The Looming Social Burnout That is Demographic Aging

EVERY CULTURE THE WORLD OVER BRAGS ABOUT HOW THEY RESPECT THEIR ELDERS, AND IT'S ALL TRUE – UP UNTIL A CERTAIN LEVEL OF ECONOMIC DEVELOPMENT IS ACHIEVED. It's a matter of numbers and living circumstances. In a traditional rural agrarian situation, elders are – quite frankly – not all that common. That's an exhausting life, typically not well managed with medical care. Those who make it into old age are prized for their wealth of experience and their ability to serve as extra caregivers with children. But then economic development happens and all that is turned upside down.

The big differences include the improvement in living conditions, healthcare, and sanitation, plus dramatically altered cost incentives. Elders live a whole lot longer, costing in medical care. Children go from representing more labor on the farm to constituting new costs (education being the biggie). Housing is tighter and costlier. Family size drops dramatically, particularly as mothers are lured into more education and forced into second-paycheck careers.

In sum, elders, like kids, switch from being relatively low-cost additional assets to high-cost household liabilities. Families that a generation or two back always welcomed more births and always celebrated their elder's survival now start asking very different and difficult questions: Can we afford another child? What to do with grandma?

To me, what's most fascinating about these changes is how female-skewing they are. Throughout history, men were the far more "important," but think about today: Who lives longer? The wife – not the husband.  Who takes care of you when you age? The daughter – not the son. Who's most stressed by this "sandwich generation" phenomenon (caring for kids and elders at the same time)? The mothers – not the fathers (who too often disappear). In America, two-thirds of caregivers are women.

I mean, I realize that when traditional societies leap forward into modernity, the tendency is for parents to still prefer boys as offspring, creating gender imbalances. But I don't see these lasting as historical dynamics. Smart money (and parents) in a modern society should overwhelming bet on more females – not more males. Women simply build more resilience into society as it ages, so they're the true assets while the men are the true drains.

I don't make this argument casually. I've been studying the demographics of aging for years now, and, coincidentally, after my wife and I had three kids (one daughter, two sons), we adopted three girls. In effect, we bet on girls at a tipping point in human history when they're still relatively devalued in transitioning societies (our girls hail from Asia and Africa); we went "long" on girls when the world continues to "short" them.

No, I don't pretend this unequal burden is new, as the hunter-v-nester dichotomy is as old as humanity is. I'm just saying it's getting more concentrated or further skewed thanks to modernization and everything that comes with it: birth control, divorce, single-mother households, more educational and career opportunities for women, etc. We can pretend that the sandwich-generation dynamic affects men and women equally, but it doesn't – not even close.

So no surprise to find a new study published in JAMA that notes the following toll being exacted:

Many family caregivers in the U.S. provide unpaid medical aid and other services to loved ones at the expense of their own financial, physical and mental health, a study suggests.

Nationwide, an estimated 14.7 million family caregivers assist 7.7 million older adults who live in the community rather than in institutions like nursing homes. These family members often help with daily activities like eating, bathing and dressing. Many also provide medical support such as scheduling physician checkups, managing medications, cleaning wounds and giving injections.

“This issue is not a small or isolated issue but is widespread,” said Jennifer Wolff of Johns Hopkins Bloomberg School of Public Health in Baltimore, who led the study.

Roughly 23 million Americans may not sound like a lot, but that's already 1-out-of-14 Americans, and, rest assured, that proportion will balloon in coming years and decades, so we're being offered a preview of coming social costs.

Almost half of the caregivers surveyed – 46 percent – helped an elderly person with Alzheimer’s disease or dementia. Another 34 percent assisted a loved one with a severe disability, the authors reported in JAMA Internal Medicine.

Roughly half of family caregivers provide substantial help with medical needs and spend around 28 hours a week assisting loved ones, the researchers found.

Compared with people who didn’t offer medical support, caregivers who provided substantial assistance with health care were 79 percent more likely to experience emotional difficulty and more than twice as likely to experience physical problems themselves as well as financial difficulties.

They were also more than five times as likely to miss out on important activities in their own lives and more than three times as likely to suffer lost productivity at work.

There are many reasons why the rich live substantially longer lives than the poor in this country, but one of them is that they can pay someone else to handle such burdens. The rest? They simply get worn down.

Even so, the findings add to a growing body of evidence on the physical, emotional and financial predicaments family caregivers often encounter because they devote so much of their time to assisting elderly loved ones, Carol Levine, of the United Hospital Fund of New York, notes in an accompanying editorial.

In terms of relative national resilience in the face of demographic aging, the U.S. faces a much easier (less "steep") road than does Europe, Russia, China, and Japan. Frankly, it's one of the key reasons why I, as a security strategist, don't worry all that much about the "threat" from Russia or China down the road.

But clearly, as a species, we're looking at some profound social changes as we collectively age, and women are going to be at the center of this political and economic transformation. Simply put, with all this demographic aging foreordained at this point, we'll either learn, as societies, how to become a whole lot more resilient or we'll collectively grow a whole lot more brittle.

Here's a big hint as to how women begin to dominate these responses as well: in the U.S., females currently make up the majority of advanced-degree earners (post-bachelor's degrees). This has been true for quite some time, and the skew is substantial at 60% female to 40% male. On that basis, and the longer voting "lives" of women (who outlive men by quite a few years, on average), the feminization of political systems is sure to follow. As it does, expect all manner of dramatic changes to address this looming demographic reality.

On that political trajectory, take a look at some of the demographically "oldest" democracies in the world – namely, the Scandinavian or Nordic states of Iceland, Norway, Denmark, Sweden and Finland. There you will find an unusually high percentage of women already in positions of national political power.

There Are No Development Short-Cuts, But You Can Compress the Costs - the Energy Example

BJORN LOMBORG HAS LONG BEEN A FAVORITE OF MINE, POINTING OUT VERY UN-P.C. TRUTHS ABOUT ECONOMIC DEVELOPMENT AND THE HYPOCRISY OF WELL-MEANING LIBERALS AND CONSERVATIVES ABOUT THE "RIGHT PATH." Lomborg tends to split those differences and does so most contentiously on climate change, arguing that humanity should balance benefits against costs, calm adaptation against frantic action, and measurable progress in the here-and-now against strident urgency for fantastically-ambitious-but-likely-counterproductive achievements in the distant future. In short, he's annoyingly pragmatic in a debate that's grown far too ideological and shrill on both sides. He is a person out of time – like any good strategic thinker.

This is a subject upon which I've long harped as an apostle of the true faith in capitalism: the average person in the Developing South wants all the same things we've long enjoyed in the Developed North, so – duh(!), they're not interested in pathways that continue to delay that glorious achievement, particularly when it comes to foregoing economic advance in the name of keeping their local environments "pristine" to make up for the fact that we in the North totally altered ours when grabbing for all the wealth and comforts we now enjoy. Simply put, they have no desire to pay for our "sins."

Indeed, the most notorious types in the global South who embrace this self-denial "imperative" offered by the North are the very same civilizational fundamentalists whom we now so clearly fear for their tendency to go religiously rogue in championing the mass murder of "infidels" by any means necessary. That nasty crew is more than happy to go back to the 7th-century paradise when men were nasty, brutish, and short, and women and children were just this side of sex slaves and chattel (and no, the historian in me doesn't allow me to add the word "respectively" to the end of that sentence).  If you want to see what truly constitutes preservation of the developmental pristine, spend some time within the Islamic State (Iraq, Syria) or the ranks of Boko Haram (northeast Nigeria) and al-Shabaab (south/central Somalia).  There is nothing noble in their rejection of a consumer society and all the "dangerous" liberties it presents.

What we truly know from history is that people – the world over – become more tolerant, better stewards, and more socially charitable oncetheir incomes rise to the point where they're no longer obsessed with their personal/family's/clan's survival. Just those first couple of steps up Maslow's Hierarchy of Needs and – man(!) – does humanity's innate capacity for empathy surmount darn near all, unleashing the social resilience that has defined our species' mastery of this planet.

It just takes a wee bit of strategic patience on our part (hard for us Northerners so long used to getting every material and emotional need almost instantly met), or an acceptance that economic development, while it can be sped up, isn't subject to short-cuts, much less magical leaps.

Now to Lomborg's recent op-ed on the subject of what we should or should not expect Africans to do to atone for our past mistakes/gluttony/greed for a better life, while they seek the same for themselves (I know, how dare they!):

Africa is the world’s most “renewable” continent when it comes to energy. In the rich world, renewables account for less than a tenth of total energy supplies. The 900 million people of Sub-Saharan Africa (excluding South Africa) get 80% of their energy from renewables ...

Ah, the "noble savage" who can teach all us "lost souls" how to reconnect to nature, except ...

All this is not because Africa is green, but because it is poor. Some 2% of the continent’s energy needs are met by hydro-electricity, and 78% by humanity’s oldest “renewable” fuel: wood. This leads to heavy deforestation and lethal indoor air pollution, which kills 1.3 million people each year.

Nobody wants to hear this, but humanity's journey through phases of economic development has progressively de-carbonized our energy sources, moving us from wood (don't even ask) to coal (high CO2 emissions) to oil (lower) to natural gas (still lower) to (God forbid!) nuclear (very low) and ultimately hydrogen (way low if generated by nuclear power plants).  Thus, to be pristine is to be incredibly dirty – by today's environmental standard.

But let's skip all that, say the visionaries ...

What Africa needs, according to many activists, is to be dotted with solar panels and wind turbines ...

Right on!  Fast-forward to the good parts! Like we finally figured out how to do – emphasis on the word finally:

Europe and North America became rich thanks to cheap, plentiful power. In 1800, 94% of all global energy came from renewables, almost all of it wood and plant material. In 1900, renewables provided 41% of all energy; even at the end of World War II, renewables still provided 30% of global energy. Since 1971, the share of renewables has bottomed out, standing at around 13.5% today. Almost all of this is wood, with just 0.5% from solar and wind.

Weird fact: the most developed countries in the world today tend to be the most environmentally "clean," while the least developed tend to be the most trashed. The big difference: people with money have the option to care.

So what should we reasonably demand of Africa? After all, it's home to droughts and famine that would rival America's Arizona – if the latter wasn't populated with retirees with enough wealth to make both problems go away with the swipe of a card.

... By 2040, in the IEA’s optimistic scenario, solar power in Sub-Saharan Africa will produce 14kWh per person per year, less than what is needed to keep a single two-watt LED permanently lit. The IEA also estimates that renewable power will still cost more, on average, than any other source – oil, gas, nuclear, coal, or hydro, even with a carbon tax ...

Oh my.  Still, wouldn't it be more fair to ask Africans to forego all that dehumanizing consumption for a simpler, more satisfying – and admittedly far shorter – life? Lomborg suggests "no":

Few in the rich world would switch to renewables without heavy subsidies, and certainly no one would cut off their connection to the mostly fossil-fuel-powered grid that provides stable power on cloudy days and at night (another form of subsidy). Yet Western activists seem to believe that the world’s worst-off people should be satisfied with inadequate and irregular electricity supplies.

I believe we call that "living off the grid," and doesn't that make you a better and happier person?

In its recent Africa Energy Outlook, the IEA estimates that Africa’s energy consumption will increase by 80% by 2040; but, with the continent’s population almost doubling, less energy per person will be available...

Providing more – and more reliable – power to almost two billion people will increase GDP by 30% in 2040. Each person on the continent will be almost $1,000 better off every year.

Hmm.  That sounds like they'll just be lost to the "rat race" of modern consumerism (he sanctimoniously intoned, pecking away at his $1,000 laptop in his toasty-warm Madison Wisconsin home mid-winter).

But what about the costs of his selfish hedonism?

In other words, the total costs of the “African Century,” including climate- and health-related costs, would amount to $170 billion. The total benefits, at $8.4 trillion, would be almost 50 times higher.

The same general argument probably holds for India and other developing countries . . .

Annoying, isn't he?

But let's be clear about his argument, brushing aside the usual straw-man criticism that he cares not for the environment:

One day, innovation could drive down the price of future green energy to the point that it lifts people out of poverty more effectively than fossil fuels do. Globally, we should invest much more in such innovation. (emphasis mine) But global warming will not be fixed by hypocritically closing a path out of poverty to the world’s poor.

Just think about how much we in the North now naturally obsess over our own perceived lack of resilience or brittleness in the face of today's global complexity, uncertainty, and challenges. And then imagine doing that on a dirt floor in a one-room hut in rural southern Ethiopia while you breath in the fumes from your dung-fueled cookstove.

Which sounds easier to you?

We all want to manage this world with greater care, more foresight, and kind accommodation of each another's basic and higher needs. And we will get there, increasing our collective resilience as we go. We just won't take any shortcuts, nor leave anybody behind - much less ask them to do so to make up for our past transgressions.

What China wants, China gets - at a cost to the planet

One of the ways in which China starts getting blamed for all things globalization is the direct impact its consumers can have on global markets - sending them soaring and crashing in a historical heartbeat.

I've talked about China's incredible hunger for various nuts in the past, and how that demand has fundamentally reshaped ag markets in the US.

This NYT story discusses how fishermen off the coast of Mexico are ignoring governmental attempts to preserve an overfished area for sea cucumbers.  Out-of-area guys are slipping into zones being vigilantly guarded by locals and pulling out hauls right under their noses.  This creates a "wild west" atmosphere were towns square off against towns over their precious slices of the pie and every stranger is treated like a would-be criminal.

Until China emerged in its middle-class glory, they wasn't much of a demand, as sea cucumbers aren't really eaten by Mexicans.  But now the demand is such that one guy poaching can claim $700 a day in profit.

So this section of Mexico's coastline is in uproar . . . because Chinese like their sea cucumbers.

There will come a time - soon enough, when virtually everyone in the world who isn't Chinese will be living some version of this story.

A while back, America played that role, and while everyone wanted to please that American consumer, the dynamic created a lot of antipathy too.

And that is what's coming toward China at high speed.

The pollution trigger in China

I love that building.  Locals in Beijing have dubbed it the "squatting man" or some such (you get the idea), indicating that the Chinese sense of humor is as fine as anybody else's.

But patience wears thin on the subject of pollution, which is stunning to behold in China - as in, take my allergy issues in Indiana and times it by 10 in terms of the resulting agony.

Here we see the same fundamental failure of authoritarian rule that we saw in the Soviet Union:  when the state has unbridled power, it trashes the environment.  The Soviets took that sin to amazing depths, but the Chinese are rapidly closing in on those horrific standards.

And yes, democracy is the answer - the only answer.  We bitch about the BANANAs and NIMBYs (look 'em up) in the US, but frankly, these cranks do God's work day-in and day-out - along with our legal system.  Give me one Erin Brockovitch over a million Maos (or even a hundred Dengs) and we will all live in a much better world.

The strongest grass-roots democratization dynamics inside China involve the environment.  Some of the best progressive elements within the US during our similar out-of-control developmental age (late 19th century) were likewise focused (and again, TR leads the way politically).  It's the easiest and most direct trigger to the whole "I'm mad as hell and I'm not going to take it anymore" dynamic that fuels democratization.  You simply push people too far with your incompetence and indifference.

Yes, the new generation of CCP leaders seems far more aware of the issue - Li  Keqiang especially.  But as the NYT front-pager today points out, that lofty talk doesn't surmount the bureaucratic infighting within the single-party state.  Here is where the lack of an out-of-power party is crucial.  No one can sweep in with an electoral mandate to clean things up - hence, nothing significant gets accomplished.  

The great dynamic of America's Progressive Era was that parties won big and ruled big, whether they were Dems or Republicans.  That's how stuff (new rules) got done and things improved dramatically.

That's also what we lack today with the evenly-and-deeply-divided Boomer-centric electorate - hence our deep need for reforms as well.  But at least we have the system in place for when the electorate gets fed-up enought to force action.

China lacks this, and it's getting to be a huge hindrance to its further progress as a nation.

Censorship of tweets/microblog posts in China

WAPO article on Rice U. study (richly detailed and seemingly very robust in data capture and analysis on how the Chinese gov deletes micro-blog posts).

First point article makes is that China's flow of tweets is several times that of Twitter, so we're talking massive amount.  It seems gov cuts about 12% of them.

Here are the envisioned procedures:

Explicit filtering: a banned keyword triggers an automated system, which stops the message from posting and warns the user he has violated policy.

Implicit filtering: a banned keyword triggers an automated system, which delays the message until a censor can see it and tells the user there’s a server error in the meantime.

Camouflaged posts: a banned keyword triggers an automated system, which keeps the message from displaying publicly but shows the user it has posted.

Backwards repost search: either a human censor or an automated system discovers a problematic posts and deletes all versions of it (re-posts, etc.) across the network.

Backwards keyword search: a censor notices a problematic keyword and deletes a number of its instances across the network.

User monitoring: certain users who are censored frequently are flagged for closer scrutiny.

Account closures: censors shut down problematic accounts entirely. The study counted 300 such closures of 3,500 accounts in a one-month period.

Search filtering: a regularly updated list of terms cannot be searched.

Public timeline filtering: sensitive topics are edited out of the general Weibo “fire hose.”

While we may celebrate the technical achievement (most posts killed in less than 10 minutes), we must remember the tremendous effort required and the larger reality that banned conversations occur all the time.  All the government succeeds in doing is clamping down on public transmission.

The topics show how defensive the government is - from the geostrategic to the completely mundane:

Okay, so Syria trends one day and then gov corruption comes next, but then look at the rainstorms cluster, because that's just people bitching about how poorly the gov responded to the frickin' rain!  I mean, that is sad.

What's sad about this effort is that the gov does seek to respond on some level to these issues, so it listens.  It just can't allow that listening or response process to be acknowledged - much less the initial bitching.

You may spot strength in that, or some BS about the "Chinese way of governance" and so forth, but all that fades away as the Chinese people modernize their society and exhibit more and more competence in running their own daily lives, businesses, and the larger society itself.  

By engaging in all this clamping down of speech, all the government does is signal that it's not to be held responsible for its failures, and that determination blocks the naturally positive expansion of nationalism in the direction of societal self-improvement, meaning the gov is making itself less stable and thus more brittle over time by refusing to respect its own people and their righteous complaints.

In historical terms, this is spitting in the wind and wondering why there always seems to be saliva in one's eyes. The government is simply refusing to converse with a public that is becoming more self-deterministic - through economic success - with each passing day.

Again, there is no singular Chinese/Asian path in this regard.  The same breakdown of the collective mindset that happened in the West happens in the East.  Modernization/industrialization is simply that powerful.

Let a million muckrakers bloom!

Nice NYT story on Chinese blogger who "thrives as muckracker."  Odd choice of wording there.  Self-professed citizen journalist in early 40s is being tolerated for now, as his "freelance campaign against graft has earned him pop-star acclaim and send a chill through Chinese officialdom."

Sounds like a fine line.  I mean, once you start going on the BBC with your stories, you take your life into your hands.

One of his latest tricks is posting sex videos of high bureaucrats having at it with young prostitutes.  He also says things like, "I'm fighting a war.  Even if they beat me to death, I won't give up my sources or the videos."

A local Beijing journalism academic says, "Here on Chinese soil, it's almost impossible for citizen journalists like him to survive long term."

But if you want the self-regenerative progressivism to take hold, you have to tolerate these types.  Otherwise bad stuff continues to be swept under rugs.  Problem is, of course, showing the crimes of the single party leads to that single party's legitimacy being further diminished.

The CCP in China has typically operated along the lines of, it's okay to unmask mid-level officials but not truly high ones (like the NYT did recently, triggering the Chinese hacking attacks).  But people know that, if mid-level types are routinely engaging in mischief, it's because the higher-ups tolerate it as lesser versions of their own evil.

So the fine line continues.  The blogger recently got a flattering Xinhua treatment, and yet gov censors constantly remove his micro-blog pieces almost the minute they appear.

Again, ultimately Beijing needs to allow this sort of positive self-renewal. It's a sign of the maturation of Chinese society in response to all the positive socio-economic churn.

You either trust the people or you don't, and the CCP's problem is that, it most definitely does not trust its own people.

No question where things are headed.  Anyone who thinks the future is less transparency and less public accountability is kidding themselves.

South Korea follows Japan's path to soft-power exports

WAPO story on how South Korean directors are experiencing a sort of explosion in Hollywood.  I've long been a big fan of SouKo's horror films, but now it appears that we're getting a broader flow - post-Gangnam Style:

South Korea’s film directors, like its pop stars, have been trying for years to break out of their country’s competitive but small market and into the West. Just as Korean music finally broke through last year with Psy’s “Gangnam Style,” this might be the year that Korean directors take over Hollywood.

Three of South Korea’s top directors are this year releasing, and in one case already have released, their first English-language films, often featuring top-name American actors (or Anglophones who pose as Americans), the New York Times noted in a story this weekend. The directors have long had “fan bases” in Hollywood eager to pull them into the U.S. market, the Times says, explaining that American producers appreciate that Korean directors’ “style and restraint go hand in hand with a taste for visceral, often bloody stories in popular categories like horror and crime.”

South Korea seems poised to follow the path of Japan.  It had its democratization moment back in the 1990s, and its big firms have gone from knock-offs to high-end offerings.  Now, it's time to start exporting the culture.

It's a journey worth watching.  China invariably follows this path, and the Chinese spend a lot of time watching South Korea and how it navigates from middle-income to higher realms.  South Korea is, last time I checked, just about the biggest regional investor in China and you see Koreans all over the place in major cities - especially in universities.  It seems like a positive "lead goose" effect, wherein the Chinese are more ready to follow the South Korean example than admit to doing the same with Japan.

Then again, it's natural to focus more on the country making the journey is closest historical proximity to your own.  Japan modeled itself significantly on the US, South Korea watched and copied Japan's example.  China will eventually copy South Korea in many ways, and Seoul is an excellent example of how you do it.

More on the China middle-income trap

Great piece in Forbes that my wife found.

Part that caught my eye references a second analysis:

In their final installment on the Chinese economy, titled “Beyond the Miracle”,Barclays Capital analysts in Hong Kong led by Yiping Huang wrote that China will avoid the middle-income trap as a whole. However, they did not underestimate the risks facing China’s economy in the coming years.  It’s one thing to be middle income. It’s another thing to move out of that middle income and into the coveted high income category of Western Europe, the United Statesa and Japan.

The experience of countries that failed to make the jump to high-income status suggest that their inability to innovate and upgrade can be attributed to three broad factors: (1) macroeconomic, political and social instability; (2) persistent inefficient allocation of resources; and (3) insufficient support to physical infrastructure and human capital development.

The persistently inefficient allocation of resources is the government having too much of a role in investment and picking winners and losers (mostly shielding the latter while the elite corruptly hoards the benefits of the former).  I realize that contradicts the "wisdom of the state" notion behind the Beijing Consensus, but history says the state displays little smarts, and there is a ton of evidence of badly spent public investment in China.  

The instability arises from a lot of things:  enviro damage, repression of political rights and free speech, corruption of officials, and the S-curve slowdown in general.

China does decently-to-well on the sufficient support to infrastructure development - both hard and soft.  But that can backfire too if the growth fails to materialize or the slowdown is profound enough.

Answer for all these things is simple:  turn the people loose on creativity and freedom of spending choices. Problem is, of course, the single-party dictatorship finds all that uncomfortable, so they shortchange it whenever and wherever they can.  Why?  If people get to decide too much of their economic reality on their own, their ambition naturally turns to politics over time.  People simply stop being willing to be treated like children on the latter score; it offends their intelligence and obvious sense of accomplishment - especially when they know full well that talented Chinese abroad succeed and get to politically participate in democracies.

And that's what eventually stops the show, forcing political change.

Nice NYT piece on dangers of inequality inside China

Appears in NYT Opinionator blog after print edition.  Writer is former Singaporean reporter/photojournalist.

Part of a series on inequality.

A snippet:

With the “rats” and “ants,” the trash collectors, cobblers and couriers, it took time to build rapport and trust. But it was even harder to get wealthy Chinese — perhaps like rich people everywhere — to open up. Most live in gated, guarded communities on the outskirts of the city, and socialize behind closed doors. A few months ago, I was granted rare permission to photograph inside an exclusive club in Beijing for high rollers, and only at a party where some members were in costume.

The migrant workers and the poor mostly accept that life is unfair, at least for now.

“There is no difference between me and the people who live in the posh condominium above,” Zhuang Qiuli, 27, a “rat tribe” pedicurist who lived in a basement apartment, told me in Beijing. “We wear the same clothes and have the same hairstyles. The only difference is we cannot see the sun. In a few years, when I have money, I will also live upstairs.”

I was just struck by the sun reference.  Other big driver in China is, of course, the pollution, which is why, on many days, nobody gets to see the sun.

As always, the similarities to the populism of the Second Industrial Revolution in the US are striking.

The coming age of hyper-transparency

In a huge simulation that we just ran at Wikistrat (and in several previous ones), this issue of hyper-transparency keeps popping up as a magnificently powerful shaping dynamic in future politics - as in, you can corrupt but you cannot hide (for long).

NYT reporting here that the paper's networks have been subjected to massive hacking efforts directed from China and that these repeated assaults were timed in response to the paper running that nasty expose on how Chinese political elites (and particularly the family of Premier Wen Jiabao) made - literally - billions on an insider deal involving what is now the world's largest insurance company.

Naturally, the Chinese government thinks it's sending a signal big-time - as in, don't mess with our political crooks.  Like any mafia, the Chinese Communist Party believes intimidation will always save its skin.  And when the masses of Chinese were too busy starving or struggling through their lives (see, Mao), there was no question that it worked.  

But things changed with Deng Xiaoping, who knew that what he set in motion would both make China a powerful economic giant and eventually cost the party its dictatorship.  This is why Deng is a personal hero of mine - a great and wise man who changed world history for the better.

No, his legacy is not yet complete, and Deng, who was one of those who approved the Tiananmen Square massacre, knew full well that timing was everything.  So, no illusions on his part about how long this would take.

But that hyper-transparency is arriving already across China.  What the Party wants hidden is getting far harder to hide.  Bravo Times!

So yeah, the CCP remains fearful of its citizenry and now it needs to fear the NYT as well, because it is all one vast conspiracy called globalization and connectivity and transparency and markets and democracy and super-empowered individuals.  It is a conspiracy hatched over 200 years ago by a far-sighted bunch of genuine revolutionaries.

And it's coming for you, Mr. Apparatchik - and your little (running) dog too!

As always, when in doubt, resort to nationalism - the last refuge of scoundrels the world over.  So the Party justifies this as America's doing/meddling/etc.

But rest assured, when they come for the Wens and his relatives and everybody else who stole from the Chinese people, they'll all be wearing Chinese faces.

The real "virus" has already infected too many Chinese to be stopped now.  These people are among the most rabid capitalists in the world, and you've got to respect everything that goes into that.  

But capitalism unbound is one nasty creature, which is why democracy is the only antidote.

And that's why the Chinese Communist Party is totally screwed, no matter how big a fight it puts up.

The clock is ticking, my friends.

China: The race up the production/development/political ladder is on!

Wow, that took a long time!  

Recall my recent post on China's college graduates (8m strong per year) and their expectations.

Right on cue, the NYT runs another front-pager that follows the logic up nicely:  "With diplomas, Chinese reject jobs in factory."

This is the development conundrum in a nutshell for the single-party state:  you give the people what they want (factory jobs that generate income so people moving off the land can make it in the city and send their kids to college) and then they just want more - in the form of those college kids.  And the more they want and you provide and they accomplish and achieve, the more they're running their own complex lives and get tired of hearing how only the one party and the one way are acceptable.

Best example of this was South Korea in the 1990s - four decades of essentially single-party rule and then things got a bit tumultuous.  But now look at South Korea - a second-tier great power on the move and becoming a soft-power exporter (Psy's hilarious and catchy "Gangnam Style" is just the hardest door-knocker of the burgeoning flow; personally I love the horror movies best) in addition to being a powerhouse product exporter. In many ways, China wants to replicate South Korea's path.  It's just the Party that assumes it can (or should) be done in a single-party format.

But yes, all the same tipping points eventually get reached. The size differential isn't key; it's a matter of generational turnover, and this article is a big pointer in this regard:  college grads who turn down their noses on factory jobs.

There's no turning back at this point:  China's future evolutions are already a fait accompli.  The only thing left for the West is to NOT screw it up, which typically occurs whenever we freak out over perceived "gaps" or "being passed by" or other such declinist nonsense.

The "victory," if you need such things, has already been won.  And we have Deng Xiaoping to thank for that.

China must live in the real world of its own making.  It cannot exist in the imaginary balance-of-power environments posited by the realists - on either side of the Pacific.    That real world of its own making forces very hard compromises.

And they are just beginning across China.

Civilization = bad connectivity principle, but dream = good

Trio of stories (2 FT and 1 NYT) on evolving ideologies of Russia (old leader), Egypt (new leader) and China (new leader).

Putin is floating a unique Russian civilization idea - likely as his legacy signature concept in governance.  The purpose is setting the long-term course of how Moscow handles the federation's many nationalities.  For now, a trial balloon, but already the blowback is sensed and it's building.  These nationalities naturally feel like they're being told to assimilate or find themselves a bit lost in Russia's future - as defined by Putin et al.

Morsi in Egypt is now revealing a similar bias on his effort with the constitution.  He wants to make it so Islamist that Egypt's many minorities are reacting badly, seeing no good space for themselves in Egypt's future on this basis.

My point in raising both issues:  when you argue civilization and, on that basis, identity (typically tied to religion), then you're saying, "This is how we're going to run this place and this is how we're going organize our connectivity with the outside world - by requiring this sort of homogeniety at home."

Problem is, the self-limiting nature.  If you want connectivity, you want to promote diversity.   That attracts the bodies and minds and the money.  This is an old concept, as in back to Amsterdam and the Dutch when they built up their global nets.  England picks up this vibe and does similarly.  The US gets the DNA via New Amsterdam-cum-New-York.

When you don't care about identity/religion on this level, you take on all comers, meaning you're open for business with everyone.  That's how you succeed.

Third cite:  Xi Jinping in China resurrecting "Chinese dream" notion as part of his reform/progressive agenda.

That "dream" apes the US version, which is centered on success and the pursuit of happiness.  

Why good?  It says your identity is more about success than comformity and homogeniety.  You'll work with anybody, because the dream trumps the exclusionary identity.

So, my point:  if you go the civilization/religious identity route, you scare off connectivity and globalization (or certainly retard it), but if you go the "dream" route, you choose pragmatism over such identity.  Your identity is simply your culture of success.

I think both Russia and Egypt will learn the limits of this approach, and it will be a painful process. But these are natural growth patterns.

China, I think, risks the other pathway:  the cult of success makes it harder to promote morality.

So it's the old choice:  preserve the identity and the attached morality, or risk both by opening up and prioritizing success.

Why I always advocate the latter:  It simply works better on raising income, and when you raise income, it's a virtuous cycle, as the people become even more tolerant and open, seeing the value in this path.

Meanwhile, if you choose identity over success, you makes less money and achieve less, and you tend to trigger a vicious cycle, as the outside world becomes more evil in your eyes ("Why won't they do business with us on our terms?")

But this is why China succeeds where Russia (and I fear Egypt) will not.

Xi summoning his inner T.R.?

Xi will be walking the tightrope for a solid decade.  He needs to reform - but he's a princeling.  He needs to keep the country growing - but he needs to tame its many excesses (especially industry's rampant abuse of the environment).  And all the while he needs to assert China as a true global power - without taking on any unnecessary or risky fights.

If Xi Jinping isn't China's Teddy Roosevelt, that nation is going to end up wishing he was.

[And if you think I mischaracterize TR in any way, you need to read up on your Edmund Morris, for TR started no wars and actually was the first sitting POTUS to win a Nobel Peace Prize.]

Good sign (first cite below) is his early edict that Chinese officials need to cut down on all the pagentry and red carpets and flower arrangements and "empty talk" and spend more time touring the less fortunate parts of their mini-kingdoms.  You know, see how the other half lives now and then.

Very TR.

Bad sign (second cite) is China cutting exploration cable of Vietnam's national oil company as it tries to explore what it considers to be its chunk of the South China Sea bed.

A bit bully, to coin a phrase, but also a bit TR, who was famous for not taking crap off the powers-that-have-been.

We will want to see only the good stuff, and will cringe at the assertiveness, but the two must go hand in hand. Only Nixon could go to China, as they say.  You want Xi to fix things at home?  Well, then he'll need to prove things abroad.  There is a yin-yang balance to national shame and national pride.  Both work to drive a population and its leaders toward "positive" change.

China won't go meekly into its necessary future - nobody does.

The man has his work cut out for him - as towering as task as TR regrading the economic landscape of this country and centering our politics on the middle class.  Third cite notes that "China's murky shadow banking system could amount to nearly 50 percent of GDP and debate is raging about the effectiveness of how it is regulated."

Let's hope Xi is a suitable "traitor to his class."

After all, we lucked out and got two Roo-se-velts [thank you Netherlands!].

And became the greatest power the world has ever known.

The more China replicates that journey, the better off this world is.

And that's the God's honest truth.

Speaking this morning at Walt Disney World at a political post-election gathering of sorts.  I am preaching the progressive gospel to all who will listen.  Hallelujah brother!  Give me a high-four Mickey!

The Chinese Communist Party comes up with new "test" for industrial projects

Thanks to growing grass-roots protests by Chinese citizens over big industrial projects, the NYT reports that the government there now says all such plans must pass a "social risk assessment" prior to final approval.  

Interesting choice of terms, yes?  The environmental impact is what the people worry about, but it's the "social risk" that gets the government interested.  Apparently this has been done in some local governments for a while now (the experiment, per the Chinese way) and now it's being adopted on national scale.

China already has environmental impact studies, and now the government says (as of 1 Sept) that they must be posted on the internet (also interesting).

Environmental minister says, "By doing so, I hope we can reduce the number of mass incidents in the future."

The tipping point?

Enviro protests used to attract only the old and retired.  Then the young started showing up in numbers, and that's when the Party got scared.

China is, as I argue, on the verge of a huge and prolonged progressive era.  All sorts of things to clean up. Each time such steps are taken, just a bit more power to the people - always defensively offered by the government.

No-fault separatism thanks to globalization

Old argument of mine:  globalization comes in and all manner of divorces ensue.  Typically it's a fake state in the Gap that's coming apart at the artificial seams, but the larger point is, the more overarching multinationalism you have, the lower the cost of divorce/remapping.  You're going to be together anyway (you still have the "kids" of the union), but why stay together if you don't have to?

Europe demonstrates this:  the more integrated it becomes, the more states appear.

Great FT one-pager on "long-simmering separatist movements . . . gaining strength."  You might think it's the Eurozone troubles that is responsible, but that's the proximate opportunity - not the ultimate enabler.  Real federalism is coming, so why not get out of your unhappy marriage in the bargain?

Here's the counterintuitive part: it's often the most competent and richest that want out.  The better want to leave behind the worse.

So this isn't about suffering.  This is about ambition.

China not-so-bad sign: no longer growth-at-all-costs

Nice NYT story on growth of (primarily) middle class resistance to unlimited growth ambitions WRT environmental damage.  Most experts who track the grass-root democracy arising in China have noted its strong concentration in the environmental realm.  

It's a natural development that we've seen everywhere else a middle class historically arises:  once you get to a certain level of GDP ($4-7,000) you start caring about the environment a whole lot more.

Chart shows all the places where projects have been delayed/cancelled in response to popular demands.

Point being:  all part of the natural slowdown in growth that comes with modernization.  Things get more complex.  The public puts up with less crap.  China is not different in this regard whatsoever.

As I've noted for years now, Asian countries that modernize and open up to globalization typically do so as single-party states (either explicit or de facto) for about 5 decades.  Then things change.

That logic says China goes democratic in the 2020s - or faster.

China bad sign #2: young professionals leaving in record numbers

Yes, a brain drain as reported in the NYT.

At 30, Chen Kuo had what many Chinese dream of: her own apartment and a well-paying job at a multinational corporation. But in mid-October, Ms. Chen boarded a midnight flight for Australia to begin a new life with no sure prospects.

Like hundreds of thousands of Chinese who leave each year, she was driven by an overriding sense that she could do better outside China. Despite China’s tremendous economic successes in recent years, she was lured by Australia’s healthier environment, robust social services and the freedom to start a family in a country that guarantees religious freedoms.

“It’s very stressful in China — sometimes I was working 128 hours a week for my auditing company,” Ms. Chen said in her Beijing apartment a few hours before leaving. “And it will be easier raising my children as Christians abroad. It is more free in Australia.”

As China’s Communist Party prepares a momentous leadership change in early November, it is losing skilled professionals like Ms. Chen in record numbers. In 2010, the last year for which complete statistics are available, 508,000 Chinese left for the 34 developed countries that make up the Organization for Economic Cooperation and Development. That is a 45 percent increase over 2000.

Guess who wins this lottery, as usual?

When experts note that China modernized and marketized and opened-up to the world for the past 40 years and the Party still rules, they miss the reality of what happens when a critical mass middle class appears and starts wanting more than just a rising income.

That day has arrived.

So no, it's not a question of "Can China ever go democratic?"  It's only a question of when.

There is nothing unique about Chinese or Asian civilization in this regard.  Modernization is modernization.  People are people.  Democracy isn't achieved because it's fabulous.  It happens because it's the best worst system you can manage when you reach the point of genuine development.

China's future captured in perfect lead paragraph/sentence

Here it is from a WSJ piece:

China's latest evidence of sputtering growth underlnes a dilemma for its incoming leaders: They can shore up the economy by doubling down on an exhausted growth model, or take a risky political bet on reforms that could worsen the slowdown in the short term.

That not only captures where China is today (as in, this quarter), it basically captures where China is for the next decade or so.  I mean, what happens to a "communist" party when the progressive era necessarily arrives?

Well, the first instinct is to try and run it yourself, maintaining single-party rule, but that's basically impossible. The pain meted out will create blowbacks, no matter whether you direct it at the "gilded age" elite or the increasingly demanding middle class or the decidedly put-upon working class.  Worse, in the end, you'll need to disappoint them all on some level, which is where that throw-the-bums-out dynamic comes in handy:  a party wins and does what is necessary, outlives its welcome, and then gets tossed.  But in a sustainable progressive era, the opposition party that then comes in also does its bit, just tackling a different segment until its welcome is worn out.  And so on.

That's how the US did it 1890 onward.  When the Dems or GOP won, they won big and ruled big and changed big, and we got a much better country for it. 

China lacks that ability due to the stultifying nature of single-party rule, which, contrary to our green-eyed fantasies, is NOT more agile or adept or bold or visionary in its leadership.  Instead, it is self-preserving in the extreme.  It's bread-and-circuses.  It rules by fear and in fear of its own public.  

The WSJ piece is all about giving more money to consumers and the "dangers" inherent to that process.  It's a proxy description of the coming democratization of China, because giving money to consumers is giving decision-making power to the average citizen, versus hoarding it within the elite.  It's the economic prelude to the democratic denouement.

China has already reached the democratizing point.  I still believe it will muddle along with years before taking the plunge, in part because of that stultifying nature of single-party rule.  If we're lucky, Xi Jinping will be a real leader, but even if he is, we'll most likely have to wait a good 5-7 years to see that turn out.  That's how long it will take him to consolidate power as the evidence for the needed change piles up all around him.

And yes, those two dynamics are deeply intertwinned.

America's job?  Don't provide any stupid excuses for Beijing to avoid facing their own realities.

The "strategic pivot" is just such an excuse, which tells me Obama and Co. don't really understand China.

Sad to say, Romney's answers are beyond stupid and have no chance of being implemented (thank God).

Where I would expect Chinese to be right now - and reasonably so

 

WSJ story on snapshot of Chinese attitudes about things and their own lives by Chinese polling firm:

The vast majority of Chinese people believe their country is heading in the right direction, according to a Pew Research Center survey, although there is rising discontent over issues from corruption to food safety—and a growing fondness for U.S.-style democracy.

One of the more surprising findings of the survey of Chinese attitudes by Washington-based Pew is that as public confidence in Chinese institutions— from government bureaucracies to the health-care system—deteriorates, appreciation for other systems of government is building.

Some 52% expressed a positive view of American-style democracy, with approval levels highest among the urban educated elite. However, affection for U.S. policy-making and President Barack Obama has cooled since he took office.

Overall, domestic confidence is higher in China than anywhere except Brazil, according to the poll conducted by Beijing firm Horizon Research Consultancy Group. In all, 82% of those surveyed said they are satisfied with the way things are going, and 83% said China's economic situation is good or very good, while 70% said their family's lot has improved financially over the past five years.

But attitudes in key areas have soured since Pew asked many of the same questions in 2008. Half of those polled said official malfeasance is a very big problem, worse than the 39% who said so in 2008, while another 35% termed it a moderately big problem.

Chinese this year categorized as very big problems many issues they described as only moderately bad in 2008, such as food safety, air pollution, education, worker rights, income inequality and the health-care system. While 13% said quality issues related to manufactured goods were a very big problem in 2008, for example, that figure shot to 33% this year.

Rising prices registered as a problem for 92% of respondents. 

That, my friends, is a nation poised on the edge of a progressive era/democratization. 

I'm not predicting it for tomorrow.  My favorite window for the big push is 2025-2030, but I am guessing I am being too pessimistic.

Wikistrat briefing on China slowdown (part 1 of 4)

In March of 2012, Wikistrat ran a multi-week simulation that explored the possible future pathways for China as its encounters various developmental "walls" surrounding its attempted shift from extensive growth (more inputs) to intensive growth (more productivity) and thus avoid the so-called middle-income trap (i.e., it's far harder to shift from medium to high income than it is from low to medium). 

Dr. Thomas P.M. Barnett Discusses the results and take-away insights from the simulation.

Part 1 of 4