Chapter 6 Section 1 The Productivity Revolution Creates the World
Thomas Friedman, working for The New York Times, travels around the world all day long, and writes a global bestseller rich in language, describing a beautiful fairy tale world: "The world is flat, and people everywhere can take advantage of it." The global opportunities are becoming more and more consistent. The same is true for enterprises and countries, which can realize their advantages and embody value on a global scale more easily than before, and are no longer limited to the original fragmented world pattern.” He will globalize Divided into three vivid stages.
The stage of "Globalization 1.0" is mainly the fusion between countries. This stage began when Columbus discovered the "New World" in 1492 and lasted until around 1800. The labor force is the driving force of the globalization process in this stage.In Globalization 1.0, the world shrank from a geographically large size to a medium size.According to Friedman, globalization is led by individual countries, such as Spain to the New World of America, Portugal to East Asia, and Britain to India and North America.The motivation for countries to globalize is to plunder natural resources.
The "Globalization 2.0" stage is the convergence between companies. The time is from 1800 to 2000. The invention and innovation of various technologies become the main driving force of this globalization-from the steamship and railway to the telephone and computer. During this period, it was interrupted by the Great Depression and the two world wars from 1929 to 1933.The globalization of this era has compressed the world from a medium to a small size.Globalization during this time was driven by multinational corporations.At the beginning, multinational companies engaged in manufacturing transferred their industrial chains to low-cost countries.Later, with the rapid decline in communication costs and the substantial improvement in reliability, the service objects changed from commodities that cannot be exchanged over long distances to commodities that can be exchanged over long distances, and innovative service trade sprang up.Some multinational companies have begun to separate commercial services from their core businesses, transfer them to low-cost countries, and outsource services, thereby greatly reducing costs.
In the "Globalization 3.0" stage, the individual becomes the protagonist, and the skin color or cultural differences between the East and the West are no longer obstacles to cooperation or competition.Different from the labor-intensive traditional service industry, the sudden emergence of information services produces added value that is completely different from that of the industrial economy and creates a completely different way of life.Friedman believes that the information revolution has continued to deepen in the past 30 years, and capital, technology and talents can achieve global flow and allocation more than ever before.The continuous innovation of software and the popularization of computer networks allow people all over the world, especially in China and India, to easily realize their social division of labor through the Internet.In this era of Globalization 3.0, the world has shrunk from small to micro, while flattening the global economic stage.Friedman predicted that the globalization at this stage is not the globalization of countries, nor the globalization of companies, but the continuous globalization of individuals.Small businesses have thought from a global perspective since their birth, placed themselves on the global stage, gradually expanded their businesses horizontally and vertically, realized diversified operations and extended industrial chains.However, large enterprises find ways to make them smaller, focus on core business, outsource other non-core business, and even transfer all production processes overseas, and the locals are only responsible for system integration development and management.In this global marketplace, the playing field has become more equal, enabling small businesses to compete at a fast pace with large corporations across the globe.
The fairy tale world described by Friedman is beautiful, but he is largely based on the special case of India and does not have the general significance applicable to the majority of low-income countries. Before 1991, the Indian economy was a system similar to a planned economy.If a company wants to buy a computer, it needs to make at least 50 trips to New Delhi to apply for various permits. India ran out of foreign exchange reserves in 1991 and suffered a current account crisis. From June 1991 to May 1996, when Singh served as the Minister of Finance of the Rao government, he carried out unprecedented economic reforms and broke the shackles of the "license economy".India's supply response is astonishing. It seized the opportunity of the information revolution in an instant and rose rapidly in the software industry and service outsourcing, shocking the world.
Just before the sudden and rapid growth of the Indian economy broke the 44-year "Indian-style growth" of 2% to 3%, the general consensus of the World Bank and other countries was that economic development must first take the road of industrialization, and the heavy and chemical industry stage is the only way. Then take the road of informatization.However, India "walked upside down", starting with the non-capital-intensive information service industry, bypassing factors such as foreign exchange reserve restrictions and poor infrastructure that restrict the development of the manufacturing industry, and fully developing the service industry. The comparative advantage of having a low cost and English-speaking workforce.After completing the original capital accumulation and sufficient accumulation of foreign exchange reserves, India began to gradually develop the manufacturing industry in 2004.It can be predicted that the Indian economy will continue to grow rapidly in the medium and long term.But can India's unique experience be replicated for the rest of the world?The answer is that it is very unlikely.The premise of the information service industry is not only to have cheap labor, but also to have a large number of junior knowledge workers who have received at least high school education, that is, the accumulated human capital must reach a certain threshold.Most low-income countries have only low-cost labor and no necessary human capital.
So, is the world really flat?From the perspective of labor costs alone, the world is indeed flattened, but it is not the case in terms of social welfare.Theoretically speaking, low-income countries can take advantage of the trend of system technology modularization, intervene in the link with the lowest added value, take advantage of low cost, steadily learn by doing, accumulate experience, and then climb to high-end modules.In this way, low-income countries can grow faster than high-income countries, and the per capita income of various countries should be relatively similar.However, on the contrary, since the Industrial Revolution broke out in Britain in 1820, the per capita income gap between countries in the world has become wider and wider.As shown in Figure 1-1, according to the per capita income data of OECD economist Angus Maddison, the per capita income of the major regions of the world was basically the same before 1820, but after 1820, the United States and Western Europe continued to grow and became the "club of rich countries"; Latin America and Eastern Europe were basically in line with the world average and became the "club of middle-income countries"; Asia basically did not improve from 1820 to 1950 until after World War II Only started to catch up and joined the "middle-income country club"; while the African region has been impoverished for a long time, and the low-income situation has not changed.Therefore, the world is not flat, but in a ladder shape, and the income gap between countries is still widening, indicating that the distance between the ladders is also continuing to expand.
Harvard University professor Jeffrey Sachs' "Ladder Theory" in "The End of Poverty: Economic Possibilities in Our Era" vividly tells us that the world is not flat, and countries with low labor costs are far from being able to cut into global modularization Production.He described: "We also feel the process of development, that is, from subsistence agriculture to light industry and urbanization, and then to high-tech service industry. In Malawi, 84% of the population lives in rural areas; in Bangladesh In China, 76% of the population is rural; in India, 72%; The service industry, while the employment-population ratio of the service industry in the United States is 75%." His "ladder theory" mainly elaborates the following situations:
The first rung is extreme poverty. "If the economy is like a ladder, the ascending rungs of which represent the steps to economic well-being, there are about 1 billion people in the world (1/6 of the human population) living like Malawians. of life—disease, famine, and poverty too great to climb the first rung of the development ladder. These are the 'poorest of the poor' or 'absolutely poor' on the planet. Famous African Economic expert Paul Collier also saw in "The Bottom Billion: The Mystery of the Decline of the Poorest Countries", "Although the global economy is unprecedentedly prosperous, there are still 1 billion people left behind in the ranks of development." In addition, 70% of the bottom 1 billion people in the global economy and society live in sub-Saharan African countries, whose economies have been stagnant or in recession for a long time, and there is no hope of improvement so far. These people and these countries pose serious challenges to the traditional way of economic development and constitute a destabilizing factor in the world'." Indeed, as Collier observes, one of the main reasons why piracy in Somalia is rampant is that Poverty in Somalia.
The second step is low income. "The upper rungs of the development ladder correspond to the upper part of the low-income countries, about 1.5 billion people, who face the same problems as women in Bangladesh. These are the 'poor people', they living better than merely subsisting. …The extreme poor (approximately 1 billion) and the poor (another 1.5 billion) together make up 40% of the global population.”
The third ladder is middle income. "Another 2.5 billion people (including IT workers in India) are on the higher rungs of the development ladder and constitute the middle income class. These are middle income households, but certainly not middle class by the standards of rich countries They live mostly in cities and can live in relatively comfortable houses that even have indoor plumbing. They can buy scooters and even, someday, a car. These people are well-nourished and even People in rich countries often get sick from eating unhealthy fast food."
The fourth ladder is rich. "Continuing up the ladder of development, the remaining one-sixth of the world's population belongs to the high-income world—about a billion people. These wealthy households include the billion or so people in the rich countries, and a growing number of middle-income countries. of the affluent population—such as tens of millions of high-income individuals living in cities such as Shanghai, Rio de Janeiro, and Mexico City. Beijing’s young professionals can also be included in the 1/6 affluent world population before the 21st century.”
Except for a few countries such as some newly industrialized countries in Asia, the income of all countries has actually experienced the "Matthew Effect", that is to say, the poor are getting poorer and the rich are getting richer.Jeffrey Sachs pointed out unabashedly that the greatest tragedy of our time is that 1/6 of the population has never stepped on the ladder of development, and 8 million people die every year due to extreme poverty. "So when I talk about 'the end of poverty,' I'm going to talk about two goals that are closely related. The first goal is to end the misery of one-sixth of the world's population -- the people who live in extreme poverty, A daily struggle for basic survival. Every human being on Earth can and should enjoy basic standards of nutrition, health, water and toilets, housing, and other minimum needs for survival, well-being, and participation in society.Second One goal is to ensure that all the world's poor, including those in moderate poverty, have the opportunity to move up the development ladder."
Why are some countries on the ladder of wealth while others remain on the ladder of abject poverty?Why is this ladder visible but not climbable?To answer this question, we must first figure out how the ladder of human welfare arises.
Management guru Peter Drucker said: "The world seems to me to be uneven. Their vision is only flat when there is an opportunity to make it flat, but if another opportunity presents it, it becomes flat." It’s not flat anymore.” What is Drucker’s “opportunity”?In my opinion, the "opportunity" that can change the world and the fundamental way to create a stepwise distribution of human social welfare is the productivity revolution.
Today, the world has experienced three productivity revolutions, namely the agricultural revolution, the industrial revolution and the information revolution, and the fourth productivity revolution that is gestating is the biotechnology revolution.As early as the 19th century, Friedrich List pointed out in "The National System of Political Economy" that the wealth created by the industrial economy is far greater than that of the agricultural economy, and agriculture will also be transformed by industry.He said:
The degree of development of a country is not mainly determined by the amount of wealth it accumulates (that is, exchange value), as Say believes, but by the degree of development of its productive forces. . . . the great statesmen of all modern nations, with few exceptions, have recognized the importance of industry to national wealth, culture, and power, and the need to preserve it.In this regard, Edward III is the same as Elizabeth, King Frederick is the same as Joseph II, Washington is the same as Napoleon, and they all have the same understanding.They don't need to delve into it in theory. With their foresight, they have already seen the essence of the entire industry and have a correct understanding.The Physiocrats, on the other hand, had an ulterior motive and used sophistical reasoning methods to look at this essence from another angle.The castle in the air built by this school has disappeared, and the more modern school of economics has destroyed it, but the latter still cannot get rid of the mistakes made by its predecessors, but it has taken a small step forward.
The popular economics school failed to recognize the difference between productivity and pure exchange value, and could not examine the former independently of the latter, but only as a subsidiary factor under the theory of exchange value. Therefore, the relationship between agricultural productivity and industrial It is also impossible to realize how much difference there is in essence between the two productive forces.It fails to see that after the industry has developed from an agricultural country, a large amount of physical and mental strength, natural resources, and instrumental strength (the popular school of thought calls this "capital") will be poured into this area to play a role. If the domestic industry is not built If industry is developed, these factors will have no chance to develop; it thinks that when industry develops, these factors will leave agriculture and turn to industry and thus affect agriculture. It does not know that industry is to a large extent a completely new, growing The power exerted by agriculture is not only far from the situation of sacrificing agricultural interests, but also often assists such interests, and is an effective means to enable it to achieve a high level of development.
However, the industrial revolution was not the only type of productivity revolution, and after that, the information revolution came unexpectedly. In the 1980s, American sociologist Daniel Bell divided human society into three stages in his book The Advent of Post-Industrial Society: agricultural society, industrial society and information society. In 1980, Toffler released his masterpiece "The Third Wave", which became popular all over the world, especially in China, which had just opened its doors.He divided the history of human development into the "agricultural civilization" of the first wave, the "industrial civilization" of the second wave, and the "information society" of the third wave.Both Daniel Bell and Toffler noticed the manifestations of the productivity revolution, showing the ability of the "futurists" to perceive the subtle changes in the world.
Combining all these quotations, what I want to say here is that the world is not flat, but stepped.As shown in Table 1-1, we currently see only four worlds in history: the world of hunting economy, the world of agricultural economy, the world of industrial economy and the world of information economy. In addition, the world of biotechnology and nanotechnology may be entering.After the Second World War, most countries climbed the ladder of the industrial economy, and some countries still stayed in the ladder of the agricultural world.The low level of human capital and low per capita income lead to a high birth rate, which leads to a "poverty trap" in which the poorer and the poorer the child, the poorer the child.In the world of industrial economy, Japan is one of the most successful examples. During the development process, it has the ability to continuously improve technology and create brands. "Made in Japan" is also known all over the world.However, after Japan's per capita income reached 30,000 US dollars, it failed to grasp the new productivity revolution of the information economy. The information industry was suppressed by the manufacturing industry, and it has been stagnant for a long time since 1991.In the world of information economy and biotechnology economy, there seems to be only one country that has succeeded so far—the United States.The U.S. economy has entered the era of information economy, creating the miracle of "low inflation, low unemployment, high growth" in the 1990s.However, after the bursting of the Internet bubble in 2001, it was still struggling, and the information industry failed to make a comeback as quickly as people optimistically expected.Since the 1980s, under the cultivation of the capital market, the U.S. bio-industry has only just emerged, and it is still difficult to take the lead.
The productivity revolution did not flatten the world, but destroyed it. It ruthlessly changed all the states of the world according to its own will and created its own new world. In 1848, in the Communist Manifesto, Marx and Engels gave a very vivid and profound description of the special case of the productivity revolution, that is, the industrial revolution that took place at that time. They wrote:
The constant revolution of production, the constant upheaval of all social conditions, the perpetual instability and change, this is what distinguishes the bourgeois epoch from all previous epochs.All fixed, fast-frozen relations, with their train of ancient and venerable notions and opinions, are swept away, all new-formed ones become antiquated before they can ossify.Everything that was hierarchical and fixed evaporated, and everything that was sacred was profaned.People finally have to look at their living status and their mutual relations with a sober eye... The ancient national industry has been wiped out, and it is still being wiped out every day.They have been supplanted by new industries, the establishment of which has become a matter of vital importance to all civilized peoples; these industries no longer process raw materials of their own, but from remote regions; Products are not only for domestic consumption, but also for consumption all over the world.
The old needs, which are satisfied by the products of the country, are replaced by new ones, which are to be satisfied by the products of very distant countries and regions.The previous state of self-sufficiency and self-defense among local and nationalities has been replaced by mutual contacts and interdependence in all aspects of various nationalities.This is true of material production, and so is spiritual production.The spiritual products of the nations became common property.National one-sidedness and narrowness became more and more impossible, and a world literature was formed out of many national and local literatures.The bourgeoisie, thanks to the rapid improvement of all means of production and the great convenience of communication, has drawn all nations, even the most barbaric, into civilization.The low prices of its commodities are the artillery with which it destroys all Great Walls and conquers the most stubborn xenophobia of barbarians.It compels all nations—if they do not wish to perish—to adopt the bourgeois mode of production; it compels them to introduce among themselves what is called civilization, that is, to become bourgeois.In a word, it creates a world for itself in its own image.
Indeed, the productivity revolution is "creating a world for itself according to its own appearance", in other words, in the territory of a specific productivity, everything is decided by the productivity.
Marx and Engels exemplified in "The German Ideology" that after the productivity revolution, the economic system has undergone fundamental changes. They pointed out, "Every time there is a new invention, every time industry advances, there is a new territory Get out of this field... Now let's just talk about one argument: the 'essence' of a fish is its 'existence', which is water. The 'essence' of a river fish is the river water. But once the river is at the mercy of industry, once It's polluted with dyes and other waste, the river has steamers running in it, the water in the river is no longer the 'essence' of the fish once it's channeled into channels where simply draining the water out can deprive the fish of their habitat, It will no longer be a suitable environment for fish to survive."
In Friedman's view, the "river" is still flat, but in fact, the "river" is already an industrialized river, and the nature of the "fish" has also changed. "The river is still flat" is just a superficial illusion.In the era of agriculture, agriculture is hard work on limited land, "no pain, no harvest"; in the industrial age, agriculture has been transformed into "industrialized agriculture", and chemical fertilizers and agricultural machinery have become the main guarantee of agricultural output, " No amount of hard work” may “reap a lot”; in the information society, “order farming” and information logistics have emerged, opening up a seamlessly linked world agricultural market; in the era of bio-economy, agriculture is “genetic engineering agriculture” , Tomatoes can grow into towering trees, and potatoes do not need to grow wildly underground, but freely bathe in the sun and rain on the treetops. Medicines will be configured according to individual DNA, and the human life span may reach 120 years.
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