Wednesday, August 1, 2012

More fundamental

When I go to places like Subway or convenience store in US, I am more than shocked by how inefficient the employees are. If they worked than in a private company in China, they will be laid off almost immediately or inundated by the shouts of furious customers (I admit, the Chinese customers are not polite). This is a just anecdotal evidence, but I have other reasons to believe that the US labor productivity is very low (I think partly due to the social welfare). In contrast, the labor productivity in China is much higher:
http://itechnow.com/why-apple-chose-china-to-produce-its-products/
what is described is almost unthinkable (no punch for some sports "scientist's" comments on Ye) in US. That is the difference between the US labor productivity and that of China. Not surprisingly, lots of factories decided to outsource. What is America's solution to this? For politicians, it is easy--exchange rate is the culprit. While moving exchange rate might have help balance the trade (there is no conclusive theoretical models or empirical evidence), the more fundamental solution is to improve labor productivity via enhancing education and building better incentive system (like welfare system or the power to layoff). That US never does. It likes to take superficial measures like "buy American" mandate, or appreciate RMB threat. Unless they keep "buy American" mandate forever binding, and keep depreciating USD against RMB, they will find the same imbalance coming back to haunt them. I think amid all the talks about exchange rate, this more fundamental concern on productivity is missing.

Thoughts go back to Ye again. The western response to Ye's success is just a reflection of their unhealthy psychology--passively cursing others' rise without getting their a** off and catch up. They heyday for Great Britain was long gone. America is still the top giant, but its edge has shrunk. While China still has a long long way to go (and it is not at all obvious whether it will get close to today's US), it has risen significantly. This is not taken amicably. Despite rhetoric, we dislike changes. We like things to stay where they are, what we are used to. When the balance breaks, we get uneasy. When someone who had been so frail, so weak and so despicable is catching up, there is a tinge of discomfort. Maybe it is jealousy--why am I not going up as fast? Maybe it is insecurity, will that guy threaten my place? Whatever the motive, we want to suppress that change, instead of changing with it, and improving with it. However, there will always be people who catches up, if we only think of suppressing that change, and one day, we will inevitably find we are no longer able to suppress it--then we lose our place for good, and by the way, the dignity is long lost.


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