Hari Puter ( Hari Son)

I have a perfect explaination for the lack of blogs in the recent days. I was too busy listening to Harry Potter Series. I have seen the movies of book one and two when they were released. I dont remember watching book number three, although my roommate said I did watch it. I have listening to the audio book number five, and read the book number four I believe. Anyways, this was before I decided to listen to the whole series Back To Back in view of the upcoming release of the sixth book. I have the whole series in audio book format produced by the BBC.

First of all, the school of Hogswart reminds me of my own school in India, both based on the British System of Schooling, that is, both have houses which you belonged to, competition against each other in sports and other activites. I used to stay at the Dorms at the school, where the system was quite similar with common room and houses. ( Although the houses for school were different from houses for the dorms.) And more importantly, We were an all boys school. It has become a co-ed after I graduated from high school and still is I believe.

Homo economicus; Paul Wolfowitz and World Trade

Couple of Issues came up over the last week about which I wanted to write down. One was this interesting article on the economist about trade and specialization being the reason why Homo sapiens displaced previous members of the genus, such as Homo neanderthalensis (Neanderthal man), and emerged triumphant as the only species of humanity.

This week also saw first major development in terms of trade and commerce between the two big asian nations, India and China. Through mostly symbolic in many ways, I am hoping general world order would see a better world peace and prosperity than during previous globalization periods with nearly one third of the populations cooperating together. Alas, theory is as beautiful as practice is messy. Here is an interesting discussion on slashdot on the same.

And Finally, looks like Paul Wolfowitz is becoming the head of World Bank. I am sure there will be changes in the structure of major institutions of the world inaddition to changes in United States. (In United States, you have social security, karl rove led republican re-emergence, etc where as the rest of the world U.N is going through major transformations, World Banks looks like it is changing, basically anywhere United States can influence any way.) Only time will tell if which of these will be radical transformations and which will sizzle out.

Richie Rich and Rembrandt

Early during my childhood, while I was in my third grade I believe, I was introduced to a comic book called, "Richie Rich: The Poor Little Rich Boy". I don't remember why I was attracted to it at that time, never the less, it was and still is one of my fav. Comic book series. I just kept reading and reading them until, I believe, I must have read the whole series.

The comic was printed in the United States and although I don't know about the author's or publisher history much, I believe Harvey Comics published the comics starting from the 1950's, however gaining wide popularity only in the 1960's onwards. It would be not until late 1980's that I would start reading them. Well, guess what, whenever I go to India, I still sit down and read a couple of the old copies I collected.

The thing that attracted me to the comic was the extravagant lifestyle and un-realistic riches displayed by the kid and his father. A personal robot, statues made of gold, vaults in the estate which were big enough to be houses, helicopters, the mansion had 1000 rooms and growing!! All this, the kid was still called Poor!! Somehow all the money in the world could not buy him much happiness :-(

The comics showed me a world of what money and business could do. And what it could not. In my own childish, innocent way. I cannot say that the series did not influence my career choices to become an business man. Ofcourse, later more stuff influenced my decision when reading Richie Rich was not the most intellectual thing I could do.

Why all this talk about Richie Rich today, now? While I was reading "Morgan : An American financier", I suddenly remembered where I heard the word, "Rembrandt" first in my life. (The book was talking about Morgan collecting around 300 Rembrandts in his lifetime. ) It was in Richie Rich. He had Rembrandts all over his house. And more over, I remember an issue when he tries to convince his mom that the whole mansion needs re-painting since the Rembrandts did not look nice on the walls. He, finally, convinces her saying that her jewels does not look good enough. Some of the mansions described in the Morgan's book sound just like the houses of make believe Richie Rich. I guess Capitalism reached me at a much earlier age than I realized. Through American Comic Books!!

The World might be Flat; but the strategic areas are already taken.

Yesterday I watched charlie Rose interview Thomas L. Friedman about his latest book called, "The World Is Flat : A Brief History Of The Twenty-First Century". The interview was very interesting and , as usual, it got me thinking in the various terms in regards to the book, it's premise and the effects of a flat world. Most of the information presented in the book is not unknown to me, however, this book ( I hope) will be a comprevensive introductory material for anybody interested in the future of the world in general and the effects of technology in particular to our daily lifes.

The book was written while the author was interviewing business leaders in india and elsewhere about Outsourcing and its effects on daily lifes of the populations involved in it. Althrough I did not read the book yet, ( I am dying to start reading it), I did buy it just a few minutes ago. I am bound to write some more about the book and its emplications; as well as critic it ( which is by no means an expert cirtic of the book), I would like to write down the 10 forces that flatten the world according to the author.

1. 11/9/89 : The fall of the berlin wall in germany and the start of the end of the bipolar world. Also personal computers came into scene with usable technologies at costs affortable to general public.
   
2. 8/9/95 : The start of the boom of .coms with netscape.
   
3. Work-Flow Software: The applications could start to talk to each other. This is still a force we encounter everyday.
   
4. Open-Sourcing: Linux and the Open source community. The power of individuals in smaller groups has never been greater.
5. Outsourcing: Your credit card call center is handled by a person whose name is longer than Schwarzenegger!!
6. Offshoring: Moving entire factories to other parts of the world. The effects of China.
   
7. Supply-Chaining: Wal-mart effect. If you have taken any business course in recent years, or are in touch with business in anyway, you will know what i mean.
   
8. Insourcing: DHL, UPS, Fedex. They now do everything you ask them to do, and more. The value added servies they started cant easily to replicated and are essential to the globalization.
   
9. In-forming: Yahoo, Google, etc. The explosion of information, both on-demand and distributive. The effect of internet can be really left when i can watch any place in the world, live and know what is going on there. And you though the telegraph was the greatest inventation of communication!!
10. The Steriods: Wireless telecommunications and ultra-mobile world of devices.
    

The author goes on in further chapters talking about some other stuff, which i haven't touched yet, however I will comment on it once I did read it.

In the message boards of charlie Rose, I found the following comments which I think give a fair critic of the view presented by the author.

Part 1 - the missing cycle.
The problem he ignores, and doesn't talk about in his book, is that we in the US have what everyone else in the world wants. We don't have the highest standard of living, but we're pretty close to it. So now as democratization spreads, and older cultures modernize (China, India, Russia), they want the stuff we enjoy. An additional 3 Billion people are now competing for all of the same jobs and they want what we want. The insidious nature of this transformation is that they all are fighting for jobs we don't want, but in the process, they end up taking away the jobs we do want. By that I mean menial tasks like assembly are now in Asia because these jobs don't pay very well. But then the need for Supervisors, Managers, Directors, Chief of operations, etc. materializes. Then because the first plant did well, additional plants get built which divert even more jobs. Then the wages that they receive in their local currency elevates their standard of living which drives up the rate of consumption in their local economy which sparks the local phenomenon of "keeping up with Jones". Eventually their consumption adds to the demand for more production, which creates more jobs, which are not located in the USA. Get it. Do you now see how seemingly innocuous, but truly insidious, this cycle really is for Americans? Mr. Friedman fails to illuminate us on this salient point and fails to acknowledge this cycle in his book.

This cycle is currently underway and as these other citizens of the world fight for their right to own a home, a car, and a TV, their standard of living will rise. Relative to ours, this means Americans will either become the lords over all, or our standard of living will either stagnate or decline. As 3 to 7 Billion over the next 50 years fight to have what we have, major dislocations will devastate the G7. Unemployment in Europe is already in double digits and young able-bodied man and women have no jobs because they have out priced their worth to the global markets. Local wages are too high and taxes are too high. And as a commentary for us in the US, our government is now unraveling the "New Deal" of yester-year and embarking on decreasing taxation as a way to attract foreign capital and investment so that the USA isn't left out of the new third world economic engine. Plus it attracts foreigners to buy our debt, which is keeping us afloat. To put it simply the new global players still need the USA's consumers!

However, what Mr. Friedman doesn't acknowledge is that in the near future the rest of world won't need us. Once we have sold them the technology to build and then show them how to do it, these other countries are on their own. Fortunately, our companies are leading in many areas, but think of these other countries as apprentices. Remember Japan and Germany. Both were decimated after WW II, but as our proteges, they were fast learners and took off all by themselves.

Part 2 - World Population
From an egocentric point of view, Americans are currently biggest consumers on the planet and everybody around the world is serving our need for consumption. Companies are driving down costs to provide better and lower cost goods for us to buy. And they are searching the globe to get this done (this is why Mr. Friedman has a rosy outlook because this is good for us now). However, eventually these other countries rate of consumption will exceed ours and they will serve either their own needs or the needs of their new larger customers (China, India, Russia, Brazil). This will occur in only one generation as the world's population grows by another 3 Billion.


While Mr. Friedman is correct in summarizing the current flattening of the World (Globalization, the new way), his rosy view ignores the impact of the growth in the world's population . The fact that the next doubling of the population will not occur in the USA means that if we don't own it now, we never will. Plus, our little place (USA) on the planet will appear to get smaller and our share of what's going on the world will diminish as China, India, Russia, Brazil, and 80 plus other countries dominate all markets. (These countries will no longer cow-tow to use Americans unless we control their purse strings, which is not likely).

As these 80 plus smaller countries begin to build their infrastructure, they benefit from not having to waste money on rebuilding an existing one since they didn't have one in the first place. So they are in a position to leap frog over older technologies and other mature civilized countries "in a single bound". These new "super countries" will be small and nimble with the ability to adjust like any entrepreneurial company and quickly pick a sector of interest and commoditize it. For example, with the proper irrigation system in place, a little country in Africa could decide to become the world producer of potatoes. Millions of acres of potatoes for the additional 4 Billion mouths to feed in the upcoming expanding global marketplace. Or they could become the world produce of paper clips. The choice is theirs and in a single generation they can obliterate poverty by building their country into a global store as part of the global mall.

Part 3 - World Resources
Another critical point missing from Mr. Friedman's book is that the earth's resources are now be gobbled up at an ever increasing rate. In the last 50 years, the population of the earth doubled from 2.8 Billion to 6.4 Billion and in the next 50 years it will reach over 9 Billion. The impact of this is huge and overhangs all of world's economies. And as a matter of fact, the poorer countries will be in a position to better survive any price inflation due to resource shortages, as they are not yet as dependent upon those resources as the G7. So as the world runs out of stuff the newer countries with their lower standard of living will be better able to do without. Just think about the fact that already 1/3 of the world's population is without potable water. How would an American cope without?

The flattening of the world is now inevitable, however, I don't believe the glass is half full and rising for the USA, I believe that the glass is half-full and leaking. The unknown variable is how our government can adapt to the New World order. Do they have vision to protect our position in the global marketplace? Do they acknowledge the current trends and are preparing for them? How do they plan to maintain our standard of living or are we going to watch it slip away? Lastly, are they simply fighting to keep what we've got and running us into the ground with debt?

You can't get any flatter than that. That's dead flat.

-- source: http://boards.charlierose.com/board/topic.asp?ti=12035

Although I do not agree with the details of the critic, I do agree on the broad sense of the debate that is going on.

In the Missing Cycle section, the critic complains that the rest of the world will not need United states of america. Although I wish it were the case, united states is not going to disappear for a couple of reasons. United States become the global power due to mainly reason, cheif upon them is their attaction to diversity. In history, almost all major powers of their period had diversity in their side. The importance of free exchange of ideas and resources cant be exgagreated. The reason why India and China present a major force against the powerhouse of united states is because they have such huge populations that are divserse themsevles. The vastness of their countries combined with their populations enables them to show diversity in workplace not unlike the united states. It was only when caste systems began to break that India even started to grow beyond the "hindu rate of growth" of 2 to 3%. However the situation is not perfect and could go south at any moment. Where as in United States, diversity is protected by strong institutions and establishments not yet developed in India and China and other competitors. If the immigration polcies focus on other smaller countries where people are willing to come to united states, take advantage of the eductational facilities instead of hoping to attact indians and chinese only, United States can still maintain some of its power. Unfortunely, Indians have enough Indians and Chinese have enough chinese in their countries that immigration is very much a joke. Hey, the simple idea is if i want to work with the workforce of the world, I come to United states to work. The rest can never achieve to attact the best and brightest of the world.

The second point in global population. It is a known fact that the european populations are dying out while the rest of the world is coming to age. This presents a unquie situation since population growth of one part of the world has never effected the population of any other part of the world. Looking at it in a simplistic microeconomic view, the only way the developed economiocs can survive is when they protect themselves in high levels of income by sheilding themselves in high-paying jobs. They still need to be a part of the global society of commerce and trade, without which they will not benefit from the low cost (compared to their income level) goods and services available. Unfortuentely, this has been ignored by most of the developed countries. They either take the route of complete protectionism thereby leaving out low cost oppertunities or they do not focus on issues that enable these societies to maintain their high income. Right now, the present economic scanieo rewards highly educated individuals regardless of the sector they are in. High educational costs limit the competitiveness of the skilled workforce of the developed world. Again a good immigration policy added with good educational and economic incentives should help the developed world.

The third point made is about global resources. Here I believe the very nature of capitalism, i.e., the in-built tension between the entrupreous and the established corporations/businesses will give us the solution. I personally hope that capitalism would move away from a destrutive emphasis on materialistic goods and services, and focus more on health and happiness of individuals and society. Just like how india and china embraced the wireless technologies without going through the telephone generation, given enough economic incentives more eco-friendly goods and services will be introduced by the market. Just think of the amount of money that was spent on houses during the 19th century and the amount of wastage they endured. Nowadays eco-friendly houses are a common place in some countries and will be so as more and more people demand it. Simple laws of economics of scale.

I have been reading a book called, "Our Modern Times: The New nature of Capitalism in the information age" which looks at the other side of the technological revolution. The human side and how that is impacting the generation at present. I will write about it hopefully in my next posting.

The importance of work

Everybody hates work. Work makes you get up early in the morning, makes you do tasks that you would rather not do, and finally you earn just enough to keep on doing that for the rest of your life. The moment you are born, you have work lined up for you. In the first few years, you work is most intensive. You have to learn to know your body, learn to walk, learn a new language and finally start to understand the social laws and regulations around you. I say, start to learn because it never ends. Not until you die.

You are enrolled in kindergarten, then comes primary, middle and high school. You all know the drill. You work on your studies, hopefully giving you social laws and skills that help you live within the social regulations of your society, i.e., be educated so that you can earn your own "living" in this world. And finally you come out, You have completed your skill set requirements. You have reached a point for which you have been preparing your whole life. The moment when you start paying back your dues. The so-called childhood is over, now face the world. The society starts demanding stuff from you, and you keep satisfaction it. Until you retire at the age of 60-65 years. Then your skill has better uses, (or no more uses) so you try to satisfy them.

I went through all of this for a reason. Suppose and just suppose you don't have to work. You will not earn anything or your earning is just enough for surviving, that is, like cashing out your unemployment benefits.

Suddenly, you have so much time and so little work needed to be done. Some people have no problem being "lazy", and actually welcome it. However, for most people, the average person who has struggled through the previous tasks assigned to him or her by the society suddenly has nothing to do.

It is said that old women are the best matchmakers of the society. They sit around, conference and debate the pros and cons of a prospective couple. If you ask them why they are so bothered with such tasks, they would point to the lack of work as well as they being needed in this industry. Thus, certain sections of the society are assigned informal tasks for the rest of their lives.

What I want to point out is that even tough most people hate formal work, they cant live without it. Until you have lived without a task-reward system, you do not appreciate the necessity of the work ethic in human society.

People say that good old days were better. When everybody was a farmer and stuff. I don't see the difference between those times and now. The amount of time is the same. 24 hours. The number of formal tasks performed varied. You did have less formal tasks to be formed. However, you have informal tasks that needed to be taken care of. An example would be the high children ratio per parent. Raising children was an informal task, which stuck to the task-reward system. An happy child gives happiness to the parents and visa versa.

In the present generation, we survive by the task-reward system. The system of tasks as well as the reward system has become more sophosicated and complex but the fundamentals are the same. It has become very formal, as in salary increases, promotions etc.

What will happen if there is no task/reward system? One can say, communism as well as socialism, both do not have such system at the individual level. They do have it at the societal level or the community level. Such task/reward system does not work at any other level without having it at the individual level. Once a robust and successful reward system (i.e. capitalism) is attained, further advances can be made possible.

I am giving the example of capitalism as a successful reward system with a pinch of salt. Capitalism address the need for reward correctly, however, the mode of the reward/prize itself is under constant debate. It has been reported repeatedly that people in highly capitalistic counties are no more happier than poorer countries which have lower levels of capitalist insticts. Or should I say materialistic insticts.

Coming back to the point, The "lazy people" do not have reward system. Nor do those who do not work. Thus, without motivation, life becomes suddenly every hard. You question each aspect of life, trying to find some kind of reward. The stuff you learnt, the classes you took. The good times as well as the bad times. However the problems with reward system is that it is giving you the rewards as long as you work your tasks, once you stop, the rewards stop. None are carried over from the previous year nor future work is rewarded today in the present society. This society of ours has become an complete results based society. No work means no chance of attaining positive results. No positive results means no rewards. And a person without rewards...Well you figure.