 1965 is partially explained by Inglehart’s theory of social change.  In the early 1970’s, he proposed that when people grow up in abundance, their social values changed.  The 1950’s and ’60’s represented the first time that the mass of Americans grew up middle class-and it had a profound effect on their values.  Inglehart predicted that society would transition from being “elite-directed” to being “elite-challenging” and that we would live in a “post-materialist” society where people would lose interesting in traditional religion, become more interested in personal spirituality and people would be more interested in personal freedom, abortion rights, gay right and the environment.  He also predicted that folks would vote less but sign more petitions.  It’s largely played out that way.

And this is where my beef with The Big Sort begins.  After this aggressive hypothesis, the rest of the book falls into a set of stylized facts explaining how we got to today and how it’s represented in society, rather than a discussion of how to live in today’s reality.  We learn that geography, more than class or gender, is a better indicator of how you will vote.  Labour leaders were pro-Iraq was in Republican counties but against it in Democratic counties.  Same for women.  We hear that in 2004, 73% of Americans lived in counties where the same political party had been elected since 1992 (not much dialogue there).  And there’s a long description of the rise of the Evangelical Right (the origin of Public vs. Private Protestantism, the preacher McGavan [Bridges of God] recognizing that Christianity spreads as a mass movement and this leads to the Saddleback Churches of the world) plus a quaint description of how Applebee’s uses community to fill tables (each Applebee’s has a ‘community wall’ celebrating the history and people of the area; they then eat in groups).

There’s a lot of commentary on how dangerous a situation this is and a thorough description of how it’s emerged, but there’s no guide to the future.  There’s not even a whiff of how we might manage our way out of this.  A great book, but I’m hoping there’ll be a sequel about what we might do next.

And now for some interesting factoids:

  • Democrats may be a little more flexible than Republicans.  Between 1995 and 2000, 79% of people who left Republican counties moved to counties that would vote Republican in 2004.  However, people who left Democratic counties moved to both Republican and Democratic-voting counties (but not to Republican landslide counties).
  • In Ohio in the 1960’s, Michigan’s working class voted solidly Democrat. However, in Ohio they voted Republican (which was arguably against their interests). The explanation is that in Michigan all the workers lived near one another and acted as a block whereas in Ohio they were interspersed with the middle class, who frequently voted Republican. There was no cohesive Ohio working class and no cohesive Democrat machine to get out the vote. This is a prelude to today, where Bishop would argue that economic specialization has led to geographic segregation, which is reflected by more similar people living together (hence the landslide votes).
  • The Founding Fathers envisioned the House and Senate as a place for a constant clashing of opinions.  In the early years of the Republic, there was talk about whether legislators should be “instructed” by their constituents or if they should represent the local opinions of their constituency but be focused more on what was best for the nation.  The national perspective was the winner, but Bishop would argue that the “instructors” are taking back the legislative branch.
  • Contact hypothesis: when groups have contact with others, they can learn how to integrate and find middle ground.  However, in order to work, the groups must see themselves as equals, the meetings must take place as a pursuit of a shared goal and the meetings must not be artificial.

Couldn’t Happen Here

If you know me, you might know that I spent my last year of college in Germany.  I’ve always had a curious fascination with the place: it’s a nation that didn’t exist until the late 19th century and then spent the first half of the 20th century trying to take over the world-and committing moral suicide along the way.  It was then torn in two and rebounded to become (at least the Western part) one of the most successful countries in the world.

I’ve always wondered how the nation spun into the moral decay that led to World War II and the Holocaust.  The world was in a bad time in the 1930s (sound familiar?) but the Germans responded in their own uniquely offensive (both militarily and morally) way.  Recently I’ve been reading Christopher Isherwood‘s The Berlin Stories, which gives a sense of what the atmosphere was like in the early 1930s before the Nazis came to power.  He chronicles the time and it offers a bit of insight into what life was like in a  nation humbled and bankrupted by the Versailles Treaty, wracked by hyperinflation and desperately searching for strong leadership – be it from the Right or the Left.

Here’s a striking passage:

Berlin was in a state of civil war [Isherwood is returning to it in late 1932].  Hate exploded suddenly, without warning, out of nowhere; at street corners, in restaurants, cinemas, dance halls, swimming-baths; at midnight, after breakfast, in the middle of the afternoon.  Knives were whipped out, blows were dealt with spiked rings, beer-mugs, chair-legs or leaded clubs; bullets slashed the advertisements on the poster-columns, rebounded from the iron roofs of latrines.  In the middle of a crowded street a young man would be attacked, stripped, thrashed and left bleeding on the pavement; in fifteen seconds it was all over and the assilants had disappeared.  Otto got a gash over the eye with a razor in a battle on a fair-ground near the Copernickerstrasse.  The doctor put in three stitches and he was in hospital for a week.  The newspapers were full of death-bed photographs of rival martyrs, Nazi, Reichsbanner and Communist.  My pupils [he was a teacher] looked at them and shook their heads, apologizing for the state of Germany. “Dear, dear!” they said, “it’s terrible.  It can’t go on.”

The murder reporters and the jazz-writers had inflated the German language beyond recall.  The vocabulary of newspaper invective (traitor, Versailles-lackey, murder-swine, Marx-crook, Hitler-swamp, Red-pest) had come to resemble, through excessive use, the formal phraseology of politeness employed by the Chinese.  The word Liebe, soaring from the Goethe standard, was no longer worth a whore’s kiss.  Spring, moonlight, youth, rose, girl, darling, heart, May: such was the miserably devaluated currency dealt in by authors of all those tangoes, waltzes and fox-trots which advocated the private escape.  Find a dear little sweetheart, they advised, and forget the slump, ignore the unemployed.  Fly, they urged us, to Hawaii, to Naples, to the Never-Never-Vienna.  Hugenberg, behind the Ufa [a film production company], was serving up nationalism to suit all tastes.  He produced battlefield epics, farces of barrack-room life, operattas in whch the jinks of a pre-war military aristocracy were reclothed in the fashions of 1932.  his brilliant directors and camera-men had to concentrate their talents on cyncially beautiful shots of the bubbles in champagne and the sheen of lamplight on silk.

And morning after morning, all over the immense, damp, dreary town and the packing-case colonies of huts in the suburb allotments, young men were waking up to another workless empty day to be spent as they could best contrive; selling bootlaces, begging, playing draughts in the hall of the Labour Exchange, hanging about urinals, opening the doors of cars, helping with crates in the marekts, gossiping, lounging, stealing, overhearing racing tips, sharing stumps of cigarette-ends picked up in the gutter, singing folk-songs for groschen in courtyards and between stations in the carriages of the Undergorund Railway.  After the New Year, the snow fell, but did not lie; there was no money to be earned by sweeping it away.  The shopkeepers rang all coins on the counter for fear of the counterfeiters.  Frl. Schroeder’s astrologer foretold the end of the world.  “Listen,” said Fritz Wendel, between sips of a cocktail in the bar of the Eden Hotel, “I give a damn if this country goes communist.  What I mean, we’d have to alter our ideas a bit.  Hell, who cares?”

As an aside, this is almost certainly what life was like in Sarajevo in 1992.  When I was in Germany I knew a girl who had been to Croatia for a holiday in 1990.  She remembered that every night there were fistfights between men in the street; the next year, the war began.

It was a similar situation in Rwanda in the years leading up to the genocide in 1994.  The UN was reporting that there was violence in the streets attributable to many parties – the military, politicized youth mobs and various ethnic groups.

Someone is going to write a fascinating paper one day talking about how nations respond to crises: the U.S. in the 1930’s peacefully overcame the displacement brought on by economic disaster and became strong; the Germans projected their issues outward onto the rest of the world whereas Yugoslavia/Rwanda collapsed into horrific civil wars.  I’d love to know why each responded in its own way.

21st Century Moment

Today I had a truly 21st century moment.

I was in a meeting that was not going in the greatest direction and I updated my Facebook status to read:

Lindsay is not getting that warm and fuzzy feeling

Debate what you will the merits of using Facebook at work, but you weren’t in this meeting (iPhone + Facebook = no more boring meetings).  Anyways, this was around 2:30 or so, not too long after Obama’s inauguration.  This led to the following comment:

listen here you canadian cynic!  let the amerikanis have their moment.  they’ve put up with bush for the last eight years, you too would be warm and fuzzy.

My workers were definitely feeling warm and fuzzy today – I was genuinely impressed when they clapped for their President after his swearing in.  (I couldn’t feel that warm and fuzzy as his first sentence was “my fellow citizens…” and I am, alas, not a citizen – but I still liked the speech and wish the new Pres nothing but success).

Episode 44: A New Hope

I couldn’t help but notice all the chatter on Facebook today about Barack Obama’s election as the 44th President of the United States.  Here are a couple of status updates by my friends (who, it should be mentioned are overwhelmingly in the Obama demographic: highly educated, urban 25-35 year olds-but mostly not American):

ABC is raising a glass to the US voters with relief and a heartfelt thank-you

DEF can’t wait to see the White House occupied by an African-American family, as it should have been since 143 years ago

GHI (American) has renewed optimism with our new charismatic, unifying leader…

JKL (American) is glad he won’t have to listen to people in the middle east complain to him about US polotics [sic] for the next 4 years! 

MNO is impressed by America today.

PQR (American) is alternating between pinching herself and drinking champagne, pinching herself and drinking champagne….

STU (American) YES WE DID!

VWX is is [sic] hopeful that today is the dawn of a new era for the US and the world.

YZA thinks she picked a good year to establish permanent residency in the US! (and is happy 123 went blue).

BCD is OBAMA-licious.

EFG (American) is inspired to use her status line to congratulate Ohio (and the rest of you) on an election well done. Cleveland Baracks!

Here’s to the next four years:

And I apologize for the weak Star Wars pun in the title of this post.