Home >> History, Ideology & Science >> International Business

     Email   Print 

No place for gloom and doom - 'It's productivity, stupid.'

Iqbal Latif - 10/2/2007

I religiously follow ‘Steve’ he is one of the most outstanding ‘skeptical optimist’ on the net. He weighs evidence before and after deciding an issue and continues to cobble together new pieces of evidence that further strengthens his eternal optimism. Judging truly from the lessons of history he believes that humans are on net balance builders and not destroyers. Some nations have missed their grand opportunity of embracing a new renaissance; they rather missed all chances of reawakening and enlightenment. Future growth and better living standards belong to only those who will not only work hard but will adopt cohabitation as a part of their mindset. Poppy growers in Afghanistan production work the hardest but are furthest from the spoils of the riches of the world, their bigoted minds have closed all avenues of improvement, and ironically even the poppies they grow they do it quite inefficiently.

Productivity and freedom of minds is so interrelated. A tolerant pluralistic society will be far more productive than a close dogmatic society. One of the reasons, we see a two tier world one bulging with prosperity and new frontiers of growth other spiraling down under the weight of dogma is because of closed and openness of minds.

'Guru Steve ' works with no political agenda but I see in his writings a recipe of improvement for a underworld of dogma that wants to progress and be productive without being open, I try to learn from him the lessons that ‘open societies’ turn knowledge into gold ( MSFT, ORCL and GOOG) and how closed minds destroy societies to end up at the lowest rung of human development (Chad, Afghanistan, Saudi). Locked minds and dogma has the worst impact on productivity of nations.

http://www.optimist123.com/optimist/2007/05/its_productivit.html

One his finest post that I like the most is ‘It's productivity, stupid.’

Excerpt...

Which economy will our grandkids inherit from us: Doomsday, or Easy Street?

The Doomsday Squad

Senator Kent Conrad and Comptroller General David Walker, among others, have their opinion as to which way things will turn out for our grandkids: it's Doomsday, no question (...unless we sign up for their remedies, which some call "belt-tightening," but look to me more like a tourniquet around the neck). But Kent Conrad and David Walker have been hogging way too much of the airtime the so-called free press devotes to our nation's economic prospects; the press reaction to Walker's Fiscal Wake-up Tour is an example. That kind of one-sided coverage is unfortunate, because there are many experts who disagree with the dogma that says doomsday is inevitable—but they're getting ignored by our free press.

David Walker said, "We face a demographic tsunami that will never recede." [My reaction: "Never? Really??"] His list of fiscal challenges is "led by the imminent retirement of the baby boomers, whose promised Medicare and Social Security benefits will swamp the federal budget in coming decades." Kent Conrad's sound bite, from the same article (in USA Today, Nov'05), was this: "We're not preparing for what we all know is to come. We're all sleepwalking through this period." [My reaction: "Yes, some of us do indeed seem to be sleepwalking, Senator Conrad."]

The Productivity Squad

If they'd pay some attention to experts who understand what it takes not just to avoid doomsday, but to achieve continued growing prosperity, both Walker and Conrad—if not their gaping groupies—might learn something new and encouraging. Click on the following thumbnail for specific quotes I selected, from a few of the people who understand the power of productivity: Paul Krugman, Paul Romer, Brad DeLong, Eric Beinhocker, Ray Kurzweil, and William Lewis. (Even though this group's political leanings are diverse, they have little to no disagreement about the importance of productivity to our economy.)

In case you're interested, here's a zoomed-out snapshot of the fifty-year model; click on the thumbnail to enlarge it. (The graphic was moved on top of the calculations for convenience, but the calculations weren't disturbed.)

http://www.optimist123.com/optimist/2007/05/its_productivit.html

Recently, I responded on his blog and answered two questions that I thought needed an answer from my part of the world. I am reproducing the answers and encourage readers to visit ‘Steve and his predictions of growth and welfare, in my opinion he makes a great case for all us that our children are part of a great growth experiences, we are at the cusp of huge leap forward, it is all the question of seeing glass half empty or half full, he sees it the way the glass is..

<< I'm guessing that in the 1800's the annual rate of increase in productivity was less than 1/2 of one percent. I'm GUESSING that in the 1700's it was less than 1/10th of one percent. I'm guessing that pre-Biblical times it was less that .01% annually. I'm GUESSING that someday fifty or a hundred years from now, we might actually see an average annual rate of increase in productivity in the 5% range. Then again, maybe not; who in the heck knows?>>

‘Productivity growth’ is a function of freedom and pluralism in a society…A comparison of pre-renaissance dark ages and post renaissance progress of human society especially the western civilization in Europe are clear indication of a huge jump in productivity as a result of freedom accorded to minds.

Wealth in society without knowledge is injurious. To a society that is not in the fore front of research and development is a society that stalls and becomes stagnated, some societies may appear wealthy but in absence of knowledge based productivity are stuck in time.

Afghanistan and Saudi Arabia, one an impoverished land locked country and the other an oil rich country with sizeable reserves are both suffering with low level of knowledge based productivity increases. Their GDP improves but as a direct result of 'commodity' price increases, as the demand in the west for ‘drugs and oil’ increase so is the GDP of Afghanistan and Saudi economy multiplies. However, the bottom line is that without freedom of mind both nations are stuck in Stone Age.

<< I have a productivity question. Would focusing terrorism reduction efforts on interdiction (more Arabic speakers please!), and spending less on overseas military deployments, help productivity?
Here's another, related one. Would we help productivity if we make our response to future terrorist attacks more proportional to the attack (unlike what we did after 9-11)?.>>

War and terrorism has a direct impact on global productivity. Medieval minds who plan obliteration are 'net destroyers' of human advancement. To use planes full of innocent human beings and to help bring buildings down in crowded spaces need no appeasements. Those who use planes designed for peaceful transport as ‘guided missiles’ deserve a response proportional to their huge unproductive abilities. Shifting the theater of war from '1 Liberty Plaza' to downtown Kandahar or around caves of Waziristan is the most balanced response one can envisage. The vandals at the door of Rome in few centuries were only possible when much earlier on Augustus decided to withdraw from the doctrine of external defense of the Empire borders across Rhine and Danube. The vandals today can encroach on the door of age of wisdom without impunity the transport links provide them the ease and facility, the unseen nature of the enemy is a dire threat. In this undeclared state of global war exporting the war to their own neighborhood is the best defense.

The decay of a society begins when 'appeasement' with vandals is encouraged. The problems with wining over unseen terror outfit is that the ‘plans’ killed in embryonic stages are rarely ever seen as credible dangers, if 911 was nipped in the bud we could have seen a far bigger attack in next few years may be with far bigger repercussions, if similar action would have been taken post African bombing or post Cole who could say that 911 would have materialized, today for last 6 years the inability of Al-Qaida to penetrate through homeland defenses is the greatest success of the 'tongue in cheek' disproportionate response.

The ability to stop terror plans in their infancy is the biggest benefit of a disproportionate response, unfortunately for a public set on instant gratification and ‘Rambo’ kind of winnable war movies the unseen story behind the scenes are no achievements.

Free minds reflect growth close and productivity increases whereas close minds lead to destruction and stagnation.