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50 Future Ideas You Really Need to Know by Richard Watson
23andMe, 3D printing, access to a mobile phone, Albert Einstein, artificial general intelligence, augmented reality, autonomous vehicles, BRICs, Buckminster Fuller, call centre, clean water, cloud computing, collaborative consumption, computer age, computer vision, crowdsourcing, dark matter, dematerialisation, digital Maoism, Elon Musk, energy security, failed state, future of work, Geoffrey West, Santa Fe Institute, germ theory of disease, happiness index / gross national happiness, hive mind, hydrogen economy, Internet of things, Jaron Lanier, life extension, Marshall McLuhan, megacity, natural language processing, Network effects, new economy, oil shale / tar sands, pattern recognition, peak oil, personalized medicine, phenotype, precision agriculture, profit maximization, RAND corporation, Ray Kurzweil, RFID, Richard Florida, Search for Extraterrestrial Intelligence, self-driving car, semantic web, Skype, smart cities, smart meter, smart transportation, statistical model, stem cell, Stephen Hawking, Steve Jobs, Steven Pinker, Stewart Brand, strong AI, Stuxnet, supervolcano, telepresence, The Wisdom of Crowds, Thomas Malthus, Turing test, urban decay, Vernor Vinge, Watson beat the top human players on Jeopardy!, web application, women in the workforce, working-age population, young professional
the condensed idea The world runs out of water timeline 2003 Washing cars with water banned in Sydney, Australia 2008 70 percent of major Chinese cities water stressed 2010 India suspects China of water theft after it builds new dam 2011 Welsh organic water for sale in Los Angeles 2021 Sana’a in Yemen becomes first major city to run out of water 2032 Las Vegas runs out of water 2038 Water labeling of all consumer products 2050 Global pricing for a barrel of water (150 liters) 05 Wane of the West In 2001 Goldman Sachs, a global investment bank, listed Brazil, Russia, India and China as the four (BRIC) countries that would dominate the global economy by 2041. China has already replaced Japan as the world’s second-largest economy and may overtake the United States as early as 2027. Jim O’Neill, Chief Economist of Goldman Sachs, coined the acronym “BRICs” in a briefing paper issued in London on November 30, 2001. The briefing (Building Better Economic BRICs) described how Brazil, Russia, India and China, all chosen on the basis of population, economic development and attitudes toward globalization, were reshaping the world in terms of economic power. The briefing note also boldly predicted that by 2041 (then revised to 2039) these nations would eclipse the six largest Western nations with regard to economic output.
In fact, following the global recession that started in 2007/8, the concept seems stronger than ever. Asian and southern economic power is still rising and, with the arguable exception of Russia, all of the BRIC nations have emerged from the Global Financial Crisis (GFC) stronger economically than their Western counterparts, which are suffering varying degrees of decline. Goldman now predicts that China will eclipse the USA economically by 2027 and that the BRIC bloc will overtake the six leading Western nations by 2031—ten years sooner than originally predicted. Will the wall fall? Could the BRIC wall collapse? China’s future growth is certainly at a crossroads. It has enjoyed double-digit growth for almost a decade, but there is a school of opinion that says this cannot continue hand in glove with the country’s resolutely communist regime.
This applies not only to Western-inspired global institutions, but also to Western belief systems and brands. Moreover, the BRIC concept isn’t a purely intellectual exercise. For example, since China has now become the world’s leading car market, this has implications for demand for Brazilian copper. Thus asset prices can be adjusted. Goldman’s estimate that by 2030 there will be 2 billion new middle-class consumers living on the planet boosts demand for other resources, commodities and products ranging from oil, gas, coal, potash and water to lithium, copper, cardboard and even cheese. “Consider the past and you shall know the future.” Chinese proverb Test of strength So, will the BRICs keep growing or could some cracks start to appear in the bloc? The most likely outcome is exactly what Goldman says it is—that the BRIC nations will largely dominate the world economy.
The Post-American World: Release 2.0 by Fareed Zakaria
affirmative action, agricultural Revolution, airport security, anti-communist, Asian financial crisis, battle of ideas, Berlin Wall, Bretton Woods, BRICs, British Empire, call centre, capital controls, central bank independence, centre right, collapse of Lehman Brothers, conceptual framework, Credit Default Swap, currency manipulation / currency intervention, delayed gratification, Deng Xiaoping, double entry bookkeeping, failed state, Fall of the Berlin Wall, financial innovation, global reserve currency, global supply chain, illegal immigration, interest rate derivative, knowledge economy, Mahatma Gandhi, Martin Wolf, mutually assured destruction, new economy, oil shock, open economy, out of africa, postindustrial economy, purchasing power parity, race to the bottom, reserve currency, Ronald Reagan, Silicon Valley, Silicon Valley startup, South China Sea, Steven Pinker, The Great Moderation, Thomas L Friedman, Thomas Malthus, trade route, Washington Consensus, working-age population, young professional
Zbigniew Brzezinski, “The Dilemma of the Last Sovereign,” American Interest 1, no. 1 (Autumn 2005). 8. Benjamin Schwarz, review of Stephen E. Ambrose, The Good Fight, in Atlantic Monthly, June 2001, p. 103. 9. Naazneen Barma et al., “The World without the West,” National Interest, no. 90 (July/Aug. 2007): 23–30. 10. See a survey from the Economist on “The New Titans” in the Sept. 14, 2006, issue. 11. Jim O’Neill and Anna Stupnytska, The Long-term Outlook for the BRICs and N-11 Post Crisis (Goldman Sachs, Global Eonomics Paper no. 192, Dec. 4, 2009). 12. Thomas L. Friedman, The World Is Flat: A Brief History of the Twenty-first Century (New York: Farrar, Straus and Giroux, 2006), 226. Andy Grove’s statement is quoted in Clyde Prestowitz, Three Billion New Capitalists: The Great Shift of Wealth and Power to the East (New York: Basic Books, 2005), 8. 13.
Ernest Harsch, “Big Leap in China-Africa Ties,” Africa Renewal 20, no. 4 (Jan. 2007): 3. 16. Carlos H. Conde, “Asean and China Sign Trade and Services Accord,” International Herald Tribune, Jan. 14, 2007. 17. “Out of Their Silos; China and America,” Economist, June 10, 2006. 18. Joshua Cooper Ramo, “The Beijing Consensus” (Foreign Policy Centre, London, 2004). 5. The Ally 1. Jim O’Neill and Anna Stupnytska, The Long-term Outlook for the BRICs and N-11 Post Crisis (Goldman Sachs, Global Eonomics Paper no. 192, Dec. 4, 2009). 2. “GM to triple parts sourcing from India,” Times of India, Nov. 20, 2007. 3. Jahangir Aziz and Steven Dunaway, “China’s Rebalancing Act,” Finance & Development 44, no. 3 (Sept. 2007). 4. Yasheng Huang, “Will India Overtake China?” Foreign Policy, July/Aug. 2003, pp. 71–81. 5. Manjeet Kripalani, “Read All About It: India’s Media Wars,” BusinessWeek, May 16, 2005. 6.
Nongovernmental players were too few and too weak to worry about. Now, look at something like trade negotiations, and you see the developing world acting with greater and greater force. Where they might once have taken any deal offered by the West or ignored the process altogether, countries like Brazil and India play hardball until they get the deal of their choice. They have heard Western CEOs explain where the future lies. They have read the Goldman Sachs BRIC report. They know that the balance of power has shifted. The Kyoto accord (now treated as sacred because of President George W. Bush’s cavalier rejection of it) is in fact a treaty marked by its adherence to the old worldview. Kyoto assumed that if the West came together and settled on a plan, the Third World would adopt the new framework and the problem would be solved. That may be the way things have been done in international affairs for decades, but it makes little sense today.
Affordable Care Act / Obamacare, Asian financial crisis, asset allocation, Ayatollah Khomeini, bank run, banking crisis, Ben Bernanke: helicopter money, bitcoin, Black Swan, Bretton Woods, BRICs, business climate, capital controls, Carmen Reinhart, central bank independence, centre right, collateralized debt obligation, collective bargaining, complexity theory, computer age, credit crunch, currency peg, David Graeber, debt deflation, Deng Xiaoping, diversification, Edward Snowden, eurozone crisis, fiat currency, financial innovation, financial intermediation, financial repression, Flash crash, floating exchange rates, forward guidance, George Akerlof, global reserve currency, global supply chain, Growth in a Time of Debt, income inequality, inflation targeting, invisible hand, jitney, Kenneth Rogoff, labor-force participation, labour mobility, Lao Tzu, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, Long Term Capital Management, mandelbrot fractal, margin call, market bubble, market clearing, market design, money: store of value / unit of account / medium of exchange, mutually assured destruction, obamacare, offshore financial centre, oil shale / tar sands, open economy, Plutocrats, plutocrats, Ponzi scheme, price stability, quantitative easing, RAND corporation, reserve currency, risk-adjusted returns, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, Satoshi Nakamoto, Silicon Valley, Silicon Valley startup, Skype, sovereign wealth fund, special drawing rights, Stuxnet, The Market for Lemons, Thomas Kuhn: the structure of scientific revolutions, Thomas L Friedman, too big to fail, trade route, uranium enrichment, Washington Consensus, working-age population, yield curve
The BELLs’ experience from 2008 to 2014 offers powerful lessons for Europe’s southern periphery as it continues to adjust in the years ahead. ■ BRICS While the BELLs were breaking new ground in demonstrating fiscal consolidation’s benefits, the more powerful BRICS have unsettled conventional wisdom and cast doubt on the U.S. dollar’s future as the world’s leading reserve currency. When the BRICS leaders convened a finance ministers’ summit in September 2006 in New York City, they showed every sign of evolving in line with O’Neill’s original prescription, not so much as a coherent economic bloc but as a political force. The meetings evolved into a formal leaders’ summit in Yekaterinburg, Russia, in June 2009, and the summits have continued at the ministerial and leaders’ level. In 2010 the original BRIC group of Brazil, Russia, India, and China invited South Africa to join its ranks, and the acronym was changed to BRICS.
India has growth and great promise but has not come close to realizing its potential because its world-class red-tape raj stifles innovation. Among the BRICS, Brazil and South Africa come closest to being “real” economies in the sense that growth is sustainable, corruption is not completely rampant, and entrepreneurship has room to breathe. Yet there is no denying the success of the BRICS moniker. The original term BRIC was created by Jim O’Neill and his colleagues at Goldman Sachs in 2001 to highlight the group’s share of global GDP and higher growth rates compared to established large economy groups such as the G7. But O’Neill’s analysis was not primarily economic; it was political. Beyond the basic facts about size and growth, O’Neill called for rethinking the G7’s international governance model to reduce Europe’s role and increase the role of emerging economies in a new G5 + BRICs = G9 formula. In his proposed G9, O’Neill glossed over differences in social development, including bedrock principles such as civil rights and the rule of law, with the comment “The other members would need to recognise that not all member countries need to be the ‘same.’”
. : Buttonwood, “The Euro Zone Crisis: Growth Problem,” Economist, December 17, 2012, http://www.economist.com/blogs/buttonwood/2012/12/euro-zone-crisis. a €60 billion bailout fund . . . : Matina Stevis, “Euro Zone Closes In on Bank Plans,” Wall Street Journal, June 13, 2013, http://online.wsj.com/article/SB10001424127887323734304578542941134353614.html. Chapter 6: BELLs, BRICS, and Beyond The original term BRIC was created . . . : Jim O’Neill, “Building Better Global Economic BRICs,” Goldman Sachs, Global Economics Paper no. 66, November 30, 2001, http://www.goldmansachs.com/our-thinking/archive/archive-pdfs/build-better-brics.pdf. “The other members would need to recognise . . .”: Ibid., p. S11. He attributes economic success in the Baltics . . . : Anders Åslund, “Southern Europe Ignores Lessons from Latvia at Its Peril,” Peterson Institute for International Economics, Policy Brief no.
The Ascent of Money: A Financial History of the World by Niall Ferguson
Admiral Zheng, Andrei Shleifer, Asian financial crisis, asset allocation, asset-backed security, Atahualpa, bank run, banking crisis, banks create money, Black Swan, Black-Scholes formula, Bonfire of the Vanities, Bretton Woods, BRICs, British Empire, capital asset pricing model, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, collateralized debt obligation, colonial exploitation, Corn Laws, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, Daniel Kahneman / Amos Tversky, deglobalization, diversification, diversified portfolio, double entry bookkeeping, Edmond Halley, Edward Glaeser, Edward Lloyd's coffeehouse, financial innovation, financial intermediation, fixed income, floating exchange rates, Fractional reserve banking, Francisco Pizarro, full employment, German hyperinflation, Hernando de Soto, high net worth, hindsight bias, Home mortgage interest deduction, Hyman Minsky, income inequality, interest rate swap, Isaac Newton, iterative process, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, labour mobility, London Interbank Offered Rate, Long Term Capital Management, market bubble, market fundamentalism, means of production, Mikhail Gorbachev, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, mortgage tax deduction, Naomi Klein, Nick Leeson, Northern Rock, pension reform, price anchoring, price stability, principal–agent problem, probability theory / Blaise Pascal / Pierre de Fermat, profit motive, quantitative hedge fund, RAND corporation, random walk, rent control, rent-seeking, reserve currency, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, seigniorage, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, spice trade, structural adjustment programs, technology bubble, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, too big to fail, transaction costs, value at risk, Washington Consensus, Yom Kippur War
Shiller, The New Financial Order: Risk in the 21st Century (Princeton, 2003). 6. From Empire to Chimerica 1 Dominic Wilson and Roopa Purushothaman, ‘Dreaming with the BRICs: The Path to 2050’, Goldman Sachs Global Economics Paper, 99 (1 October 2003). See also Jim O’Neill, ‘Building Better Global Economic BRICs’, Goldman Sachs Global Economics Paper, 66 (30 November 2001); Jim O’Neill, Dominic Wilson, Roopa Purushothaman and Anna Stupnytska, ‘How Solid are the BRICs?’, Goldman Sachs Global Economics Paper, 134 (1 December 2005). 2 Dominic Wilson and Anna Stupnytska, ‘The N-11: More than an Acronym’, Goldman Sachs Global Economics Paper, 153 (28 March 2007). 3 Goldman Sachs Global Economics Group, BRICs and Beyond (London, 2007), esp. pp. 45-72, 103-8. 4 The argument is made in Kenneth Pomeranz, The Great Divergence: China, Europe and the Making of the Modern World Economy (Princeton / Oxford, 2000).
If O’Neill is correct, we are living through one of the most astonishing shifts there has ever been in the global balance of financial power; the end of an era, stretching back more than a century, when the financial tempo of the world economy was set by English-speakers, first in Britain, then in America. The Chinese economy has achieved extraordinary feats of growth in the past thirty years, with per capita GDP increasing at a compound annual growth rate of 8.4 per cent. But in recent times the pace has, if anything, intensified. When O’Neill and his team first calculated projections of gross domestic product for the so-called BRICs (Brazil, Russia, India and China, or Big Rapidly Industrializing Countries), they envisaged that China could overtake the United States in around 2040.1 Their most recent estimates, however, have brought the date forward to 2027.2 The Goldman Sachs economists do not ignore the challenges that China undoubtedly faces, not least the demographic time bomb planted by the Communist regime’s draconian one-child policy and the environmental consequences of East Asia’s supercharged industrial revolution.3 They are aware, too, of the inflationary pressures in China, exemplified by soaring stock prices in 2007 and surging food prices in 2008.
As we have seen, this crisis also originated in the United States as millions of American households discovered they could not afford to service billions of dollars’ worth of subprime mortgages. There was a time when American crises like these would have plunged the rest of the global financial system into recession, if not depression. Yet at the time of writing Asia seems scarcely affected by the credit crunch in the US. Indeed, some analysts like Jim O’Neill, Head of Global Research at Goldman Sachs, say the rest of the world, led by booming China, is ‘decoupling’ itself from the American economy. If O’Neill is correct, we are living through one of the most astonishing shifts there has ever been in the global balance of financial power; the end of an era, stretching back more than a century, when the financial tempo of the world economy was set by English-speakers, first in Britain, then in America.
GDP: A Brief but Affectionate History by Diane Coyle
Asian financial crisis, Berlin Wall, big-box store, Bretton Woods, BRICs, clean water, computer age, conceptual framework, crowdsourcing, Diane Coyle, double entry bookkeeping, en.wikipedia.org, Erik Brynjolfsson, Fall of the Berlin Wall, falling living standards, financial intermediation, global supply chain, happiness index / gross national happiness, income inequality, income per capita, informal economy, John von Neumann, Kevin Kelly, Long Term Capital Management, mutually assured destruction, Nathan Meyer Rothschild: antibiotics, new economy, Occupy movement, purchasing power parity, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, The Wealth of Nations by Adam Smith, Thorstein Veblen, University of East Anglia, working-age population
Its dominance was trumpeted by popular authors such as Thomas Friedman in his books The Lexus and the Olive Tree and The World Is Flat. The message was: this is an uncomfortable ride but deal with it because global capitalism is sweeping the whole world before it. Yet some doubts started to emerge even before the onset of the financial crisis in late 2007. There was, for example, not just the rise of the BRICs, but the prospect of their overtaking the West. The economist Jim O’Neill of Goldman Sachs coined the BRIC acronym. In 2001 he first published a report noting the rapid growth of these large emerging economies and their potential to overtake some of the leading developed economies in terms of the size of GDP. Maddison’s historical data on GDP over the centuries showed that GDP per capita in China had been similar to that of the leading economies of the time, Britain, France, and the Netherlands, in 1800.
One of the prime pieces of evidence was the large fall in poverty in India and especially China as they increasingly engaged in the global market. Despite the crisis, this remains true, and other countries have joined the ranks of so-called emerging markets, such as Indonesia, Nigeria, Ghana, and Mozambique. Still, the continuing expansion of GDP in the developed world during the mid-2000s, as well as astoundingly rapid growth in the BRIC economies (Brazil, Russia, India, and China) and, to a lesser extent, in other emerging markets, fed the arrogance of the financial markets. There was said to be a “New Paradigm” of economic growth thanks to technology-driven increases in productivity. This was the era of books with titles like Dow 36,000 and what Alan Greenspan famously described as “irrational exuberance.”1 Some economists warned early that the bubble would end disastrously.2 Many more found it easier to assume that the buoyancy of financial markets would be sustained than to stick their necks out and predict economic cataclysm—it takes courage to stand out from the pack and make an extreme and unwelcome pronouncement.
Abramowitz, Moses, 113 Africa, 31–33, 72, 93, 138 Anders, William, 68 art, 127–28, 132 assets, contributing to sustainability, 134–35, 137 austerity measures, 23 Australia, 73, 109, 118 automation, 128–29 Bangladesh, 53 base year, in GDP calculations, 31, 33–34 Baumol, William, 127 Benford’s Law, 3, 143n3 Berners-Lee, Tim, 81 Bhalla, Surjit, 53 Bhutan, 112 Bos, Frits, 47–48 Boskin Commission, 35, 88 Brazil, 94, 125 Bretton Woods system, 48 BRIC economies, 94, 96 Brynjolfsson, Erik, 128–30 Burundi, 73 business, purpose of, 95 Campaign for Happiness, 112 Canada, 73, 89, 109 capabilities, 72–73, 134 capital consumption, 131 capitalism: 1970s crisis of, 59–75; 2008 crisis of, 93–118; achievements of, 5–6; innovation as hallmark of, 91; investment and depreciation, 131–33 capital widening, 132 Carson, Rachel, Silent Spring, 69 centrally planned economies, 46–47, 56, 60, 66–68 Central Statistical Office (United Kingdom), 18 Chad, 73 chain-weighted price indexes, 33–34 China: economic growth of, 94, 96–97; economic limitations of, 96–97; GDP of, 51–53, 96, 97; living standards in, 51, 57, 96; manufacturing and exporting in, 82, 97, 125; U.S. relations with, 97 Christophers, Brett, 104, 105 circular flow, 26–27, 27f, 57, 63 Clark, Colin, 12, 13, 17, 50, 84 Clean Water Act (1972), 69 Clegg, Nick, 110 Cobb, John, 116 Cold War, 46–47, 60, 66 communications technology, 81–82 communism, 46–47, 60, 66–68, 96 compound arithmetic, 64, 83, 130–31 comprehensive wealth, 133, 135 computers, 80–82, 87–88 conspicuous consumption, 112 consumerism, 45, 112 consumer spending (C), 27–28, 45 consumer surplus, 130 customization, of goods and services, 123–25 Cuyahoga River, 69 Daly, Herman, 116 Darling, Alastair, 102 dashboard approach, 118, 136 data collection, 33, 37, 51–53, 137–38 Data Resources, Incorporated (DRI), 21 Davenant, Charles, 8 David, Paul, 79 Defense Advanced Research Projects Agency (DARPA), 81 defense spending, 14–16 deferred stock options, 37 deflators, 31 Defoe, Daniel, 9 DeLong, Brad, 86, 117 Democratic Republic of Congo, 54, 73 Deng Xiao Ping, 96 depreciation, 25, 30, 131–33 developed/high-income countries: GDP of, 72, 93; informal economy in, 107 developing/low-income countries: economic growth/stagnation in, 61, 71–72; GDP of, 32–33, 51, 71–72; informal economy in, 107, 109; and PPP, 50–53 development aid, 72, 74 digital products and services, 129–31 disasters, GDP growth after, 43 Domar, Evsey, 55 double-entry bookkeeping, 8 Easterlin, Richard, 111 Eckstein, Otto, 21 econometric models, 20–21, 23 economic growth: critiques of, 60; in eighteenth and nineteenth centuries, 12; lack of, in developing countries, 61; meanings and measures of, 15; meanings of, 123; potential rate of, 82–83; problems arising from, 63–64; real, 30–31; significance of, 135–36; sustainable, 71, 116, 137; theories/models of, 55–57, 78–81; virtuous circle of, 57, 59, 64, 73, 79; well-being and welfare aided by, 135 economics, challenges to conventional, 59–61 economic welfare.
Earth Wars: The Battle for Global Resources by Geoff Hiscock
Admiral Zheng, Asian financial crisis, Bakken shale, Bernie Madoff, BRICs, butterfly effect, clean water, cleantech, corporate governance, demographic dividend, Deng Xiaoping, Edward Lorenz: Chaos theory, energy security, energy transition, eurozone crisis, Exxon Valdez, flex fuel, global rebalancing, global supply chain, hydraulic fracturing, Long Term Capital Management, Malacca Straits, Masdar, megacity, Menlo Park, Mohammed Bouazizi, new economy, oil shale / tar sands, oil shock, Panamax, purchasing power parity, Ralph Waldo Emerson, RAND corporation, Shenzhen was a fishing village, Silicon Valley, smart grid, South China Sea, sovereign wealth fund, special economic zone, spice trade, trade route, uranium enrichment, urban decay, working-age population, Yom Kippur War
Ross Garnaut, Australia and the Northeast Asian Ascendancy (Canberra: Australian Government Publishing Service, 1989), p. 36. 5. Ibid., p. 13. 6. Ibid., p. 36. 7. HSBC, “The World in 2050,” Hong Kong, January 2011. 8. Goldman Sachs, “BRICs and Beyond,” 23 November 2007. 9. Remarks at Prime Minister Yoshihiko Noda’s press conference, 2 September 2011. 10. Son, Masayoshi, “Tsunami Clears Way for Solar-Powered Japan,” Asia Times, 23 September 2011. 11. Prof. Kazunari Domen, “Development of Photocatalysts for Energy Conversion,” www.domen.t.u-tokyo.ac.jp/english/index_framepage_E.html. CHAPTER 13 BRACQK (Brazil, Russia, Australia, Canada, Qatar, Kazakhstan) Is the New BRIC Russia cannot be great and will not remain a great power if we do not develop the Far East region. —former Russian Prime Minister Yevgeny Primakov, November 1998 (ITAR-TASS report) Brazil, Russia, Australia, Canada, Qatar, and Kazakhstan (the BRACQKs) have one thing in common: an abundance of energy resources, including oil and gas, that make them attractive investment targets for big energy consumers such as China and India.
But the U.S. Energy Information Administration strikes a cautionary note on Indonesian exports and the development of new mines there, citing infrastructure and environmental concerns and whether domestic coal consumption might be given preference over exports. Indonesia is one of the Next-11 economies identified by investment bank Goldman Sachs as likely to follow the high-growth path set by Brazil, Russia, India, and China. Exhibit 6.4 Countries with biggest coal reserves, proven reserves at end of 2009 (billions of tonnes) * primarily lignite (brown coal) Source: World Coal Association Coal’s Technological Response Although there is no doubt coal and other fossil fuels such as oil and gas will remain a key part of the world’s energy supply over the next 20 years, coal’s contribution to global warming has evoked a technological response.
Energy Swing to Unconventional Resources International Interest in Shale Pipeline Projects in the Mix Gulf of Mexico Prospects The Cuba–China Connection Opening the U.S. Investment Door Chapter 12: Japan after the Deluge Political Shifts in North Asia Player of Consequence Equity Partners around the Globe JX Holdings Builds Energy, Metals Business SoftBank’s “New Energy” Vision Renewable Potential Chapter 13: BRACQK (Brazil, Russia, Australia, Canada, Qatar, Kazakhstan) Is the New BRIC Uncertainty for Foreign Investment Brazil’s Pre-Salt Independence Australia’s Foot on the Gas Canada’s Athabasca Challenge Qatar Fires up Its LNG Trains Kazakhstan’s Fields of Dreams Chapter 14: The Up and Comers Turkey: A Pivotal Position Iran: Rich in Oil and Gas, but Lacking Technology and International Friends Indonesia: Growing Spending Power Mexico: Exploiting the Potential Chapter 15: What Happens Next Significant Developments Ahead Survive and Prosper Challenges for China, India Replicated Conclusion Bibliography Acknowledgments About the Author Index Copyright © 2012 John Wiley & Sons Singapore Pte.
The World in 2050: Four Forces Shaping Civilization's Northern Future by Laurence C. Smith
Bretton Woods, BRICs, clean water, Climategate, colonial rule, deglobalization, demographic transition, Deng Xiaoping, energy security, flex fuel, global supply chain, Google Earth, guest worker program, Hans Island, hydrogen economy, ice-free Arctic, informal economy, invention of agriculture, invisible hand, land tenure, Martin Wolf, megacity, Mikhail Gorbachev, New Urbanism, oil shale / tar sands, oil shock, peak oil, purchasing power parity, Ronald Reagan, Ronald Reagan: Tear down this wall, side project, Silicon Valley, smart grid, sovereign wealth fund, special economic zone, The Wealth of Nations by Adam Smith, Thomas Malthus, trade liberalization, trade route, UNCLOS, UNCLOS, urban planning, Washington Consensus, Y2K
The transformation is being fueled by a globalizing economy, marked by an historic shift of relative wealth and economic power from West to East, and by the increasing weight of new players—especially China and India. China and India—along with Brazil and Russia—are considered such economic giants-in-waiting that they’ve won their own acronym, the “BRICs” (from the first letters of Brazil, Russia, India, and China), first coined in 2003 by the global financial services company Goldman Sachs.66 According to econometric model projections by Goldman Sachs, PricewaterhouseCoopers, the Japan Center for Economic Research, the International Monetary Fund, and others, the BRICs are on pace to displace current economic leaders faster than you might think, thus redrawing the map of global economic power over the next forty years.67 The world’s three biggest economies today are the United States, Japan, and Germany.
Andrews, “Mineral Resources, Economic Growth, and World Population,” Science 185 (1974): 13-10. 100 For more on this discussion of mineral exhaustion and the perils of a fixed-stock approach to resource assessment, see John E. Tilton, On Borrowed Time? Assessing the Threat of Mineral Depletion (Washington, D.C.: RFF Press, 2002), 160 pp. 101 Matthew R. Simmons, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy (Hoboken, N.J.: John Wiley & Sons, 2005), 428 pp. 102 A very detailed analysis comes from the National Institute for Materials Science in Tsukuba, Japan. The authors use the Goldman Sachs BRICs and G6 economic projections discussed in Chapter 2 to project future demand for twenty-two metals. K. Halada, M. Shimada, K. Ijima, “Forecasting of the Consumption of Metals up to 2050,” Materials Transactions 49, no. 3 (2008): 402-410. 103 J. B. Legarth, “Sustainable Metal Resource Management—the Need for Industrial Development: Efficiency Improvement Demands on Metal Resource Management to Enable a Sustainable Supply until 2050,” Journal of Cleaner Production 4, no. 2 (1996): 97-104; see also C.
Note: The events described in this document were not independently verified. 65 P. 1, Global Trends 2025: A Transformed World (Washington, D.C.: U.S. National Intelligence Council, 2008), 99 pp. 66 “Dreaming with BRICs: The Path to 2050,” Global Economics Paper no 99, Goldman Sachs (2003), 24 pp. Other, more recent model studies yield comparable results. 67 E.g., from the global accounting giant PricewaterhouseCoopers, “The World in 2050: How Big Will the Major Emerging Market Economies Get and How Can the OECD Compete?” J. Hawksworth, Head of Macroeconomics, PWC (2006), 46 pp.; and the Japan Center for Economic Research, “Long-term Forecast of Global Economy and Population 2006-2050: Demographic change and the Asian Economy,” JCER (March 2007), 51 pp., and others. 68 These data are from the above econometric model study of the BRICs by Goldman Sachs. All figures in inflation-adjusted 2003 U.S. dollars, for years 2003 and 2050, Appendix II, Global Paper no. 99, Goldman Sachs (2003).
Zero-Sum Future: American Power in an Age of Anxiety by Gideon Rachman
Asian financial crisis, bank run, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, Bonfire of the Vanities, borderless world, Bretton Woods, BRICs, capital controls, centre right, clean water, collapse of Lehman Brothers, colonial rule, currency manipulation / currency intervention, deindustrialization, Deng Xiaoping, Doha Development Round, energy security, failed state, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, full employment, global reserve currency, greed is good, Hernando de Soto, illegal immigration, income inequality, invisible hand, Jeff Bezos, laissez-faire capitalism, market fundamentalism, Martin Wolf, Mexican peso crisis / tequila crisis, Mikhail Gorbachev, moral hazard, mutually assured destruction, Naomi Klein, offshore financial centre, open borders, open economy, Peace of Westphalia, peak oil, pension reform, Plutocrats, plutocrats, price stability, RAND corporation, reserve currency, rising living standards, road to serfdom, Ronald Reagan, shareholder value, Sinatra Doctrine, sovereign wealth fund, special economic zone, Steve Jobs, Stewart Brand, The Chicago School, The Great Moderation, The Myth of the Rational Market, Thomas Malthus, trickle-down economics, Washington Consensus, Winter of Discontent
INDEX Abalkin, Leonid, 56–57 Adelman, Kenneth, 167 Afghanistan, 55, 174, 199, 208–12, 244, 251–56, 258 as failed state, 10, 132, 181 U.S. war in, 96, 165, 167, 169, 174, 181, 185, 209–10, 212, 230, 233, 239, 240, 249, 252–53, 254, 268, 272, 273, 314n Africa, 7, 96, 195, 228, 235, 247, 274, 283, 289 global problems and, 205–8 African National Congress, 36, 69 African Union force, 210 Aganbegyan, Abel, 56–57 Age of Anxiety, 11, 171–292 Age of Optimism, 6, 11, 85, 91–170, 173–75, 183, 188, 191, 194, 195, 208, 231, 246–49, 259–62, 271, 272, 277, 280, 281, 286 antiglobalization movement and, 96, 153, 155–62 democracy and, 99–105 the East and, 135–43 Europe and, 145–53, 290 new world order in, 87, 93, 95–96, 230 peace and, 103, 118, 126–34, 140, 304n power and, 93, 96, 118, 162–70 progress and, 118–26 prosperity and, 107–18, 133, 134, 140, 173, 194 Age of Transformation, 11, 13–90 agriculture, 56, 125, 195, 206, 290 in China, 23, 25, 294n Ahmadinejad, Mahmoud, 197, 227, 242, 244, 248 Ahmed, Kamal, 313n AIG, 201 air-traffic controllers, 39 Albright, Madeleine, 166 Aliber, Robert, 265 Allende, Salvador, 74 al-Qaeda, 10, 96, 156–57, 161–62, 210, 252, 256 American Enterprise Institute (AEI), 39, 163–64, 167–68 Angola, 43, 131, 205, 247 Annan, Kofi, 132 antiglobalization movement, 96, 153, 155–62 antitrust cases, 120 apartheid, 69, 70 Apple, 120, 261 Aquino, Corazon, 43 Arab world, 269 Argentina, 77, 78, 188 democracy in, 17, 71, 72 Falklands War and, 34, 73, 76 military regime in, 73, 75, 76 Arizona, 211, 260 Asia, 24, 66, 94, 110, 111, 114, 117, 134–43, 157, 184, 195, 200, 205, 217, 245, 256, 274, 279 democracy in, 18, 85, 94, 283 economic crisis in (1997–98), 6, 107–8, 141–43, 159, 218, 269 rise of, 4, 6, 8, 9, 46, 59–60, 73, 80, 95, 137–40, 143, 146, 173, 262 see also East Asia; specific places Asian values, 138 Aslund, Anders, 221 Audacity of Hope, The (Obama), 170 Austria, 68, 269 authoritarianism, 9, 75–76, 124, 138, 140, 174, 175–76, 233–49, 257, 283, 284 global government and, 220, 221, 223, 231 Axis of Hugo, 241–42, 249 Baghdad, 124, 125, 148, 253–54 bailouts, 113, 142, 188–89, 195 Balkan wars, 125, 130–33, 145, 146 Balls, Ed, 3 Baltic states, 58–59, 235 Bangalore, 84–85, 141 banks, 142, 159, 191–92, 200 see also investment banks BBC, 108, 279 Beijing, 15, 25, 27, 65, 137, 190, 202–3, 206, 234–38, 240, 261, 268, 305n Tiananmen Square massacre in, see China, Tiananmen Square massacre in Belarus, 59 Belgrade, U.S. bombing of Chinese embassy in, 268 Berlin, East, 65 Berlin, West, 63 Berlin Wall, fall of, 11, 43, 63, 67, 68, 69, 73, 143, 146, 147, 149, 150, 152, 165, 180, 312n-13n Bernanke, Ben, 116–17 Bezos, Jeff, 120 Bhutto, Benazir, 211, 252 Blair, Tony, 43–44, 114–15, 118, 132, 201–2, 279–80 Bloom, Allan, 99, 100, 104 Boeing, 6, 155 Bolivia, 72, 78, 242 Bonfire of the Vanities, The (Wolfe), 40 Boot, Max, 146, 167, 168 Bosnia, 131, 132, 133, 231 Branden, Nathaniel, 109 Brazil, 17, 71, 73, 75–78, 176, 244, 245, 246, 286 in BRICs, 76–77, 196 global government and, 217, 219, 226, 227 zero-sum future and, 262, 276 Bremmer, Ian, 193 Bretton Woods, 9 Brezhnev, Leonid, 54, 64 Brezhnev Doctrine, 64, 67 Brickell, Mark, 112–13 BRICs (Brazil, Russia, India, and China), 76–77, 196 Bright, John, 128 Brookings Institution, 139, 256 Brown, Gordon, 3, 114, 117 Brussels, 213, 215, 311n Buchanan, Pat, 42, 157–58, 260 Bulgaria, 145–48 Burma, 160, 227, 274, 275 Bush, George H. W., 19, 100, 101, 130, 157, 180 Gulf War and, 87–89, 301n new world order and, 63, 87, 88, 225 Bush, George W., 5, 77–78, 105, 112, 116, 174, 179, 180, 184, 186, 213, 218 climate change and, 126, 203 Clinton compared with, 133–34, 162, 165–67 democracy promotion and, 94, 103–4, 166, 239, 240 Georgia and, 233–34 globalization and, 124, 168, 169 on high-tech warfare, 125 nation building and, 209, 210 9/11 and, 134, 165 UN and, 197, 198 U.S. power and, 165–69 war on terror and, 165, 199, 211, 212, 245 Calderón, Felipe, 258 Callaghan, James, 30 Cambodia, 254 Cambridge University, 33, 81–82 Cameron, David, 301n Campbell, John, 31, 35 Canada, 131, 147, 157, 220, 259 capital, 81, 118, 142, 150, 191, 193, 201, 264 capitalism, 15–17, 42, 52, 63–64, 78, 88, 142, 157, 227, 249, 261, 282, 291–92 Central Europe and, 69, 146 in China, 2, 22, 24, 25, 261 “democratic peace” and, 5, 127–28 India and, 70, 84 promotion of, 148–49 Rand’s championing of, 109 Thatcher and, 32–33, 36 Capitalism and Freedom (Friedman), 118 cars, 63–64, 126, 192, 194, 195, 202, 203, 276 Carter, Jimmy, 16, 39, 72 Castro, Fidel, 78, 242 Ceausescu, Nicolae, 67 Central America, 18, 43, 76 central bankers, 116 Central Europe, 58, 61, 64–70, 73, 95, 184, 235, 239, 299n, 312n–13n European Union and, 146, 149 Centre for European Reform, 280 Charter 77, 66 Chávez, Hugo, 78, 197, 227, 241–42, 244 Chellaney, Brahma, 207 Cheney, Dick, 104, 163 Chernenko, Konstantin, 53, 54 Chicago, University of, 75, 99, 105 Chidambaram, Palaniappan, 82–83, 115 Chile, 17, 36, 71–75, 77 China, 2, 4–8, 15–18, 64, 74, 116, 122, 140, 169, 181–84, 255, 261, 281, 283–90, 294n–95n agriculture in, 23, 25, 294n authoritarianism in, 140, 174, 175, 176, 223, 231, 234–41, 243, 246–49, 284 in BRICs, 76–77, 196 Cultural Revolution in, 22, 23, 27, 238 currency of, 194, 201, 223, 225, 237, 264–66, 268, 276, 290 democracy in, 18, 25–28, 140, 168, 237, 238, 283–84 economic growth in, 6, 7, 21, 24–28, 59–60, 95, 115, 136, 137, 141, 182, 183, 285, 286 energy needs of, 195, 205, 288 European Union compared with, 146, 147, 151, 152 financial crisis and, 182, 192–93, 200 foreign reserves of, 142, 183, 203, 247 global government and, 217, 219–26 global problems and, 200–203, 205–7 Hong Kong’s return to, 25, 135–36 India’s relations with, 206–7, 237, 243, 274, 286 Japan’s relations with, 190–91, 237, 238 military buildup of, 187, 249, 280 missile tests of, 136–37 opening of, 11, 15, 21–28, 80, 130, 191, 295n Opium Wars in, 17, 135–36 “peaceful rise” of, 136, 137, 143 political and economic stability of, 247–48 rise of, 5, 8, 11, 21–28, 46, 76, 77, 136, 137, 139, 143, 181, 262, 267, 271, 277, 280 Russia’s relations with, 240 Soviet Union compared with, 59–61 Special Economic Zones in, 24, 60 technology and, 123, 124 Tiananmen Square massacre in, 6, 18, 26, 27, 28, 61, 65, 100, 115, 130, 234–35, 275, 294n, 305n UN and, 225–26, 245, 289 U.S. relations with, 4, 5, 7–8, 10, 21, 25, 130, 134, 136–37, 143, 176, 182–83, 184, 186–87, 190, 194, 200, 201, 223–25, 243, 246, 253, 264–69, 271, 274, 275, 280, 284–90, 305n win-win world and, 129–30 zero-sum future and, 261, 262, 264–69, 274–77 Chirac, Jacques, 47 Chollet, Derek, 117 Christian Democrats, German, 49 civil wars, 207–8, 255 climate change (global warming), 3–4, 5, 9, 10, 125–26, 220, 223–24, 248, 281 Copenhagen talks on, 176, 203, 223, 227, 230, 242, 243, 263, 276, 286 as global problem, 174, 175, 198, 199, 201–4, 206, 208, 209, 223–24, 227–30, 272, 273, 280, 281, 286–87 Kyoto treaty on, 126, 222, 229 zero-sum future and, 262, 263–64, 267, 272, 273, 276–77 Clinton, Bill, 44, 87, 95, 102, 117, 129–34, 162, 209, 222, 279, 304n Bush Jr. compared with, 133–34, 162, 165–67, 169 democracy enlargement and, 94, 103, 166 globalization and, 129–33, 156, 158, 218 Greenspan and, 107, 108 Lewinsky and, 148 military interventions and, 132–33, 166–67, 256 technology and, 118, 123–24, 126, 131, 304n win-win world and, 5, 129–30, 131, 133, 140, 169 Clinton, Hillary, 107, 166, 184, 206, 240, 275 Closing of the American Mind, The (Bloom), 99 Cobden, Richard, 128 Cohen, Stephen, 183 cold war, 3–6, 15, 36, 42, 43, 72, 76, 117, 127–28, 183, 225, 243, 245, 249, 272, 282, 291 end of, 3, 4, 5, 10, 25, 63, 84, 85, 87, 88, 94, 100, 101, 103, 119, 121, 131, 145–46, 163–64, 167, 168, 180, 196, 229, 281, 288 Collier, Paul, 207–8, 254 Colombia, 211, 242, 247, 249 colonialism, 17, 25, 131, 135–36 communism, 2, 16, 46, 63–64, 72, 96, 101, 102, 266 collapse of, 4, 11, 15, 17, 18, 19, 21, 43, 54, 58–59, 63–71, 76, 84, 85, 88, 90, 93, 100, 102, 105, 128, 146, 164 Communist Party, Chinese, 2, 15, 22, 23–24, 26–27, 59–60, 130, 136, 235 Communist Party, French, 46–47 Communist Party, Polish, 65, 67 Communist Party, South African, 69 Communist Party, Soviet, 53, 54, 57–58 Comprehensive Nuclear Test-Ban Treaty, 222 computers, 93, 119, 120, 122–23, 129 Congo, 208, 230, 255 Congress, U.S., 87, 88, 90, 103, 107, 111–14, 222, 266, 267, 292 Geithner’s testimony to, 264 Conservative Party, British, 30, 31, 33, 51, 301n consumerism, consumer demand, 6, 33, 63–64, 66, 128, 129, 200, 202–3 Cooper, Robert, 152 cooperation, 4, 5, 10, 124, 126, 134, 175, 194, 231, 274, 282, 290 global problems and, 199, 201, 212–13, 243–44, 277, 287 Copenhagen climate talks, 176, 203, 223, 227, 230, 242, 243, 263, 276, 286 Corrigan, E.
The world economy was, in fact, growing at its fastest rate for decades in the years immediately before the crash, and the American economy, the world’s largest, was crucial to global growth. But the United States now looks set for a long period with a weaker economy as consumers pay down debt and the government wrestles with its fiscal deficit. The European Union is also facing an age of austerity. Slower growth in the United States and Europe would mean slower growth for the world as a whole. Even if the BRICs (Brazil, Russia, India, and China) successfully manage to decouple their economic fortunes from those of the United States and to forge ahead without the need for strong American demand, the world economy will still feel very different. With the United States and the European Union growing more slowly than developing nations, it will be harder to make the case that this is a win-win world, in which all major powers are getting richer together and have an incentive to cooperate and to keep their markets open.
By 2010, Brazil, with a population of close to 200 million and the tenth-largest economy in the world, was widely recognized as a key emerging global power. Goldman Sachs, the investment bank, helped to confer this status by making Brazil one of the BRICs—the four emerging powers that Jim O’Neill, the bank’s chief economist, argued would help define the next century. Unworthy suspicions that Goldman had included Brazil alongside Russia, India, and China simply to make a catchier acronym were shelved as Brazil’s growing international status became more apparent. In June 2009, the BRICs held their first ever summit meeting in Russia—a rare example of an investment bank’s research paper provoking geopolitical change.14 Another plausible reason why Latin America’s role in the story of globalization has been downplayed is that the economic record of free-market reforms there is much patchier—and so less interesting and alarming to North Americans and Europeans than the seemingly inexorable rise of China and India.
Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else by Chrystia Freeland
Albert Einstein, algorithmic trading, banking crisis, barriers to entry, Basel III, battle of ideas, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Branko Milanovic, Bretton Woods, BRICs, business climate, call centre, carried interest, Cass Sunstein, Clayton Christensen, collapse of Lehman Brothers, conceptual framework, corporate governance, credit crunch, Credit Default Swap, crony capitalism, Deng Xiaoping, don't be evil, double helix, energy security, estate planning, experimental subject, financial deregulation, financial innovation, Flash crash, Frank Gehry, Gini coefficient, global village, Goldman Sachs: Vampire Squid, Gordon Gekko, Guggenheim Bilbao, haute couture, high net worth, income inequality, invention of the steam engine, job automation, joint-stock company, Joseph Schumpeter, knowledge economy, knowledge worker, linear programming, London Whale, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, Mikhail Gorbachev, Moneyball by Michael Lewis explains big data, NetJets, new economy, Occupy movement, open economy, Peter Thiel, place-making, Plutocrats, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, postindustrial economy, Potemkin village, profit motive, purchasing power parity, race to the bottom, rent-seeking, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, self-driving car, short selling, Silicon Valley, Silicon Valley startup, Simon Kuznets, Solar eclipse in 1919, sovereign wealth fund, stem cell, Steve Jobs, The Spirit Level, The Wealth of Nations by Adam Smith, Tony Hsieh, too big to fail, trade route, trickle-down economics, Tyler Cowen: Great Stagnation, wage slave, Washington Consensus, winner-take-all economy
That’s because the party was in honor of the Goldman thinker who served notice to the Western investment community a decade ago that the Internet revolution wasn’t the only economic game in town. The world was also being dramatically transformed by the rise of the emerging markets, in particular the four behemoths that Jim O’Neill, then chief economist at Goldman Sachs, dubbed the BRICs: Brazil, Russia, India, China. In the book Mr. O’Neill launched at his January party, The Growth Map: Economic Opportunity in the BRICs and Beyond, he argues that the BRIC concept “has become the dominant story of our generation” and introduces readers to “the next eleven” emerging markets, which are joining the BRICs in transforming the world. The group of Goldman executives who toasted Mr. O’Neill in New York are in the vanguard of one of the consequences of the powerful economic forces he describes—the rise, in the developed Western economies, of the 1 percent and the creation of what many are now calling a new gilded age.
“India’s gilded age is going to be a combination” CF interview with Ashutosh Varshney, November 13, 2011. The two gilded ages can also get in each other’s way See Mark Landler, “Chinese Savings Helped Inflate American Bubble,” New York Times, December 25, 2008. “In the long run, we are in good shape” CF interview with John Van Reenen, January 13, 2012. “This is an exciting story” Jim O’Neill, The Growth Map: Economic Opportunity in the BRICs and Beyond (Penguin, 2011), pp. 251–52. “Wealth will be created but also spent” Reader feedback on “The Second Economy,” McKinsey Quarterly Facebook post, November 1, 2011. http://www.facebook.com/note.php?note_id=10150536805679908. “I only hope you are right” Ibid. Until a few years ago, the reigning theory Richard A. Easterlin, “Does Economic Growth Improve the Human Lot?
Globalization may widen inequality within certain national borders, but on a global basis it has been a huge force for good, narrowing inequality among people on an unprecedented scale. Tens of millions of people from the BRICs and beyond are being taken out of poverty by the growth of their economies. While it is easy to focus on the fact that China has created so many billionaires, it should not be forgotten that in the past fifteen or so years, 300 million or more Chinese have been lifted out of poverty. . . . We at Goldman Sachs estimate that 2 billion people are going to be brought into the global middle class between now and 2030 as the BRIC and N-11 economies develop. . . . Rather than be worried by such developments, we should be both encouraged and hopeful. Vast swaths of mankind are having their chance to enjoy some of the fruits of wealth creation.
Imagining India by Nandan Nilekani
affirmative action, BRICs, British Empire, business process, business process outsourcing, call centre, clean water, colonial rule, corporate governance, cuban missile crisis, deindustrialization, demographic dividend, demographic transition, Deng Xiaoping, distributed generation, farmers can use mobile phones to check market prices, full employment, ghettoisation, glass ceiling, global supply chain, Hernando de Soto, income inequality, informal economy, joint-stock company, knowledge economy, labour market flexibility, land reform, LNG terminal, load shedding, Mahatma Gandhi, market fragmentation, Mikhail Gorbachev, Network effects, new economy, New Urbanism, open economy, pension reform, Potemkin village, price mechanism, race to the bottom, rent control, rolodex, Ronald Reagan, school vouchers, Silicon Valley, smart grid, special economic zone, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, transaction costs, trickle-down economics, unemployed young men, upwardly mobile, urban planning, urban renewal, women in the workforce, working poor, working-age population
And this capacity is especially valuable in the changing world market. In its strengths, India is a jigsaw piece that is falling perfectly into place in the landscape of the global economy. The single biggest advantage in this context is India’s demographic dividend, which is well-known thanks to the landmark Goldman Sachs BRICs report that came out in 2003. I discuss this demographic opportunity with Roopa Purushothaman, the brilliant and precocious economist—she was twenty-five at the time of the BRICs analysis—who coauthored the report. “We didn’t realize at the time the impact these projections would have,” Roopa tells me, “but the report created waves, and it drew a lot of attention to the potential effects of India’s demographic dividend.” It certainly did—I remember the somewhat premature blowing of trumpets across India when the report was released, and it formed the basis of the ill-fated “India Shining” campaign that the NDA government, up for reelection, launched.
Pollard, The Genesis of Modern Management, 1965, cited in Keith Grint, The Sociology of Work, Polity Publishers, 2005. 21 Sunil Amrith, “Political Culture of Health in India: A Historical Perspective,” Economic and Political Weekly, January 2007. 22 Helen (Hong) Qiao, “Will China Grow Old Before Getting Rich?,” in Goldman Sachs BRICs Report, 2006. 23 Valerie Hudson and Andrea den Boer, Bare Branches: The Security Implications of Asia’s Surplus Male Population. BCSIA Studies in International Security, MIT Press, 2004. 24 Myron Weiner and Michael S. Teitelbaum, Political Demography, Demographic Engineering, Berghahn Books, 2001. 25 Ibid. 26 Dominic Wilson and Roopa Purushothaman, “Dreaming with BRICs: The Path to 2050,” Global Economics Paper No. 99, Goldman Sachs, October 2003. 27 P. N. Mari Bhat, “Demographic Scenario, 2025,” Study #S-15, Research Projects on India—2025 conducted by Centre for Policy Research, New Delhi, July 2003. 28 Tim Dyson, “India’s Population: The Future,” in Twenty-First Century India: Population, Economy, Human Development, and the Environment, edited by Tim Dyson, Robert Cassen and Leela Visaria, Oxford University Press, 2004. 29 P.
Gandhi, Rahul Gandhi, Rajiv Gandhi, Sanjay Gandhi, Shailesh gas Gas Authority of India Ltd (GAIL) Gates, Bill Gates, Melinda Gates Foundation Gawli, Arun General Committee of Public Instruction General Motors George III, King of England George V, King of England Ghosh, Amitav Ghosh, Jayati Giuliani, Rudolph global information system (GIS) maps global warming Godrej Storwel cupboards Gokhale, Gopal Krishna gold Golden Quadrilateral project Goldman Sachs BRICs report Good Capitalism, Bad Capitalism (Baumol, Litan and Schramm) goods and services tax (GST) Gopalaswami, N. Gopinath, Captain Gorbachev, Mikhail Goswami, Omkar government, Indian: autocratic ; bureaucracy of ; corruption in ; decentralized; employment in ; reform of ; regulation by ; rural ; state and local ; top-down approach to transparency in ; urban Government of India Act (1935) government schools Govinda Gowalkar, M.
Extreme Money: Masters of the Universe and the Cult of Risk by Satyajit Das
affirmative action, Albert Einstein, algorithmic trading, Andy Kessler, Asian financial crisis, asset allocation, asset-backed security, bank run, banking crisis, banks create money, Basel III, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Bonfire of the Vanities, bonus culture, Bretton Woods, BRICs, British Empire, capital asset pricing model, Carmen Reinhart, carried interest, Celtic Tiger, clean water, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Daniel Kahneman / Amos Tversky, debt deflation, Deng Xiaoping, deskilling, discrete time, diversification, diversified portfolio, Doomsday Clock, Emanuel Derman, en.wikipedia.org, Eugene Fama: efficient market hypothesis, eurozone crisis, Fall of the Berlin Wall, financial independence, financial innovation, fixed income, full employment, global reserve currency, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, happiness index / gross national happiness, haute cuisine, high net worth, Hyman Minsky, index fund, interest rate swap, invention of the wheel, invisible hand, Isaac Newton, job automation, Johann Wolfgang von Goethe, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, Kevin Kelly, labour market flexibility, laissez-faire capitalism, load shedding, locking in a profit, Long Term Capital Management, Louis Bachelier, margin call, market bubble, market fundamentalism, Marshall McLuhan, Martin Wolf, merger arbitrage, Mikhail Gorbachev, Milgram experiment, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, mutually assured destruction, Naomi Klein, Network effects, new economy, Nick Leeson, Nixon shock, Northern Rock, nuclear winter, oil shock, Own Your Own Home, pets.com, Plutocrats, plutocrats, Ponzi scheme, price anchoring, price stability, profit maximization, quantitative easing, quantitative trading / quantitative ﬁnance, Ralph Nader, RAND corporation, random walk, Ray Kurzweil, regulatory arbitrage, rent control, rent-seeking, reserve currency, Richard Feynman, Richard Feynman, Richard Thaler, risk-adjusted returns, risk/return, road to serfdom, Robert Shiller, Robert Shiller, Rod Stewart played at Stephen Schwarzman birthday party, rolodex, Ronald Reagan, Ronald Reagan: Tear down this wall, savings glut, shareholder value, Sharpe ratio, short selling, Silicon Valley, six sigma, Slavoj Žižek, South Sea Bubble, special economic zone, statistical model, Stephen Hawking, Steve Jobs, The Chicago School, The Great Moderation, the market place, the medium is the message, The Myth of the Rational Market, The Nature of the Firm, The Predators' Ball, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, trickle-down economics, Turing test, Upton Sinclair, value at risk, Yogi Berra, zero-coupon bond
Only the fact that the piece is attributed to the analyst (for personal recognition) and the company (for marketing value) is important. It helps to come up with the big idea. In 2001, Jim O’Neill, an analyst with Goldman Sachs, came up with the BRIC (Brazil, Russia, India, and China) economies. CRIB was rejected as infantile. It was marketing genius. The now ubiquitous acronym pithily captured the increasing power of emerging countries in the global economy. As investors and companies flooded into the BRIC economies, Goldmans, the thought leaders, earned large fees from providing advice, raising money, and investing it. In India in 2007, when a fund management company was listed on the Mumbai Stock Exchange, its share price went up sharply because one of the management team had worked with O’Neill on the BRIC research. In 2010, O’Neill introduced a new acronym for favored frontier markets—CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa).
His speech is spiced with “When I had dinner/lunch/tea/tamarind juice with such and such.” According to him, “global think” will usher in a new age of endless prosperity and wealth for all denizens of the blue planet, driven by free market economics, democracy, and global trade. “The state of markets” turns out to be a Nobel-Prize laureate economist who reports “sound prospects,” “dampened risk,” and “subdued volatility.” The BRIC (Brazil, Russia, India, and China) economies will power the world with endless demand for commodities and “stuff,” interest rates will remain low and stock markets will always go up. “The state of mind” is Swami Muktinanda, who strides on to the stage in saffron robes finished off with elegant Gucci loafers. He urges the audience to harness the spiritual energy of the cosmos, trying to get everyone to levitate.
Treasury, 87, 174 VADM (very accurately defined maturity), 178 Bonfire of the Vanities, 239 bonuses, 317-318 books, financial, 96-98 boom and bust cycles, 305 Booth School of Business, 116 Borges, Jorge Luis, 210 Born, Brooksley, 300 borrowing levels, increase in, 265, 267-268 Boston Post, 34 Bottomley, Horatio, 89 Bourdieu, Pierre, 308 Bouton, Daniel, 227 Bowers, David, 357 Bowie Bonds, 168 Bowie, David, 157, 168, 186 Bowsher, Charles, 272 Boy, John, 330 BP (British Petroleum), Gulf of Mexico oil spill, 361 Braddock, Ben, 308 Brandenburg Gate, Ronald Reagan’s speech at, 101 Brazilian reals, 21 Breeden, Richard, 292, 296 Bretton Woods, 29-30 BRIC (Brazil, Russia, India, and China), 90 bridges, 150, 158 Bridgewater, 327 Bright-Sided: How the Relentless Promotion of Positive Thinking Has Undermined America, 186 British Aluminum (BA), 57 British pound sterling, 22 Brodsky, Joseph, 44 brokers money, 22 mortgages, 186 Brown, Gordon, 81, 342, 347 Brown, Ian Harold, 35 Bryan, William Jennings, 26, 324 bubbles, 277-278 economies, 39, 54 end of, 329 price, 299 Buckely, Christopher, 98 budget deficits, 1970s, 104 Buffett, Warren, 154, 202, 276, 325-326 bonuses, 319 compensation, 316 derivatives, 211, 225, 236 end of bubble, 329 Financial Times, 206 Gen Re Securities, 231 GE stock, 344 hedge funds, 261 ownership percentage of Moody’s, 283 purchase of, 322 bugs, gold, 28 Bulletin of Atomic Scientists, 34 bullion, gold.
3D printing, Asian financial crisis, backtesting, bank run, banking crisis, Berlin Wall, Bernie Sanders, BRICs, business climate, business process, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, centre right, colonial rule, Commodity Super-Cycle, corporate governance, crony capitalism, currency peg, dark matter, debt deflation, deglobalization, deindustrialization, demographic dividend, demographic transition, Deng Xiaoping, Doha Development Round, Donald Trump, Edward Glaeser, Elon Musk, eurozone crisis, failed state, Fall of the Berlin Wall, falling living standards, Francis Fukuyama: the end of history, Freestyle chess, Gini coefficient, hiring and firing, income inequality, indoor plumbing, industrial robot, inflation targeting, Internet of things, Jeff Bezos, job automation, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, labor-force participation, Malacca Straits, Mark Zuckerberg, market bubble, megacity, Mexican peso crisis / tequila crisis, mittelstand, moral hazard, New Economic Geography, North Sea oil, oil rush, oil shale / tar sands, oil shock, pattern recognition, Peter Thiel, pets.com, Plutocrats, plutocrats, Ponzi scheme, price stability, Productivity paradox, purchasing power parity, quantitative easing, Ralph Waldo Emerson, random walk, rent-seeking, reserve currency, Ronald Coase, Ronald Reagan, savings glut, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Simon Kuznets, smart cities, Snapchat, South China Sea, sovereign wealth fund, special economic zone, spectrum auction, Steve Jobs, The Wisdom of Crowds, Thomas Malthus, total factor productivity, trade liberalization, trade route, tulip mania, Tyler Cowen: Great Stagnation, unorthodox policies, Washington Consensus, WikiLeaks, women in the workforce, working-age population
Nothing illustrates the impermanence of global trends better than the fate of the most-hyped emerging nations of the 2000s, Brazil, Russia, India, and China. Marketers rolled them into the acronym BRICs, to capture the idea that these four giants were poised to dominate the global economy. Today the acronym is often qualified with an adjective like broken or crumbling, dismissed as a “bloody ridiculous investment concept,” or reshuffled into a new acronym like CRaBs, to capture how ungainly China, Russia, and Brazil look now. In the AC era, the annual GDP growth rate of China has fallen from 14 percent to private estimates of less than 5,3 of Russia from 7 percent to negative 2, and of Brazil from 4 percent to negative 3. Of the original BRICs, only India has any hope of growing anywhere near as fast in the 2010s as it did in the 2000s.
Cates, Andrew, Bhanu Baweja, and Sophie Constable. “Globalization’s Challenges.” UBS Research, July 21, 2015. Chatterji, Aaron, Edward Glaeser, and William Kerr. “Clusters of Entrepreneurship and Innovation.” National Bureau of Economic Research, Working Paper no. 19013, May 2013. Chaudhary, Latika, Aldo Musacchio, Steven Nafziger, and Se Yan. “Big BRICs, Weak Foundations: The Beginning of Public Elementary Education in Brazil, Russia, India, and China.” National Bureau of Economic Research, Working Paper no. 17852, February 2012. Credit Suisse Demographic Research, n.d. Czaika, Mathias, and Christopher Parsons. “The Gravity of High-Skilled Migration Policies.” International Migration Institute, May 21, 2015. “Dominant and Dangerous.” Economist, October 3, 2015. Eberstadt, Nicholas. “The Demographic Future: What Population Growth—and Decline—Means for the Economy.”
Group Hype Long growth spurts, as we have seen, are improbable in any one country, and even less probable for a collection of countries. This basic fact did not dampen the hype of the last decade. A combination of forces after 2002 helped trigger an emerging-world boom, which saw growth double over the next five years to an average rate of more than 7 percent for the more than 150 countries tracked by the IMF. Forecasters soon projected that the largest emerging economies—Brazil, Russia, India, and China—would expand at a torrid pace, with their average incomes eventually catching up with those of the developed world. Thus was born the myth of mass “convergence,” a worldwide leveling of incomes. This scenario had a beguiling appeal to all kinds of people, from NGOs rooting for the poor to global investors hoping to capitalize on emerging markets, to pundits eager to identify the next big shift in the global balance of power.
Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis by Anatole Kaletsky
bank run, banking crisis, Benoit Mandelbrot, Berlin Wall, Black Swan, bonus culture, Bretton Woods, BRICs, Carmen Reinhart, cognitive dissonance, collapse of Lehman Brothers, Corn Laws, correlation does not imply causation, credit crunch, currency manipulation / currency intervention, David Ricardo: comparative advantage, deglobalization, Deng Xiaoping, Edward Glaeser, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, F. W. de Klerk, failed state, Fall of the Berlin Wall, financial deregulation, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, George Akerlof, global rebalancing, Hyman Minsky, income inequality, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Rogoff, laissez-faire capitalism, Long Term Capital Management, mandelbrot fractal, market design, market fundamentalism, Martin Wolf, moral hazard, mortgage debt, new economy, Northern Rock, offshore financial centre, oil shock, paradox of thrift, peak oil, pets.com, Ponzi scheme, post-industrial society, price stability, profit maximization, profit motive, quantitative easing, Ralph Waldo Emerson, random walk, rent-seeking, reserve currency, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, short selling, South Sea Bubble, sovereign wealth fund, special drawing rights, statistical model, The Chicago School, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, Washington Consensus
See Claudia Goldin and Lawrence Katz, “Transitions: Career and Family Life Cycles of the Educational Elite, American Economic Review: Papers and Proceedings 98:2 (2008): 363-369. Chapter Nineteen 1 For a detailed discussion of the growth potential of the biggest developing countries, the BRICs—Brazil, Russia, India, and China, plus smaller developing countries coming up behind them—see Dominic Wilson and Roopa Purushothaman, “Dreaming with BRICs: The Path to 2050,” Global Economics Paper No. 99, Goldman Sachs Global Research, October 2003. Available from http://www2.goldmansachs.com/ideas/brics/book/99-dreaming.pdf. See also Goldman Sachs Global Economics Group, BRICs and Beyond, November 2007. Available from http://www2.goldmansachs.com/ideas/brics/book/BRIC-Full.pdf. 2 Summarizing the conclusions of April 2009 G20 summit in London Gordon Brown declared: “The old Washington Consensus is over.” See Jonathan Weisman and Alistair Macdonald, “Obama, Brown Strike Similar Note on Economy,” Wall Street Journal, April 3, 2009.
“Cities, Regions and the Decline of Transport Costs.” NBER Working Paper 9886. Cambridge, MA: National Bureau of Economic Research, 2003. Goldin, Claudia, and Lawrence Katz. “Transitions: Career and Family Life Cycles of the Educational Elite.” American Economic Review: Papers and Proceedings 98:2 (2008): 363-369. Goldman Sachs Global Economics Group. BRICs and Beyond. New York: Goldman Sachs Global Research Centre, November 2007. Available from http://www2.goldmansachs.com/ideas/brics/book/BRIC-Full.pdf. Goodhart, C.A.E. “Monetary Relationships: A View from Threadneedle Street.” Papers in Monetary Economics, vol. 1. Sydney: Reserve Bank of Australia, 1975. Greenspan, Alan. “The Challenge of Central Banking.” Remarks at the Annual Dinner and Francis Boyer Lecture of the American Enterprise Institute for Public Policy Research.
Washington: Peterson Institute for International Economics, 1990. Williamson, John and Roberto Zagha. “From the Hindu Rate of Growth to the Hindu Rate of Reform.” Working Paper #144. Center for Research on Economic Development and Policy Reform. Palo Alto: Stanford University, 2002. Wilson, Dominic, and Roopa Purushothaman. “Dreaming with BRICs: The Path to 2050.” Global Economics Paper No. 99. New York: Goldman Sachs Global Research Centre, October 2003. Available from http://www2.goldmansachs.com/ideas/brics/book/99-dreaming.pdf. Wolf, Martin. Why Globalization Works. New Haven: Yale University Press, 2004. Wood, John Cunningham, and Michael McLure, eds. Vilfredo Pareto: Critical Assessments. New York: Routledge, 1999. Zietz, Joachim. “A Note on Tests of Efficient Market Hypotheses: The Case of the Forward Exchange Rate.”
Stuffocation by James Wallman
3D printing, Airbnb, back-to-the-land, Berlin Wall, big-box store, Black Swan, BRICs, carbon footprint, Cass Sunstein, clean water, collaborative consumption, crowdsourcing, David Brooks, Fall of the Berlin Wall, happiness index / gross national happiness, high net worth, income inequality, James Hargreaves, Joseph Schumpeter, Martin Wolf, McMansion, means of production, Nate Silver, Occupy movement, post-industrial society, Post-materialism, post-materialism, Richard Florida, Richard Thaler, sharing economy, Silicon Valley, Simon Kuznets, Skype, spinning jenny, The Signal and the Noise by Nate Silver, Thorstein Veblen, Tyler Cowen: Great Stagnation, World Values Survey, Zipcar
.), Megachange: The World in 2050 (London: Economist, 2011). See also, the French Institute of Demographic Studies (Ined)’s forecast that there will be 9.7 billion by 2050, up from just over 7 billion today. The rise of the global middle class Consider, for example, the opening statement in Dominic Wilson, Alex L. Kelston, Swarnali Ahmed, “Is this the BRICs Decade?“, Goldman Sachs’ BRICs Monthly Issue, 10/03, May 2010: “The last decade saw the BRICs make their mark on the global economic landscape. Over the past 10 years they have contributed over a third of world GDP growth and grown from one-sixth of the world economy to almost a quarter (in PPP terms). Looking forward to the coming decade, we expect this trend to continue and become even more pronounced.“ Or consider the final sentence in Catherine Wolfram, “Rising Middle Class Fuels Global Energy Surge“, Bloomberg.com, 17 January 2012: “There is no doubt that the rise of the global middle class is a positive development.
3D printing, Airbnb, American energy revolution, autonomous vehicles, Bakken shale, barriers to entry, Bernie Sanders, BRICs, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, cloud computing, collective bargaining, computer age, dark matter, David Ricardo: comparative advantage, deindustrialization, dematerialisation, Deng Xiaoping, deskilling, Dissolution of the Soviet Union, Donald Trump, Downton Abbey, Edward Glaeser, Erik Brynjolfsson, eurozone crisis, everywhere but in the productivity statistics, falling living standards, first square of the chessboard, first square of the chessboard / second half of the chessboard, Ford paid five dollars a day, Francis Fukuyama: the end of history, future of work, gig economy, global supply chain, global value chain, hydraulic fracturing, income inequality, indoor plumbing, industrial robot, interchangeable parts, Internet of things, inventory management, invisible hand, Jacquard loom, James Watt: steam engine, Jeff Bezos, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph-Marie Jacquard, knowledge economy, low skilled workers, lump of labour, Lyft, manufacturing employment, means of production, new economy, performance metric, pets.com, price mechanism, quantitative easing, Ray Kurzweil, rent-seeking, reshoring, rising living standards, Robert Gordon, Ronald Coase, savings glut, Second Machine Age, secular stagnation, self-driving car, sharing economy, Silicon Valley, single-payer health, software is eating the world, supply-chain management, supply-chain management software, TaskRabbit, The Nature of the Firm, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, trade liberalization, transaction costs, Tyler Cowen: Great Stagnation, Uber and Lyft, Uber for X, very high income, working-age population
Between the end of the Second World War and the late 1990s, relatively few emerging economies were catching up to rich ones at any given point: that is, were enjoying faster growth in real GDP per capita. Those that did caught up at a snail’s pace, growing only about 1.5 percentage points faster per year, according to one estimate.9 From the late 1990s, however, close to 75 per cent of emerging economies experienced catch-up growth and at a scorching pace, growing about 3.3 percentage points faster than rich economies. This was the BRIC era; in 2001 Goldman Sachs economist Jim O’Neill identified the big emerging markets, Brazil, Russia, India and China, as countries likely to reshape the global economy and financial markets, thanks to their extremely rapid growth.10 Yet the growth acceleration extended right across most of the developing world. What happened? The answer seems simple enough: China happened. In 1980, GDP per person in China, adjusted for local living costs, was 2.5 per cent of that in America.
Robert Lucas Jr (1937–) is an American economist at the University of Chicago. In 1995 he won the Nobel Prize in Economic Sciences. 8. Lucas, Robert E., Jr, ‘On the Mechanics of Economic Development’, Journal of Monetary Economics, 1988. 9. Subramanian and Kessler, ‘The Hyperglobalization of Trade and its Future’. 10. Terence James ‘Jim’ O’Neill, Baron O’Neill of Gatley (1957–), is a British economist and the former chairman of Goldman Sachs Asset Management. He is best known for coining BRIC, the acronym that stands for Brazil, Russia, India and China – the four rapidly developing countries that have come to symbolize the shift in global economic power away from the developed G7 economies. 11. Baldwin, Richard, ‘Trade and Industrialization after Globalization’s Second Unbundling: How Building and Joining a Supply Chain are Different and Why it Matters’ in Feenstra, Robert C., and Taylor, Alan M., eds., Globalization in an Age of Crisis: Multilateral Economic Cooperation in the Twenty-First Century (Chicago, IL: University of Chicago Press, 2014). 12.
Acemoglu, Daron ageing populations agency, concept of Airbnb Amazon American Medical Association (AMA) anarchism Andreessen, Marc Anglo-Saxon economies Apple the iPhone the iPod artisanal goods and services Atkinson, Anthony Atlanta, Georgia austerity policies automation in car plants fully autonomous trucks of ‘green jobs’ during industrial revolution installation work as resistant to low-pay as check on of menial/routine work self-driving cars and technological deskilling automobiles assembly-line techniques automated car plants and dematerialization early days of car industry fully autonomous trucks self-driving cars baseball Baumol, William Belgium Bernanke, Ben Bezos, Jeff black plague (late Middle Ages) Boston, Massachusetts Brazil BRIC era Bridgewater Associates Britain deindustrialization education in extensions of franchise in financial crisis (2008) Great Exhibition (London 1851) housing wealth in and industrial revolution Labour Party in liberalization in political fractionalization in real wages in social capital in surpassed by US as leading nation wage subsidies in Brontë, Charlotte Brynjolfsson, Erik bubbles, asset-price Buffalo Bill (William Cody) BuzzFeed Cairncross, Frances, The Death of Distance (1997) capital ‘deepening’ infrastructure investment investment in developing world career, concept of cars see automobiles Catalan nationalism Central African Republic central banks Chait, Jonathan Charlotte chemistry, industrial Chicago meat packers in nineteenth-century expansion of World’s Columbia Exposition (1893) China Deng Xiaoping’s reforms economic slow-down in era of rapid growth foreign-exchange reserves ‘green jobs’ in illiberal institutions in inequality in iPod assembly in technological transformation in wage levels in Chorus (content-management system) Christensen, Clayton Cisco cities artisanal goods and services building-supply restrictions growth of and housing costs and industrial revolution and information membership battles in rich/skilled and social capital clerical work climate change Clinton, Hillary Coase, Ronald Columbia University, School of Mines communications technology communism communities of affinity computing app-based companies capability thresholds cloud services cycles of experimentation desktop market disk-drive industry ‘enterprise software’ products exponential progress narrative as general purpose technology hardware and software infrastructure history of ‘Moore’s Law’ and productivity switches transistors vacuum tubes see also digital revolution; software construction industry regulations on Corbyn, Jeremy Corliss steam engine corporate power Cowen, Tyler craft producers Craigslist creative destruction the Crystal Palace, London Dalio, Ray Dallas, Texas debt deindustrialization demand, chronically weak dematerialization Detroit developing economies and capital investment and digital revolution era of rapid growth and industrialization pockets of wealth in and ‘reshoring’ phenomenon and sharp slowdown and social capital see also emerging economies digital revolution and agency and company cultures and developing economies and distance distribution of benefits of dotcom tech boom emergence of and global imbalances and highly skilled few and industrial institutions and information flows investment in social capital niche markets pace of change and paradox of potential productivity and output and secular stagnation start-ups and technological deskilling techno-optimism techno-pessimism as tectonic economic transformation and trading patterns web journalism see also automation; computing; globalization discrimination and exclusion ‘disruption’, phenomenon of distribution of wealth see inequality; redistribution; wealth and income distribution dotcom boom eBay economics, classical The Economist education in emerging economies during industrial revolution racial segregation in USA and scarcity see also university education electricity Ellison, Glenn Ellison, Sara Fisher emerging economies deindustrialization economic growth in education in foreign-exchange reserves growth in global supply chains highly skilled workers in see also developing economies employment and basic income policy cheap labour as boost to and dot.com boom in Europe and financial crisis (2008) ‘green jobs’ low-pay sector minimum wage impact niche markets in public sector ‘reshoring’ phenomenon as rising globally and social contexts and social membership as source of personal identity and structural change trilemma in USA see also labour; wages Engels, Friedrich environmental issues Etsy euro- zone Europe extreme populist politics liberalized economies political fractionalization in European Union Facebook face-recognition technology factors of production land see also capital; labour ‘Factory Asia’ factory work assembly-line techniques during industrial revolution family fascism Federal Reserve financial crisis (2008) financial markets cross-border capital flows in developing economies Finland firms and companies Coase’s work on core competencies culture of dark matter (intangible capital) and dematerialization and ‘disruption’ ‘firm-specific’ knowledge and information flows internal incentive structures pay of top executives shifting boundaries of social capital of and social wealth start-ups Ford, Martin, Rise of the Robots (2015) Ford Motor Company fracking France franchise, electoral Friedman, Milton Fukuyama, Francis Gates, Bill gender discrimination general purpose technologies enormous benefits from exponential progress and skilled labour supporting infrastructure and time lags see also digital revolution Germany ‘gig economy’ Glaeser, Ed global economy growth in supply chains imbalances lack of international cooperation savings glut and social consensus globalization hyperglobalization and secular stagnation and separatist movements Goldman Sachs Google Gordon, Robert Gothenburg, Sweden Great Depression Great Depression (1930s) Great Exhibition, London (1851) Great Recession Great Stagnation Greece ‘green jobs’ growth, economic battle over spoils of boom (1994-2005) and classical economists as consistent in rich countries decline of ‘labour share’ dotcom boom emerging economies gains not flowing to workers and industrial revolution Kaldor’s ‘stylized facts of’ and Keynes during liberal era pie metaphor in post-war period and quality of institutions and rich/elite cities rich-poor nation gap and skilled labour guilds Hansen, Alvin Hayes, Chris, The Twilight of the Elites healthcare and medicine hedge funds and private equity firms Holmes, Oliver Wendell Hong Kong housing in Bay-Area NIMBY campaigns against soaring prices pre-2008 crisis zoning and regulations Houston, Texas Huffington Post human capital Hungary IBM identity, personal immigration and ethno-nationalist separatism and labour markets in Nordic countries and social capital income distribution see inequality; redistribution; wealth and income distribution India Indonesia industrial revolution automation during and economic growth and growth of cities need for better-educated workers and productivity ‘second revolution’ and social change and wages and World’s Fairs inequality and education levels between firms and housing wealth during industrial revolution during liberal era between nations pay of top executives rise of in emerging economies and secular stagnation in Sweden wild contingency of wealth see also rich people; wealth and income distribution inflation in 1970s hyperinflation information technology see computing Intel interest rates International Space Station (ISS) iRobot ISIS Italy Jacksonville, Florida Jacquard, Joseph Marie Japan journalism Kaldor, Nicholas Keynes, John Maynard Kurzweil.
2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, Airbnb, American Society of Civil Engineers: Report Card, asset-backed security, Bakken shale, banking crisis, BRICs, British Empire, business process, business process outsourcing, call centre, Carmen Reinhart, clean water, collapse of Lehman Brothers, collateralized debt obligation, credit crunch, currency manipulation / currency intervention, demand response, Donald Trump, Frederick Winslow Taylor, high net worth, housing crisis, hydraulic fracturing, If something cannot go on forever, it will stop, illegal immigration, index fund, intermodal, inventory management, Kenneth Rogoff, labor-force participation, LNG terminal, low skilled workers, Mark Zuckerberg, Martin Wolf, Maui Hawaii, McMansion, mortgage debt, Network effects, new economy, obamacare, oil shale / tar sands, oil shock, peak oil, Plutocrats, plutocrats, price stability, quantitative easing, race to the bottom, reserve currency, reshoring, Richard Florida, rising living standards, risk tolerance, risk/return, Silicon Valley, Silicon Valley startup, six sigma, Skype, sovereign wealth fund, Steve Jobs, superstar cities, the High Line, transit-oriented development, Wall-E, Yogi Berra, Zipcar
The new conventional wisdom, as Floyd Norris of the New York Times wrote in the spring of 2011, holds, “It is hard to see how the euro zone can be undone, but it is even harder to see how it will prosper.”8 In his 2008 book, The Post-American World, Fareed Zakaria, editor of Newsweek International, convincingly asserted that the developing world will play a greater role in the global economy and in geopolitical affairs. But as impressive as the growth of the BRIC nations—Brazil, Russia, India, and China—has been, they are still way behind the United States, and they are still extremely poor. With a combined population of 2.85 billion, the BRIC countries had a combined GDP of $11 trillion in 2010, about $3,860 per person. The United States, with 311 million people, managed to produce nearly $15 trillion in GDP in 2010, or $48,000 per capita. The gap between the United States and these developing economies is so vast that they will need a few more decades of uninterrupted growth before their citizens’ standard of living truly matches that of Americans.
The rescue plans and recovery efforts of 2008 and 2009 were conceived on the fly, and they were haphazard and painful. But the bailouts, stimulus, and private-sector restructuring efforts got the country back on the path to growth, unsatisfying as it has been. In fact, U.S. companies and consumers, with an assist from policymakers, proved adept at restructuring rapidly and shucking debt. Jim O’Neill, the London-based Goldman Sachs economist who coined the term BRIC, hasn’t given up on the United States. “Crucially, the post–credit bubble collapse doesn’t seem to have left some other powerful attributes of the U.S. economy severely damaged,” he wrote in the Financial Times in January 2011. “Another wonderful attribute of the U.S. is the decisiveness of policymaking, despite frequent evidence to the contrary in Congress.” These abilities helped the public and private sectors to put the brakes on the epic fail of late 2008 and early 2009 and propelled the beginnings of a recovery.
But perhaps the rest of the country should strive to become a little more like North Dakota, in its ability to tap internal resources, to produce as well as consume, to engage with the world, and to reverse decline. The North Dakota miracle starts with some very good geological fortune and the application of a new technology to make much more of an existing internal resource. The boom in the state, whose economy grew a BRIC-esque 7 percent in 2010, is being led by oil.3 First discovered in the 1950s, the oil fields in western North Dakota declined in the 1980s and 1990s. Oil production peaked at about 150,000 barrels per day in the late 1970s, and in 2001 it fell to a relative trickle of 85,000 barrels per day. But starting in the middle of the 2000s, new techniques were brought to bear in the Bakken Shale, the stratum of rock that lies under about 15,000 square miles of scrubland in the western part of the state.
The Global Auction: The Broken Promises of Education, Jobs, and Incomes by Phillip Brown, Hugh Lauder, David Ashton
affirmative action, barriers to entry, Branko Milanovic, BRICs, business process, business process outsourcing, call centre, collective bargaining, corporate governance, credit crunch, David Ricardo: comparative advantage, deindustrialization, deskilling, Frederick Winslow Taylor, full employment, future of work, glass ceiling, global supply chain, immigration reform, income inequality, industrial robot, job automation, Joseph Schumpeter, knowledge economy, knowledge worker, labour market flexibility, low skilled workers, manufacturing employment, market bubble, market design, neoliberal agenda, new economy, pensions crisis, post-industrial society, profit maximization, purchasing power parity, QWERTY keyboard, race to the bottom, Richard Florida, Ronald Reagan, shareholder value, Silicon Valley, sovereign wealth fund, stem cell, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, Thomas L Friedman, trade liberalization, transaction costs, trickle-down economics, winner-take-all economy, working poor
These data should be treated as indicative because it is difﬁcult to assess their reliability. Equally, enrollment ﬁgures do not tell us how many actually enter the global job market on an annual basis due to high levels of dropouts in some countries. But it does show that the expansion of higher education has not been limited to Organisation for Economic Co-operation and Development (OECD) member states or the BRIC nations of Brazil, Russia, India, and China. Ukraine and Mexico have more people enrolled in higher education than the United Kingdom, with Poland and Turkey making rapid gains, almost doubling their participation rates between 1996–2007. Diana Farrell and colleagues at the McKinsey Global Institute also found that “Poland has nearly as many suitable engineers as does much more populous Russia. The Czech Republic, Hungary, Poland, and Russia together have as many suitable generalists as does India, which has 5 times their total population, and nearly as many suitable engineers.
See also labor arbitrage aristocracy of talent, 161–62 Asia, 44 brain circulation, 22 brain drain, 39, 92 brainpower, 16, 18, 30, 99, 124 branding, 95–96 Asian ﬁnancial crisis, 58, 151 Braverman, Harry, 80 Asian Tigers, 8, 10, 18, 32, 36–40 The Atlantic Magazine, 151 auto industry, 49–50, 54–55, 59–60, 66, 70–71, 83–84, 101–2, 105–6, 111, 174n27, 174–75n34 Brazil, 32, 182n43 BRIC (Brazil, Russia, India, and China) nations, 35, 152, 181n41 Brint, Steven, 173n9 Britain, 21, 116, 122, 124, 134, 139–40, baby boomers, 19 backlash, 149 151, 153, 158, 183n18. See also United Kingdom Brown, Gordon, 23 bailout, 111, 148, 151 Batra, Ravi, 178n21 Baumol, William, 152 Becker, Gary, 122–23 Brown, Phillip, 143, 182n3 Buchanan, James, 134 build to order, 101–2 Bush administration, 111–12 business processes, 51–52, 72, 74–76, 77, 79 Bussolo, Maurizio, 130–31 recessions, 148 reverse engineering, 42 riots, 10 call centers, 51–52, 73, 81 Callahan, David, 144 Cambridge University, 134 Canada, 30, 91 Cao, Cong, 44 technology transfer, 41 telecommunications industry, 54 trade imbalance, 108–9, 151 unemployment, 41, 47 wage rate increase, 59 Capco Consulting, 77 capital (deﬁned), 162–63, 187n30 capitalism, 4–6, 10–11, 17, 23–26, 54, 67–68, 110–11, 113, 115, 151, 157, 161, 180n25, war for talent, 88–89 WTO (World Trade Organization), 41 Christian, Parenti, 174n33 classical economics theory, 100 187n26 casino economy, 187n31 club of rich nations, 30, 32, 168n2 cold-callers, 74 CFO Magazine, 79 Chambers, John, 85 Chanel, 114 collective bargaining, 17, 125, 160 colleges and universities, 6, 7–9, 25–26, 30, 31, 32, 40–41, 46–47, 87–88, 93–95, 116, childhood, 11–12, 143–46, 160 China.
See also United Kingdom Brown, Gordon, 23 bailout, 111, 148, 151 Batra, Ravi, 178n21 Baumol, William, 152 Becker, Gary, 122–23 Brown, Phillip, 143, 182n3 Buchanan, James, 134 build to order, 101–2 Bush administration, 111–12 business processes, 51–52, 72, 74–76, 77, 79 Bussolo, Maurizio, 130–31 recessions, 148 reverse engineering, 42 riots, 10 call centers, 51–52, 73, 81 Callahan, David, 144 Cambridge University, 134 Canada, 30, 91 Cao, Cong, 44 technology transfer, 41 telecommunications industry, 54 trade imbalance, 108–9, 151 unemployment, 41, 47 wage rate increase, 59 Capco Consulting, 77 capital (deﬁned), 162–63, 187n30 capitalism, 4–6, 10–11, 17, 23–26, 54, 67–68, 110–11, 113, 115, 151, 157, 161, 180n25, war for talent, 88–89 WTO (World Trade Organization), 41 Christian, Parenti, 174n33 classical economics theory, 100 187n26 casino economy, 187n31 club of rich nations, 30, 32, 168n2 cold-callers, 74 CFO Magazine, 79 Chambers, John, 85 Chanel, 114 collective bargaining, 17, 125, 160 colleges and universities, 6, 7–9, 25–26, 30, 31, 32, 40–41, 46–47, 87–88, 93–95, 116, childhood, 11–12, 143–46, 160 China. See also BRIC (Brazil, Russia, India, and China) nations auto industry, 54 Blackstone Group Greater China, 43, Collins, Randall, 139 The Coming of Post-Industrial Society, 18 comparative advantage, 111 180n24 cheating scandal, 144 competencies, 78–79 competition China Development Bank (CDB), 42 China International Marine Containers Group (CIMC), 57–58 academic credentials, 139 Asian Tigers, 18 and education, 40 China Investment Corporation, 42–43 Chinese Academy of Science, 44 elite universities, 95 global auction, 132 Chinese Dragons, 58 education, 7–8, 29–30, 32, 32–35 global auction, 148 global economy, 3 human capital, 18, 106, 161 knowledge economy, 15 government as economic partner, 157–58 green technologies, 157 knowledge wars, 20, 22–23, 30, 47, 164 mass production, 71–72 Harvard Girl Yiting Liu, 145 Higher Education Mega Centre, 29 Human Genome Project, 40 neoliberalism, 24 and prosperity, 154–55 quality-cost revolution, 50 income inequalities, 129 intellectual property rights (IPRs), 53 knowledge wars, 20 middle class, 2, 130 modernization, 157 nanotechnology program, 44 self-interest, 40 STEM subjects studies, 155 supply chains, 104–5 transnational companies, 99–100 trust relations, 107 war for talent, 87, 89–93 opportunity trap, 137 Project 211, 33 quality-cost revolution, 50, 55, 60–61 R&D (research and development), 42–43, 53, 157 190 119, 121, 133–34, 136, 140, 153, 162, 177n26 Index winner-takes-all, 11, 165n7 computer industry, 42, 56, 66, 72–77, 81, 89, 100–102, 174n27.
How to Run the World: Charting a Course to the Next Renaissance by Parag Khanna
Albert Einstein, Asian financial crisis, back-to-the-land, bank run, blood diamonds, borderless world, BRICs, British Empire, call centre, carbon footprint, charter city, clean water, cleantech, cloud computing, corporate governance, corporate social responsibility, Deng Xiaoping, Doha Development Round, don't be evil, double entry bookkeeping, energy security, European colonialism, facts on the ground, failed state, friendly fire, global village, Google Earth, high net worth, index fund, informal economy, invisible hand, labour mobility, laissez-faire capitalism, Masdar, megacity, microcredit, mutually assured destruction, Naomi Klein, New Urbanism, offshore financial centre, oil shock, open economy, out of africa, private military company, Productivity paradox, race to the bottom, RAND corporation, reserve currency, Silicon Valley, smart grid, South China Sea, sovereign wealth fund, special economic zone, sustainable-tourism, The Fortune at the Bottom of the Pyramid, The Wisdom of Crowds, too big to fail, trade liberalization, trickle-down economics, UNCLOS, uranium enrichment, Washington Consensus, X Prize
Nothing Succeeds Like Success China is the world’s factory floor, India its back office, Russia its gas station, and Brazil its farm. These are the “BRICs”: Brazil, Russia, India, and China. You’ve been told already that if you’re not invested there, you’re missing the future. And yet they didn’t get to this vaunted position by following Western prescriptions; they did just one thing well and have expanded from there. Brazil is now an industrial and energy power also; Russia is growing its agricultural production; India has become a major player in steel, manufacturing, and biotechnology; and China has moved up the value chain to semiconductors and satellites. The growing spending power of BRIC middle classes has Western retail brands scrambling, while the success of BRIC companies has blurred the traditional boundaries between North and South and realigned global economic relations faster than any multilateral negotiation.
The growing spending power of BRIC middle classes has Western retail brands scrambling, while the success of BRIC companies has blurred the traditional boundaries between North and South and realigned global economic relations faster than any multilateral negotiation. They are now part of every conversation about how to run the world. Since Goldman Sachs first coined the term “BRIC,” corporate labels have captured investors’ imagination, reminding us that credit-rating agencies often have more influence over a country’s prospects than the World Bank does. Indonesia, Egypt, and other countries now clamor to earn such labels that increase their visibility and attractiveness to investors from the United States, Saudi Arabia, and China. Malaysia’s leadership explicitly brands its country “Malaysia Incorporated” to emphasize its fusion of public and private credentials. It takes its lesson from neighboring Singapore, the most respected government in the world—not least because it is modeled on and run like a company.
Importantly, all of these actors should allow organic alliances to emerge to solve the problems at hand. We can admire the boundless creativity of human ingenuity all we want. Better diplomacy is how to harness it. If you can afford to buy this book, or have the technology to order it, you have no excuse not to contribute to the new mega-diplomacy. The future of global governance is not as simple as talking about the “BRIC” countries. Instead, it is a bricolage of movements, governance arrangements, networks, soft law codes, and other systems at the local, regional, and global level. Some experts are skeptical that a world of connected but self-governing communities of various sizes—and many more transcending space altogether—can be more than the sum of their parts. But we don’t have to be skeptics to apply skepticism to evaluate what works in diplomacy today.
air freight, banking crisis, big-box store, BRICs, carbon footprint, collateralized debt obligation, collective bargaining, credit crunch, David Ricardo: comparative advantage, decarbonisation, energy security, food miles, hydrogen economy, illegal immigration, immigration reform, invisible hand, James Watt: steam engine, Just-in-time delivery, market clearing, megacity, North Sea oil, oil shale / tar sands, oil shock, peak oil, profit maximization, reserve currency, South Sea Bubble, the market place, The Wealth of Nations by Adam Smith, trade liberalization
King Hubbert’s quips: “So long as oil is used as a source of energy, when the energy cost of recovering a barrel of oil becomes greater than the energy content of the oil, production will cease no matter what the monetary price may be” (www.hubbertpeak.com/Hubbert/). CHAPTER 2: DEMAND SHIFT p. 57: To get a glimpse of the extravagance of Ski Dubai, go to skidxb.com. p. 63: The “BRIC” moniker first appeared in the 2003 Goldman Sachs report, “Dreaming With the BRICs” (www2.goldmansachs.com/ideas/brics/book/99-dreaming.pdf). The crucial idea was that the economies of Brazil, Russia, India and China will soon overtake those of the more developed countries by their sheer size. p. 65: For an analysis of how OPEC’s own consumption growth is eating into its export capacity, and the attendant implications for world oil supply see Jeff Rubin and Peter Buchanan “OPEC’s Growing Call On Itself,” September 10, 2007 (research.cibcwm.com/res/Eco/EcoResearch.html).
Within five years, the majority of the world’s auto fleet won’t be driving on the autobahns of Germany or the interstate highways of America but on the crowded roads of India and China, teeming with first-time drivers. North America may be the land of the car, but that’s very much a rearview mirror on where car sales are growing today. Whereas even in the best of economic times, car sales in mature markets like the US and Western Europe grew at a miserly 1 to 2 percent per year, if that, they grew at ten to twenty times that pace in Brazil, Russia, India and China (the so-called BRIC countries, identified as the economic titans of the coming decades by Goldman Sachs in 2001). In early 2009 China’s car market surpassed the US market, which is likely to come out of the recession about half the size it went in. And China was by no means the only place outside of the OECD where car sales were booming. Sales were up 30 percent in Russia and Brazil in 2007, while India also sported double-digit growth rates.
Everyone, rich and poor, bought into globalization because everyone benefited. Incomes rose globally, and at historically impressive rates. Because we wanted to pay less for shoes, someone in Vietnam moved from the rice fields to a factory. He or she may not have lived in luxury, but then societies don’t go from subsistence farming to first-world prosperity in one ambitious step—though, as the growth rates of the BRIC countries and the so-called Asian Tigers show, it is possible to move up the economic ladder in a hurry in a global economy. But rising energy costs will soon decouple that factory in Vietnam from its North American or European market. As North American and European markets return to local sourcing, they will sever their trade links with the developing world and force that world to find another way to grow.
Berlin Wall, blood diamonds, BRICs, British Empire, central bank independence, clean water, colonial rule, corporate social responsibility, crony capitalism, Deng Xiaoping, Donald Trump, F. W. de Klerk, Gini coefficient, Livingstone, I presume, McMansion, megacity, offshore financial centre, oil shock, open economy, purchasing power parity, rolodex, Ronald Reagan, Silicon Valley, South China Sea, sovereign wealth fund, structural adjustment programs, trade route, transfer pricing, upwardly mobile, urban planning, Washington Consensus, WikiLeaks
Some of the money spent on the Nkandla residence was diverted from the Department of Public Works’ budget for inner-city regeneration, the body charged with remoulding the physical legacy of apartheid. South Africa aspires to be part of the vanguard of a new world order. Alongside Brazil, Russia, India and China, it belongs to the so-called BRICS nations, a grouping of fast-growing industrial economies that began as an acronym of the five countries, coined by the Goldman Sachs economist Jim O’Neill, and has evolved into a club that has its own summits and, as of 2014, its own bank, a counterweight to the World Bank and the IMF. At the BRICS summit in Brazil in July 2014, Zuma told his fellow heads of state that he recognized that the South African economy ‘needs to be more inclusive, more dynamic, with the fruits of growth shared equitably’. If Zuma is sincere in that endeavour, he will need to break the spell of southern Africa’s stupendous natural riches, which have brought violence and dispossession ever since an English vicar’s son called Cecil John Rhodes first set foot in the diamond fields of the Highveld. 10 The New Money Kings ROBERT MUGABE had a serious problem.
Tito Yepes, Justin Pierce and Vivien Foster, ‘Making Sense of Africa’s Infrastructure Endowment: A Benchmarking Approach’, World Bank, January 2008, http://elibrary.worldbank.org/doi/book/10.1596/1813-9450-4912. 11. Foster, ‘Africa Infrastructure Country Diagnostic’. 12. Vivien Foster and Cecilia Briceño-Garmendia, ‘Africa’s Infrastructure: A Time for Transformation’, World Bank, 2010, http://siteresources.worldbank.org/INTAFRICA/Resources/aicd_overview_english_no-embargo.pdf. 13. Simon Freemantle and Jeremy Stevens, ‘BRIC and Africa: New Partnerships Poised to Grow Africa’s Commercial Infrastructure’, Standard Bank, 15 October 2010; ‘China-Africa Economic and Trade Cooperation’, Information Office of the State Council, Beijing, August 2013, www.safpi.org/sites/default/files/publications/China-AfricaEconomicandTradeCooperation.pdf. 14. Vivien Foster, William Butterfield, Chuan Chen and Nataliya Pushak, ‘Building Bridges: China’s Growing Role as Infrastructure Financier for Sub-Saharan Africa’, World Bank, 2009, http://siteresources.worldbank.org/INTAFRICA/Resources/BB_Final_Exec_summary_English_July08_Wo-Embg.pdf. 15.
., 70 GDP vs. human development scores, 211–212 imperialism today and, 149 migrants from, 245 poverty causes theories/solutions, 3–4 resource rent economy, 72, 136 UN Human Development Index, 162, 212 weapons trade, 84–85, 87, 147 See also specific countries; specific individuals Africa Progress Panel, 52, 53 African Development Bank/index, 148, 165, 171 African Union/headquarters, 137 Akerele, Richard, 71–72 Al-Bashir, Omar, 147 Al-Maktoum, Ahmed bin Saeed, 242 Al-Qaeda, 79, 142, 186 Alamieyeseigha, Diepreye, 202 Amaechi, Rotimi, 203 American revolution, 73 Angola China and, 86–87, 92, 93–97, 172, 173 China Sonangol and, 27–28, 92, 95–97, 98, 100, 101–102, 114, 119, 144, 145, 230 civil war, 9, 85, 86, 87, 145, 172, 224, 228 corruption and, 11–12, 17, 19–20, 27, 97, 173 ‘cryptocracy’, 27, 97, 173 diamonds, 48, 105 dissent/protestors against abuses, 23–24 Dutch Disease, 71 economic/political inequalities, 9, 12, 19, 20–25 economy/growth, 9–10 forced relocation, 20–22 GDP/human development score, 212 government spending allocations, 19 IMF and, 172–173 independence and, 10 Kilamba settlement, 22–23, 27 oil/resource rent and, 10–14, 139, 148, 224 See also Futungo (Angola); specific companies/organizations; specific individuals ‘Angolagate’ scandal, 87 Annan, Kofi, 52, 53 Anvil Mining, 38–40, 159–160, 161 Areva and Niger, 132, 139–140, 141, 142, 149, 150, 233 Asari-Dokubo, Mujahid, 176, 178, 197 Avidan, Asher, 110 Babangida, Ibrahim, 180, 186 BAE Systems, 15 Bataglia, Helder background, 87–88 Pa and, 87, 88–89, 90, 92, 94, 101 trip to China, 88–89, 90, 94 Bazoum, Mohamed, 133 BEE (Black Economic Empowerment), South Africa, 213, 214, 216, 231 Bellingham, Henry, 113 Bellzone, 143, 144 Benin, 62, 65 BHP Billiton, 7, 108, 113 Biafra, 63, 184 Biti, Tendai, 221 Biya, Paul, 5 Blair, Tony, 123 Bo Xilai, 91 Bokassa, Jean-Bédel, 138 Boko Haram, 79, 181, 206 Bond, James (World Bank), 156, 157 Bongo, Omar, 139 Bonyongwe, Happyton, 236 Botswana, 70, 212, 226–227 Bout, Viktor, 54, 85 BP, 2, 11, 13, 19, 26, 93, 96, 101, 139, 145 BRICS nations, 218 Briggs, Annkio, 175–176 British pension funds, 52, 245 British Virgin Islands and businesses, 51, 97, 140, 166, 167, 236–237 Bryant, Joe, 13, 14, 17, 19, 25 BSGR, 104, 108–109, 110, 113–114, 123–127, 128, 129 Bunkering (oil), 176–177, 196, 198 Bush, George H. W., 53 Bush, George W., 147, 191 Cabot company, 32 Carlyle, 13, 25 Carson, Johnnie, 78 Chad and oil/corruption, 73, 148, 154–155, 177 Changhui, Zhao, 137 Chávez, Hugo, 89, 90 Chen Tonghai, 99–100 Cheney, Dick, 191 Cheung, Jack, 121 Chevron, 11, 94, 154, 178 China African resources-for-infrastructure deals, 133–137, 140, 143, 148–149 Angola and, 86–87, 94, 172, 173 buying Western companies in Africa, 143 economic growth/new markets, 81 foreign multinationals corruption scandals in, 82 intelligence/spying, 83–84 military/business connections, 84 money available, 137 oil consumption, 11, 81 weapons trade, 87, 147 Western criticism of, 147 vs.
Admiral Zheng, Asian financial crisis, Berlin Wall, Bretton Woods, BRICs, British Empire, credit crunch, Dava Sobel, deindustrialization, Deng Xiaoping, deskilling, discovery of the americas, Doha Development Round, energy security, European colonialism, failed state, Fall of the Berlin Wall, Francis Fukuyama: the end of history, global reserve currency, global supply chain, illegal immigration, income per capita, invention of gunpowder, James Watt: steam engine, joint-stock company, Kenneth Rogoff, land reform, land tenure, Malacca Straits, Martin Wolf, Naomi Klein, new economy, New Urbanism, open economy, pension reform, price stability, purchasing power parity, reserve currency, rising living standards, Ronald Reagan, Scramble for Africa, Silicon Valley, South China Sea, sovereign wealth fund, special drawing rights, special economic zone, spinning jenny, Spread Networks laid a new fibre optics cable between New York and Chicago, the scientific method, Thomas L Friedman, trade liberalization, urban planning, Washington Consensus, Xiaogang Anhui farmers
The most dramatic change was the rising share of global GDP accounted for by Asia, which, excluding Japan, increased from 16.4% in 1973 to 30.9% in 2001, while its share of the world’s population rose from 54.6% in 1973 to 57.4% in 2001.112 This picture will change even more dramatically over the next few decades. It is estimated that by 2032 the share of global GDP of the so-called BRICs, namely Brazil, Russia, India and China, will exceed that of the G7, namely the US, Canada, the UK, Germany, France, Italy and Japan. And by 2027 it is projected that China will overtake the United States to become the world’s largest economy.113 To illustrate how increasingly diverse the world is likely to become, it is envisaged that the combined GDP of another eleven developing countries (Bangladesh, Egypt, Indonesia, Iran, Korea, Mexico, Nigeria, Pakistan, the Philippines, Turkey and Vietnam) could reach two-thirds of the level of the G7 by 2050.114 Meanwhile, the developing world’s share of the global population will steadily rise, though Asia’s will remain relatively constant at just below 60%, with that of India and China, the two most populous countries in the world, enjoying a combined share of 37.3% in 2001,115 projected to fall very slightly.
The huge mismatch between national wealth on the one hand and size of population on the other that has characterized the last two centuries will be significantly reduced. For the developing world, including the most populous countries, poverty has meant marginalization or effective exclusion from global decision-making; economic power, in contrast, is a passport to global enfranchisement. Or, to put it another way, a global economic regime based on the BRICS (namely Brazil, Russia, India and China), together with other developing countries, will be inherently more democratic than the Western regime that has previously prevailed. Furthermore, the fact that China, as the top dog, is so numerous will in itself introduce a more democratic element, albeit in the crudest sense, to the global polity. One-fifth of the world, after all, is rather more representative than the US’s 4.6 per cent.25 That China, as a global power, will be so numerous will have many consequences.
Zhang Yunling, East Asian Regionalism and China, pp. 24, 29. 33 . David M. Lampton, ‘China’s Rise in Asia Need Not Be at America’s Expense’, in Shambaugh, Power Shift, p. 312. 34 . Kim, ‘East Asian New Regionalism’, p. 65. 35 . Zhang and Tang, ‘China’s Regional Strategy’, pp. 52-3. 36 . Michael Yahuda, ‘The Evolving Asian Order: The Accommodation of Rising Chinese Power’, in Shambaugh, Power Shift, p. 349. 37 . Jim O’Neill et al., ‘China and Asia’s Future Monetary System’, Goldman Sachs Global Economics Paper, 129 (12 September 2005), p. 11; for details of the Chiang Mai Initiative, see www.unescap.org/pdd/publications/bulletin2002/ch8.pdf. 38 . Zhang Yunling, East Asian Regionalism and China, p. 54. 39 . Ibid., p. 29; also Martin Wolf, ‘Asia Needs the Freedom of Its Own Monetary Fund’, Financial Times, 19 May 2004. 40 .
airport security, banking crisis, barriers to entry, Berlin Wall, blood diamonds, Bretton Woods, BRICs, capital controls, clean water, Deng Xiaoping, Doha Development Round, energy security, European colonialism, failed state, global rebalancing, global supply chain, income inequality, informal economy, Julian Assange, labour mobility, Martin Wolf, Mikhail Gorbachev, mutually assured destruction, Nixon shock, nuclear winter, purchasing power parity, reserve currency, Ronald Reagan, smart grid, South China Sea, sovereign wealth fund, special economic zone, Stuxnet, trade route, uranium enrichment, Washington Consensus, WikiLeaks, Yom Kippur War
There is no reason why Western-based companies can’t exploit these vulnerabilities and compete more effectively with Chinese companies. Still, China and other emerging markets do seem quicker than the United States to recognize the value of closer ties with Africa and the possibilities that the G-Zero can create. That’s one big reason why the BRIC countries invited South Africa to join their club in December 2010. By traditional measures, South Africa’s economy can’t begin to compete with those of the other BRICs (Brazil, Russia, India, and China). The IMF estimated in 2010 that it was less than one-quarter the size of Russia’s, the smallest of the four BRICs, and just 6 percent of China’s.13 But South Africa is a member of the Southern African Development Community, a collection of emerging states that includes Angola, Africa’s second largest oil producer; Botswana, the world’s largest diamond producer; Zambia, the continent’s biggest copper producer; and Mozambique, with enormous untapped reserves of coal.
Mutsa Chironga, Acha Leke, Susan Lund, and Arend van Warmelen, “Cracking the Next Growth Market: Africa,” Harvard Business Review (May 2011): 117–22, http://hbr.org/product/cracking-the-next-growth-market-africa/an/R1105J-PDF-ENG. 12. Phil Thornton and Matthew Plowright, “U.S. Urges China to Embrace Global Business Standards,” Emerging Markets, September 6, 2011, http://www.emergingmarkets.org/Article/2845846/Asia/US-urges-China-to-embrace-global-business-standards.html. 13. Jon Herskovitz, “Debutante S. Africa Adds Political Cement to BRICS,” Reuters, April 13, 2011, http://www.reuters.com/article/2011/04/13/brics-safrica-idUSL3E7FD16Z20110413. 14. Chironga et al., “Cracking the Next Growth Market.” 15. Unicef, “Viet Nam: Planning and Social Policy,” http://www.unicef.org/vietnam/planning_policy.html. 16. Statistics Canada, “International Trade,” http://www.statcan.gc.ca/pub/11-402-x/2010000/pdf/international-eng.pdf. 17. Alan Greenblatt, “Brazil Hopes to Add Oil Wealth to Booming Economy,” NPR, September 7, 2011, http://www.npr.org/2011/09/07/140213865/brazil-hopes-to-add-oil-wealth-to-a-booming-economy. 18.
Yet given the issues that still separate emerging powers from one another, the quick selection of Lagarde reminds us not to exaggerate the speed of that transition or the likelihood that they can work together over the longer term on anything of substance. Another interesting test of emerging-market strength will come with selection of the next World Bank president, a post held since the bank’s founding by an American. Denied the leadership role at the IMF, the BRICS governments (Brazil, Russia, India, China, and South Africa) may feel they have to try to mount a formidable challenge when the World Bank job opens. But this world in transition is not simply an international system divided between established and emerging powers. It’s also one in which little unity of purpose exists among governments within these two groups. That can only make it more difficult to shift the balance of power within organizations that were designed seven decades ago to entrench American and European leadership.
The Handbook of Personal Wealth Management by Reuvid, Jonathan.
asset allocation, banking crisis, BRICs, collapse of Lehman Brothers, correlation coefficient, credit crunch, cross-subsidies, diversification, diversified portfolio, estate planning, financial deregulation, fixed income, high net worth, income per capita, index fund, interest rate swap, laissez-faire capitalism, land tenure, market bubble, merger arbitrage, new economy, Northern Rock, pattern recognition, Ponzi scheme, prediction markets, risk tolerance, risk-adjusted returns, risk/return, short selling, side project, sovereign wealth fund, statistical arbitrage, systematic trading, transaction costs, yield curve
How many trusts exist in Jersey? Given the nature of the beast, that sort of statistic is virtually impossible to come by. At a time when transparency is the new buzz word, the foundation could have a lot to offer. Granted, Anglo-Saxons and old money the world over have grown accustomed to and comfortable with the trust. What about new money? Of the four big economies of the future (Brazil, Russia, India and China, often referred to as BRIC), only India has a legal culture that recognizes the trust. But all four of them understand the concept of the company, from which the foundation is but a short step. Of course transparency means more than not hiding what you are up to. It flows naturally from the confidence of undertaking only business that it is proper for a regulated service provider to conduct. Consequently, it is a requirement that the, or a, member or a Foundation’s organ of management, known as its council, should be a qualified person: that is, a person licensed to provide financial services and regulated by the JFSC.
Some of the prime locations mentioned above are still experiencing some strength, with Monaco in particular holding reasonably firm against levels earlier in 2008. Each of the above are truly global destinations, drawing buyers from ultra-highnet-worth individuals (UHNWIs), defined as those with net assets excluding their principal residence in excess of $10 million. They comprise traditional buyers from the UK, other northern European countries, the United States and the Middle East, and also from the BRIC nations (Brazil, Russia, India and China). ‘High net worths’ do perhaps approach property ownership differently from most, often balancing portfolios and being driven by tax reasons to locations such __________________________________________ THE OVERSEAS PROPERTY MARKET 71 ឣ Table 2.2.1 Winners and losers: Prime global markets, residential price change, year to Q4 2008 and quarter to Q4 2008 Location Country Y on Y Q on Q Bangkok Jakarta Bali Kuala Lumpur Istanbul Moscow Dubai Geneva Verbier Cancun Vancouver Marrakech Shanghai Gstaad Cape Town Limassol Paris Mauritius Seychelles Berlin Johannesburg Monaco Montenegro Rome Milan Bermuda Nice Sao Paulo Cayman Islands St Tropez Cannes St Jean Cap de Ferrat Frankfurt Lake Como Golden Triangle Forte dei Marmi San Francisco Florence Madrid New York (Manhattan) Tokyo Courchevel Chianti Thailand Indonesia Indonesia Malaysia Turkey Russia UAE Switzerland Switzerland Mexico Canada Morocco China Switzerland South Africa Cyprus France Mauritius Seychelles Germany South Africa Monaco Montenegro Italy Italy Bermuda France Brazil Cayman Islands France France France Germany Italy Portugal Italy USA Italy Spain USA Japan France Italy 22.5% 17.7% 16.7% 15.8% 14.3% 13.1% 10.8% 8.5% 7.6% 7.3% 5.6% 5.5% 5.2% 4.4% 4.3% 3.9% 3.8 3.7 3.6 3.1 2.9 2.1 2.1 1.4 1.2 0.1 0.0 0.0 0.0 0.0 0.0 0.0 –0.7 –1.4 –2.0 –3.0 –3.1 –3.6 –3.8 –4.1 –5.4 –7.5 –8.2 3.4% 3.0% 3.7% 2.3% 2.1% –5.6% –19.1% 1.1% 0.5% 1.1% 0.0% 0.9% –3.9% 0.0% 0.5% –0.5 0.0 0.6 0.5 0.0 –1.0 –10.7 –0.5 0.4 0.2 –0.3 –5.0 0.0 0.0 –5.0 –3.0 –5.0 –0.7 –0.9 –1.0 –2.0 –0.7 –2.5 –2.6 –3.2 –4.4 –5.0 –5.0 ឣ 72 REAL ESTATE AND FORESTRY ______________________________________________ Table 2.2.1 continued Location Country Melbourne Mallorca Venice Sydney Mumbai Barbados Dordogne Singapore Marbella London Hong Kong Australia Spain Italy Australia India Barbados France Singapore Spain United Kingdom China Y on Y –8.5 –10.0 –10.5 –11.9 –12.5 –14.3 –14.5 –14.6 –15.0 –16.9 –24.5 Q on Q –1.9 –5.0 –6.5 –6.4 –6.2 –5.3 –5.0 –2.2 –5.7 –9.4 –26.6 as Monaco, Switzerland and the Caribbean rather than by, say, the frequency of public flights that might be more critical in lower-price locations.
Today, the market for fine and decorative art trade in 42 countries refers to paintings and drawings (British, Scottish, Irish, European, American, Australian, Canadian, German, Austrian, Greek, Scandinavian, Spanish, Swiss, Israeli, Latin American, Orientalist, Indian, Chinese, Russian, South-East Asian, plus Old Masters, 19th century, Victorian and Edwardian, 20th century, Impressionist and modern, contemporary plus marine and nautical, sporting), prints and multiples, sculpture, statues and figures, furniture and lighting (English, French, European, American plus 19th century, 20th century plus folk), installation and video art, rugs 25,000,000,000 1997 25,000,000,000 1998 1999 15,000,000,000 2000 2001 2002 10,000,000,000 2003 2004 5,000,000,000 2005 2006 rts po ex al To t re po rte rs y ce an m er G er th 2007 O nd Fr an K U la SA U er itz Sw To t al im po rts rs a re rte Ko h re er th O po y na hi C ut So ce an m an Fr er G n n pa Ja nd ai Sp K U la er Sw itz U SA 0 Source: United Nations Figure 4.2.3 International trade in works of art, collectors’ pieces and antiques by country (US $) ឣ 144 PLEASURABLE INVESTMENT ______________________________________________ and carpets, decorations and tapestries, ceramics, glass, silver and objets de vertu (English, European, American, Russian), clocks, watches and barometers, jewellery, jewels and diamonds, icons, works of art (antiquities, Chinese, Judaica, Islamic, Indian, Aboriginal, African and Oceanic, pre-Columbian, American Indian, Japanese, Korean) and garden statuary. The smaller market for collectables loosely refers to old cars, postage stamps, numismatic coins, banknotes, stock certificates, scripts, medals, musical instruments, textiles and costume, vintage wines and spirits, cigars, photographs, playing cards, objets de vertu, bric-a-brac, scientific instruments, books and manuscripts (English, Continental, American plus Medieval, natural history, maps, travel, children’s), sporting memorabilia, arms and armour, dolls and toys, games and teddy bears, luggage and other memorabilia. Formulating an art investment strategy: the pros and cons Art’s value is one of the weightiest, most indispensable and mystifying concepts. The assignment of monetary value to any artwork is a complex process since there are a myriad of factors affecting art’s desirability at any point.
accounting loophole / creative accounting, affirmative action, bank run, banking crisis, Berlin Wall, bonus culture, Branko Milanovic, BRICs, call centre, Cass Sunstein, central bank independence, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation does not imply causation, Credit Default Swap, deindustrialization, demographic transition, Diane Coyle, disintermediation, Edward Glaeser, Eugene Fama: efficient market hypothesis, experimental economics, Fall of the Berlin Wall, Financial Instability Hypothesis, Francis Fukuyama: the end of history, George Akerlof, Gini coefficient, global supply chain, Gordon Gekko, greed is good, happiness index / gross national happiness, Hyman Minsky, If something cannot go on forever, it will stop, illegal immigration, income inequality, income per capita, invisible hand, Jane Jacobs, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, labour market flexibility, low skilled workers, market bubble, market design, market fundamentalism, megacity, Network effects, new economy, night-watchman state, Northern Rock, oil shock, principal–agent problem, profit motive, purchasing power parity, railway mania, rising living standards, Ronald Reagan, Silicon Valley, South Sea Bubble, Steven Pinker, The Design of Experiments, The Fortune at the Bottom of the Pyramid, The Market for Lemons, The Myth of the Rational Market, The Spirit Level, transaction costs, transfer pricing, tulip mania, ultimatum game, University of East Anglia, web application, web of trust, winner-take-all economy, World Values Survey
This latter development means global inequality has decreased substantially, but inequality within nations has not.14 In general developing countries divide into sheep and goats—a group including India and China that have been gaining ground on the rich countries in average per capita incomes and a group concentrated in sub-Saharan Africa where this process (which economists term convergence) has not been taking place. With their huge populations, the income advances in the two Asian giants carry real weight in the global income distribution. But national averages, which look only at inequality between countries are not fully adequate measures given that there is great inequality within many countries—and especially in the rapidly growing countries of Brazil, Russia, India, and China (called the BRICs), which have made such a big difference in the middle parts of the global income distribution.15 Branko Milanovic reports that about two-thirds of global inequality currently is due to differences in income levels between countries, a big shift from the nineteenth-century pattern, when only 15 percent of measured inequality was due to national differences, and 85 percent due to income inequality within countries.16 Another way of assessing inequality suggested by this pattern is to look at what has happened to individual incomes across the world.17 The incomes of the Forbes Rich List have soared massively ahead of those of people living in the poorest African countries whose economies have been shrinking.
See also psychology Bell, Daniel, 230, 235–36 Bentham, Jeremy, 31 Berlin Wall, 182, 226, 239 Bhutan, Kingdom of, 40 Biswas–Diener, Robert, 48 Blackberry phones, 205 black markets, 225 Blake, William, 27 Blinder, Alan, 133, 224 Blueprint for a Safer Planet (Stern), 29 Bono, 194–96, 308n13 bonuses: bankers and, 87–88, 115, 139, 143–44, 193, 221, 223, 277–78, 295; as essential, 88; halting of, 278; lobbyists and, 87–88; penal tax on, 278; policy recommendations for, 277–79, 295–96; reform and, 295 boom–bust cycles, 4, 277, 280, 283; fairness and, 136–37; happiness and, 22, 28; posterity and, 93, 102, 106–9; trust and, 145, 147; values and, 213, 222–23, 233 Booth, Charles, 131 Boskin Commission, 37 Bové, José, 27 Bowling Alone (Putnam), 140–41 Boyle, James, 196 Brazil, 63, 65, 123 BRICs (Brazil, Russia, India, and China), 123, 160, 164, 176–77 British National Health Service, 247 British Social Attitudes, 140–41 Bronk, Richard, 28 Brown, Gordon, 93 Brundtlandt Report, 77 bubbles, 3, 26, 223, 228, 301n1 Buchanan, James, 220, 242 Bundesbank, 99 Burry, Michael, 86 Bush, George W., 127–28 Calculus of Consent, The: Logical Foundations of Constitutional Democracy (Buchanan and Tullock), 242 call centers, 131, 133, 161 Cameron, David, 288 capitalism: China and, 234; communism and, 96, 182–83, 209–13, 218, 226, 230, 239–40; community and, 27, 51, 65, 117–18, 137, 141, 152–54; cultural effects of, 25–29, 230–38; current crisis of, 6–9; democracy and, 230–38; Engels on, 14; fairness and, 134, 137, 149; growth and, 268, 275, 290, 293, 297; happiness and, 25–29, 33, 45, 53–54; historical perspective on, 3, 6, 14; institutions and, 240; market failure and, 226–30; Marx on, 14; measurement and, 182; mercantile economy and, 27–28; nutrition and, 10; profit–oriented, 18; Protestant work ethic and, 13–14; protests against, 211–13; rethinking meaning of, 9; social effects of, 25–26; values and, 209–13, 218, 226, 230–32, 235–36; well-being and, 137–39 carbon prices, 70–71 celebrities, 33 charitable giving, 33, 141 Checkpoint Charlie, 147 China, 161, 262, 280; capitalism and, 234; carbon emissions and, 63; changed demographic structure of, 90; convergence and, 122; declining population in, 98; energy use in, 63, 65; global manufacturing and, 149; inequality and, 125–26; Mao and, 10; middle class of, 125–26; as next major power, 94; one–child policy and, 95–96; population growth and, 95–96; purchasing power parity (PPP) and, 306n19; rise in wealth of, 81, 122–23, 125, 212; savings and, 87, 94, 100, 108; wage penalties and, 133; World Bank influence and, 163 cities, 308n29; face-to-face contact and, 165–68; size and, 165–66; structural changes in, 165–70; urban clustering and, 166 City of London, 147, 221 Clemens, Michael, 81 climate change, 5–7, 17, 24, 90, 238; carbon prices and, 70–71; Copenhagen summit and, 62, 64–65, 68, 162, 292; domestic dissent and, 66–71; future and, 75–83; geological history and, 69; global warming and, 57, 64, 66, 68; greenhouse gases and, 23, 29, 35, 59, 61–63, 68, 70–71, 83; Himalayan glaciers and, 66–67; incandescent light bulbs and, 59–60; InterAcademy Council and, 66–67; Intergovernmental Panel on Climate Change (IPCC) and, 59, 66–69, 82, 297; Kyoto Protocol and, 62–64; lack of consensus on, 66–71; Montreal Protocol and, 59; policy dilemma of, 58–62; policy recommendations for, 267, 280, 297; politics and, 62–65; social welfare and, 71–75; technology and, 59–60, 198 Coachella Value Music Festival, 197 Cobb, John, 36 Coca Cola, 150 coherence, 49 Cold War, 93, 112, 147, 209, 213, 239, 252 Collier, Paul, 77–78, 80, 82 Commerzbank, 87 Commission on the Measurement of Economic Performance and Social Progress, 37–38 communism: Berlin Wall and, 182, 226, 239; capitalism and, 96, 182–83, 209–13, 218, 226, 230, 239–40; Cold War and, 93, 112, 147, 209, 213, 239, 252; fall of, 209–13, 226, 239–40, 252; Iron Curtain and, 183, 239, 252; Leipzig marches and, 239; one-child policy and, 95–96; Velvet Revolution and, 239 community: civic engagement and, 140–41; globalization and, 148–49; intangible assets and, 149–52, 157, 161 (see also trust); public service and, 295; Putnam on, 140–41, 152–54 commuting, 45–47 Company of Strangers, The (Seabright), 148–49, 213–14 comprehensive wealth, 81–82, 202–3, 208, 271–73 consumerism, 22, 34, 45, 138 consumption: conspicuous, 11, 22, 45, 236; consumerism and, 22, 34, 45, 138; cutting, 61; downgrading status of, 11; downshifting and, 11, 55; Easterlin Paradox and, 39–44; global per capita, 72; of goods and services, 7, 10, 24, 35–36, 40, 82, 99, 161, 188, 191, 198, 214, 218, 228–29, 282; green lifestyle and, 55, 61, 76, 289, 293; growth and, 280, 295; happiness and, 22, 29, 40, 45; hedonic treadmill and, 40; increasing affluence and, 12; institutions and, 254, 263; Kyoto Protocol and, 63–64; measurement and, 181–82, 198; missing markets and, 229; natural resources and, 8–12, 58, 60, 79–82, 102, 112, 181–82; nature and, 58–61, 71–76, 79, 82; posterity and, 86, 104–5, 112–13; reduction of, 105; Slow Movement and, 27; trends in, 138; trilemma of, 13–14, 230–36, 275; values and, 229, 236 convergence, 5, 122 Copenhagen summit, 62, 64–65, 68, 162, 292 Crackberry, 205 Crafts, Nicholas, 156–57 credit cards, 2, 21, 136, 138, 283 Csikszentmilhalyi, Mihaly, 45–49 Cultural Contradictions of Capitalism, The (Bell), 230, 235–36 Czechoslovakia, 239 Daly, Herman, 36 Damon, William, 48 Dasgupta, Partha, 61, 73, 77–78, 80, 82 David, Paul, 156 Dawkins, Richard, 118 debit cards, 2 decentralization, 7, 159, 218, 246, 255, 275, 291 defense budgets, 93 democracy, 2, 8, 16, 312n19; capitalism and, 230–38; culture and, 230–38; fairness and, 141; growth and, 268–69, 285–89, 296–97; institutions and, 242–43, 251–52, 262; nature and, 61, 66, 68; posterity and, 106; trust and, 175; values and, 230–35 Denmark, 125 Dickens, Charles, 131 Diener, Ed, 48, 49 Discourse on the Origin and Basis of Inequality among Men (Rousseau), 114 distribution, 29, 306n22; Asian influence and, 123; bifurcation of social norms and, 231–32; consumerism and, 22, 34, 45, 138; Easterlin Paradox and, 39–44; fairness and, 115–16, 123–27, 134, 136; food and, 10, 34; of goods and services, 7, 10, 24, 35–36, 40, 82, 99, 161, 188, 191, 198, 214, 218, 228–29, 282; income, 34, 116, 123–27, 134, 278; inequality and, 123 (see also inequality); institutions and, 253; measurement and, 181, 191–99, 202; paradox of prosperity and, 174; policy recommendations for, 276, 278; posterity and, 87, 94; trust and, 151, 171; unequal countries and, 124–30; values and, 226 Dorling, Danny, 224, 307n58, 308n34 Douglas, Michael, 221 downshifting, 11, 55 downsizing, 175, 246, 255 drugs, 44, 46, 137–38, 168–69, 191, 302n47 Easterlin, Richard, 39 Easterlin Paradox, 39–44 eBay, 198 Economics of Ecosystems and Biodiversity project, The (TEEB), 78–79 economies of scale, 253–58 Economy of Enough, 233; building blocks for, 12–17; first ten steps for, 294–98; growth and, 182; happiness and, 24; institutions and, 250–51, 258, 261–63; living standards and, 13, 65, 78–79, 106, 113, 136, 139, 151, 162, 190, 194, 267; Manifesto of, 18, 267–98; measurement and, 182, 186–88, 201–7; nature and, 59, 84; Ostrom on, 250–51; posterity and, 17, 85–113; values and, 217, 233–34, 238; Western consumers and, 22 (see also consumption) Edinburgh University, 221 efficiency, 2, 7; evidence–based policy and, 233–34; fairness and, 126; Fama hypothesis and, 221–22; happiness and, 9, 29–30, 61; institutions and, 245–46, 254–55, 261; limits to, 13; nature and, 61–62, 69, 82; network effects and, 253, 258; productivity and, 13 (see also productivity); trilemma of, 13–14, 230–36, 275; trust and, 158–59; values and, 210, 215–16, 221–35 Ehrlich, Paul, 70 e-mail, 252, 291 “End of History, The” (Fukuyama), 239 Engels, Friedrich, 14 Enlightenment, 7 Enron, 145 environmentalists.
The globalization that occurred in the late nineteenth and early twentieth centuries was an exchange of capital for raw materials, usually on favorable terms for the imperial sources of capital. That of the late twentieth and early twenty-first century has been different in character. Although the majority of cross-border trade and investment so far consists of rich countries increasing their economic links with each other, developing countries, especially the BRICs, account for a rapidly growing share of world production and trade. The OECD countries’ share of world GDP declined from 65 percent in 1975 to 55 percent by 2005. During roughly the same period, its share of world exports declined from 73 percent to 67 percent.21 The geographic scope of production has greatly increased, therefore, both in terms of the growth of trade and investment and its geographic distance.
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Many times it does end up being fortuitous, but I find it tends to be more fortuitous when resources are allocated to an idea that is on the cusp of coming to fruition. How important is China in the commodity world? Quantitatively, China is dramatically more important than it was before 2000. It is worth broadening the answer to the growing importance of the emerging markets and especially the BRICs (Brazil, Russia, India, and China), but with China as the cornerstone. Before 2000, metals demand in the developed economies was roughly equivalent to that in the emerging economies, whereas after 2000, emerging markets demand for metals grew at 8 percent, while developed world demand was flat. As you can see, the Asian influence is very important. Emerging markets now contribute more to nominal GDP growth globally than developed markets.
Index Absolute return, generation Accounting leverage, economic leverage (contrast) Active management, passive management (combination) Active managers, search process Active risk allocation, importance Active risk management, dedication Adaptability call Agricultural commodities, prices Agricultural futures (1977-2009) AIG, bailout Alchemy of Finance, The (Soros) Allocators, future adaptability Alpha beta, contrast central bank source extraction, zero-sum game generation policy change, impact providing, policy error (usage) risk-adjusted measure Alpha-seeking macro fund Alternative energy source, supply (increase) Annual cash demands, short-term constraints Annual cash flows, importance AOL-Time Warner deal Armageddon scenario, extrapolation Asia crisis (1997) repeat Asia crisis (1998-1999) Asia currencies, bullishness Asian equities impact perspective Asia performance Asset-backed securities index (ABX), problem Asset/liability matching Assets allocation, function collapse deflation, renewal expected return generation purchase (Buffett) Asymmetric bet example structure Back tests Backwardation Bacow, Larry Bailouts, usage Balance sheets availability strength Baltic dry shipping rate (1998-2009) Bank capital ratios, Basel II framework (usage) Bank of International Settlements (BIS), turnover data Banks balance sheets, problems implosion leverage ratios Bayesian methods Bear market Bear Stearns bailout government bond leverage change perspective (Bernanke) Beauty contest, concept Benchmark Beneficiaries, payments (impact) Bernanke, Ben actions Bear Stearns perspective debt deflation perspective success/error Beta alpha, contrast correlation portfolio Beta-plus domination Big Oil Black box applications, naivete Black swan Bolton, Anthony Bond option positions, leverage Bond repurchase agreement (repo) Bonds attractiveness Bond Trader perspective collapse fixed interest markets, rout (1994) perspective (Drobny Global Conference) portfolio purchase, leverage (usage) traders vigilantes Bond Trader, The capital allocation determination central banks, alpha source diversification firm-level risk management fixed income trading hedge fund/prop desk, contrast inputs, usage interview liquidity, measurement process market change focus positioning, importance money managers, meeting options, usage performance positions, scaling sizing determination time horizon traders control hiring trades consideration miss worst-case scenario trading ideas wealth maximization Brazil, Russia, India, and China (BRIC) Break-even inflation Brent crude British Telecom, pension fund (Commodity Trader hiring) Bubbles. See Credit bubble creation future Bond Trader prediction Professor prediction neutrality Buffett, Warren diversification Reader’s Digest franchise S&P index performance prediction California Public Employees’ Retirement System (CalPERS) contribution levels, increase equities allocation Equity Trader operation flexibility, impact fund, formula hedge funds, in-house operation investment performance, improvement target, increase methodology 1% effect peak-to-trough drawdown Pensioner control pension problems portfolio construction, assumption Predator operation unlevered pension fund CalPERS Model Cambridge Endowment, asset management Capital accumulation adequacy ratios allocation, determination availability compounding inflows, attraction loss, avoidance management tactical asset allocation models, usage pools preservation raising total destruction unlevered pool Capital Asset Pricing Model (CAPM) confusion Capitalism, stability Cash balance holding importance leverage, relationship obligations, meeting (difficulty) valuation quality Catastrophe risk options CDX generic credit spreads Central banker talent, Bond Trader perspective Central banks, alpha source Charitable foundation, running (example) China commodity market manipulation Commodity Super Cycle, importance Commodity Trader perspective decoupling examination FDI fiscal stimulus foreign exchange reserves future G7 demand reliance GDP GDP (2000-2008) global reserves acquisition growth rates, achievement importance, Commodity Investor perspective investment-to-GDP ratios Plasticine Macro Trader perspective problems renminbi (2005-2009) superpower Church of England, pension fund assets Client risk Closet dollar exposure Cocoa (1970-2009) Cohen, Abbey Joseph Collateralized debt obligations (CDOs) Commodities bearish view collapse, Commodity Hedger anticipation Commodity Investor focus curves pricing susceptibility equities Commodity Investor perspective exposure definition, application indices, usage impact investor participation long/short, ease meltdown options markets, liquidity price-induced inflation prices collapse financial flows, impact risk, equity risk (contrast) space, active manager search Commodities and oil (2008) Commodity Hedger, The big moves Cargill employment commodities collapse exposure, indices (usage) discipline endowment process full-risk positions, risk collars (requirement) globalization, meaning human bias, impact information arbitrage information flow, absence interview investment process investor focus lessons leverage, usage liquidity management valuation process market entry mistakes passive commodity indices, avoidance peak oil belief portfolio construction price dislocation identification real asset perspective real money fund operation redemptions, absence risk collars function impact risk management tactical approach tail hedging, impact time horizon, shortening trader development trades examination, events/news (impact) example execution hurdles/shortage ideas, origination one-year time horizon problems trading history volatility, dampening Commodity Investor, The active/tactical pension fund manager annual returns China, importance commodities/commodity equities focus cyclical/secular macro/micro thought process deferred oil trade downside risk, mitigation export land model false confidence hedge fund interaction hedge fund manager skill hyperinflation, worry ideas, trading interview investment process lessons liquidity, examination liquid net worth long-term investment horizon macro/micro domination macro theme mines, purchase oil fields, purchase pension fund, base currency philosophy positions, scaling process real money manager scenario resource nationalism risk-taking ability sovereign wealth fund, control speculative flows spot shortages/outages state pension fund, control tactical approach trade, problem trends triangulated conviction uncertainty, risk Commodity markets China manipulation Commodity Trader approach factors pricing structure stress test Commodity Super Cycle importance initiation trade selection Commodity Trader, The career trades China perspective commodities long/short, ease perspective trades global book, running global energy positions hedge fund money management inflation perspective interview liquidity, absence market coverage entry options, usage prop trader, hedge fund manager (contrast) prop trading, customer flow (impact) risk management failure second order effects short side Commodity trading advisers (CTAs), impact Constraints Consuelo Mack WealthTrack (Swensen) Consumer Price Index (CPI) Consumer price inflation (CPI) number, investment Contango Conundrum Speech (Greenspan) Convenience yield Copper (1989-2009) Core inflation, headline inflation (contrast) Core positions trading, indices/options (usage) Corn, yield expectations (increase) Corner solution Corn futures (2006-2009) Corn futures (2007) Corporate bonds, risky assets Corporate pensions funds, PBGC guarantees NLRB ruling Correlations analysis movement risk, increase Corruption Perceptions Index (CPI) Counterparty risk importance Country-related Eurobonds, usage Coxe, Don Crash (2008) banks, problems foresight CRB (2004-2009) CRB Commodity Index (2001) CRB Index (2009) Credit bubble future recognition trades Credit default swaps (CDSs) levels, examination payment usage Credit indices, tranches Credit pricing, example Credit spreads, tightness Crop yields, pollution (impact) Cross-correlation misunderstanding risk management Cross-sectional data sets Crowded positions, identification Crowding factor issue pervasiveness Crude oil inventory Cumulative returns (1990-2009) Currency hedge Currency valuation Cyclical analysis Data mining techniques, contrast Datastream, usage Debt.
Because inflation is the main enemy of savings in the long term, 70 percent of the capital should be invested in a global portfolio of inflation-linked bonds, currency unhedged. My recommendation would be Norway, Sweden, Euroland, U.S., and U.K. inflation-linked bonds—countries with credible inflation indices and institutions. The remaining 30 percent should be in other real assets in emerging markets, which, if they go to zero, the coupon instruments would compensate. Thus, I would invest half of the remainder in some weighted basket of BRIC inflation-linked bonds and the other half in BRIC equities, currency unhedged. If everything is currency unhedged and your friend is based in the U.S., then a large dollar rally is a big risk, no? It is and it isn’t. Because such a large percentage of the portfolio is in linkers, a massive U.S. dollar rally means that other currencies have depreciated. Many of the countries I mentioned will actually start producing a higher inflation coupon from the pass-through of currency to CPI.
How to Speak Money: What the Money People Say--And What It Really Means by John Lanchester
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There’s a faint sense of embarrassment and foot shuffling about the term “emerging” in particular, because it sounds so patronizing, like those school prizes for “most improved.” (Or the only prize ever won during her school career by the late Princess Diana, an award for the best-kept hamster.) Developing economies are poorer than emerging ones, but again there is no agreed threshold for the distinction. Brazil, Russia, India, and China, the famous BRICs, are generally seen as emerging economies, and so are Mexico, Indonesia, and Turkey; South Korea is sometimes on these lists, but some other economists regard it as a fully developed economy. It isn’t on the IMF list of emerging economies, which adds the following to the countries already mentioned: Argentina, Bulgaria, Chile, Estonia, Hungary, Latvia, Lithuania, Malaysia, Pakistan, Peru, Philippines, Poland, Romania, South Africa, Thailand, Ukraine, Venezuela.
The Bretton Woods system lasted from 1945 until President Nixon unilaterally took the USA off it on 15 August 1971, an event known as the “Nixon shock,” which reintroduced free-floating currencies. Nixon’s reasons for doing that were linked to the pressures on the US economy created by the Vietnam War and the growing trade deficit; his actions allowed the US dollar to drop in value, which was a help to industry and exports. BRIC A term coined by the former Goldman Sachs economist Jim O’Neill, meaning Brazil, Russia, India, China. These are the fastest-growing emerging economies, respectively now the eighth-, ninth-, eleventh-, and third-biggest economies in the world. All of them are marked by sharp levels of recent growth accompanied by sharp levels of rising inequality. budget A tool for managing expenditure, in which a person or company or government sets out its proposed spending for the next year.
Seventeen Contradictions and the End of Capitalism by David Harvey
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Growth that goes much above 5 per cent, on the other hand, is typically taken in ‘mature economies’ (that is, not contemporary China) as a sign of ‘overheating’, which always comes with the threat of runaway inflation. In recent times, even across the ‘crash’ years of 2007–9, global growth kept fairly steady, close to 3 per cent or so, though most of it was in emerging markets (such as Brazil, Russia, India and China – the BRIC countries in short). The ‘advanced capitalist economies’ fell to 1 per cent growth or below from 2008 to 2012. In 1820, Maddison calculates, global output was worth $694 billion in 1990 constant dollars (‘billion’ on the US scale, meaning 1,000 million). By 1913 it had risen to $2.7 trillion (on the US scale a trillion is 1,000 billion); in 1973 it stood at $16 trillion and by 2003 nearly $41 trillion.
Much of this has been due to the phenomenal growth of China, along with substantial bursts of growth in the other so-called BRIC countries (Brazil, Russia and India). Disparities in the global distribution of wealth and income between countries have been much reduced with rising per capita incomes in many developing parts of the world. The net drain of wealth from East to West that had prevailed for over two centuries has been reversed as East Asia in particular has risen to prominence as a powerhouse in the global economy. The recovery of the global economy (anaemic though it was) from the traumas of 2007–9 had largely been based by 2013 on the rapid expansions in so-called ‘emerging’ markets (mainly the BRIC countries). This shift had even extended to Africa, which was the one part of the world that seemed to have escaped almost entirely from any effects of the crisis.
., Disposable Women and Other Myths of Global Capitalism, New York, Routledge, 2006 Index Numbers in italics indicate Figures. 2001: A Space Odyssey (film) 271 A Abu Ghraib, Iraq 202 acid deposition 255, 256 advertising 50, 121, 140, 141, 187, 197, 236, 237, 275, 276 Aeschylus 291 Afghanistan 202, 290 Africa and global financial crisis 170 growth 232 indigenous population and property rights 39 labour 107, 108, 174 ‘land grabs’ 39, 58, 77, 252 population growth 230 Agamben, Giorgio 283–4 agglomeration 149, 150 economies 149 aggregate demand 20, 80, 81, 104, 173 aggregate effective demand 235 agribusiness 95, 133, 136, 206, 247, 258 agriculture ix, 39, 61, 104, 113, 117, 148, 229, 239, 257–8, 261 Alabama 148 Algerian War (1954–62) 288, 290 alienation 57, 69, 125, 126, 128, 129, 130, 198, 213, 214, 215, 263, 266–70, 272, 275–6, 279–80, 281, 286, 287 Allende, Salvador 201 Althusser, Louis 286 Amazon 131, 132 Americas colonisation of 229 indigenous populations 283 Amnesty International 202 anti-capitalist movements 11, 14, 65, 110, 111, 162 anti-capitalist struggle 14, 110, 145, 193, 269, 294 anti-globalisation 125 anti-terrorism xiii apartheid 169, 202, 203 Apple 84, 123, 131 apprenticeships 117 Arab Spring movement 280 Arbenz, Jacobo 201 Argentina 59, 107, 152, 160, 232 Aristotelianism 283, 289 Aristotle 1, 4, 200, 215 arms races 93 arms traffickers 54 Arrighi, Giovanni 136 Adam Smith in Beijing 142 Arthur, Brian: The Nature of Technology 89, 95–9, 101–4, 110 artificial intelligence xii, 104, 108, 120, 139, 188, 208, 295 Asia ‘land grabs’ 58 urbanisation 254 assembly lines 119 asset values and the credit system 83 defined 240 devalued 257 housing market 19, 20, 21, 58, 133 and predatory lending 133 property 76 recovery of 234 speculation 83, 101, 179 associationism 281 AT&T 131 austerity xi, 84, 177, 191, 223 Australia 152 autodidacts 183 automation xii, 103, 105, 106, 108, 138, 208, 215, 295 B Babbage, Charles 119 Bangkok riots, Thailand (1968) x Bangladesh dismantlement of old ships 250 factories 129, 174, 292 industrialisation 123 labour 108, 123, 129 protests against unsafe labour conditions 280 textile mill tragedies 249 Bank of England 45, 46 banking bonuses 164 electronic 92, 100, 277 excessive charges 84 interbank lending 233 and monopoly power 143 national banks supplant local banking in Britain and France 158 net transfers between banks 28 power of bankers 75 private banks 233 profits 54 regional banks 158 shell games 54–5 systematic banking malfeasance 54, 61 Baran, Paul and Sweezy, Paul: Monopoly Capitalism 136 Barcelona 141, 160 barrios pobres ix barter 24, 25, 29 Battersea Power Station, London 255 Battle of Algiers, The (film) 288 Bavaria, Germany 143, 150 Becker, Gary 186 Bernanke, Ben 47 Bhutan 171 billionaires xi, 165, 169, 170 biodiversity 246, 254, 255, 260 biofuels 3 biomedical engineering xii Birmingham 149 Bitcoin 36, 109 Black Panthers 291 Blade Runner (film) 271 Blankfein, Lloyd 239–40 Bohr, Niels 70 Bolivia 257, 260, 284 bondholders xii, 32, 51, 152, 158, 223, 240, 244, 245 bonuses 54, 77, 164, 178 Bourdieu, Pierre 186, 187 bourgeois morality 195 bourgeois reformism 167, 211 ‘Brady Bonds’ 240 Braudel, Fernand 193 Braverman, Harry: Labor and Monopoly Capital 119 Brazil a BRIC country 170, 228 coffee growers 257 poverty grants 107 unrest in (2013) 171, 243, 293 Brecht, Bertolt 265, 293 Bretton Woods (1944) 46 brewing trade 138 BRIC countries 10, 170, 174, 228 Britain alliance between state and London merchant capitalists 44–5 banking 158 enclosure movement 58 lends to United States (nineteenth century) 153 suppression of Mau Mau 291 surpluses of capital and labour sent to colonies 152–3 welfare state 165 see also United Kingdom British Empire 115, 174 British Museum Library, London 4 British Petroleum (BP) 61, 128 Buffett, Peter 211–12, 245, 283, 285 Buffett, Warren 211 bureaucracy 121–2, 165, 203, 251 Bush, George, Jr 201, 202 C Cabet, Étienne 183 Cabral, Amilcar 291 cadastral mapping 41 Cadbury 18 Cairo uprising (2011) 99 Calhoun, Craig 178 California 29, 196, 254 Canada 152 Cape Canaveral, Florida 196 capital abolition of monopolisable skills 119–20 aim of 92, 96–7, 232 alternatives to 36, 69, 89, 162 annihilation of space through time 138, 147, 178 capital-labour contradiction 65, 66, 68–9 and capitalism 7, 57, 68, 115, 166, 218 centralisation of 135, 142 circulation of 5, 7, 8, 53, 63, 67, 73, 74, 75, 79, 88, 99, 147, 168, 172, 177, 234, 247, 251, 276 commodity 74, 81 control over labour 102–3, 116–17, 166, 171–2, 274, 291–2 creation of 57 cultural 186 destruction of 154, 196, 233–4 and division of labour 112 economic engine of 8, 10, 97, 168, 172, 200, 253, 265, 268 evolution of 54, 151, 171, 270 exploitation by 156, 195 fictitious 32–3, 34, 76, 101, 110–11, 239–42 fixed 75–8, 155, 234 importance of uneven geographical development to 161 inequality foundational for 171–2 investment in fixed capital 75 innovations 4 legal-illegal duality 72 limitless growth of 37 new form of 4, 14 parasitic forms of 245 power of xii, 36, 47 private capital accumulation 23 privatisation of 61 process-thing duality 70–78 profitability of 184, 191–2 purpose of 92 realisation of 88, 173, 192, 212, 231, 235, 242, 268, 273 relation to nature 246–63 reproduction of 4, 47, 55, 63, 64, 88, 97, 108, 130, 146, 161, 168, 171, 172, 180, 181, 182, 189, 194, 219, 233, 252 spatiality of 99 and surplus value 63 surpluses of 151, 152, 153 temporality of 99 tension between fixed and circulating capital 75–8, 88, 89 turnover time of 73, 99, 147 and wage rates 173 capital accumulation, exponential growth of 229 capital gains 85, 179 capital accumulation 7, 8, 75, 76, 78, 102, 149, 151–5, 159, 172, 173, 179, 192, 209, 223, 228–32, 238, 241, 243, 244, 247, 273, 274, 276 basic architecture for 88 and capital’s aim 92, 96 collapse of 106 compound rate of 228–9 and the credit system 83 and democratisation 43 and demographic growth 231 and household consumerism 192 and lack of aggregate effective demand in the market 81 and the land market 59 and Marx 5 maximising 98 models of 53 in a new territories 152–3 perpetual 92, 110, 146, 162, 233, 265 private 23 promotion of 34 and the property market 50 recent problems of 10 and the state 48 capitalism ailing 58 an alternative to 36 and capital 7, 57, 68, 115, 166, 218 city landscape of 160 consumerist 197 contagious predatory lawlessness within 109 crises essential to its reproduction ix; defined 7 and demand-side management 85 and democracy 43 disaster 254–5, 255 economic engine of xiii, 7–8, 11, 110, 220, 221, 252, 279 evolution of 218 geographical landscape of 146, 159 global xi–xii, 108, 124 history of 7 ‘knowledge-based’ xii, 238 and money power 33 and a moneyless economy 36 neoliberal 266 political economy of xiv; and private property rights 41 and racialisation 8 reproduction of ix; revivified xi; vulture 162 capitalist markets 33, 53 capitalo-centric studies 10 car industry 121, 138, 148, 158, 188 carbon trading 235, 250 Caribbean migrants 115 Cartesian thinking 247 Cato Institute 143 Central America 136 central banks/bankers xi–xii, 37, 45, 46, 48, 51, 109, 142, 156, 161, 173, 233, 245 centralisation 135, 142, 144, 145, 146, 149, 150, 219 Césaire, Aimé 291 CFCs (chloro-fluorocarbons) 248, 254, 256, 259 chambers of commerce 168 Chandler, Alfred 141 Chaplin, Charlie 103 Charles I, King 199 Chartism 184 Chávez, Hugo 123, 201 cheating 57, 61, 63 Cheney, Dick 289 Chicago riots (1968) x chicanery 60, 72 children 174 exploitation of 195 raising 188, 190 trading of 26 violence and abuse of 193 Chile 136, 194, 280 coup of 1973 165, 201 China air quality 250, 258 becomes dynamic centre of a global capitalism 124 a BRIC country 170, 228 capital in (after 2000) 154 class struggles 233 and competition 150, 161 consumerism 194–5, 236 decentralisation 49 dirigiste governmentality 48 dismantlement of old ships 250 dispossessions in 58 education 184, 187 factories 123, 129, 174, 182 famine in 124–5 ‘great leap forward’ 125 growth of 170, 227, 232 income inequalities 169 industrialisation 232 Keynesian demand-side and debt-financed expansion xi; labour 80, 82, 107, 108, 123, 174, 230 life expectancy 259 personal debt 194 remittances 175 special economic zones 41, 144 speculative booms and bubbles in housing markets 21 suburbanisation 253 and technology 101 toxic batteries 249–50 unstable lurches forward 10 urban and infrastructural projects 151 urbanisation 232 Chinese Communist Party 108, 142 Church, the 185, 189, 199 circular cumulative causation 150 CitiBank 61 citizenship rights 168 civil rights 202, 205 class affluent classes 205 alliances 143, 149 class analysis xiii; conflict 85, 159 domination 91, 110 plutocratic capitalist xiii; power 55, 61, 88, 89, 92, 97, 99, 110, 134, 135, 221, 279 and race 166, 291 rule 91 structure 91 class struggle 34, 54, 67, 68, 85, 99, 103, 110, 116, 120, 135, 159, 172, 175, 183, 214, 233 climate change 4, 253–6, 259 Clinton, President Bill 176 Cloud Atlas (film) 271 CNN 285 coal 3, 255 coercion x, 41–4, 53, 60–63, 79, 95, 201, 286 Cold War 153, 165 collateralised debt obligations (CDOs) 78 Collins, Suzanne: The Hunger Games 264 Colombia 280 colonialism 257 the colonised 289–90 indigenous populations 39, 40 liberation from colonial rule 202 philanthropic 208, 285 colonisation 229, 262 ‘combinatorial evolution’ 96, 102, 104, 146, 147, 248 commercialisation 262, 263, 266 commodification 24, 55, 57, 59–63, 88, 115, 140, 141, 192, 193, 235, 243, 251, 253, 260, 262, 263, 273 commodities advertising 275 asking price 31 and barter 24 commodity exchange 39, 64 compared with products 25–6 defective or dangerous 72 definition 39 devaluation of 234 exchange value 15, 25 falling costs of 117 importance of workers as buyers 80–81 international trade in 256 labour power as a commodity 62 low-value 29 mobility of 147–8 obsolescence 236 single metric of value 24 unique 140–41 use value 15, 26, 35 commodity markets 49 ‘common capital of the class’ 142, 143 common wealth created by social labour 53 private appropriation of 53, 54, 55, 61, 88, 89 reproduction of 61 use values 53 commons collective management of 50 crucial 295 enclosure of 41, 235 natural 250 privatised 250 communications 99, 147, 148, 177 communism 196 collapse of (1989) xii, 165 communist parties 136 during Cold War 165 scientific 269 socialism/communism 91, 269 comparative advantage 122 competition and alienated workers 125 avoiding 31 between capitals 172 between energy and food production 3 decentralised 145 and deflationary crisis (1930s) 136 foreign 148, 155 geopolitical 219 inter-capitalist 110 international 154, 175 interstate 110 interterritorial 219 in labour market 116 and monopoly 131–45, 146, 218 and technology 92–3 and turnover time of capital 73, 99 and wages 135 competitive advantage 73, 93, 96, 112, 161 competitive market 131, 132 competitiveness 184 complementarity principle of 70 compounding growth 37, 49, 222, 227, 228, 233, 234, 235, 243, 244 perpetual 222–45, 296 computerisation 100, 120, 222 computers 92, 100, 105, 119 hardware 92, 101 organisational forms 92, 93, 99, 101 programming 120 software 92, 99, 101, 115, 116 conscience laundering 211, 245, 284, 286 Conscious Capitalism 284 constitutional rights 58 constitutionality 60, 61 constitutions progressive 284 and social bond between human rights and private property 40 US Constitution 284 and usurpation of power 45 consumerism 89, 106, 160, 192–5, 197, 198, 236, 274–7 containerisation 138, 148, 158 contracts 71, 72, 93, 207 contradictions Aristotelian conception of 4 between money and the social labour money represents 83 between reality and appearance 4–6 between use and exchange value 83 of capital and capitalism 68 contagious intensification of 14 creative use of 3 dialectical conception of 4 differing reactions to 2–3 and general crises 14 and innovation 3 moved around rather than resolved 3–4 multiple 33, 42 resolution of 3, 4 two modes of usage 1–2 unstable 89 Controller of the Currency 120 corporations and common wealth 54 corporate management 98–9 power of 57–8, 136 and private property 39–40 ‘visible hand’ 141–2 corruption 53, 197, 266 cosmopolitanism 285 cost of living 164, 175 credit cards 67, 133, 277 credit card companies 54, 84, 278 credit financing 152 credit system 83, 92, 101, 111, 239 crises changes in mental conceptions of the world ix-x; crisis of capital 4 defined 4 essential to the reproduction of capitalism ix; general crisis ensuing from contagions 14 housing markets crisis (2007–9) 18, 20, 22 reconfiguration of physical landscapes ix; slow resolution of x; sovereign debt crisis (after 2012) 37 currency markets, turbulence of (late 1960s) x customary rights 41, 59, 198 D Davos conferences 169 DDT 259 Debord, Guy: The Society of the Spectacle 236 debt creation 236 debt encumbrancy 212 debt peonage 62, 212 decentralisation 49, 142, 143, 144, 146, 148, 219, 281, 295 Declaration of Independence (US) 284 decolonisation 282, 288, 290 decommodification 85 deindustrialisation xii, 77–8, 98, 110, 148, 153, 159, 234 DeLong, Bradford 228 demand management 81, 82, 106, 176 demand-side management 85 democracy 47, 215 bourgeois 43, 49 governance within capitalism 43 social 190 totalitarian 220, 292 democratic governance 220, 266 democratisation 43 Deng Xiaoping x depressions 49, 227 1930s x, 108, 136, 169, 227, 232, 234 Descartes, René 247 Detroit 77, 136, 138, 148, 150, 152, 155, 159, 160 devaluation 153, 155, 162 of capital 233 of commodities 234 crises 150–51, 152, 154 localised 154 regional 154 developing countries 16, 240 Dhaka, Bangladesh 77 dialectics 70 Dickens, Charles 126, 169 Bleak House 226 Dombey and Son 184 digital revolution 144 disabled, the 202 see also handicapped discrimination 7, 8, 68, 116, 297 diseases 10, 211, 246, 254, 260 disempowerment 81, 103, 116, 119, 198, 270 disinvestment 78 Disneyfication 276 dispossession accumulation by 60, 67, 68, 84, 101, 111, 133, 141, 212 and capital 54, 55, 57 economies of 162 of indigenous populations 40, 59, 207 ‘land grabs’ 58 of land rights of the Irish 40 of the marginalised 198 political economy of 58 distributional equality 172 distributional shares 164–5, 166 division of labour 24, 71, 112–30, 154, 184, 268, 270 and Adam Smith 98, 118 defined 112 ‘the detail division of labour’ 118, 121 distinctions and oppositions 113–14 evolution of 112, 120, 121, 126 and gender 114–15 increasing complexity of 124, 125, 126 industrial proletariat 114 and innovation 96 ‘new international division of labour’ 122–3 organisation of 98 proliferating 121 relation between the parts and the whole 112 social 113, 118, 121, 125 technical 113, 295 uneven geographical developments in 130 dot-com bubble (1990s) 222–3, 241 ‘double coincidence of wants and needs’ 24 drugs 32, 193, 248 cartels 54 Durkheim, Emile 122, 125 Dust Bowl (United States, 1930s) 257 dynamism 92, 104, 146, 219 dystopia 229, 232, 264 E Eagleton , Terry: Why Marx Was Right 1, 21, 200, 214–15 East Asia crisis of 1997–98 154 dirigiste governmentality 48 education 184 rise of 170 Eastern Europe 115, 230 ecological offsets 250 economic rationality 211, 250, 252, 273, 274, 275, 277, 278, 279 economies 48 advanced capitalist 228, 236 agglomeration 149 of dispossession 162 domination of industrial cartels and finance capital 135 household 192 informal 175 knowledge-based 188 mature 227–8 regional 149 reoriented to demand-side management 85 of scale 75 solidarity 66, 180 stagnant xii ecosystems 207, 247, 248, 251–6, 258, 261, 263, 296 Ecuador 46, 152, 284 education 23, 58, 60, 67–8, 84, 110, 127–8, 129, 134, 150, 156, 168, 183, 184, 185, 187, 188, 189, 223, 235, 296 efficiency 71, 92, 93, 98, 103, 117, 118, 119, 122, 126, 272, 273, 284 efficient market hypothesis 118 Egypt 107, 280, 293 Ehrlich, Paul 246 electronics 120, 121, 129, 236, 292 emerging markets 170–71, 242 employment 37 capital in command of job creation 172, 174 conditions of 128 full-time 274 opportunities for xii, 108, 168 regional crises of 151 of women 108, 114, 115, 127 see also labour enclosure movement 58 Engels, Friedrich 70 The Condition of the English Working Class in England 292 English Civil War (1642–9) 199 Enlightenment 247 Enron 133, 241 environmental damage 49, 61, 110, 111, 113, 232, 249–50, 255, 257, 258, 259, 265, 286, 293 environmental movement 249, 252 environmentalism 249, 252–3 Epicurus 283 equal rights 64 Erasmus, Desiderius 283 ethnic hatreds and discriminations 8, 165 ethnic minorities 168 ethnicisation 62 ethnicity 7, 68, 116 euro, the 15, 37, 46 Europe deindustrialisation in 234 economic development in 10 fascist parties 280 low population growth rate 230 social democratic era 18 unemployment 108 women in labour force 230 European Central Bank 37, 46, 51 European Commission 51 European Union (EU) 95, 159 exchange values commodities 15, 25, 64 dominance of 266 and housing 14–23, 43 and money 28, 35, 38 uniform and qualitatively identical 15 and use values 15, 35, 42, 44, 50, 60, 65, 88 exclusionary permanent ownership rights 39 experts 122 exploitation 49, 54, 57, 62, 68, 75, 83, 107, 108, 124, 126, 128, 129, 150, 156, 159, 166, 175, 176, 182, 185, 193, 195, 208, 246, 257 exponential growth 224, 240, 254 capacity for 230 of capital 246 of capital accumulation 223, 229 of capitalist activity 253 and capital’s ecosystem 255 in computer power 105 and environmental resources 260 in human affairs 229 and innovations in finance and banking 100 potential dangers of 222, 223 of sophisticated technologies 100 expropriation 207 externality effects 43–4 Exxon 128 F Facebook 236, 278, 279 factories ix, 123, 129, 160, 174, 182, 247, 292 Factory Act (1864) 127, 183 famine 124–5, 229, 246 Fannie Mae 50 Fanon, Frantz 287 The Wretched of the Earth 288–90, 293 fascist parties 280 favelas ix, 16, 84, 175 feminisation 115 feminists 189, 192, 283 fertilisers 255 fetishes, fetishism 4–7, 31, 36–7, 61, 103, 111, 179, 198, 243, 245, 269, 278 feudalism 41 financial markets 60, 133 financialisation 238 FIRE (finance, insurance and real estate) sections 113 fishing 59, 113, 148, 249, 250 fixity and motion 75–8, 88, 89, 146, 155 Food and Drug Administration 120 food production/supply 3, 229, 246, 248, 252 security 253, 294, 296 stamp aid 206, 292 Ford, Martin 104–8, 111, 273 foreclosure 21, 22, 24, 54, 58, 241, 268 forestry 113, 148, 257 fossil fuels 3–4 Foucault, Michel xiii, 204, 209, 280–81 Fourier, François Marie Charles 183 Fourierists 18 Fourteen Points 201 France banking 158 dirigiste governmentality under de Gaulle 48 and European Central Bank 46 fascist parties 280 Francis, Pope 293 Apostolic Exhortation 275–6 Frankfurt School 261 Freddie Mac 50 free trade 138, 157 freedom 47, 48, 142, 143, 218, 219, 220, 265, 267–270, 276, 279–82, 285, 288, 296 and centralised power 142 cultural 168 freedom and domination 199–215, 219, 268, 285 and the good life 215 and money creation 51 popular desire for 43 religious 168 and state finances 48 under the rule of capital 64 see also liberty and freedom freedom of movement 47, 296 freedom of thought 200 freedom of the press 213 French Revolution 203, 213, 284 G G7 159 G20 159 Gallup survey of work 271–2 Gandhi, Mahatma 284, 291 Gaulle, Charles de 48 gay rights 166 GDP 194, 195, 223 Gehry, Frank 141 gender discriminations 7, 8, 68, 165 gene sequences 60 General Motors xii genetic engineering xii, 101, 247 genetic materials 235, 241, 251, 261 genetically modified foods 101 genocide 8 gentrification 19, 84, 141, 276 geocentric model 5 geographical landscape building a new 151, 155 of capitalism 159 evolution of 146–7 instability of 146 soulless, rationalised 157 geopolitical struggles 8, 154 Germany and austerity 223 autobahns built 151 and European Central Bank 46 inflation during 1920s 30 wage repression 158–9 Gesell, Silvio 35 Ghana 291 global economic crisis (2007–9) 22, 23, 47, 118, 124, 132, 151, 170, 228, 232, 234, 235, 241 global financialisation x, 177–8 global warming 260 globalisation 136, 174, 176, 179, 223, 293 gold 27–31, 33, 37, 57, 227, 233, 238, 240 Golden Dawn 280 Goldman Sachs 75, 239 Google 131, 136, 195, 279 Gordon, Robert 222, 223, 230, 239, 304n2 Gore, Al 249 Gorz, André 104–5, 107, 242, 270–77, 279 government 60 democratic 48 planning 48 and social bond between human rights and private property 40 spending power 48 governmentality 43, 48, 157, 209, 280–81, 285 Gramsci, Antonio 286, 293 Greco, Thomas 48–9 Greece 160, 161, 162, 171, 235 austerity 223 degradation of the well-being of the masses xi; fascist parties 280 the power of the bondholders 51, 152 greenwashing 249 Guantanamo Bay, Cuba 202, 284 Guatemala 201 Guevara, Che 291 Guggenheim Museum, Bilbao 141 guild system 117 Guinea-Bissau 291 Gulf Oil Spill (2010) 61 H Habermas, Jürgen 192 habitat 246, 249, 252, 253, 255 handicapped, the 218 see also disabled Harvey, David The Enigma of Capital 265 Rebel Cities 282 Hayek, Friedrich 42 Road to Serfdom 206 health care 23, 58, 60, 67–8, 84, 110, 134, 156, 167, 189, 190, 235, 296 hedge funds 101, 162, 239, 241, 249 managers 164, 178 Heidegger, Martin 59, 250 Heritage Foundation 143 heterotopic spaces 219 Hill, Christopher 199 Ho Chi Minh 291 holocausts 8 homelessness 58 Hong Kong 150, 160 housing 156, 296 asset values 19, 20, 21, 58 ‘built to order’ 17 construction 67 controlling externalities 19–20 exchange values 14–23, 43 gated communities ix, 160, 208, 264 high costs 84 home ownership 49–50 investing in improvements 20, 43 mortgages 19, 21, 28, 50, 67, 82 predatory practices 67, 133 production costs 17 rental markets 22 renting or leasing 18–19, 67 self-built 84 self-help 16, 160 slum ix, 16, 175 social 18, 235 speculating in exchange value 20–22 speculative builds 17, 28, 78, 82 tenement 17, 160 terraced 17 tract ix, 17, 82 use values 14–19, 21–2, 23, 67 housing markets 18, 19, 21, 22, 28, 32, 49, 58, 60, 67, 68, 77, 83, 133, 192 crisis (2007–9) 18, 20, 22, 82–3 HSBC 61 Hudson, Michael 222 human capital theory 185, 186 human evolution 229–30 human nature 97, 198, 213, 261, 262, 263 revolt of 263, 264–81 human rights 40, 200, 202 humanism 269 capitalist 212 defined 283 education 128 excesses and dark side 283 and freedom 200, 208, 210 liberal 210, 287, 289 Marxist 284, 286 religious 283 Renaissance 283 revolutionary 212, 221, 282–93 secular 283, 285–6 types of 284 Hungary: fascist parties 280 Husserl, Edmund 192 Huygens, Christiaan 70 I IBM 128 Iceland: banking 55 identity politics xiii illegal aliens (‘sans-papiers’) 156 illegality 61, 72 immigrants, housing 160 imperialism 135, 136, 143, 201, 257, 258 income bourgeois disposable 235 disparities of 164–81 levelling up of 171 redistribution to the lower classes xi; see also wages indebtedness 152, 194, 222 India billionaires in 170 a BRIC country 170, 228 call centres 139 consumerism 236 dismantlement of old ships 250 labour 107, 230 ‘land grabs’ 77 moneylenders 210 social reproduction in 194 software engineers 196 special economic zones 144 unstable lurches forward 10 indigenous populations 193, 202, 257, 283 dispossession of 40, 59, 207 and exclusionary ownership rights 39 individualism 42, 197, 214, 281 Indonesia 129, 160 industrial cartels 135 Industrial Revolution 127 industrialisation 123, 189, 229, 232 inflation 30, 36, 37, 40, 49, 136, 228, 233 inheritance 40 Inner Asia, labour in 108 innovation 132 centres of 96 and the class struggle 103 competitive 219 as a double-edged sword xii; improving the qualities of daily life 4 labour-saving 104, 106, 107, 108 logistical 147 organisational 147 political 219 product 93 technological 94–5, 105, 147, 219 as a way out of a contradiction 3 insurance companies 278 intellectual property rights xii, 41, 123, 133, 139, 187, 207, 235, 241–2, 251 interest compound 5, 222, 224, 225, 226–7 interest-rate manipulations 54 interest rates 54, 186 living off 179, 186 on loans 17 money capital 28, 32 and mortgages 19, 67 on repayment of loans to the state 32 simple 225, 227 usury 49 Internal Revenue Service income tax returns 164 International Monetary Fund (IMF) 49, 51, 100, 143, 161, 169, 186, 234, 240 internet 158, 220, 278 investment: in fixed capital 75 investment pension funds 35–6 IOUs 30 Iran 232, 289 Iranian Revolution 289 Iraq war 201, 290 Ireland dispossession of land rights 40 housing market crash (2007–9) 82–3 Istanbul 141 uprising (2013) 99, 129, 171, 243 Italy 51,161, 223, 235 ITT 136 J Jacobs, Jane 96 James, C.L.R. 291 Japan 1980s economic boom 18 capital in (1980s) 154 economic development in 10 factories 123 growth rate 227 land market crash (1990) 18 low population growth rate 230 and Marshall Plan 153 post-war recovery 161 Jewish Question 213 JPMorgan 61 Judaeo-Christian tradition 283 K Kant, Immanuel 285 Katz, Cindi 189, 195, 197 Kenya 291 Kerala, India 171 Keynes, John Maynard xi, 46, 76, 244, 266 ‘Economic Possibilities for our Grandchildren’ 33–4 General Theory of Employment, Interest, and Money 35 Keynesianism demand management 82, 105, 176 demand-side and debt-financed expansion xi King, Martin Luther 284, 291 knowledge xii, 26, 41, 95, 96, 100, 105, 113, 122, 123, 127, 144, 184, 188, 196, 238, 242, 295 Koch brothers 292 Kohl, Helmut x L labour agitating and fighting for more 64 alienated workers 125, 126, 128, 129, 130 artisan 117, 182–3 and automation 105 capital/labour contradiction 65, 66, 68–9, 146 collective 117 commodification of 57 contracts 71, 72 control over 74, 102–11, 119, 166, 171–2, 274, 291–2 deskilling 111, 119 discipline 65, 79 disempowering workers 81, 103, 116, 119, 270 division of see division of labour; domestic 196 education 127–8, 129, 183, 187 exploitation of 54, 57, 62, 68, 75, 83, 107, 108, 126, 128, 129, 150, 156, 166, 175, 176, 182, 185, 195 factory 122, 123, 237 fair market value 63, 64 Gallup survey 271–2 house building 17 housework 114–15, 192 huge increase in the global wage labour force 107–8 importance of workers as buyers of commodities 80–81 ‘industrial reserve army’ 79–80, 173–4 migrations of 118 non-unionised xii; power of 61–4, 71, 73, 74, 79, 81, 88, 99, 108, 118–19, 127, 173, 175, 183, 189, 207, 233, 267 privatisation of 61 in service 117 skills 116, 118–19, 123, 149, 182–3, 185, 231 social see social labour; surplus 151, 152, 173–4, 175, 195, 233 symbolic 123 and trade unions 116 trading in labour services 62–3 unalienated 66, 89 unionised xii; unpaid 189 unskilled 114, 185 women in workforce see under women; worked to exhaustion or death 61, 182 see also employment labour markets 47, 62, 64, 66–9, 71, 102, 114, 116, 118, 166 labour-saving devices 104, 106, 107, 173, 174, 277 labour power commodification of 61, 88 exploitation of 62, 175 generation of surplus value 63 mobility of 99 monetisation of 61 private property character of 64 privatisation of 61 reserves of 108 Lagos, Nigeria, social reproduction in 195 laissez-faire 118, 205, 207, 281 land commodification 260–61 concept of 76–7 division of 59 and enclosure movement 58 establishing as private property 41 exhausting its fertility 61 privatisation 59, 61 scarcity 77 urban 251 ‘land grabs’ 39, 58, 77, 252 land market 18, 59 land price 17 land registry 41 land rents 78, 85 land rights 40, 93 land-use zoning 43 landlords 54, 67, 83, 140, 179, 251, 261 Latin America ’1and grabs’ 58, 77 labour 107 reductions in social inequality 171 two ‘lost decades’ of development 234 lawyers 22, 26, 67, 82, 245 leasing 16, 17, 18 Lebed, Jonathan 195 Lee Kuan-Yew 48 Leeds 149 Lefebvre, Henri 157, 192 Critique of Everyday Life 197–8 left, the defence of jobs and skills under threat 110 and the factory worker 68 incapable of mounting opposition to the power of capital xii; remains of the radical left xii–xiii Lehman Brothers investment bank, fall of (2008) x–xi, 47, 241 ‘leisure’ industries 115 Lenin, Vladimir 135 Leninism 91 Lewis, Michael: The Big Short 20–21 LGBT groups 168, 202, 218 liberation struggle 288, 290 liberty, liberties 44, 48–51, 142, 143, 212, 276, 284, 289 and bourgeois democracy 49 and centralised power 142 and money creation 51 non-coercive individual liberty 42 popular desire for 43 and state finances 48 liberty and freedom 199–215 coercion and violence in pursuit of 201 government surveillance and cracking of encrypted codes 201–2 human rights abuses 202 popular desire for 203 rhetoric on 200–201, 202 life expectancy 250, 258, 259 light, corpuscular theory of 70 living standards xii, 63, 64, 84, 89, 134, 175, 230 loans fictitious capital 32 housing 19 interest on 17 Locke, John 40, 201, 204 logos 31 London smog of 1952 255 unrest in (2011) 243 Los Angeles 150, 292 Louis XIV, King of France 245 Lovelace, Richard 199, 200, 203 Luddites 101 M McCarthyite scourge 56 MacKinnon, Catherine: Are Women Human?
The Great Fragmentation: And Why the Future of All Business Is Small by Steve Sammartino
3D printing, additive manufacturing, Airbnb, augmented reality, barriers to entry, Bill Gates: Altair 8800, bitcoin, BRICs, Buckminster Fuller, citizen journalism, collaborative consumption, cryptocurrency, Elon Musk, fiat currency, Frederick Winslow Taylor, game design, Google X / Alphabet X, haute couture, helicopter parent, illegal immigration, index fund, Jeff Bezos, jimmy wales, Kickstarter, knowledge economy, Law of Accelerating Returns, market design, Metcalfe's law, Minecraft, minimum viable product, Network effects, new economy, post scarcity, prediction markets, pre–internet, profit motive, race to the bottom, random walk, Ray Kurzweil, recommendation engine, remote working, RFID, self-driving car, sharing economy, side project, Silicon Valley, Silicon Valley startup, skunkworks, Skype, social graph, social web, software is eating the world, Steve Jobs, too big to fail, web application
This is something large conglomerates in the packaged goods, power generation and other industrial stalwart categories should take note of. A corporate strategy that relies on growth from selling to developing nations as they industrialise is fraught with short-sighted danger. The speed of development of certain technologies means that industrial methods of production may never eventuate in tomorrow’s non–BRIC countries’ developing economies. BRIC: Brazil, Russia, India and China 3D printing (discussed in detail in chapter 10) has the potential to circumvent manufacturing altogether. Exponential advances in solar, wind and other power-generating technologies may mean that houses will become self-sufficient with regard to their energy needs. As we saw for media and communications, the ability to create products that enable us to own the tools is where the economy is headed.
But it’s not just knowing where the cheapest price is that will create a further downward pressure; it’s access to lower cost forms of production for all types of work. Economic border hopping We’ve already seen how technology prices are in rapid freefall, but the inputs for labour and manufacturing are also being facilitated via the digital revolution. Anyone can now do what once only the most privileged organisations could through democratised access to BRIC-nations labour. You no longer need some kind of special economic licence, or insight into the local geography, language or even culture, to be able to have work done in emerging markets. Once the domain of big business, now small business and independent entrepreneurs have access to a globalised and digitally connected workforce. The new minimum wage As the web has emerged as a tool of commerce, socialisation and business tools, a market for labour arbitrage has emerged.
High technology prices are quickly heading to free, disposable, inconsequential … call it what you will, but price is no longer a barrier for the most vital parts of our economy. We all have NASA-level powers today. The current path of technology is to become cheaper, smaller and more available. Contrary to what the tabloids say, life has never been cheaper. In developed markets wages continue to grow at rates above inflation year on year. Everything is getting cheaper and prices have never been more reasonable in real terms. And this will continue. New access to BRIC-nations labour will add more service providers to the labour market via digital connections enabling everyone — not just large corporations — to border hop and lower the costs of doing business and making things. Sites such as Alibaba will continue to open up low-cost manufacturing to those previously excluded, creating an increased oversupply of everything and forcing prices down. In simple terms, we just have to come back to the very first lesson we ever had in economics, the one I keep on ranting about and everyone seems to forget: price is a function of demand and supply, and the supply of everything is getting bigger and even infinite.
Breakout Nations: In Pursuit of the Next Economic Miracles by Ruchir Sharma
3D printing, affirmative action, Albert Einstein, American energy revolution, anti-communist, Asian financial crisis, banking crisis, Berlin Wall, BRICs, British Empire, business climate, business process, business process outsourcing, call centre, capital controls, Carmen Reinhart, central bank independence, centre right, cloud computing, collective bargaining, colonial rule, corporate governance, crony capitalism, deindustrialization, demographic dividend, Deng Xiaoping, eurozone crisis, Gini coefficient, global supply chain, housing crisis, income inequality, indoor plumbing, inflation targeting, informal economy, Kenneth Rogoff, knowledge economy, labor-force participation, labour market flexibility, land reform, M-Pesa, Mahatma Gandhi, market bubble, megacity, Mexican peso crisis / tequila crisis, new economy, oil shale / tar sands, oil shock, open economy, Peter Thiel, planetary scale, quantitative easing, reserve currency, Robert Gordon, Shenzhen was a fishing village, Silicon Valley, software is eating the world, sovereign wealth fund, The Great Moderation, Thomas L Friedman, trade liberalization, Watson beat the top human players on Jeopardy!, working-age population
This shift—from merely crunching data to analyzing information—was illustrated in a viewer-friendly way by an IBM computer named “Watson” when, in early 2011, it dominated the most successful human champion of the popular American TV quiz show Jeopardy! However large the impact of digital technology will be on economic productivity (and I believe it will be significant), it is likely to be disproportionately large in the leading economies, particularly the United States. As wages rise in emerging nations, they are starting to automate and digitize their manufacturing plants, but nations like Brazil, Russia, India, and China remain well below the global average on automation measures, such as number of robots per employee. The hot new thing is machines that can “print” a three-dimensional product, including anything from a machine tool part to a mobile phone case—straight from a digital image. And all of the top-fifteen companies that make 3D printers are based in the United States, Europe, and Japan. Despite its inherent advantages as a technology-driven society, Japan seems almost to have given up on competing for the title of breakout nation in the top income category.
To take a simple measure, through the first six months of 2011 in the top-ten emerging stock markets, the weakest returns came in India, down 9 percent, and the best came in Indonesia, up 13 percent. This 22-percentage-point gap was unusually narrow, a clear indicator of herd behavior. In 2012, the gap climbed to 64 percentage points, with Brazil down 3 percent and Turkey, still a model for economic normalcy in the Muslim world, up 61 percent. Broken BRICS All of the BRICS economies are slowing sharply. China is on track to see its GDP growth fall well below the 8 percent target that Beijing had maintained for many years. The country’s slowdown is in turn taking the wind out of economies that set sail in the last decade by selling commodities to China, particularly Russia and Brazil, where GDP growth rates have slipped to 3.5 percent and 1 percent, respectively, in 2012.
That complacency will be a huge handicap as the world economy enters a new era. In this slower and more volatile world, the growth rates of countries and companies will start to diverge, so the Third Coming will be about understanding emerging markets as individual nations. This is as true in politics as economics. For example, the concern in the West over the rise of the major emerging markets as a political bloc, coming together in BRICS-type summits, is greatly exaggerated. The core of this group—Brazil, Russia, India, China, and South Africa—consists of nations with competing political interests. They are a group of commodity exporters versus importers, and trade links among them are surprisingly limited; although China has rapidly growing trade and financial links with the other four, those four don’t do much business with one another.
Brazillionaires: The Godfathers of Modern Brazil by Alex Cuadros
affirmative action, Asian financial crisis, big-box store, BRICs, cognitive dissonance, crony capitalism, Deng Xiaoping, Donald Trump, Elon Musk, facts on the ground, family office, high net worth, index fund, invisible hand, Jeff Bezos, Mark Zuckerberg, NetJets, offshore financial centre, profit motive, rent-seeking, risk/return, savings glut, short selling, Silicon Valley, sovereign wealth fund, stem cell, The Wealth of Nations by Adam Smith, too big to fail, transatlantic slave trade, transatlantic slave trade, We are the 99%
So he bought the rights to some iron ore deposits, put them into a company with the bland name MMX Mineração & Metálicos, and decided to hold an IPO—an initial public offering of stock. When he went to the bankers at Credit Suisse and Pactual, a local investment house, they had two good reasons to listen to him. One, investors were all excited over the BRICs. A Goldman Sachs economist had come up with this acronym to describe the four countries—Brazil, Russia, India, and China—that he saw as the new motors of the world economy. But few Brazilian companies had shares listed on an exchange, so there was a lot of unmet demand for vehicles to invest in the country. The other reason to listen to Eike was that he put his famous dad on MMX’s board. And with Eliezer’s help, he hired away some of Vale’s best engineers.
BY EARLY 2010, EIKE had taken five companies public in as many years: MMX Mineração (mining), LLX Logística (ports), MPX Energia (power plants), OGX Petróleo (oil), and OSX Brasil (oil platforms). He called his group EBX—his initials plus the indispensable X. He said it stood for wealth multiplication. And indeed, as his share prices rose, each offering added billions of dollars to his fortune. Whatever investors wished for, Eike came up with an answer. With the rise of the BRICs, people talked about the potential for “South-South trade.” The problem was that Brazil’s infrastructure lagged way behind the needs of a first-rate economy. At the port of Santos, where Lula had sold peanuts on the docks as a kid, container ships idled for hours waiting for a berth. Truck drivers delivering Mato Grosso soy could line up so long that they set up hammocks between their rigs. So Eike decided to build the port of Açu (pronounced ah-SOOH), which means “grand” in the indigenous Tupi-Guarani language.
See also Brazilian economy; specific governments; specific societal subjects American companies owned by Brazilians, xv American ideas of wealth in, xvi, 22 archetypal Brazilian, 48–49 bureaucracy and basic services, 10–11 complexo de vira-lata (mutt complex), 16, 98, 227, 260 contradiction of, 107 coup of 1964, 86, 95 culture, 4, 11–12, 22, 30, 50, 256 culture of corruption, xvii, 50–51, 54–55 culture of gambiarra, 148 debate about national progress, 13–14 flag of, 38 independence, 49–50 infrastructure problems, 144, 226, 260 labor laws, 21, 83 lack of Protestant ethic, 199–200 language, 8, 59 meritocracia and, 193, 194, 206, 207 migrant workers in, 45 national problems, 13–14, 37, 226 novos ricos, 143 oligarchy of, 48, 160 os anos de chumbo (years of lead), 44 outsider tradition in, 127–30 panelaço protests, 271 political apathy in, 96–97 population, xv, 11, 58, 98 Portuguese land grants, 49 protests of 2013, 231–36, 254–55, 258 protests of 2015, 271–72 Rabo preso (tied tail), 50 Republic of 1889, 129 rich’s preferential treatment, xiv, 49 “rouba mas faz” attitude, 37, 46–47, 56, 89, 270 soccer and, 236–37 thirteenth salary, 39, 118 tradition of wealth, 22 two routes to wealth in, 32 words for tricks and cheats, 50 Brazilian Congress anti-corruption laws, 2013, 235–36 Brazilian Senate building, 64 constitutional amendment to allow donations by companies, 275 corruption in, 33, 293n54 inquiry into Petrobras, 274–75 Brazilian Dream, 161, 170, 207–8, 257 Brazilian economy, 9, 151–56 Belíndia to describe, 12, 21, 129 bubble worries, 144, 244, 281, 286 buying on installments (parcelado), 21 Collor Plan, 92, 298n92 consumer debt, 252 consumer spending, 21–22, 80, 183 corruption’s effect on, 51 credit buying vs. cash, 19 currency of, 18, 21, 260, 300n108 custo Brasil, 21, 51 desenvolvimentismo, 44, 183 Dilma and, 223 Eike’s bubble, 286 as export leader, xv, 4, 59 foreign investment, 9, 14, 16 GDP, 44, 45, 288nxiv GDP losses, lucro Brasil, 51 history of patronage, 49–50 import tariffs, 21 inflation, 21, 92, 183, 226 interest rates, 19, 23, 172, 183 land ownership by the one percent, 59 Lula years, easy credit, 183 materialism and, 15, 257 middle class or classe C, 80–81, 97, 183, 226, 257, 272 military dictatorship and, 44–45 monopoly and, 81 monthly minimum wage, 25 national debt, 183, 269 1970s, 12 opportunity cost, 238–39, 242 patrimonialismo, 50, 71, 177, 280 public works and, 56–57 as rigged, 208 size of, 288nxiv stagflation, 260 Standard & Poor’s rating, 9, 271 startups in (see entrepreneurship) state supported business, 176–77 unemployment, 226 wealth inequity, xiv, xv, 45, 213–14, 284 wealth tax proposal, 55, 95, 269 BRICs, 137, 144 British Virgin Islands, 35 Brizola, Leonel, 313n234 B Team, 213 BTG Pactual, 218, 219–20, 221, 222–23 Buarque, Chico, 48 Buarque de Holanda, Sérgio, 48–49, 199, 200, 201 Budweiser, xv, 192 Buffett, Warren, 26, 156, 193, 197, 199, 203, 204, 205–6, 210, 310n209 Bunge, 62 Burger King, xv, 192, 209, 212 Burle Marx, Roberto, 86 Businessweek website, 211–12 BuzzFeed, 262 Cabral, Sérgio, 171, 184–85, 225, 226, 227, 240, 306n171 cachaça (alcohol), 13, 14, 18, 258 Cairu, José da Silva Lisboa, Viscount of, 176 Caixa (state bank), 290n40, 297n84 Caldeira, Jorge, 174 Camargo, Dirce, 52, 53, 289n35, 292n52, 293n53 Camargo, Sebastião, 31, 39, 42–44, 46, 69, 84, 160, 280, 292n47, 294n69 character of, 48, 90 construction of Brasília, 47–48 daughters of, 43, 52 death of, and accolades, 48 favorite project, 47 luxuries and lifestyle, 43, 53 military dictatorship and Oban, 42–44, 53, 291n42 nicknamed “China,” 43 “o homem dos relacionamentos,” 46 partnership with Barros, 46–47 politics and contracts, 43, 46–48 Rio-Niterói Bridge, 44, 292n45 Ultragaz venture, 42–43, 291n42 wealth of, 90 Camargo Corrêa, 30, 32, 39, 42, 46, 125, 228–29 Belo Monte dam and, 67, 71, 72, 273 Brasília construction, 63 bribes and, 39, 273 campaign donations, 54, 171, 293n54 Carwash and, 51, 270–71 founding of, 46 immunity deal, 274, 316n274 Limoeiro Dam, 47 Olympic Games construction, 274 politics and contracts, 43–44, 46, 47, 55, 292n45 size and worth, 52 toll bridge built by, 53, 293n53 Transamazônica highway, 68–69 Tucuruí dam, 72 warning to author, 52–53 World Cup 2014 construction and, 238 Camargo family, 52, 53 campaign donations, 53–54, 63, 275, 285TK, 293n54, 317n275.
algorithmic trading, asset-backed security, bank run, banking crisis, Bernie Madoff, Black Swan, Bretton Woods, BRICs, British Empire, collateralized debt obligation, computer age, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, currency peg, diversification, Doha Development Round, energy security, financial deregulation, financial innovation, fixed income, Francis Fukuyama: the end of history, George Gilder, housing crisis, Hyman Minsky, imperial preference, income inequality, index arbitrage, index fund, interest rate derivative, interest rate swap, Joseph Schumpeter, Kenneth Rogoff, large denomination, Long Term Capital Management, market bubble, Martin Wolf, Menlo Park, mobile money, Monroe Doctrine, moral hazard, mortgage debt, new economy, oil shale / tar sands, oil shock, peak oil, Plutocrats, plutocrats, Ponzi scheme, profit maximization, Renaissance Technologies, reserve currency, risk tolerance, risk/return, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, short selling, sovereign wealth fund, The Chicago School, Thomas Malthus, too big to fail, trade route
Banking is not the creator of our prosperity, but is the creation of it. It is not the cause of our wealth, but it is the consequence of our wealth.”3 In fairness to advocates, there is good reason to think that finance in the twenty-first century, somewhat like manufacturing in the late nineteenth, must rise as a share of GNP in major nations. What is unlikely in this 2010-50 framework, to take one example, is that the emerging BRIC group of nations—Brazil, Russia, India, and China—will see the percentage of their GNP represented by finance exceed or even approach the shares represented by their burgeoning manufacturing and extraction industries. Of course, there will be, as in China and the Persian Gulf, major buildups in central bank reserves and sovereign wealth funds earned by high-profile manufactures and oil revenues. But that does not go to the basic point.
Indeed, Westerners also know the history—of London circa 1858, when the city was nicknamed “the Smoke”; of soot-layered Pittsburgh or the Ruhr circa 1908; and of the petrochemical stench enveloping Houston circa 1958 being called “the smell of prosperity.” The BRIC nations—not just China, but also Brazil and India—have every intention of insisting that the nations of the long-since-industrialized West make the contemporary sacrifices, while the current aspirants have two or three decades of opportunity comparable to the West’s from the 1890s through the 1950s. Besides their sense of environmental history, the BRIC states come well armed financially. Of the five largest foreign-currency reserves in the world, three are maintained by China (number one), Russia (number three), and India (number five), and each nation is a big exporter.
Fred Bernanke, Ben bailouts of 2008 and inflation and Bernstein, Carl Bernstein, Peter Birah, Fatih Birol, Faith Black, Fischer Bloom, David Bloomberg, Michael Bloomberg/Los Angeles Times polls Bloomberg News Blunt, Roy BNP Paribas Bodman, Samuel Boesky, Ivan Bolivia Bookstaber, Richard Born, Brooksley Boskin, Michael Boskin Commission BP Brandon, Henry Braudel, Fernand Brazil Bretton Woods II BRIC nations Brown, Gordon Brunei Bryan, William Jennings budget deficits Buffett, Warren Buiter, Willem Bulgaria Bullnomics agflation and Chicago School economics and Christian fundamentalists and and debasement of official statistics, see consumer price index definition of EMH ideology and Bull Run: Wall Street, the Democrats, and the New Politics of Personal Finance (Gross), 46 Bureau of Economic Analysis Bureau of Labor Statistics (BLS) Burkle, Ronald Burma Road Bush, George H.
Civilization: The West and the Rest by Niall Ferguson
Admiral Zheng, agricultural Revolution, Albert Einstein, Andrei Shleifer, Atahualpa, Ayatollah Khomeini, Berlin Wall, BRICs, British Empire, clean water, collective bargaining, colonial rule, conceptual framework, Copley Medal, corporate governance, credit crunch, David Ricardo: comparative advantage, Dean Kamen, delayed gratification, Deng Xiaoping, discovery of the americas, Dissolution of the Soviet Union, European colonialism, Fall of the Berlin Wall, Francisco Pizarro, full employment, Hans Lippershey, haute couture, Hernando de Soto, income inequality, invention of movable type, invisible hand, Isaac Newton, James Hargreaves, James Watt: steam engine, John Harrison: Longitude, joint-stock company, Joseph Schumpeter, land reform, land tenure, Louis Pasteur, Mahatma Gandhi, market bubble, Martin Wolf, means of production, megacity, Mikhail Gorbachev, new economy, probability theory / Blaise Pascal / Pierre de Fermat, profit maximization, purchasing power parity, quantitative easing, rent-seeking, reserve currency, road to serfdom, Ronald Reagan, savings glut, Scramble for Africa, Silicon Valley, South China Sea, sovereign wealth fund, special economic zone, spice trade, spinning jenny, Steve Jobs, Steven Pinker, The Great Moderation, the market place, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, Thorstein Veblen, total factor productivity, trade route, transaction costs, transatlantic slave trade, transatlantic slave trade, upwardly mobile, uranium enrichment, wage slave, Washington Consensus, women in the workforce, World Values Survey
Richard Mayne (New York, 1993) Brownworth, Lars, Lost to the West: The Forgotten Byzantine Empire that Rescued Western Civilization (New York, 2009) Cahill, Thomas, How the Irish Saved Civilization (New York, 1995) Chandler, T., Four Thousand Years of Urban Growth: A Historical Census (Lewiston/Queenstown, 1987) Chaudhary, Latika, Aldo Musacchio, Steven Nafziger and Se Yan, ‘Big BRICs, Weak Foundations: The Beginning of Public Elementary Education in Brazil, Russia, India, and China, 1880–1930’, draft working paper (2010) Clark, Gregory, A Farewell to Alms: A Brief Economic History of the World (Princeton, 2007) Clark, Kenneth, Civilisation: A Personal View (London, 2005 ) Coulborn, Rushton, The Origin of Civilized Societies (Princeton, 1959) Darwin, John, After Tamerlane: The Rise and Fall of Global Empires (London, 2007) Dawson, Christopher, The Making of Europe: An Introduction to the History of European Unity (London, 1932) Diamond, Jared, Guns, Germs and Steel: A Short History of Everybody for the Last 13,000 Years (London, 1998) ———, ‘How to Get Rich: A Talk’, Edge, 56, June 7, 1999 Eisenstadt, S.
Richardson, Statistics of Deadly Quarrels. For a modern review, see Hayes, ‘Statistics of Deadly Quarrels’ and the discussion in Pinker, Better Angels. 16. Kotkin, Armageddon Averted. 17. Guan and Li, ‘GDP and Economic Structure’. 18. Maddison, World Economy. 19. http://gcr.weforum.org/gcr2010/. 20. http://www.conference-board.org/data/economydatabase/. 21. I am grateful to Jim O’Neill at Goldman Sachs for providing me with the relevant dataset. 22. Martin Wolf, ‘Will China’s Rise Be Peaceful?’, Financial Times, 16 November 2010. 23. Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, World Population Prospects: The 2008 Revision, http://esa.un.org/unpp, 27 November 2010. 24. Huntington, Clash of Civilizations, tables 3.1, 3.2, 3.3, 4.3, 4.5, 4.6. 25.
Hibbs and Olsson, ‘Geography’; Bockstette et al., ‘States and Markets’. 28. Diamond, Guns, Germs and Steel. 29. Diamond, ‘How to Get Rich’. 30. See e.g. Roberts, Triumph of the West. 31. See North, Understanding the Process of Economic Change; North et al., Violence and Social Orders. 32. Clark, Farewell to Alms, pp. 337–42. 33. Rajan and Zingales, ‘Persistence of Underdevelopment’; Chaudhary et al., ‘Big BRICs, Weak Foundations’. 34. Huntington, Clash of Civilizations. 35. Wallerstein, Modern World-System. 36. Huntington, Clash of Civilizations. 37. See e.g. Kagan, Paradise and Power and, more recently, Schuker, ‘Sea Change’. 38. See most recently Osborne, Civilization. 39. Morris, Why the West Rules. 40. Brownworth, Lost to the West. 41. Cahill, How the Irish Saved Civilization.
3D printing, Airbnb, Asian financial crisis, bank run, banking crisis, barriers to entry, Basel III, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, BRICs, British Empire, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, cleantech, collaborative consumption, collapse of Lehman Brothers, collective bargaining, corporate governance, credit crunch, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, currency peg, debt deflation, Diane Coyle, Downton Abbey, Edward Glaeser, Elon Musk, en.wikipedia.org, energy transition, eurozone crisis, fear of failure, financial deregulation, first-past-the-post, forward guidance, full employment, Gini coefficient, global supply chain, Growth in a Time of Debt, hiring and firing, hydraulic fracturing, Hyman Minsky, Hyperloop, immigration reform, income inequality, interest rate derivative, Irish property bubble, James Dyson, Jane Jacobs, job satisfaction, Joseph Schumpeter, Kenneth Rogoff, labour market flexibility, labour mobility, liquidity trap, margin call, Martin Wolf, mittelstand, moral hazard, mortgage debt, mortgage tax deduction, North Sea oil, Northern Rock, offshore financial centre, oil shale / tar sands, oil shock, open economy, price stability, private sector deleveraging, pushing on a string, quantitative easing, Richard Florida, rising living standards, risk-adjusted returns, Robert Gordon, savings glut, school vouchers, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Skype, smart grid, smart meter, software patent, sovereign wealth fund, Steve Jobs, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, Tyler Cowen: Great Stagnation, working-age population, Zipcar
Britain remains unhealthily reliant on exports of financial services, for which demand has fallen.418 Worse, Britain has failed to tap into the boom in emerging economies. As a share of GDP, it exports less to emerging economies than any other of the Group of Seven (G7) largest advanced economies – and indeed less to China than any EU-15 country, including Greece.419 Japan sends nearly a quarter of its goods exports to Brazil, Russia, India and China (the BRICs), Germany a tenth – and Britain only 5 per cent.420 Worse, Britain’s exports to the BRICs have grown more slowly in recent years than any other G-7 economy’s.421 That said, since Britain sends more of its exports to America, it will hopefully do better if the US recovery strengthens. Sterling’s devaluation has not only failed to promote Britain’s economic rebalancing, it has most likely delayed it, as Chapter 2 explained.422 Policymakers have complacently assumed that exports would automatically soar and neglected difficult reforms and investment to promote export-led growth.
Exports of financial and insurance services accounted for 10.2 per cent of Britain’s exports in 2011 and fell by an average of 1 per cent between 2007 and 2011. 419 EU-15 countries are the (generally richer) 15 countries that were members of the EU before its eastward enlargement in 2004. 420 International Monetary Fund, United Kingdom 2013 Article IV Consultation, July 2013, Annex 3, Figure A3.6. In 2011, 23.2 per cent of Japan’s goods exports went to the BRICs, 10.2 per cent of Germany’s, 7.4 per cent of Italy’s and 6.2 per cent of France’s, but only 5.2 per cent of Britain’s. 421 International Monetary Fund, United Kingdom 2013 Article IV Consultation, July 2013, Annex 3, Figure A3.7. Between 2007 and 2011, Britain’s exports to the BRICs grew by 4.2 per cent a year, while France’s grew by 5.9 per cent, Italy’s by 6.7 per cent, Germany by 9.6 per cent, Japan by 10 per cent and the United States’ by 11.4 per cent. 422 See also Philippe Legrain, "Don’t Blame the Euro Mess for Britain’s Plight", Wall Street Journal, 21 October 2012 http://online.wsj.com/article/SB10000872396390444734804578066134006073180.html 423 Office for National Statistics, gross fixed capital formation (code: NPQR) divided by GDP at market prices (code: ABMI) 424 http://www.economist.com/news/leaders/21580466-why-being-159th-best-investment-no-way-country-sustain-recovery-lets-try 425 http://www.prospectmagazine.co.uk/economics/adam-posen-george-osborne/ 426 International Monetary Fund, United Kingdom 2013 Article IV Consultation, July 2013, pages 77 and 78 427 Ibid, Figure A4.11 and Figure A4.24 428 More precisely, this is the rate at which the Bank of England lends to banks overnight secured against collateral. 429 Near-zero interest rates lowered mortgage interest costs for existing borrowers, which has doubtless supported spending.
The Last Lingua Franca: English Until the Return of Babel by Nicholas Ostler
barriers to entry, BRICs, British Empire, call centre, en.wikipedia.org, European colonialism, Internet Archive, invention of writing, Isaac Newton, Machine translation of "The spirit is willing, but the flesh is weak." to Russian and back, open economy, Republic of Letters, Scramble for Africa, statistical model, trade route, upwardly mobile
The assumption is that English will just be too entrenched, its continued use too convenient, for it ever to be let go. This assumption we have found reason to doubt. If the majority powers of the future, memorably termed in a Goldman Sachs report1 the BRIC— Brazil, Russia, India, China—were accepting English as their mother tongue, there might be some truth in this. Such developments have been known in the past, with colonized populations taking up a world language as their own. There is, after all, no going back from Spanish for the vast mestizo population of Central and South America, nor is there any retreat from Russian across Siberia, nor escape from English in Jamaica or Hawaii. But the BRIC are not. At best, they and their neighbors are teaching their children to cope with English as a second language, a lingua-franca. Long after the anglophone powers’ economic and military dominance around the world has faded, and the initiative for the world’s political and economic decisions has passed to others, the BRIC or whatever other nations are then dominant will retain a prior loyalty to their own national languages.
Long after the anglophone powers’ economic and military dominance around the world has faded, and the initiative for the world’s political and economic decisions has passed to others, the BRIC or whatever other nations are then dominant will retain a prior loyalty to their own national languages. This will be their default code, the medium in which they feel most at ease, and in which their elites can stay in touch with the vast masses of their populations. All these powers have a single dominant official language that is close to the top of the table of languages considered in chapter 10: Portuguese, Russian, Hindi-Urdu, Chinese. Although— short of successful aggressive and invasive wars— it is hard to see these languages being generally used outside their current confines, they may develop their own spheres of wider cur-rency.
Transactions of the American Philological Association 55: 52– 61. Watson, Burton. 1993. Records of the Grand Historian: Han Dynasty I. 2nd ed. New York: Columbia University Press. Watson, W. 1983. “Iran and China.” In Yarshater, ed., 537– 58. Wexler, Paul. 1996. The Non-Jewish Origins of the Sephardic Jews. Albany: State University of New York Press. Wilson, D., and R. Purushothaman. 2003. Dreaming with BRICs: The path to 2050. New York: Goldman Sachs, Global Economics paper 99. Windfuhr, Gernot. 1979. Persian Grammar: History and state of its study. Berlin: Walter de Gruyter. Winternitz, Moriz. 1987. History of Indian Literature. Vols. 1– 20 Delhi: Motilal Banarsidass. Woodard, Roger D., ed. 2004. The Cambridge Encyclopaedia of the World’s AncientLanguages. Cambridge: Cambridge University Press.
The Social Life of Money by Nigel Dodd
accounting loophole / creative accounting, bank run, banking crisis, banks create money, Bernie Madoff, bitcoin, blockchain, borderless world, Bretton Woods, BRICs, capital controls, cashless society, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, computer age, conceptual framework, credit crunch, cross-subsidies, David Graeber, debt deflation, dematerialisation, disintermediation, eurozone crisis, fiat currency, financial innovation, Financial Instability Hypothesis, financial repression, floating exchange rates, Fractional reserve banking, German hyperinflation, Goldman Sachs: Vampire Squid, Hyman Minsky, illegal immigration, informal economy, interest rate swap, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, Kula ring, laissez-faire capitalism, land reform, late capitalism, liquidity trap, litecoin, London Interbank Offered Rate, M-Pesa, Marshall McLuhan, means of production, mental accounting, microcredit, mobile money, money: store of value / unit of account / medium of exchange, mortgage debt, new economy, Nixon shock, Occupy movement, offshore financial centre, paradox of thrift, payday loans, Peace of Westphalia, peer-to-peer lending, Ponzi scheme, post scarcity, postnationalism / post nation state, predatory finance, price mechanism, price stability, quantitative easing, quantitative trading / quantitative ﬁnance, remote working, rent-seeking, reserve currency, Richard Thaler, Robert Shiller, Robert Shiller, Satoshi Nakamoto, Scientific racism, seigniorage, Skype, Slavoj Žižek, South Sea Bubble, sovereign wealth fund, special drawing rights, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transaction costs, Wave and Pay, WikiLeaks, Wolfgang Streeck, yield curve, zero-coupon bond
Central banks were under political pressure to loosen their monetary policies, and sometimes to engage in competitive currency devaluation—so-called currency wars—as a means of boosting exports and kick-starting economic recovery. As what some experts believe is a further consequence of the crisis, by a circuitous but discernible route, several governments collapsed amid political uprising in the Middle East during the first half of 2011.1 The broader ramifications of the crisis for the global economy, its effect on the emerging BRIC economies (Brazil, Russia, India, and China), for example, are yet to be fully discerned. This is a crisis of legitimacy as much as economics, provoked by the contrast between the resources that governments have devoted to rescuing banks and on the other hand, their subsequent willingness to make dramatic and socially corrosive cuts in public expenditures. Many financial institutions have been saved from insolvency by a combination of public finds and creative accounting, but households and individuals tend to be granted no such leniency.
Monetary union seems desirable for such states because of the scale of the threat posed by unrestricted capital flows to most existing national currencies when their exchange rates are not fixed (Eichengreen 2008).9 Fourth, there is the decline of the U.S. dollar as the world’s reserve currency, and relatedly, the “currency wars” and the strengthening of the Chinese renminbi, along with other BRIC (Brazil, Russia, India, and China) currencies (Cohen 2011; Fratzscher and Mehl 2011; Rickards 2011). Fifth, in the wake of that decline, there is the prospect of a global currency such as the special drawing rights (SDRs) issued by the IMF (Cohen 2011; Mundell 2012). Sixth, and finally, there is the growth of monetary forms that are not issued by states, such as digital monies. Although these forms are by no means new, their development has accelerated since the 1990s, and there are now several thousand complementary currencies in operation worldwide (North 1999, 2005, 2007).
* * * 1 Ruskin 1997: 185. 2 In a series of surveys conducted since 1987, between 80 and 85 percent of respondents have consistently expressed broad agreement with the statement, “I don’t like the idea of being in debt” (source: British Market Research Bureau, see http://www.marketresearchworld.net/content/view/643/77/). 3 Household debt has been increasing, particularly up until the 2007 financial crisis, when it rose from 113 percent (in 2000) to 175 percent (in 2007) of GDP in Britain, and from 100 to 135 percent in the United States during the same period. In Iceland, total (public and private) debt rose from 289 percent of GDP in 2003 to 1189 percent by 2008. It doubled in Ireland, reaching 700 percent of GDP in 2008 (Roxburgh, Lund, et al. 2010: 20). Debt was increasing in the BRICS economies, too. Before the banking crisis, total debt was growing at an annual compound rate of 15 percent in China and Brazil, 16 percent in India, and 32 percent in Russia (Roxburgh, Lund, et al. 2010: 21). There are roughly 191 million credit cards in Brazil, or one per member of the population: the number of cards doubled between 2004 and 2007 alone (Source: Euromonitor International, see http://www.euromonitor.com/financial-cards-and-payments-in-brazil/report).
airport security, Albert Einstein, BRICs, carbon footprint, clean water, cleantech, Climategate, corporate social responsibility, decarbonisation, energy security, Exxon Valdez, failed state, fear of failure, income inequality, Joseph Schumpeter, market fundamentalism, Naomi Klein, new economy, nuclear winter, oil shock, peak oil, Ponzi scheme, purchasing power parity, Ronald Reagan, shareholder value, The Spirit Level, The Wealth of Nations by Adam Smith, union organizing, University of East Anglia
Let’s make this clear—this means that year after year, each individual produces and consumes 2.5 percent more than the year before, meaning that by 2050, the world economy would be around three times larger than that of 2005—even if the population didn’t grow at all. Goldman Sachs has another set of data and predictions that reach similar conclusions. They forecast that while per capita GDP will approximately double in the G7 developed economies by 2050, the real growth in per capita income will occur in the BRIC (Brazil, Russia, India, and China) and N-11 (Next Eleven, the large developing economies that along with the BRIC have the potential to overtake the G7 as the world’s largest economies this century). In these economies, Goldman Sachs sees per capita income increasing on average by almost ten times between 2006 and 2050.3 These countries already are (in the case of China) or are rapidly becoming the world’s major economies. When we add population increases to per capita income increases, we can see a world in 2050 where the economy is many times the size of today’s.
Currency Wars: The Making of the Next Gobal Crisis by James Rickards
Asian financial crisis, bank run, Benoit Mandelbrot, Berlin Wall, Big bang: deregulation of the City of London, Black Swan, borderless world, Bretton Woods, BRICs, British Empire, business climate, capital controls, Carmen Reinhart, Cass Sunstein, collateralized debt obligation, complexity theory, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, Daniel Kahneman / Amos Tversky, Deng Xiaoping, diversification, diversified portfolio, Fall of the Berlin Wall, family office, financial innovation, floating exchange rates, full employment, game design, German hyperinflation, Gini coefficient, global rebalancing, global reserve currency, high net worth, income inequality, interest rate derivative, Kenneth Rogoff, labour mobility, laissez-faire capitalism, liquidity trap, Long Term Capital Management, mandelbrot fractal, margin call, market bubble, Mexican peso crisis / tequila crisis, money: store of value / unit of account / medium of exchange, Network effects, New Journalism, Nixon shock, offshore financial centre, oil shock, open economy, paradox of thrift, price mechanism, price stability, private sector deleveraging, quantitative easing, race to the bottom, RAND corporation, rent-seeking, reserve currency, Ronald Reagan, sovereign wealth fund, special drawing rights, special economic zone, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, time value of money, too big to fail, value at risk, War on Poverty, Washington Consensus
• March 31, 2009: The Financial Times reports that China and Argentina have entered into a currency swap, which would allow Argentina to use Chinese yuan in lieu of dollars. • April 26, 2009: Agence France Presse reports that China is calling for the reform of the world monetary system and replacement of the U.S. dollar as the leading reserve currency. • May 18, 2009: The Financial Times reports Brazil and China have agreed to explore conducting bilateral trade without using dollars. • June 16, 2009: Reuters reports that Brazil, Russia, India and China, at a BRIC summit, call for a more “diversified, stable and predictable currency system.” • November 3, 2009: Bloomberg reports that India has purchased $6.7 billion worth of IMF gold to diversify assets away from the weaker dollar. • November 7, 2010: World Bank president Robert Zoellick states that the G20 should “consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values
Romer, former Chair of the Council of Economic Advisers, commenting on quantitative easing, February 27, 2011 Three supercurrencies—the dollar, the euro and the yuan—issued by the three largest economies in the world—the United States, the European Union and the People’s Republic of China—are the superpowers in a new currency war, Currency War III, which began in 2010 as a consequence of the 2007 depression and whose dimensions and consequences are just now coming into focus. No one denies the importance of other major currencies in the global financial system, including Japanese yen, UK pounds sterling, Swiss francs, and those of the remaining BRICs: Brazilian real, Russian ruble, Indian rupee and South African rand. These currencies derive their importance from the size of the economies that issue them and the volume of trade and financial transactions in which those countries engage. By these measures, the indigenous dollars issued by Australia, New Zealand, Canada, Singapore, Hong Kong and Taiwan, as well as the Norwegian krone, South Korean won and UAE dirham, all have pride of place.
Losing Control: The Emerging Threats to Western Prosperity by Stephen D. King
Admiral Zheng, asset-backed security, barriers to entry, Berlin Wall, Bernie Madoff, Bretton Woods, BRICs, British Empire, capital controls, Celtic Tiger, central bank independence, collateralized debt obligation, corporate governance, credit crunch, crony capitalism, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, demographic dividend, demographic transition, Deng Xiaoping, Diane Coyle, Fall of the Berlin Wall, financial deregulation, financial innovation, Francis Fukuyama: the end of history, full employment, George Akerlof, German hyperinflation, Gini coefficient, hiring and firing, income inequality, income per capita, inflation targeting, invisible hand, Isaac Newton, knowledge economy, labour market flexibility, labour mobility, low skilled workers, market clearing, Martin Wolf, Mexican peso crisis / tequila crisis, Naomi Klein, new economy, Ponzi scheme, price mechanism, price stability, purchasing power parity, rent-seeking, reserve currency, rising living standards, Ronald Reagan, savings glut, Silicon Valley, Simon Kuznets, sovereign wealth fund, spice trade, statistical model, technology bubble, The Great Moderation, The Market for Lemons, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transaction costs, Washington Consensus, women in the workforce, working-age population, Y2K, Yom Kippur War
It’s no surprise that, these days, Germany and Japan regard emerging economies as some of their biggest customers: as the world’s most important producers of capital goods, sustained increases in plant and machinery investment within the emerging world are good news for the likes of Siemens and Komatsu. Overall, the share of global industrial ‘added value’ coming from the developed nations has dropped from 68.3 per cent in 1971 to 51.9 per cent in 2008, while the share accruing to Brazil, Russia, India and China (BRIC), has risen from 2.6 to 16.5 per cent over the same period (similar figures apply to capital spending). For GDP as a whole, the G7 share has fallen more moderately from 70.5 per cent in 1971 to 61.1 per cent in 2008, with the share for China et al. rising from 3.3 to 11.6 per cent over the period:13 in other words, the developed nations have moved away from manufacturing while the BRICs have become increasingly dependent on it. The Ricardian interpretation of these developments is simple. All that’s happened is that each area of the world has focused on its comparative advantage.
Endless Money: The Moral Hazards of Socialism by William Baker, Addison Wiggin
Andy Kessler, asset allocation, backtesting, bank run, banking crisis, Berlin Wall, Bernie Madoff, Black Swan, Branko Milanovic, Bretton Woods, BRICs, business climate, capital asset pricing model, corporate governance, correlation does not imply causation, credit crunch, Credit Default Swap, crony capitalism, cuban missile crisis, currency manipulation / currency intervention, debt deflation, Elliott wave, en.wikipedia.org, Fall of the Berlin Wall, feminist movement, fiat currency, fixed income, floating exchange rates, Fractional reserve banking, full employment, German hyperinflation, housing crisis, income inequality, index fund, inflation targeting, Joseph Schumpeter, laissez-faire capitalism, land reform, liquidity trap, Long Term Capital Management, McMansion, moral hazard, mortgage tax deduction, naked short selling, offshore financial centre, Ponzi scheme, price stability, pushing on a string, quantitative easing, RAND corporation, rent control, reserve currency, riskless arbitrage, Ronald Reagan, school vouchers, seigniorage, short selling, Silicon Valley, six sigma, statistical arbitrage, statistical model, Steve Jobs, The Great Moderation, the scientific method, time value of money, too big to fail, upwardly mobile, War on Poverty, Yogi Berra, young professional
History reveals isolated events: the crack up of the Continental currency in America in 1781 or the bust of the German mark in 1923, which famously resulted in wheelbarrows full of paper currency just to buy bread. But never before has the world seen an event which engulfed the entire planet. We may go down in history as the first generation to live through one, what do you think of that? With the seizure of the credit markets in the fall of 2008, the jig was up for just about every major market in the global economy. The emerging BRIC economies—Brazil, Russia, India, and China—fell in unison with stock markets in the United States, Canada, Great Britain, France, and Germany. The commodities markets, which had been beneficiaries of immense speculation for the better part of the trading year, suddenly dropped, squeezing even the true believers from the market. I ix x FOREWORD Price for oil, gold, copper—thought to provide refuge from the mayhem in the stock market—crashed along with everything else.
Population growth, once a scare akin to global warming today, peaked at 2.4 percent in the 1960s in developing regions. While the first response of poor people to exposure to newfound wealth may be the instinct of procreation to provide for them in their old age, such customs die off. China once feared a population explosion, but within decades it will experience an aging demographic due to its one-child policy. At first in 2008 Wall Street excitedly embraced the concept that Brazil, Russia, India, and China (the “BRIC” countries) could grow independently of the rest of the world, and in so doing maintain upward pressure on commodity prices. Despite the pressure from integration into the world capitalist system of former communist and socialist states 360 ENDLESS MONEY global demand probably did not expand much more than population growth. Frank Veneroso, in a June 2007 presentation to the World Bank, meticulously established that consumption of commodities grew only about 2 percent in this cycle, but “apparent” demand was manipulated through parking physical stocks in China, for instance.
The Extreme Centre: A Warning by Tariq Ali
Affordable Care Act / Obamacare, Berlin Wall, bonus culture, BRICs, British Empire, centre right, deindustrialization, Edward Snowden, Fall of the Berlin Wall, financial deregulation, first-past-the-post, full employment, labour market flexibility, land reform, means of production, Mikhail Gorbachev, Monroe Doctrine, mortgage debt, North Sea oil, obamacare, offshore financial centre, reserve currency, Ronald Reagan, South China Sea, The Chicago School, The Wealth of Nations by Adam Smith, trade route, trickle-down economics, Washington Consensus, Wolfgang Streeck
It has maintained spectacular growth rates and in the second quarter of 2010, it overtook Japan as the world’s second-largest economy (a position which Japan had maintained for nearly four decades). Valued at $1.33tn, its economy is already bigger than that of Germany, the UK or France. By the end of 2010 its foreign exchange reserves stood at $2.85tn. According to a 2009 Goldman Sachs report, it will also overtake the US economy by 2027 (and the BRIC countries, Brazil, Russia, India and China, are set to displace the G7 as the largest economic bloc by 2032). When Admiral Timothy Keating, the head of US Pacific Command, met a senior Chinese admiral in the crisis year of 2008, he heard a surprising offer. Keating reported that his unnamed counterpart had suggested drawing a line down the middle of the Pacific, adding: ‘You guys can have the east part of the Pacific: Hawaii to the States.
Connectography: Mapping the Future of Global Civilization by Parag Khanna
1919 Motor Transport Corps convoy, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, 9 dash line, additive manufacturing, Admiral Zheng, affirmative action, agricultural Revolution, Airbnb, Albert Einstein, amateurs talk tactics, professionals talk logistics, Amazon Mechanical Turk, Asian financial crisis, asset allocation, autonomous vehicles, banking crisis, Basel III, Berlin Wall, bitcoin, Black Swan, blockchain, borderless world, Boycotts of Israel, Branko Milanovic, BRICs, British Empire, business intelligence, call centre, capital controls, charter city, clean water, cloud computing, collateralized debt obligation, complexity theory, corporate governance, corporate social responsibility, credit crunch, crony capitalism, crowdsourcing, cryptocurrency, cuban missile crisis, data is the new oil, David Ricardo: comparative advantage, deglobalization, deindustrialization, dematerialisation, Deng Xiaoping, Detroit bankruptcy, diversification, Doha Development Round, edge city, Edward Snowden, Elon Musk, energy security, ethereum blockchain, European colonialism, eurozone crisis, failed state, Fall of the Berlin Wall, family office, Ferguson, Missouri, financial innovation, financial repression, forward guidance, global supply chain, global value chain, global village, Google Earth, Hernando de Soto, high net worth, Hyperloop, ice-free Arctic, if you build it, they will come, illegal immigration, income inequality, income per capita, industrial robot, informal economy, Infrastructure as a Service, interest rate swap, Internet of things, Isaac Newton, Jane Jacobs, Jaron Lanier, John von Neumann, Julian Assange, Just-in-time delivery, Kevin Kelly, Khyber Pass, Kibera, Kickstarter, labour market flexibility, labour mobility, LNG terminal, low cost carrier, manufacturing employment, mass affluent, megacity, Mercator projection, microcredit, mittelstand, Monroe Doctrine, mutually assured destruction, New Economic Geography, new economy, New Urbanism, offshore financial centre, oil rush, oil shale / tar sands, oil shock, openstreetmap, out of africa, Panamax, Peace of Westphalia, peak oil, Peter Thiel, Plutocrats, plutocrats, post-oil, post-Panamax, private military company, purchasing power parity, QWERTY keyboard, race to the bottom, Rana Plaza, rent-seeking, reserve currency, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Scramble for Africa, Second Machine Age, sharing economy, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, six sigma, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, Stuxnet, supply-chain management, sustainable-tourism, TaskRabbit, telepresence, the built environment, Tim Cook: Apple, trade route, transaction costs, UNCLOS, uranium enrichment, urban planning, urban sprawl, WikiLeaks, young professional, zero day
And in the decade before the financial crisis, the top five British banks lent 84 percent of their portfolios to property and financial services centered on London, neglecting the entire rest of the country. Under the rubric of “Big Society,” London’s new devolution plan provides infrastructure loans to cities such as Manchester and Sheffield to develop their own urban regeneration plans and skills programs. But these are loans, not grants or investments; they must be paid back. The former Goldman Sachs executive Jim O’Neill has called for the creation of a super-region called “ManSheffLeedsPool” that would invest these funds into connective rail corridors between them while pushing for Scotland-like autonomy. Demographics further ensure that devolution will continue to remap Britain, even in areas it has fought for decades to control. Northern Ireland’s latter twentieth-century “Troubles” (which pitted the militant IRA against British counterterrorism forces) peaked when Protestants made up the majority of the population.
Ohmae, Kenichi. The End of the Nation State: The Rise of Regional Economies. Free Press, 1996. ———. The Next Global Stage: Challenges and Opportunities in Our Borderless World. Wharton School Publishing, 2005. Olsthoorn, Xander, and Anna J. Wieczorek, eds. Understanding Industrial Transformation: Views from Different Disciplines. Springer, 2006. O’Neill, Jim. The Growth Map: Economic Opportunity in the BRICs and Beyond. Portfolio Hardcover, 2011. Ooi, Kee Beng. The Eurasian Core and Its Edges: Dialogues with Wang Gangwu on the History of the World. Institute of Southeast Asian Studies, 2015. Osnos, Evan. Age of Ambition: Chasing Fortune, Truth, and Faith in the New China. Farrar, Straus and Giroux, 2014. Ostrom, Elinor. “Beyond Markets and States: Polycentric Governance of Complex Economic Systems.”
Coined: The Rich Life of Money and How Its History Has Shaped Us. Grand Central, 2015. Sennett, Richard. Together: The Rituals, Pleasures, and Politics of Cooperation. Yale University Press, 2012. Senor, Dan, and Saul Singer. Start-Up Nation: The Story of Israel’s Economic Miracle. Twelve, 2011. Seung Ho Park, Nan Zhou, and Gerardo R. Ungson. Rough Diamonds: The Four Traits of Successful Breakout Firms in BRIC Countries. Jossey-Bass, 2013. Sharma, Ruchir. Breakout Nations: In Pursuit of the Next Economic Miracles. W. W. Norton, 2013. Sharma, Vivek. “Give Corruption a Chance.” National Interest, Nov. 2013. Simpfendorfer, Ben. The Rise of the New East: Business Strategies for Success in a World of Increasing Complexity. Palgrave Macmillan, 2014. Singer, Peter. One World: The Ethics of Globalization.
algorithmic trading, Berlin Wall, bonus culture, BRICs, business process, collapse of Lehman Brothers, collateralized debt obligation, complexity theory, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, disintermediation, diversification, Emanuel Derman, financial innovation, fixed income, friendly fire, Goldman Sachs: Vampire Squid, high net worth, housing crisis, London Whale, Long Term Capital Management, merger arbitrage, new economy, passive investing, performance metric, risk tolerance, Ronald Reagan, Saturday Night Live, shareholder value, short selling, sovereign wealth fund, The Nature of the Firm, too big to fail, value at risk
Selected Spear, Leeds & Kellogg partners became Goldman PMDs. 2001: Goldman disbands its M&A department and places its M&A bankers in groups focused on specific industries (C, O, T). Goldman is the top global M&A adviser and underwriter of all IPOs and common stock offerings. The September 11 terrorist attacks have significant economic impacts. The Fed reduced the federal funds rate to 1 percent from 2001 to 2002, leading to a surge in home sales and refinancing. Goldman issues a report on the emerging BRIC (Brazil, Russia, India, and China) economies. 2002: In a faltering economy, with the high degree of consolidation of banks after the repeal of the Glass–Steagall Act, there is media speculation that Goldman could be forced into a merger to remain viable against large competing banks having assets double or triple those of Goldman. Paulson announces Goldman’s strategy for becoming the leading global investment bank, securities, and investment management firm (C).
Kapnick 0.600% 1,590,114 84,276,065 111,912,254 Scott M. Pinkus 0.600% 1,590,114 84,276,065 111,912,254 Steven T. Mnuchin 0.600% 1,590,114 84,276,065 111,912,254 Sylvain M. Hefes 0.600% 1,590,114 84,276,065 111,912,254 Thomas K. Montag 0.600% 1,590,114 84,276,065 111,912,254 Wiet H. Pot 0.600% 1,590,114 84,276,065 111,912,254 Byron D. Trott 0.550% 1,457,605 77,253,060 102,586,233 George W. Wellde Jr. 0.550% 1,457,605 77,253,060 102,586,233 Jim O’Neill 0.550% 1,457,605 77,253,060 102,586,233 John J. Powers 0.550% 1,457,605 77,253,060 102,586,233 Michael S. Sherwood 0.550% 1,457,605 77,253,060 102,586,233 Richard S. Sharp 0.550% 1,457,605 77,253,060 102,586,233 Andrew M. Alper 0.525% 1,391,350 73,741,557 97,923,222 Carlos A. Cordeiro 0.525% 1,391,350 73,741,557 97,923,222 Charles B. Seelig Jr. 0.525% 1,391,350 73,741,557 97,923,222 Daniel W.
Broken Markets: A User's Guide to the Post-Finance Economy by Kevin Mellyn
banking crisis, banks create money, Basel III, Bernie Madoff, Big bang: deregulation of the City of London, Bonfire of the Vanities, bonus culture, Bretton Woods, BRICs, British Empire, call centre, Carmen Reinhart, central bank independence, centre right, cloud computing, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, credit crunch, crony capitalism, currency manipulation / currency intervention, disintermediation, eurozone crisis, fiat currency, financial innovation, financial repression, floating exchange rates, Fractional reserve banking, global reserve currency, global supply chain, Home mortgage interest deduction, index fund, joint-stock company, Joseph Schumpeter, labor-force participation, labour market flexibility, liquidity trap, London Interbank Offered Rate, lump of labour, market bubble, market clearing, Martin Wolf, means of production, mobile money, moral hazard, mortgage debt, mortgage tax deduction, Ponzi scheme, profit motive, quantitative easing, Real Time Gross Settlement, regulatory arbitrage, reserve currency, rising living standards, Ronald Coase, seigniorage, shareholder value, Silicon Valley, statistical model, Steve Jobs, The Great Moderation, the payments system, Tobin tax, too big to fail, transaction costs, underbanked, Works Progress Administration, yield curve, Yogi Berra
Today, workers across the globe ﬁnd themselves in competition with each other. Work will migrate to where enterprises ﬁnd the best combination of 123 124 Chapter 6 | The Consumer in the World After Finance costs, skills, and ﬂexibility. That is why nearly half the world’s manufacturing output is now in greater China. The result is that perhaps a billion people can now lead basic middle-class lives in the so-called BRIC countries of Brazil, Russia, India, and China, places that scarcely had a middle class a generation ago. Overall, this means that the global economic pie is getting larger rapidly, but the share enjoyed by Western consumers is not growing. In their role as producers and wage earners, American and other Western workers are still vastly too costly for ﬁrms facing global competition to employ them. Don’t be misled by the election-year rhetoric of wicked corporations shipping American jobs overseas and promises to do something about it.
Andrei Shleifer, asset allocation, asset-backed security, Bernie Madoff, bitcoin, Black Swan, BRICs, Carmen Reinhart, cleantech, compound rate of return, credit crunch, diversification, diversified portfolio, equity premium, estate planning, fixed income, high net worth, implied volatility, index fund, invisible hand, Kenneth Rogoff, market bubble, passive investing, pattern recognition, prediction markets, risk tolerance, risk/return, Robert Shiller, Robert Shiller, sovereign wealth fund, too big to fail, transaction costs, Vanguard fund, yield curve, zero-coupon bond
As a Danish citizen who has lived in the US and UK for over 20 years I might instinctively be over-allocating to Europe and the US because I’m familiar with those markets. But in doing that I would implicitly be claiming that Europe and the US would have a better risk/return profile than the rest of the world. This might or might not turn out that way, but the point is that we don’t know ahead of time. Or you could find yourself making statements like, ‘I believe the BRIC (Brazil, Russia, India and China) countries are set to dominate growth over the next decades and are cheap.’ Perhaps you’d be right, but you would also be saying that you know something that the rest of the world has not yet discovered. This does not make sense unless you have an edge. The advantage of diversification The world equity portfolio is the most diversified equity portfolio we can find. To give an idea of the benefits of diversification in the home market consider Figure 5.2, which suggests the benefits decline as we add securities in the home market.
Rethinking Money: How New Currencies Turn Scarcity Into Prosperity by Bernard Lietaer, Jacqui Dunne
3D printing, agricultural Revolution, Albert Einstein, Asian financial crisis, banking crisis, Berlin Wall, BRICs, business climate, business process, butterfly effect, carbon footprint, Carmen Reinhart, clockwork universe, collapse of Lehman Brothers, complexity theory, conceptual framework, credit crunch, discounted cash flows, en.wikipedia.org, Fall of the Berlin Wall, fear of failure, fiat currency, financial innovation, Fractional reserve banking, full employment, German hyperinflation, happiness index / gross national happiness, job satisfaction, Marshall McLuhan, microcredit, mobile money, money: store of value / unit of account / medium of exchange, more computing power than Apollo, new economy, Occupy movement, price stability, reserve currency, Silicon Valley, the payments system, too big to fail, transaction costs, trickle-down economics, urban decay, War on Poverty, working poor
Currently, as infrastructure crumbles in the United States and in many other nations, and the availability of high-quality education and health care plummets, with massively underfunded liabilities, the stark statistics still don’t tell the full story of America’s sons and daughters and, indeed, the entire global family as it grapples with an uncertain future. The situation is particularly dire in Europe: Greece, Spain, Ireland, the United Kingdom, and Italy are in a credit crunch not seen in generations. Even in the countries that were up until recently considered booming, nations like the BRICs—Brazil, Russia, India, and China— development was highly uneven, with entire regions experiencing scarcity and need. Now it would appear that their economic bloom is wilting.10 Practically everywhere one finds many tales of how the highly competitive nature of the conventional money system influences our lives. REQUIEM FOR A DREAM It takes a moment to get over the initial shock of seeing Fred bagging groceries in a popular national grocery store outlet.
McMafia: A Journey Through the Global Criminal Underworld by Misha Glenny
anti-communist, Anton Chekhov, Berlin Wall, blood diamonds, BRICs, colonial rule, crony capitalism, Deng Xiaoping, Doha Development Round, failed state, Fall of the Berlin Wall, financial deregulation, Firefox, forensic accounting, friendly fire, glass ceiling, illegal immigration, joint-stock company, market bubble, Mikhail Gorbachev, Nick Leeson, offshore financial centre, place-making, rising living standards, Ronald Reagan, Skype, special economic zone, Stephen Hawking, trade liberalization, trade route, Transnistria, unemployed young men, upwardly mobile
There are several prerequisites, but three are paramount: steep levels of poverty and unemployment; a high standard of basic education for a majority of the population; and a strong presence of more traditional organized crime forms. Nobody fits the bill better than the so-called BRIC nations—Brazil, Russia, India, and China. These are the leading countries among the emerging markets, the second tier of global power after the G8 (though politically Russia straddles the two). South Africa is regarded as a reserve player in the BRIC grouping because although a regional giant like the others, it cannot compete economically. It also fails as a cybercrime center because its standards of education have yet to recover from the damage inflicted by apartheid (see chapter 12). Snapshot of e-mail “harvesting” centers and spam targets, October 2006.
accounting loophole / creative accounting, Albert Einstein, Asian financial crisis, asset-backed security, Black Swan, Black-Scholes formula, Bretton Woods, BRICs, Brownian motion, business process, buy low sell high, call centre, capital asset pricing model, collateralized debt obligation, complexity theory, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, cuban missile crisis, currency peg, disintermediation, diversification, diversified portfolio, Eugene Fama: efficient market hypothesis, financial innovation, fixed income, Haight Ashbury, high net worth, implied volatility, index arbitrage, index card, index fund, interest rate derivative, interest rate swap, Isaac Newton, job satisfaction, locking in a profit, Long Term Capital Management, mandelbrot fractal, margin call, market bubble, Marshall McLuhan, mass affluent, merger arbitrage, Mexican peso crisis / tequila crisis, moral hazard, mutually assured destruction, new economy, New Journalism, Nick Leeson, offshore financial centre, oil shock, Parkinson's law, placebo effect, Ponzi scheme, purchasing power parity, quantitative trading / quantitative ﬁnance, random walk, regulatory arbitrage, risk-adjusted returns, risk/return, shareholder value, short selling, South Sea Bubble, statistical model, technology bubble, the medium is the message, time value of money, too big to fail, transaction costs, value at risk, Vanguard fund, volatility smile, yield curve, Yogi Berra, zero-coupon bond
Marakanond, a career central banker, was ordered to pay the vast sum back within one month or face seizure of his assets. Mavakanond was a scapegoat; Asia was back to its old tricks. Things had changed, the focus was different this time. The ‘tigers’ of South East Asia had given way to the Chinese ‘tiger’ (the Amur tiger that had once roamed China was actually long extinct). Most companies now were into BRIC – Brazil, Russia, India and China. Investors were all throwing money at these countries; businesspeople spoke in awe of the potential of the Chinese ‘dragon’. I had always thought that the dragon was a mythological creature. China reported growth of 8.00% pa exactly each quarter; the accuracy, precision and speed with which the figure was published were commendable. Nobody actually knew whether the number was accurate.
We’ll catch up for a spot of lunch. Stay in touch, old boy. Must get going. Another soul to save, you know.’ I wondered if he had bought himself an electric pencil sharpener. BOAT (Best of all time) Several ‘new age’ traders were in a bar drinking; some things hadn’t changed. Headlines in the appropriately pink FT (Financial Times) proclaimed that Brazilian bonds had fallen; Brazil, it seemed, was about to hit a ‘BRIC’ wall. The traders’ talk was also about ‘Brazilians’; the total depilation of the nether regions of a woman leaving only the briefest ‘landing strip’. One of the men was considering the male version – the ‘sac to crack’. Traders like to discuss everything with other traders; in trading rooms, this is the normal code of behaviour. Much later in the evening, the talk turned to a familiar topic: the ‘best’ trade ever – a BOAT (best of all time).
The Great Escape: Health, Wealth, and the Origins of Inequality by Angus Deaton
Admiral Zheng, agricultural Revolution, Branko Milanovic, BRICs, British Empire, call centre, clean water, colonial exploitation, Columbian Exchange, declining real wages, Downton Abbey, financial innovation, germ theory of disease, Gini coefficient, illegal immigration, income inequality, invention of agriculture, invisible hand, John Snow's cholera map, knowledge economy, Louis Pasteur, low skilled workers, new economy, purchasing power parity, randomized controlled trial, rent-seeking, rising living standards, Ronald Reagan, Simon Kuznets, Steve Jobs, Steven Pinker, structural adjustment programs, The Spirit Level, too big to fail, trade route, very high income, War on Poverty
The two largest countries in the world have been among the most successful, at least over the past quarter of a century. Is this because they are large, or is it simply that the two countries that did so well happened to be the largest? Other large countries have also outperformed the world average, at least over some periods, though none have equaled China’s staying power. Examples are Brazil, Indonesia, Japan, Russia, and the United States. The “BRIC” countries (Brazil, Russia, India, and China) certainly reap some advantages from their size. A diplomatic corps, a competent bureaucracy, a few well-trained leaders, and the faculty of a world-class university cannot all be filled with only a handful of good people, and larger countries have larger pools from which to choose. If scientific discovery—or, more relevant for poorer countries, figuring out how to adapt old knowledge to new conditions—depends on the absolute numbers of scientists or researchers and not on the fraction of the population who are scientists or researchers, then this too gives larger countries an advantage.
See also individual countries Attenborough, Richard, 2, 269 Australia, lung cancer mortality rates in, 134–35, 134f Bangladesh: life expectancies in, 27, 36; refugee camps in, 10, 104; war in, 271; women’s heights in, 160 bankers, 208–9, 211, 213 Bartels, Larry, 212 Bauer, Peter, 273 Bhagwati, Jagdish, 318–19 Birdsall, Nancy, 316 birth rates: contraception and, 241, 246–47; decreases in, 155–56, 243, 244–45, 246–47; education and, 105; in prehistory, 75, 80. See also population growth births, registration of, 71–73, 81 Blair, Tony, 144 body sizes: nutrition and, 91–92; obesity, 83, 141, 148. See also heights Boserup, Esther, 79 Botswana, 34, 108, 234, 286 Brandeis, Louis, 213 Bray, Bernice E., 158 Brazil, 19, 20, 237, 259 BRIC countries, 237. See also Brazil; China; India; Russia Britain: aristocratic families in, 82–83, 82f, 87, 93; cardiovascular disease in, 136–37, 136f; Department for International Development, 274; empire of, 5, 9–10; Enlightenment in, 10; foreign aid of, 275, 302; health care spending in, 121; Industrial Revolution in, 4, 5, 9–10, 94–95, 97–98, 100; life expectancies in, 67, 70, 81–83, 82f, 87–90, 88f, 90f, 94–95; Marmite in, 99, 226–27; National Health Service of, 138, 144; parish records of, 81; pursuit of wealth in, 55; royal family of, 85, 87; smallpox in, 81, 84–86; vital registration system of, 72 Broome, John, 81 Browne, E.
Ayatollah Khomeini, bank run, Berlin Wall, Bonfire of the Vanities, Bretton Woods, BRICs, call centre, Fall of the Berlin Wall, falling living standards, Francis Fukuyama: the end of history, haute couture, Mikhail Gorbachev, mutually assured destruction, Ronald Reagan, Ronald Reagan: Tear down this wall, union organizing
Fareed Zakaria brilliantly sketches out the perils—and opportunities—of this new global landscape in The Post-American World, 2008. See also Leslie H. Gelb, Power Rules: How Common Sense Can Rescue American Foreign Policy, HarperCollins (2009). The quantitative backstopping for my brief discussion of this theme came partly from an article in the Financial Times, June 27, 2008, by Robert Hormats and Jim O’Neill at Goldman Sachs, “A New World for America’s Next President.” The caveat is this: The administration of George W. Bush did not create the myth of American triumphalism, even if his White House elevated it to cult status. Americans bear a collective responsibility, and no fresh start or clean slate is possible under a new president without that recognition. This is the point of Tony Judt’s important essay, “What Have We Learned, If Anything?”
See North Atlantic Treaty Organization (NATO) Nazi Germany, 210–211 Nazi SS headquarters (Berlin), 15–16 NBC (television network), 9 Nemeth, Miklos, 145 background of, 28, 32 fall of communism in Hungary and, 28, 29–30, 41–42, 67, 69–73, 144–145, 206–207, 228–231, 236 Gorbachev and, 55–58, 60–61, 63, 73, 226–228 as Hungarian prime minister, 28, 32–33, 36–38, 41–42, 43, 73 Pan-European Picnic (1989) and, 97–104, 231–232 reburial of Imre Nagy and, 85–87 refugees from GDR and, 97–104, 104–105, 113–126 at Warsaw Pact summit (Bucharest; 1989), 91–95 Neruda, Pablo, 185 Neues Forum (New Forum), 152 New Forum (GDR), 172–173, 178 Newsweek, 23, 31, 89, 108, 110–111, 116, 128, 132, 140, 161, 167, 184, 214, 217, 221, 225, 228, 230–231, 232, 234 Newsweek International, 223, 224, 232 New World Order, 213 New York Review of Books, 237, 238 New York Times, 4, 222, 229 New York Times Magazine, 222, 237 Nicaragua, 210 Niedzielak, Stefan, 51 Niekro, Phil, 94 Nixon, Richard, 106 Nobel Peace Prize, 47, 135, 204 North Atlantic Treaty Organization (NATO) Balkan wars and, 213–214 Cold War and, 21 Fulda Gap and, 18, 76–77, 210 Hungary and, 57 Kosovo and, 47 nuclear deterrence, 60–61, 74–78 Warsaw Pact and, 19–20 North Korea, 217 Nowa Huta, 51–52 Nuclear Audit (Brookings Institution), 22–23, 223–224 nuclear deterrence/disarmament, 5, 12–13, 21, 55–58, 60–63, 72, 74–78, 207, 229, 237–238 Oberdorfer, Don, 225 Office on Intra-German Affairs concerning Deutsche Einheit, 24 O’Neill, Jim, 238 O’Neill, Paul, 237 One Percent Solution (Suskind), 237 Onyszkiewicz, Janusz, 225, 230, 233 Operation Fortitude, 28 Orban, Viktor, 87–88 Order No. 2, 25 Orient Express, 203 Ossies, 118 Ostpolitik, 23 Palach, Jan, 139 Palmer, Mark, 63, 144, 233 Pan Am flight 103, 39 Pan-European Picnic (1989), 97–104, 106, 116, 124, 144, 231–232 Papi (Erich Honecker). See Honecker, Erich (Papi) passports, 8–9, 101–102, 165 People’s Militia (GDR), 151, 181, 185–186 People’s Picnic (1989), 66–67 People’s Republic of China.
The former president’s baseball glove from his college days is lovingly displayed, along with bats, balls, uniforms and photos of the star Yale athlete running, diving, catching and lounging—just a few of the two million photos, ten thousand videos, innumerable souvenirs and mementos documenting his life. The 1947 Studebaker in which he drove to Texas is there, not to mention the plane he flew as a pilot during the war and the cigarette boat in which he liked to race around Kennebunkport, Maine. Then, amid all this boy-racer bric-a-brac, one comes across something much more serious: a slab of the Berlin Wall, encased in Plexiglas. An accompanying video explains what it represented and how it came to fall, with America and the Bush administration very much at the center of the narrative. Lest one miss the point, a massive bronze sculpture of a herd of wild horses, unbridled and free, stands outside the library doors. The symbolism is far from subtle, and it takes only a moment to grasp the meaning of this Ceausescu-scale statuary: beneath the flashing hoofs of these mighty mustangs is the rubble of the wall that once separated the West from those oppressed under communism.
The Relentless Revolution: A History of Capitalism by Joyce Appleby
1919 Motor Transport Corps convoy, agricultural Revolution, anti-communist, Asian financial crisis, asset-backed security, Bartolomé de las Casas, Bernie Madoff, Bretton Woods, BRICs, British Empire, call centre, collateralized debt obligation, collective bargaining, Columbian Exchange, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, deskilling, Doha Development Round, double entry bookkeeping, epigenetics, equal pay for equal work, European colonialism, facts on the ground, failed state, Firefox, Ford paid five dollars a day, Francisco Pizarro, Frederick Winslow Taylor, full employment, Gordon Gekko, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, Hernando de Soto, hiring and firing, illegal immigration, informal economy, interchangeable parts, interest rate swap, invention of movable type, invention of the printing press, invention of the steam engine, invisible hand, Isaac Newton, James Hargreaves, James Watt: steam engine, Jeff Bezos, joint-stock company, Joseph Schumpeter, knowledge economy, land reform, Livingstone, I presume, Long Term Capital Management, Mahatma Gandhi, Martin Wolf, moral hazard, Ponzi scheme, profit maximization, profit motive, race to the bottom, Ralph Nader, refrigerator car, Ronald Reagan, Scramble for Africa, Silicon Valley, Silicon Valley startup, South China Sea, South Sea Bubble, special economic zone, spice trade, spinning jenny, strikebreaker, the built environment, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thorstein Veblen, total factor productivity, trade route, transatlantic slave trade, transatlantic slave trade, transcontinental railway, union organizing, Unsafe at Any Speed, Upton Sinclair, urban renewal, War on Poverty, working poor, Works Progress Administration, Yogi Berra, Yom Kippur War
The open, prosperous societies that everyone in China and India seems to desire will wait in part on the cessation of indignities showered on poor country people. Before the World Trade Organization’s Doha talks collapsed in 2008, both India and China were invited to join a new group of seven industrialized nations, which will include the United States, the twenty-seven nations in the European Union, Brazil, Australia, and Japan. In the lingo of Wall Street investors, the BRICs, the emerging markets of Brazil, Russia, India, and China, are hot. In 2007 India, China, and Brazil produced the most millionaires, proof of their prosperity as well as of the unequal rewards of the capitalist system.47 The downside of being hot emerged for the emerging markets in 2008, when foreign investors, short on cash, began withdrawing their money to cover their leveraged debts back home. India alone lost eleven billion dollars.
Of the six billion people living today, one-sixth of them are in advanced capitalist economies, another four billion are in developing countries, and the remaining billion live in countries with stalled economies.23 World Bank figures for 2005 indicate that 1.4 billion people live below the poverty line, earning less than $1.25 a day. Unlike the backward, underdeveloped Third World nations of yore, the bottom billion today live in particular countries—fifty-seven in fact—that are treading water while the world around them is swimming toward development, even during a world recession. They are not the BRICs (Brazil, Russia, India, and China), which have won attention as “emerging markets.” Instead they are “failed states” that have begun to wear out the patience of philanthropists and test the imagination of aid organizations. Today more money is pouring into combating disease than into promoting economic change, evidence of a certain despair about development. The fifty-seven states tethered to the bottom of the global economy are not like others in the world.
The Making of Global Capitalism by Leo Panitch, Sam Gindin
accounting loophole / creative accounting, airline deregulation, anti-communist, Asian financial crisis, asset-backed security, bank run, banking crisis, barriers to entry, Basel III, Big bang: deregulation of the City of London, bilateral investment treaty, Branko Milanovic, Bretton Woods, BRICs, British Empire, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collective bargaining, continuous integration, corporate governance, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, currency peg, dark matter, Deng Xiaoping, disintermediation, ending welfare as we know it, eurozone crisis, facts on the ground, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, floating exchange rates, full employment, Gini coefficient, global value chain, guest worker program, Hyman Minsky, imperial preference, income inequality, inflation targeting, interchangeable parts, interest rate swap, Kenneth Rogoff, land reform, late capitalism, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, manufacturing employment, market bubble, market fundamentalism, Martin Wolf, means of production, money: store of value / unit of account / medium of exchange, Monroe Doctrine, moral hazard, mortgage debt, mortgage tax deduction, new economy, non-tariff barriers, Northern Rock, oil shock, precariat, price stability, quantitative easing, Ralph Nader, RAND corporation, regulatory arbitrage, reserve currency, risk tolerance, Ronald Reagan, seigniorage, shareholder value, short selling, Silicon Valley, sovereign wealth fund, special drawing rights, special economic zone, structural adjustment programs, The Chicago School, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transcontinental railway, trickle-down economics, union organizing, very high income, Washington Consensus, Works Progress Administration, zero-coupon bond
In the context of the Asian crisis it was widely predicted that manufacturing unemployment would soar as Korean, Thai, Indonesian, and other currencies were devalued, but this lowered consumer prices in the US without any significant impact on US production, except for the steel industry.64 China’s entry into the WTO considerably changed the overall picture, but while US manufacturing job losses were indeed heavy after 2001 (especially in auto and electrical appliances, as well as the long-suffering textile and apparel sector), the US was still producing more manufactured goods and receiving more foreign investment in 2007 than all the BRICs (Brazil, Russia, India, and China) combined.65 Rather than taking the US trade deficit as a measure of industrial decline, it is instructive to consider US exports and imports separately. The growth in the volume of US exports in the two decades up to 2007—even as the trade deficit accumulated—averaged a very robust 6.6 percent, leaving it only marginally behind Germany and China, the world’s largest exporters; it was the relative expansion of US imports that was the source of the growing deficit.66 The deficit, in other words, primarily came from increased US consumption, which grew faster than in other advanced capitalist countries.
This was because European governments had already been forced to move so far in the direction of austerity by the toll financial markets had exacted on the bond sales that many of them needed to cover fiscal deficits following the bailouts of their banks and decline in tax revenue. It was capitalism’s emerging market states that experienced significant inflation (ranging from 15 to 30 per cent in Brazil, Russia, India, and China in 2010–11); this was spurred by higher growth rates, and monetary policies that could not stray far from the objective of keeping currencies aligned with the dollar. Indeed, whatever grumblings were evinced, and whatever fantasies of an alternative reserve currency were concocted, the US monetary policy turn did not result in a substantive challenge to the role of the dollar and the centrality of the Federal Reserve as the world’s global banker.90 As an advisor to the People’s Bank of China put it: “It’s ironic isn’t it?
This stoked real-estate and stock-market bubbles in these countries, and threatened to undermine their competitiveness and bring back hyperinflation. But criticisms such as those repeatedly heard in 2011 from Brazil—that US policy might lead to “currency wars”—amounted to nothing like a challenge to US hegemony. The notion that the G20 would effectively become the linchpin of crisis-management and policy-coordination appeared mere window dressing by the time of the Cannes summit in the fall of 2011, with the BRIC countries left to insist that whatever financial contributions they might make to the European bailout would be channeled through an IMF still dominated by the G7, and especially the US Treasury. The most significant change from the pattern of crisis-management in the 1980s and 1990s was that, whereas it had earlier been the developing states that were required to practice austerity, the prescription of a capitalist cure for this structural crisis was reversed: the G7 states now committed themselves to austerity, while encouraging the emerging market states to stimulate their economies.
back-to-the-land, Bernie Sanders, Black Swan, Bretton Woods, BRICs, British Empire, call centre, centre right, cognitive dissonance, collateralized debt obligation, collective bargaining, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, currency manipulation / currency intervention, David Brooks, David Ricardo: comparative advantage, falling living standards, financial deregulation, financial innovation, full employment, hiring and firing, Howard Zinn, Hyman Minsky, illegal immigration, indoor plumbing, informal economy, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, lake wobegon effect, Long Term Capital Management, market fundamentalism, Martin Wolf, McMansion, medical malpractice, mortgage debt, Naomi Klein, new economy, oil shock, Plutocrats, plutocrats, price mechanism, price stability, private military company, Ralph Nader, reserve currency, rising living standards, Robert Shiller, Robert Shiller, rolodex, Ronald Reagan, school vouchers, Silicon Valley, single-payer health, South China Sea, statistical model, Steve Jobs, Thomas L Friedman, Thorstein Veblen, too big to fail, trade route, Triangle Shirtwaist Factory, union organizing, upwardly mobile, urban renewal, War on Poverty, We are the 99%, working poor, Yogi Berra, Yom Kippur War
Both Wall Street and the Pentagon favor a highly valued dollar because it enables them to buy assets around the world more cheaply. In Wall Street’s case, this means foreign business assets. In the Pentagon’s, a higher valued dollar makes it less costly to maintain its bases, its foreign missions, and its wars. Sooner or later, as the U.S. economy naturally shrinks in importance, the dollar will have to give way as the world reserve currency. Already, the leaders of the BRIC nations—Brazil, Russia, India, and China—have called for a new global credit system managed by the International Monetary Fund (IMF) or a new institution and based on a basket of currencies, which would diminish the dollar’s global importance. But this would be an enormously complex process that would take at least a decade of negotiation among the world’s two hundred and some nations—starting with a commitment from the United States.
Postcapitalism: A Guide to Our Future by Paul Mason
Alfred Russel Wallace, bank run, banking crisis, banks create money, Basel III, Bernie Madoff, Bill Gates: Altair 8800, bitcoin, Branko Milanovic, Bretton Woods, BRICs, British Empire, business process, butterfly effect, call centre, capital controls, Claude Shannon: information theory, collaborative economy, collective bargaining, Corn Laws, corporate social responsibility, credit crunch, currency manipulation / currency intervention, currency peg, David Graeber, deglobalization, deindustrialization, deskilling, discovery of the americas, Downton Abbey, en.wikipedia.org, energy security, eurozone crisis, factory automation, financial repression, Firefox, Fractional reserve banking, Frederick Winslow Taylor, full employment, future of work, game design, income inequality, inflation targeting, informal economy, Internet of things, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kevin Kelly, knowledge economy, knowledge worker, late capitalism, low skilled workers, market clearing, means of production, Metcalfe's law, money: store of value / unit of account / medium of exchange, mortgage debt, Network effects, new economy, Norbert Wiener, Occupy movement, oil shale / tar sands, oil shock, payday loans, post-industrial society, precariat, price mechanism, profit motive, quantitative easing, race to the bottom, RAND corporation, rent-seeking, reserve currency, RFID, Richard Stallman, Robert Gordon, secular stagnation, sharing economy, Stewart Brand, structural adjustment programs, supply-chain management, the scientific method, The Wealth of Nations by Adam Smith, Transnistria, union organizing, universal basic income, urban decay, urban planning, wages for housework, women in the workforce
This is a technique common in European speculative thought: to invent a category and apply it to everything, thus reclassifying all existing things as sub-categories of your new idea. It saves you the trouble of analysing complex and contradictory realities. It leads cognitive capitalism theorists to underestimate the importance of the rise of old-style industrial production in the BRIC (Brazil, Russia, India and China) countries, and for some to downplay the significance of the post-2008 financial crisis, or to see it as merely the teething troubles of the newborn system. In fact, the system we live in is not a new, coherent and functioning form of capitalism. It is incoherent. Its tense, febrile and unstable character comes from the fact that we’re living in an age of the network alongside the hierarchy, the slum alongside the web café – and to understand the situation we have to see it as an incomplete transition, not a finished model.
China into Africa: trade, aid, and influence by Robert I. Rotberg
barriers to entry, BRICs, colonial rule, corporate governance, Deng Xiaoping, energy security, European colonialism, failed state, global supply chain, global value chain, income inequality, Khartoum Gordon, labour market flexibility, land reform, megacity, microcredit, offshore financial centre, out of africa, profit maximization, purchasing power parity, RAND corporation, Scramble for Africa, South China Sea, special economic zone, structural adjustment programs, trade route, Washington Consensus
“Zambia-China Deals on DANWEI Website,” People’s Daily (19 November 2006); interview between Chris Burke, research fellow, Centre for Chinese Studies, Stellenbosch University, and a government official, Lusaka, Zambia (16 May 2007). 22. Davies and others, How China Delivers, 53. 23. Goldman Sachs’s N-11 (Next-Eleven) report provides a list of the top eleven emerging economies in terms of investment potential and economic growth. See Jim O’Neill and others, “How Solid Are the BRICs?” Global Economics Paper 134 (1 December 2005). 24. Matthew Green, “Nigeria Banks Seek Bigger Stage,” Financial Times (30 October 2007), available at http://us.ft.com/ftgateway/superpage.ft?news_id=fto10302007 1819291105&page=2 (accessed 20 May 2008). 25. This Day (21 September 2007). 26. Andrew England, “Egypt and China in Investment Deal,” Financial Times (30 October 2007), available at http://us.ft.com/ftgateway/superpage.ft?
A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing by Burton G. Malkiel
accounting loophole / creative accounting, Albert Einstein, asset allocation, asset-backed security, backtesting, Bernie Madoff, BRICs, capital asset pricing model, compound rate of return, correlation coefficient, Credit Default Swap, Daniel Kahneman / Amos Tversky, diversification, diversified portfolio, Elliott wave, Eugene Fama: efficient market hypothesis, experimental subject, feminist movement, financial innovation, fixed income, framing effect, hindsight bias, Home mortgage interest deduction, index fund, invisible hand, Isaac Newton, Long Term Capital Management, loss aversion, margin call, market bubble, mortgage tax deduction, new economy, Own Your Own Home, passive investing, pets.com, Ponzi scheme, price stability, profit maximization, publish or perish, purchasing power parity, RAND corporation, random walk, Richard Thaler, risk tolerance, risk-adjusted returns, risk/return, Robert Shiller, Robert Shiller, short selling, Silicon Valley, South Sea Bubble, The Myth of the Rational Market, The Wisdom of Crowds, transaction costs, Vanguard fund, zero-coupon bond
But over that same decade, investors who included equities from emerging markets (which were easily available through low-cost, broadly diversified emerging-market equity index funds) enjoyed quite satisfactory equity investment performance. The following graph shows that an investment in the S&P 500 actually lost money during the first decade of the 2000s. But investment in a broad emerging-market index produced quite satisfactory returns. And investment in the BRIC countries (Brazil, Russia, India, and China) produced quite generous returns. Broad international diversification would have been of enormous benefit to U.S. investors, even during “the lost decade.” DIVERSIFICATION INTO EMERGING MARKETS HELPED DURING “THE LOST DECADE”: CUMULATIVE RETURNS FROM ALTERNATIVE MARKETS Source: Vanguard, Datastream, Morningstar. Moreover, safe bonds proved their worth as a risk reducer.
Overbooked: The Exploding Business of Travel and Tourism by Elizabeth Becker
airport security, Asian financial crisis, barriers to entry, Berlin Wall, BRICs, car-free, carbon footprint, clean water, collective bargaining, colonial rule, computer age, corporate governance, Costa Concordia, Deng Xiaoping, European colonialism, Exxon Valdez, Fall of the Berlin Wall, Frank Gehry, global village, happiness index / gross national happiness, haute cuisine, indoor plumbing, Masdar, Murano, Venice glass, open borders, out of africa, race to the bottom, Ralph Nader, Scramble for Africa, Silicon Valley, statistical model, sustainable-tourism, the market place, union organizing, urban renewal, wage slave, young professional, éminence grise
It was an acknowledgment that the planet may be a higher priority than profits. A major political decision had already been taken when the now-hundred-member-strong WTTC selected Brazil as the site of the summit. It was the first time a South American country had been chosen for the prestigious gathering. Brazil, though, isn’t just a South American country. As one of the countries known collectively as BRIC (Brazil, Russia, India and China), it is one of the four major developing nations whose wealth is shifting the centers of power and influence around the world. And, with the conference’s emphasis on sustainable tourism and the environment, Brazil and its endangered Amazon Basin was an ideal choice. Grateful for this honor, Brazilian President Luiz Inácio Lula da Silva opened up the conference with a stirring address.
Bourgeois Dignity: Why Economics Can't Explain the Modern World by Deirdre N. McCloskey
Admiral Zheng, agricultural Revolution, Albert Einstein, BRICs, British Empire, butterfly effect, Carmen Reinhart, clockwork universe, computer age, Corn Laws, dark matter, David Ricardo: comparative advantage, Donald Trump, Edward Lorenz: Chaos theory, European colonialism, experimental economics, financial innovation, Fractional reserve banking, full employment, George Akerlof, germ theory of disease, Gini coefficient, greed is good, Howard Zinn, income per capita, interchangeable parts, invention of agriculture, invention of air conditioning, invention of writing, invisible hand, Isaac Newton, James Watt: steam engine, John Maynard Keynes: technological unemployment, John Snow's cholera map, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, means of production, Naomi Klein, New Economic Geography, New Urbanism, purchasing power parity, rent-seeking, road to serfdom, Robert Gordon, Ronald Coase, Ronald Reagan, Scientific racism, Scramble for Africa, Shenzhen was a fishing village, Simon Kuznets, Slavoj Žižek, spinning jenny, Steven Pinker, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, total factor productivity, transaction costs, tulip mania, union organizing, Upton Sinclair, urban renewal, V2 rocket, very high income, working poor, World Values Survey, Yogi Berra
Even somewhat sluggishly growing countries—Brazil comes to mind—have been able to make up in part for their low rates of income growth (at least by the standards of the rapidly growing and free-market places like Korea or Singapore) by having better death and illness rates. Such betterment, of course, is an imported fruit of modern and bourgeois economic growth. In truth Brazil under President Luis Inacio Lula da Silva, he of rational populism, has grown pretty smartly, with a better political foundation for sustaining the growth, perhaps, than the other of the four “BRICs” (Brazil, Russia, India, and China). A place like the often Communist-governed Kerala state in southwest India still expresses in hard form the hostility to bourgeois innovation that characterized all of India in the three decades after Independence. Kerala makes up for low growth of income with the lowest rates of illiteracy and the highest life expectancies in South Asia—compliments of medical and other discoveries by bourgeois innovators elsewhere, and of a Karalese history of excellence in education and honesty in government.
Valuation: Measuring and Managing the Value of Companies by Tim Koller, McKinsey, Company Inc., Marc Goedhart, David Wessels, Barbara Schwimmer, Franziska Manoury
air freight, barriers to entry, Basel III, BRICs, business climate, business process, capital asset pricing model, capital controls, cloud computing, compound rate of return, conceptual framework, corporate governance, corporate social responsibility, credit crunch, Credit Default Swap, discounted cash flows, distributed generation, diversified portfolio, energy security, equity premium, index fund, iterative process, Long Term Capital Management, market bubble, market friction, meta analysis, meta-analysis, new economy, p-value, performance metric, Ponzi scheme, price anchoring, purchasing power parity, quantitative easing, risk/return, Robert Shiller, Robert Shiller, shareholder value, six sigma, sovereign wealth fund, speech recognition, technology bubble, time value of money, too big to fail, transaction costs, transfer pricing, value at risk, yield curve, zero-coupon bond
Some economists warn of a return to such 473 474 INFLATION EXHIBIT 22.1 Historical Inflation Rate in Developed and Emerging Economies Annual CPI-based inflation rate, % Japan Eurozone Low-inflation economies United States 30 20 10 0 1970 97 1975 1980 1985 1990 1995 2000 2005 2010 2013 –10 High-inflation economies China Russia Brazil India 30 20 10 0 1970 97 1975 75 1980 1985 1990 1995 2000 2005 2010 2013 –10 Source: World Market Monitor. levels as government deficits have risen rapidly across developed economies.1 And in many of the fast-growing economies of Latin America and Asia, such as the BRIC countries (Brazil, Russia, India, and China), inflation has been at double-digit levels for many years. In stark contrast, Japan has experienced extremely low inflation and even deflation since the early 1990s. Inflation often persists, stretching over several years as it did during the 1970s and 1980s, because suppressing it requires strict and unpopular government measures. For example, curbing inflation caused by overheating in the economy typically requires increasing interest rates and reducing public spending to dampen growth.
9. What do executives believe are the benefits of issuing EPS guidance? Are these benefits actually realized by companies? Part Five Special Situations 31 Emerging Markets∗ Over the past decade, emerging economies in Asia, South America, Eastern Europe, and Africa grew impressively. Many of them even recovered earlier and faster than developed economies after the 2008 recession. Brazil, Russia, India, and China all moved into the top 10 of the world’s largest economies in 2014 as measured by gross domestic product (GDP).1 As these economies become more important to the global economy and to investors, it is necessary to ensure that we have sound ways to analyze and value companies and business units in these markets. Chapters 22 and 23 discussed general issues related to forecasting cash flows in a foreign currency, estimating cost of capital in a foreign currency, and incorporating high inflation rates into cash flow projections.