A friend sends me the following link, documenting that most early Americans drank alcohol: http://www2.potsdam.edu/hansondj/FunFacts/PuritansToProhibition.html
Here is my response to him:
Dear Roger
Yes, it is well known to all students of history that the first city to make filtered water available was Paisley (Scotland) in 1804 (in the USA, the first plant was built in Richmond VA in 1832)
water was not properly purified in most towns till well into the 20th c and was therefore quite unhealthy to drink earlier (it is still not properly purified in most parts of Southern Europe, as a result of which you can't drink water that is piped in by the municipality – whence the originally upper class fashion, now spreading worldwide, for bottled spring water...)
the result was that, in the past, most people drank no water, only beer, wine or spirits (the working classes drank mostly beer, the middle/ richer classes drank the more expensive products as well)
it is not at all surprising that the Puritans consumed alcohol, because (as St Paul says in his letter to Timothy – if I recollect the recipient aright) it was recommended "to drink a little wine"
since Jesus Himself made wine, I have never understood the hostility of Americans (who mostly claim to be Christians) to the drinking of wine (et al)
historically, the reason for the modern American antipathy to the consumption of alcohol is clear: the working classes, specially as they lost their social networks and their moderating influence in rural areas and moved into towns and cities, became increasingly drunk and rowdy – leading to issues of criminality, keeping the peace, and supporting families adequately
christians therefore launched the campaigns against drinking (and since they could not ask the lower classes to stop drinking while they continued to drink themselves, they themselves stopped drinking as well)
today, it is not only the working classes who don't drink in moderation, rich people are equally or even more likely to be proud of drinking to excess
the European middle classes – and Europe is basically middle class! – tend to drink almost universally, but drink in moderation; that middle class norm is increasingly coming to be violated by their own young folk, particularly if they go to work in cities other than their own
Sphere: Related Content
Monday, July 17, 2006
Jesus and the Republicans in the USA
The following article, while not something with which I agree 100%, is still broadly in line with my own understanding of Jesus.
In any case, I provide a brief quote and the link to it for your interest:
"The evangelical subculture, which prizes conformity above all else, doesn't suffer rebels gladly, and it is especially intolerant of anyone with the temerity to challenge the shibboleths of the religious right. I understand that. Despite their putative claims to the faith, the leaders of the religious right are vicious toward anyone who refuses to kowtow to their version of orthodoxy, and their machinery of vilification strikes with ruthless, dispassionate efficiency. Longtime friends (and not a few family members) will shuffle uneasily around me and studiously avoid any sort of substantive conversation about the issues I raise — and then quietly strike my name from their Christmas-card lists. "
http://chronicle.com/free/v52/i42/42b00601.htm Sphere: Related Content
In any case, I provide a brief quote and the link to it for your interest:
"The evangelical subculture, which prizes conformity above all else, doesn't suffer rebels gladly, and it is especially intolerant of anyone with the temerity to challenge the shibboleths of the religious right. I understand that. Despite their putative claims to the faith, the leaders of the religious right are vicious toward anyone who refuses to kowtow to their version of orthodoxy, and their machinery of vilification strikes with ruthless, dispassionate efficiency. Longtime friends (and not a few family members) will shuffle uneasily around me and studiously avoid any sort of substantive conversation about the issues I raise — and then quietly strike my name from their Christmas-card lists. "
http://chronicle.com/free/v52/i42/42b00601.htm Sphere: Related Content
Saturday, July 15, 2006
What does it mean to be a democracy?
I have only once met John C. Rankin, President (among other organisations) of the Mars Hill Society. However, he has kindly added me to his mailing list, so I can keep up with his activities and have the benefit of his wisdom.
His latest post has arrived with an outstanding article on the topic, "What is the Consent of the Governed?". The copyright in this piece remains with him and his son Stuart J. Rankin, but I have graciously been given permission to publish it on this Blog.
Though he writes, of course, to his fellow-Americans and in an American context, I commend the piece to you as it has profound lessons for the whole of humanity, irrespective of nationality.
"What is the Consent of the Governed?"
© 2006 by John C. Rankin and Stuart J. Rankin
The consent of the governed is the bulwark of American freedom, a risky proposition meaning the government belongs to the people. We elect our own representatives, and they are always accountable to us. Without a historically informed understanding of the consent of the governed, the only alternative is a slide toward some form of tyranny. A lazy people cannot be a free people.
Dating to the era of the Magna Carta in 1215, the consent of the governed only comes to us through a long and bloody struggle between those who aspire to freedom, and those who cling to tyranny. It comes to us through a texture of uneven yet unrelenting progress, through a growth of checks and balances.
Following the signing of The United States Constitution in 1787, Benjamin Franklin (1706-1790; and also a signer of the Declaration of Independence) was reputedly asked, “Well, Doctor, what have we got – a Republic or a Monarchy?” Franklin responded, “A Republic, if you can keep it.” In a strict monarchy, the unelected king has the final say; in a democratic and constitutional republic, the people have the final say through their elected representatives.
The phrase “a democratic and constitutional republic” can be a mouthful, but its precision is important. Democracy refers to the vote of the people, yet we are not a pure “democracy.” That would be too cumbersome, having every item in the state and nation always voted upon. Such a pure democracy can only work in small communities.
A more accurate term is “a representative government,” which is the nature of a “republic.” We democratically elect our representatives, who make the law according to the state and federal constitutions which we have also voted upon.
If we do not like how our representatives are governing, we can elect others to take their places, or even remove them sooner by more direct means.
Can we keep our republic? This is always a live question. Freedom is consistently at risk of being lost if we are not vigilant to protect it; indeed, tyrants can be elected by a constitutionally illiterate people. The best way to protect our republic is for all citizens to participate in the consent of the governed. Thus, in service to an understanding of the consent of the governed, here is a thumbnail sketch of a few important milestones along the way.
_____________________________________
1215: The Magna Carta
In feudal England the concept of “the divine right of kings” was an assumption on the part of many rulers. The king could rule as he saw fit, claiming that his authority came directly from God, and not from the church or the people.
During his reign, King John (1167-1216) alienated the barons in many ways including heavy taxation. So they forced him to sign the Magna Carta in 1215, giving certain freedoms to the church and freemen, but especially requiring the consent of the barons for any special taxes. John saw this as a momentary compromise, but this “consent of the barons,” while only applying to a small class of people, was the thin edge of the wedge for much greater change.
1295: The Establishment of Parliament
The powerful baron, Simon De Montfort (1208-1265), called England’s first Parliament apart from the authority of the king. He became de facto ruler briefly after King Henry III (1207-1272) was deposed in 1265, and expanded the principles of the Magna Carta to include a broader range of those with consent – barons, bishops, abbots, knights and town burgesses.
He was killed shortly thereafter as King Henry III regained power. But in 1295, his example led King Edward I (1239-1307) to call for the first representative Parliament that included two knights from each county, two citizens from each city and two burgesses from each borough. King Edward declared: “What touches all, should be approved by all, and it is also clear that common dangers should be met by measures agreed upon in common.”
In 1362, a law was passed that Parliament must agree to all taxation, and this was reaffirmed by The Petition of Right in 1628. Though the calling of Parliament into session was still subject to the king’s discretion, the consent of the governed gained momentum. In Spain, while New World natives were being forced to convert, the Roman Catholic Dominican priest, Bartholomew de Las Casas (1474-1566), declared that all persons are born free, and that “No one may be deprived of his liberty nor may any person be enslaved.” Also, the Jesuit priest Francisco Suarez (1548-1617) directly challenged the divine right of kings, allowing for kings to be deposed by the people “acting as a whole.”
1517: The Protestant Reformation
In Germany, Augustinian scholar and priest Martin Luther (1483-1546) did not intend to start the Protestant Reformation in 1517. But it came to pass as he sought freedom to hold his convictions when the church authorities tried to silence him. The religious wars of Europe that followed were one long bloody march toward the consent of the governed.
1620: The Mayflower Compact
When the English Puritans came to the New World for religious, political and economic liberty, their November 11, 1620 Mayflower Compact set the tone for the British Colonies – a written document where “just and equal laws … for the general good of the colony” were put in place. Governor William Bradford (1590-1657), opposed “Arbitrary Government … where a people have men set over them, without their choice or consent,” instead calling for a “government and governors as we should by common consent agree to make and choose…”
1638: The Fundamental Orders of Connecticut
Thomas Hooker (1586-1647), Puritan pastor and founder of Hartford, Connecticut, was invited in 1638 to address the new Connecticut General Assembly. He challenged them to create a written document where they who “have the power to appoint officers and magistrates also have the power to set bounds and limitations on their power” for “the foundation of authority is laid firstly in the free consent of the people.” This led to The Fundamental Orders of Connecticut in 1639, regarded as the first written constitution since antiquity. It was the first such time a people wrote a compact to form a government on their own, without appeal to any charter or royal concession.
1640: The Settling of Providence
When Puritan pastor Roger Williams (ca. 1603-1683) fled Boston, Massachusetts with ninety freeman, he established Providence, Rhode Island. He provided the most expansive definition of religious liberty since antiquity. Williams declared “that the sovereign, original and foundation of civil power lies in the people” and that “such governments as are by them erected and established have no more power, nor for no longer time, than the civil power of people consenting and agreeing shall betrust to them.”
1660: Samuel Rutherford and "Lex, Rex"
The Scottish Puritan theologian and preacher Samuel Rutherford (ca. 1600-1661) criticized the divine right of kings, and was charged with treason by King Charles II in 1660 for his book "Lex, Rex": “The Law, the King.” Rutherford said that the king is not above the law, which is to say the law is king. This simple concept is monumental – no one is above the law. Rutherford argued that “politic society is voluntary, being grounded on the consent of men.”
1689: The English Bill of Rights
Following the Glorious Revolution of 1688, any action of the king required the consent of the people as represented by Parliament. The English Bill of Rights declared: “The election of members of Parliament ought to be free,” their proceedings were not to be impeached from without, and Parliament was to be held frequently.
1690: John Locke and Two Treatises on Government
English philosopher John Locke (1632-1704) was crucially important to the founders of the United States, especially his Two Treatises on Government. Rooted in the Reformation and its interaction with the Enlightenment, Locke emphasized reason and toleration, the equality of all men, and their equal say in government. “Men, being, as has been said, by nature, all free, equal, and independent, no one else can be put out of his estate, and subjected to the political power of another, without his own consent.”
Locke argued that all men have unalienable rights given by the Creator – life, liberty and property. “Unalienable” is that which cannot be taken from us apart from due process of law, for its nature transcends human government. The consent of the governed depends on unalienable rights.
1776: The Declaration of Independence of the United States
On July 4, 1776, the Declaration of Independence from England was signed by 56 men at the risk of their lives and properties in pursuit of liberty. With their eloquent scribe Thomas Jefferson (later also to serve as President), the consent of the governed took central stage at the very foundation of the noble “American Experiment” in which we still live today:
“We hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the Pursuit of Happiness – That to secure these Rights, Governments are instituted among Men, deriving their just Powers from the Consent of the Governed …”
1780: The Massachusetts Constitution, Declaration of Rights
The state constitutions of the original thirteen colonies also affirmed the consent of the governed strongly. In Massachusetts, John Adams (1735-1826), who also served later as President, crafted the most detailed language:
“Article V – “All power residing originally in the people, and being derived from them, the several magistrates and officers of government, vested with authority, whether legislative, executive or judicial, are their substitutes and agents, and are at all times accountable to them.”
“Article VII – Government is instituted for the common good; for the protection, safety, prosperity and happiness of the people; and not for the profit, honor, or private interest of any one man, family or class of men: Therefore the people alone have an incontestable, unalienable, and indefeasible right to institute government; and to reform, alter, or totally change the same, when their protection, safety, prosperity and happiness require it.
“Article VIII – In order to prevent those, who are vested with authority, from becoming oppressors, the people have a right, at such periods and in such manner as they shall establish by their frame of government, to cause their public officers to return to private life…”
1787: The United States Constitution
The assumptions of the consent of the governed specified in the Declaration of Independence were so strong that the preamble to the U.S. Constitution starts with a bold simplicity, “We the People…”
In the First Amendment, Congress was prohibited from establishing a national church so that religious liberty would not be restricted; thus all subsequent liberties of speech, press, assembly and redress of grievances were allowed to flourish: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press, or of the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”
1818: The Connecticut Constitution, Declaration of Rights
“SEC. 1. All men when they form a social compact, are equal in rights; and no man or set of men are entitled to exclusive public emoluments or privileges from the community.
“SEC. 2. All political power is inherent in the people, and all free governments are founded on their authority, and instituted for their benefit; and they have at all times an undeniable and indefeasible right to alter their form of government in such manner as they may think expedient.”
1863: President Abraham Lincoln and the Gettysburg Address
As the consent of the governed grew in its centrality, various people, including blacks, women and Native Americans, had yet to be fully included. As he tackled the issue of justice for black Americans in the Gettysburg Address, Abraham Lincoln said:
“Fourscore and seven years ago our fathers brought forth, on this continent, a new nation, conceived in liberty, and dedicated to the proposition that all men are created equal … that this nation, under God, shall have a new birth of freedom – and that government of the people, by the people, for the people, shall not perish from the earth.”
In the Emancipation Proclamation of 1863 during the Civil War, followed by the Thirteenth, Fourteenth and Fifteenth Amendments, black Americans gained consent; in the Nineteenth Amendment in 1920 women won the constitutional right to vote; but Native Americans are still not fully enfranchised, as many live in tension between two worlds – the status of theoretically sovereign tribal nations, while also being Americans.
1981: President Ronald Reagan’s First Inaugural Address
“So, as we begin, let us take inventory. We are a nation that has a government – not the other way around. And this makes us special among the nations of the Earth. Our Government has no power except that granted it by the people.”
_____________________________________
If we honor the long struggle for the consent of the governed, then we cannot be a lazy people. We are called to hold those in government to be fully accountable to “We the People” on all occasions. “We the People” means all of us. If we are ever unsatisfied with government, we have a remedy – become involved, and make the consent of the governed a living reality. Sphere: Related Content
His latest post has arrived with an outstanding article on the topic, "What is the Consent of the Governed?". The copyright in this piece remains with him and his son Stuart J. Rankin, but I have graciously been given permission to publish it on this Blog.
Though he writes, of course, to his fellow-Americans and in an American context, I commend the piece to you as it has profound lessons for the whole of humanity, irrespective of nationality.
"What is the Consent of the Governed?"
© 2006 by John C. Rankin and Stuart J. Rankin
The consent of the governed is the bulwark of American freedom, a risky proposition meaning the government belongs to the people. We elect our own representatives, and they are always accountable to us. Without a historically informed understanding of the consent of the governed, the only alternative is a slide toward some form of tyranny. A lazy people cannot be a free people.
Dating to the era of the Magna Carta in 1215, the consent of the governed only comes to us through a long and bloody struggle between those who aspire to freedom, and those who cling to tyranny. It comes to us through a texture of uneven yet unrelenting progress, through a growth of checks and balances.
Following the signing of The United States Constitution in 1787, Benjamin Franklin (1706-1790; and also a signer of the Declaration of Independence) was reputedly asked, “Well, Doctor, what have we got – a Republic or a Monarchy?” Franklin responded, “A Republic, if you can keep it.” In a strict monarchy, the unelected king has the final say; in a democratic and constitutional republic, the people have the final say through their elected representatives.
The phrase “a democratic and constitutional republic” can be a mouthful, but its precision is important. Democracy refers to the vote of the people, yet we are not a pure “democracy.” That would be too cumbersome, having every item in the state and nation always voted upon. Such a pure democracy can only work in small communities.
A more accurate term is “a representative government,” which is the nature of a “republic.” We democratically elect our representatives, who make the law according to the state and federal constitutions which we have also voted upon.
If we do not like how our representatives are governing, we can elect others to take their places, or even remove them sooner by more direct means.
Can we keep our republic? This is always a live question. Freedom is consistently at risk of being lost if we are not vigilant to protect it; indeed, tyrants can be elected by a constitutionally illiterate people. The best way to protect our republic is for all citizens to participate in the consent of the governed. Thus, in service to an understanding of the consent of the governed, here is a thumbnail sketch of a few important milestones along the way.
_____________________________________
1215: The Magna Carta
In feudal England the concept of “the divine right of kings” was an assumption on the part of many rulers. The king could rule as he saw fit, claiming that his authority came directly from God, and not from the church or the people.
During his reign, King John (1167-1216) alienated the barons in many ways including heavy taxation. So they forced him to sign the Magna Carta in 1215, giving certain freedoms to the church and freemen, but especially requiring the consent of the barons for any special taxes. John saw this as a momentary compromise, but this “consent of the barons,” while only applying to a small class of people, was the thin edge of the wedge for much greater change.
1295: The Establishment of Parliament
The powerful baron, Simon De Montfort (1208-1265), called England’s first Parliament apart from the authority of the king. He became de facto ruler briefly after King Henry III (1207-1272) was deposed in 1265, and expanded the principles of the Magna Carta to include a broader range of those with consent – barons, bishops, abbots, knights and town burgesses.
He was killed shortly thereafter as King Henry III regained power. But in 1295, his example led King Edward I (1239-1307) to call for the first representative Parliament that included two knights from each county, two citizens from each city and two burgesses from each borough. King Edward declared: “What touches all, should be approved by all, and it is also clear that common dangers should be met by measures agreed upon in common.”
In 1362, a law was passed that Parliament must agree to all taxation, and this was reaffirmed by The Petition of Right in 1628. Though the calling of Parliament into session was still subject to the king’s discretion, the consent of the governed gained momentum. In Spain, while New World natives were being forced to convert, the Roman Catholic Dominican priest, Bartholomew de Las Casas (1474-1566), declared that all persons are born free, and that “No one may be deprived of his liberty nor may any person be enslaved.” Also, the Jesuit priest Francisco Suarez (1548-1617) directly challenged the divine right of kings, allowing for kings to be deposed by the people “acting as a whole.”
1517: The Protestant Reformation
In Germany, Augustinian scholar and priest Martin Luther (1483-1546) did not intend to start the Protestant Reformation in 1517. But it came to pass as he sought freedom to hold his convictions when the church authorities tried to silence him. The religious wars of Europe that followed were one long bloody march toward the consent of the governed.
1620: The Mayflower Compact
When the English Puritans came to the New World for religious, political and economic liberty, their November 11, 1620 Mayflower Compact set the tone for the British Colonies – a written document where “just and equal laws … for the general good of the colony” were put in place. Governor William Bradford (1590-1657), opposed “Arbitrary Government … where a people have men set over them, without their choice or consent,” instead calling for a “government and governors as we should by common consent agree to make and choose…”
1638: The Fundamental Orders of Connecticut
Thomas Hooker (1586-1647), Puritan pastor and founder of Hartford, Connecticut, was invited in 1638 to address the new Connecticut General Assembly. He challenged them to create a written document where they who “have the power to appoint officers and magistrates also have the power to set bounds and limitations on their power” for “the foundation of authority is laid firstly in the free consent of the people.” This led to The Fundamental Orders of Connecticut in 1639, regarded as the first written constitution since antiquity. It was the first such time a people wrote a compact to form a government on their own, without appeal to any charter or royal concession.
1640: The Settling of Providence
When Puritan pastor Roger Williams (ca. 1603-1683) fled Boston, Massachusetts with ninety freeman, he established Providence, Rhode Island. He provided the most expansive definition of religious liberty since antiquity. Williams declared “that the sovereign, original and foundation of civil power lies in the people” and that “such governments as are by them erected and established have no more power, nor for no longer time, than the civil power of people consenting and agreeing shall betrust to them.”
1660: Samuel Rutherford and "Lex, Rex"
The Scottish Puritan theologian and preacher Samuel Rutherford (ca. 1600-1661) criticized the divine right of kings, and was charged with treason by King Charles II in 1660 for his book "Lex, Rex": “The Law, the King.” Rutherford said that the king is not above the law, which is to say the law is king. This simple concept is monumental – no one is above the law. Rutherford argued that “politic society is voluntary, being grounded on the consent of men.”
1689: The English Bill of Rights
Following the Glorious Revolution of 1688, any action of the king required the consent of the people as represented by Parliament. The English Bill of Rights declared: “The election of members of Parliament ought to be free,” their proceedings were not to be impeached from without, and Parliament was to be held frequently.
1690: John Locke and Two Treatises on Government
English philosopher John Locke (1632-1704) was crucially important to the founders of the United States, especially his Two Treatises on Government. Rooted in the Reformation and its interaction with the Enlightenment, Locke emphasized reason and toleration, the equality of all men, and their equal say in government. “Men, being, as has been said, by nature, all free, equal, and independent, no one else can be put out of his estate, and subjected to the political power of another, without his own consent.”
Locke argued that all men have unalienable rights given by the Creator – life, liberty and property. “Unalienable” is that which cannot be taken from us apart from due process of law, for its nature transcends human government. The consent of the governed depends on unalienable rights.
1776: The Declaration of Independence of the United States
On July 4, 1776, the Declaration of Independence from England was signed by 56 men at the risk of their lives and properties in pursuit of liberty. With their eloquent scribe Thomas Jefferson (later also to serve as President), the consent of the governed took central stage at the very foundation of the noble “American Experiment” in which we still live today:
“We hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the Pursuit of Happiness – That to secure these Rights, Governments are instituted among Men, deriving their just Powers from the Consent of the Governed …”
1780: The Massachusetts Constitution, Declaration of Rights
The state constitutions of the original thirteen colonies also affirmed the consent of the governed strongly. In Massachusetts, John Adams (1735-1826), who also served later as President, crafted the most detailed language:
“Article V – “All power residing originally in the people, and being derived from them, the several magistrates and officers of government, vested with authority, whether legislative, executive or judicial, are their substitutes and agents, and are at all times accountable to them.”
“Article VII – Government is instituted for the common good; for the protection, safety, prosperity and happiness of the people; and not for the profit, honor, or private interest of any one man, family or class of men: Therefore the people alone have an incontestable, unalienable, and indefeasible right to institute government; and to reform, alter, or totally change the same, when their protection, safety, prosperity and happiness require it.
“Article VIII – In order to prevent those, who are vested with authority, from becoming oppressors, the people have a right, at such periods and in such manner as they shall establish by their frame of government, to cause their public officers to return to private life…”
1787: The United States Constitution
The assumptions of the consent of the governed specified in the Declaration of Independence were so strong that the preamble to the U.S. Constitution starts with a bold simplicity, “We the People…”
In the First Amendment, Congress was prohibited from establishing a national church so that religious liberty would not be restricted; thus all subsequent liberties of speech, press, assembly and redress of grievances were allowed to flourish: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press, or of the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”
1818: The Connecticut Constitution, Declaration of Rights
“SEC. 1. All men when they form a social compact, are equal in rights; and no man or set of men are entitled to exclusive public emoluments or privileges from the community.
“SEC. 2. All political power is inherent in the people, and all free governments are founded on their authority, and instituted for their benefit; and they have at all times an undeniable and indefeasible right to alter their form of government in such manner as they may think expedient.”
1863: President Abraham Lincoln and the Gettysburg Address
As the consent of the governed grew in its centrality, various people, including blacks, women and Native Americans, had yet to be fully included. As he tackled the issue of justice for black Americans in the Gettysburg Address, Abraham Lincoln said:
“Fourscore and seven years ago our fathers brought forth, on this continent, a new nation, conceived in liberty, and dedicated to the proposition that all men are created equal … that this nation, under God, shall have a new birth of freedom – and that government of the people, by the people, for the people, shall not perish from the earth.”
In the Emancipation Proclamation of 1863 during the Civil War, followed by the Thirteenth, Fourteenth and Fifteenth Amendments, black Americans gained consent; in the Nineteenth Amendment in 1920 women won the constitutional right to vote; but Native Americans are still not fully enfranchised, as many live in tension between two worlds – the status of theoretically sovereign tribal nations, while also being Americans.
1981: President Ronald Reagan’s First Inaugural Address
“So, as we begin, let us take inventory. We are a nation that has a government – not the other way around. And this makes us special among the nations of the Earth. Our Government has no power except that granted it by the people.”
_____________________________________
If we honor the long struggle for the consent of the governed, then we cannot be a lazy people. We are called to hold those in government to be fully accountable to “We the People” on all occasions. “We the People” means all of us. If we are ever unsatisfied with government, we have a remedy – become involved, and make the consent of the governed a living reality. Sphere: Related Content
Friday, July 14, 2006
how would you like a cheap house in space?
The Economist this week reports that "Holidays in orbit came a step closer with the launch of Genesis 1, an experimental inflatable spacecraft. The craft, paid for by Robert Bigelow, an American hotelier, took off from Siberia on a converted ballistic missile. If the test is successful, it will pave the way for cheap, habitable structures in space."
Even if the structures are cheap and habitable, it won't be cheap to get to them and back....
And it is interesting that Robert Bigelow has created America's Space Prize, a $50 million race to build an orbital vehicle capable of carrying up to seven astronauts to an orbital outpost by the end of the decade, while the Ansari X Prize challenges participants to develop a reusable three-person spacecraft capable of reach an altitude of at least 62 miles (100 kilometers) twice in two weeks, and NASA announced intentions to offer cash prizes for private space accomplishments through its Centennial Challenges office, which may offer prizes that range from $250,000 to $30 million.
While all this money is being offered as incentives to create housing in space, any idea how much is being offered as incentives to create affordable housing on earth, specially for the half of the world's population which lives on less than $2 a day? Sphere: Related Content
Even if the structures are cheap and habitable, it won't be cheap to get to them and back....
And it is interesting that Robert Bigelow has created America's Space Prize, a $50 million race to build an orbital vehicle capable of carrying up to seven astronauts to an orbital outpost by the end of the decade, while the Ansari X Prize challenges participants to develop a reusable three-person spacecraft capable of reach an altitude of at least 62 miles (100 kilometers) twice in two weeks, and NASA announced intentions to offer cash prizes for private space accomplishments through its Centennial Challenges office, which may offer prizes that range from $250,000 to $30 million.
While all this money is being offered as incentives to create housing in space, any idea how much is being offered as incentives to create affordable housing on earth, specially for the half of the world's population which lives on less than $2 a day? Sphere: Related Content
Wednesday, July 12, 2006
Is the Land of Casinos finally getting tired of casinos?
I do not know the US very well, and certainly far less well than I should.
However, from my superficial and patchy acquaintance with the country, it certainly gives the impression of having more casinos than any other country in the world.
So it might interest you, dear Reader (specially if you invest in companies that provide casino-type "entertainment") that fewer Americans are likely to visit a casino this year than did so last year.
In fact, accroding to a new Harris Interactive Poll, a clear majority of Americans say they are not likely to visit a casino in the next year. And 59% say they have not visited a casino in the past 12 months.
As with most studies, the group undertaking the study naturally does not want to turn off potential customers from the gaming industry. So it suggests that developers of new casinos might like to consider that people are willing to travel to casino destinations for a variety of experiences beyond gambling - e.g. shopping and visiting restaurants. In fact, Jim Quilty, vice president of Travel and Tourism Research at Harris, put it this way: "Casino/resorts have found a way to enrich the value of experiences they offer visitors, and in the process are capturing a larger 'share of wallet' of entertainment spend."
I would put it differently. As the appeal of gambling has declined, companies whose primary business used to be gambling have had to look beyond gambling to create more income. As they have begun to emphasise the rest of their offers, people who would never go to a gambling destination, are apparently willing to go to that destination, not for gambling but for the other activities (Las Vegas, for instance, has become less of a "gambler's town" and more of a "conference town").
This has the advantage, from the viewpoint of the companies and locations involved that a greater range of people comes in to provide custom. But it has the disadvantage, from society's point of view, that people who would never have gone to a gambling destination will experiment with gambling because they come a destination which has gambling available, and get hooked on it.
The original story that I saw is at:
http://www.travelmole.com/stories/109663.php?mpnlog=1 Sphere: Related Content
However, from my superficial and patchy acquaintance with the country, it certainly gives the impression of having more casinos than any other country in the world.
So it might interest you, dear Reader (specially if you invest in companies that provide casino-type "entertainment") that fewer Americans are likely to visit a casino this year than did so last year.
In fact, accroding to a new Harris Interactive Poll, a clear majority of Americans say they are not likely to visit a casino in the next year. And 59% say they have not visited a casino in the past 12 months.
As with most studies, the group undertaking the study naturally does not want to turn off potential customers from the gaming industry. So it suggests that developers of new casinos might like to consider that people are willing to travel to casino destinations for a variety of experiences beyond gambling - e.g. shopping and visiting restaurants. In fact, Jim Quilty, vice president of Travel and Tourism Research at Harris, put it this way: "Casino/resorts have found a way to enrich the value of experiences they offer visitors, and in the process are capturing a larger 'share of wallet' of entertainment spend."
I would put it differently. As the appeal of gambling has declined, companies whose primary business used to be gambling have had to look beyond gambling to create more income. As they have begun to emphasise the rest of their offers, people who would never go to a gambling destination, are apparently willing to go to that destination, not for gambling but for the other activities (Las Vegas, for instance, has become less of a "gambler's town" and more of a "conference town").
This has the advantage, from the viewpoint of the companies and locations involved that a greater range of people comes in to provide custom. But it has the disadvantage, from society's point of view, that people who would never have gone to a gambling destination will experiment with gambling because they come a destination which has gambling available, and get hooked on it.
The original story that I saw is at:
http://www.travelmole.com/stories/109663.php?mpnlog=1 Sphere: Related Content
Monday, July 10, 2006
An Open Letter to the Editors of ETHICAL CORPORATION magazine on their Leader regarding Divestment Campaigns and Darfur/ Sudan
The following Letter to the Editor was sent to the Editors but, as they have not published it, I include it here as an open letter:
Sirs/Mesdames
As you correctly point out, it is fairly clear to anyone even remotely familiar with the situation in Sudan that the current sort of patchy and half-hearted divestment campaign in Sudan is programmed not to work.
Indeed any divestment campaign, if it is to work, must be based on a proper and thorough analysis of the financial "heart and lungs" of the system in question. In the case of Sudan, the lungs may be said to be the Arab world, but the financial heart and blood is provided by China.
So if a divestment campaign is to be effective in Sudan, it has to hurt at the place from which the money is coming into Sudan. And that is principally China. Since that is an empire run by the Communist elite, only wholesale disinvestment from China is going to stop that oligopoly from investing in Sudan.
The question is: do we want merely to join those who make polite noises and token gestures, or are we actually prepared to do what it will apparently take to stop genocide in Sudan?
Yours faithfully
Prabhu Guptara
Weinfelden, Switzerland Sphere: Related Content
Sirs/Mesdames
As you correctly point out, it is fairly clear to anyone even remotely familiar with the situation in Sudan that the current sort of patchy and half-hearted divestment campaign in Sudan is programmed not to work.
Indeed any divestment campaign, if it is to work, must be based on a proper and thorough analysis of the financial "heart and lungs" of the system in question. In the case of Sudan, the lungs may be said to be the Arab world, but the financial heart and blood is provided by China.
So if a divestment campaign is to be effective in Sudan, it has to hurt at the place from which the money is coming into Sudan. And that is principally China. Since that is an empire run by the Communist elite, only wholesale disinvestment from China is going to stop that oligopoly from investing in Sudan.
The question is: do we want merely to join those who make polite noises and token gestures, or are we actually prepared to do what it will apparently take to stop genocide in Sudan?
Yours faithfully
Prabhu Guptara
Weinfelden, Switzerland Sphere: Related Content
Yet another comment on my Blog regarding the Danish cartoons on the Prophet Mohammed (PBUH)
I am happy to post the comments of Jon E, with my own comments in capitals:
> Dear Prabhu,
Richard forwarded a copy of your recent blog to me, and I want here to add a few comments.
> First, thanks very much for the rundown on the use of imagery in Islam.
> This is an excellent contribution to the overall debate. My only slight caveat on this would be that the current Moslem rage is in part due to the dishonourableness of the images of Mohammed (PBUH) in the cartoons. I agree. However, you either believe in freedom of speech or you don't. If you accept freedom of speech, then that includes the right of others to say things with which you might totally disagree. As I have argued elsewhere, if I say things tht are insulting or hurtful or otherwise offensive to you, you have recourse to the courts for legal redress, and you are fully entitled to cut off your financial links with me, as well as to encourage others to do so. You are also absolutely appropriate for you to protest in whatever ways are legally acceptable. What is totally unacceptable is violence and threats of violence.
> Second, I would like to venture a few comments on the very complex situation of aid to the Palestinians, and then widen this issue to look at aid in general. Your statement that "for years and years after the incident (Arafat's support for the Iraqi invasion of Kuwait) ended, the ONLY people around the world supporting the Palestinians financially were the European Union" appears too broad to me, and perhaps should be qualified. I think you are referring to government-to-government aid or ODA (Official Development Assistance). You are right, Jon. I was indeed referring to government-to-government aid. My apologies for phrasing that too widely.
> Popular people-to-people donations, or charitable giving, has been substantial to the Palestinians (also from the West), and my impression is that Hammas has channelled a lot of international private Moslem charity to Palestinians in the past few decades, and this is part of the reason they won the recent election. You are entirely right about these matters.
> Third, while attention is focused on trade through boycotting Danish goods, a secondary, and perhaps more significant target may be development assistance. It is perhaps the greatest paradox in the current situation that the most generous and "correct" among donor nations is being attacked. Denmark is the highest on all the foreign aid charts for percent of GDP given as aid to poor countries, and their policies are widely seen as among the most technically and politically advanced. For this reason, one could call Denmark the most generous nation. (See the CAVEAT on US foreign aid below) Why would the governments of some Moslem countries inflate the legitimate feelings of offence, and encourage their citizens to blow the reaction out of proportion? Why would they bite a hand that feeds them? I thought I had already suggested the real reason for this in my original blog.
> (CAVEAT on US foreign aid: Citizens of the USA widely believe that the USA is the most generous country on earth. According to the Chicago Council on Foreign Relations, 2002, the "average" American thinks that the US spends 24% of the federal budget on development assistance, and they would prefer that only 10% be spent in this way. IN REALITY, the US is the LEAST GENEROUS in terms of the amount it spends as a share of its national income - significantly less than 1% of the federal budget. While the US recently passed Japan to again be top in foreign aid in terms of sheer dollar amount given, even if private charitable giving is taken into account, and even if the Bush Administration proposals would be fully funded, the US would still "remain LAST AMONG RICH NATIONS in terms of how much of its economy is dedicated to development assistance." ODA from the US amounts to USD 54 per person per year, and private charitable giving from the US to poor countries amounts to an additional USD 19 per person per year. (Information taken from: "Rich World, Poor World", www.cgdev.org) ). You are also right in this analysis of government-to-government development assistance. However, this analysis needs to be balanced by taking into consideration the fact that there is more private generosity, philanthropy and aid that is financed by private citizens of the USA than by citizens of any other country, whether in terms of the total amount, or per head.
This "private" generosity is made possible partly because of U.S. legislation which allows private donations to be set off against tax.
What the U.S. government loses in tax revenues (and therefore in terms of revenues available for possible aid on a government-to-government basis) is compensated for by donations made "privately".
Therefore, in assessing how "miserly" or "generous" a country is, one needs to take into account not only the official or government-to-government aid, but also the private generosity of individuals and families and the trusts and foundations created by them.
> Why would they bite a hand that feeds them? Consolidation of Islamic financial and cultural influence is, I think, the answer. The overall effect of the reaction to the religiously insensitive cartoons has been to increase international polarization by alienating the most generous and open of donor countries, thereby decreasing their influence on a social and cultural level in Moslem countries. And it looks like this is the aim. Ah, I see that we agree on this!
The presence of aid agencies is a major source of Western influence in developing economies, along with trade, educational and diplomatic representations. And some of that influence is deeply offensive to Moslem morality. In particular the export of pornography, loose sexual morals of many Western visitors and the realization that families and family values are breaking down in the West presents one of the motivations for the resurgence of conservative Islam. Christians recognize the legitimate aspect of their motivation. One needs to distinguish between the intended results (official aims) and any unintended results (such as any possible "loose secual morals of western visitors").
One also needs to take into account the "loose morals" of Arab and other so-called "Muslim" visitors in other lands.
If such "Muslims" are kept on the path of whatever they are taught is "moral" only because of the legal and social pressure of being in "Muslim" countries, can their social conformity really be considered "morality"?>
> Let me end with the proposal that in this period of increased polarization we should not react in fear, triggering fight and flight mechanisms. Rather, we should in openness and humility, with hard heads and open hearts, encourage the building of more bridges between predominantly Judeo-Christian countries and the Moslem world. A proposal with which I agree entirely, except that I would not limit it to those countries
>
> Best regards, Jon Sphere: Related Content
> Dear Prabhu,
Richard forwarded a copy of your recent blog to me, and I want here to add a few comments.
> First, thanks very much for the rundown on the use of imagery in Islam.
> This is an excellent contribution to the overall debate. My only slight caveat on this would be that the current Moslem rage is in part due to the dishonourableness of the images of Mohammed (PBUH) in the cartoons. I agree. However, you either believe in freedom of speech or you don't. If you accept freedom of speech, then that includes the right of others to say things with which you might totally disagree. As I have argued elsewhere, if I say things tht are insulting or hurtful or otherwise offensive to you, you have recourse to the courts for legal redress, and you are fully entitled to cut off your financial links with me, as well as to encourage others to do so. You are also absolutely appropriate for you to protest in whatever ways are legally acceptable. What is totally unacceptable is violence and threats of violence.
> Second, I would like to venture a few comments on the very complex situation of aid to the Palestinians, and then widen this issue to look at aid in general. Your statement that "for years and years after the incident (Arafat's support for the Iraqi invasion of Kuwait) ended, the ONLY people around the world supporting the Palestinians financially were the European Union" appears too broad to me, and perhaps should be qualified. I think you are referring to government-to-government aid or ODA (Official Development Assistance). You are right, Jon. I was indeed referring to government-to-government aid. My apologies for phrasing that too widely.
> Popular people-to-people donations, or charitable giving, has been substantial to the Palestinians (also from the West), and my impression is that Hammas has channelled a lot of international private Moslem charity to Palestinians in the past few decades, and this is part of the reason they won the recent election. You are entirely right about these matters.
> Third, while attention is focused on trade through boycotting Danish goods, a secondary, and perhaps more significant target may be development assistance. It is perhaps the greatest paradox in the current situation that the most generous and "correct" among donor nations is being attacked. Denmark is the highest on all the foreign aid charts for percent of GDP given as aid to poor countries, and their policies are widely seen as among the most technically and politically advanced. For this reason, one could call Denmark the most generous nation. (See the CAVEAT on US foreign aid below) Why would the governments of some Moslem countries inflate the legitimate feelings of offence, and encourage their citizens to blow the reaction out of proportion? Why would they bite a hand that feeds them? I thought I had already suggested the real reason for this in my original blog.
> (CAVEAT on US foreign aid: Citizens of the USA widely believe that the USA is the most generous country on earth. According to the Chicago Council on Foreign Relations, 2002, the "average" American thinks that the US spends 24% of the federal budget on development assistance, and they would prefer that only 10% be spent in this way. IN REALITY, the US is the LEAST GENEROUS in terms of the amount it spends as a share of its national income - significantly less than 1% of the federal budget. While the US recently passed Japan to again be top in foreign aid in terms of sheer dollar amount given, even if private charitable giving is taken into account, and even if the Bush Administration proposals would be fully funded, the US would still "remain LAST AMONG RICH NATIONS in terms of how much of its economy is dedicated to development assistance." ODA from the US amounts to USD 54 per person per year, and private charitable giving from the US to poor countries amounts to an additional USD 19 per person per year. (Information taken from: "Rich World, Poor World", www.cgdev.org) ). You are also right in this analysis of government-to-government development assistance. However, this analysis needs to be balanced by taking into consideration the fact that there is more private generosity, philanthropy and aid that is financed by private citizens of the USA than by citizens of any other country, whether in terms of the total amount, or per head.
This "private" generosity is made possible partly because of U.S. legislation which allows private donations to be set off against tax.
What the U.S. government loses in tax revenues (and therefore in terms of revenues available for possible aid on a government-to-government basis) is compensated for by donations made "privately".
Therefore, in assessing how "miserly" or "generous" a country is, one needs to take into account not only the official or government-to-government aid, but also the private generosity of individuals and families and the trusts and foundations created by them.
> Why would they bite a hand that feeds them? Consolidation of Islamic financial and cultural influence is, I think, the answer. The overall effect of the reaction to the religiously insensitive cartoons has been to increase international polarization by alienating the most generous and open of donor countries, thereby decreasing their influence on a social and cultural level in Moslem countries. And it looks like this is the aim. Ah, I see that we agree on this!
The presence of aid agencies is a major source of Western influence in developing economies, along with trade, educational and diplomatic representations. And some of that influence is deeply offensive to Moslem morality. In particular the export of pornography, loose sexual morals of many Western visitors and the realization that families and family values are breaking down in the West presents one of the motivations for the resurgence of conservative Islam. Christians recognize the legitimate aspect of their motivation. One needs to distinguish between the intended results (official aims) and any unintended results (such as any possible "loose secual morals of western visitors").
One also needs to take into account the "loose morals" of Arab and other so-called "Muslim" visitors in other lands.
If such "Muslims" are kept on the path of whatever they are taught is "moral" only because of the legal and social pressure of being in "Muslim" countries, can their social conformity really be considered "morality"?>
> Let me end with the proposal that in this period of increased polarization we should not react in fear, triggering fight and flight mechanisms. Rather, we should in openness and humility, with hard heads and open hearts, encourage the building of more bridges between predominantly Judeo-Christian countries and the Moslem world. A proposal with which I agree entirely, except that I would not limit it to those countries
>
> Best regards, Jon Sphere: Related Content
What's Wrong with the News?: Media non-reporting of falling wages for workers and even for managers
While the media continues to spotlight the issue of "fat cats" (unnecessarily and improperly paid top executives), it continues to under-report the issue of falling wages for every other kind of worker in terms of real time and effort versus real take-home pay (in modern double-talk, this is part of the package referred to as "labour flexibility").
The issue has been highlighted in various books (e.g. those by Tom Sine and by Paul Klugman) and I have drawn attention to it at various times over the last ten years.
For an update on how the global mainstream media ignores or misrepresents the issue, see the story titled "Good News! The Rich Get Richer: Lack of applause for falling wages is media mystery" at the following website
http://www.fair.org/index.php?page=2854
That website is run by FAIR, the U.S. national media watch group, which has since 1986 aimed to offer "well-documented criticism of media bias and censorship"
FAIR scrutinises media practices that marginalize public interest, minority and dissenting viewpoints. As an anti-censorship organization, it exposes "neglected news stories and defend working journalists when they are muzzled".
FAIR believes, I think rightly, that structural reform is needed to break up the dominant media conglomerates, establish independent public broadcasting and promote strong non-profit sources of information.
It also encourages the public to contact media with their concerns, to become media activists rather than passive consumers of news.
FAIR publishes Extra!, the award-winning magazine of media criticism, and has a thriving listserv through which it distributes regular Action Alerts to its international network of activists - which you can join if you wish.
For an in-depth explanation of FAIR's critique of the mainstream media, you could start with its overview titled "What's Wrong with the News"?
You might also check out the article "What's FAIR?", by FAIR founder Jeff Cohen. And see what journalists, activists and scholars have to say about FAIR. Sphere: Related Content
The issue has been highlighted in various books (e.g. those by Tom Sine and by Paul Klugman) and I have drawn attention to it at various times over the last ten years.
For an update on how the global mainstream media ignores or misrepresents the issue, see the story titled "Good News! The Rich Get Richer: Lack of applause for falling wages is media mystery" at the following website
http://www.fair.org/index.php?page=2854
That website is run by FAIR, the U.S. national media watch group, which has since 1986 aimed to offer "well-documented criticism of media bias and censorship"
FAIR scrutinises media practices that marginalize public interest, minority and dissenting viewpoints. As an anti-censorship organization, it exposes "neglected news stories and defend working journalists when they are muzzled".
FAIR believes, I think rightly, that structural reform is needed to break up the dominant media conglomerates, establish independent public broadcasting and promote strong non-profit sources of information.
It also encourages the public to contact media with their concerns, to become media activists rather than passive consumers of news.
FAIR publishes Extra!, the award-winning magazine of media criticism, and has a thriving listserv through which it distributes regular Action Alerts to its international network of activists - which you can join if you wish.
For an in-depth explanation of FAIR's critique of the mainstream media, you could start with its overview titled "What's Wrong with the News"?
You might also check out the article "What's FAIR?", by FAIR founder Jeff Cohen. And see what journalists, activists and scholars have to say about FAIR. Sphere: Related Content
Saturday, July 08, 2006
a further comment on my Blog regarding the Danish cartoons on the Prophet Mohammed (PBUH)
Prabhu:
Your blog comments are excellent. I am largely in agreement as you know.
Only one caveat is suggested, and it is on a slightly different subject. The Western media, in its secular bent and determination to ridicule faith, has increasingly lampooned Christianity. As you will recall, the Brooklyn Museum of Art exhibited a picture of Jesus Christ in a bottle of urine and in another instance there was the Virgin Mary shown with elephant faeces splattered over her. Although there have been strong vocal objections, there has been no real violence. As a result I suspect the media has developed increasing comfort in ridiculing faiths of all kinds.
As a Christian, I object to ridicule of my faith and pretenses of art that are vulgar and untrue, and I suspect even moderate Moslems interested in helping their people evolve into the modern world also resent ridiculing media acts concerning the Prophet Mohammed (PBUH). Although the real fight is internal within Islam, we still do not need to provide any unnecessary ammunition for the extremists to provoke violence and use their quest for power as a way to recruit supporters with religious excuses. Like most so-called religious wars, the real motivations were either commercial or territory and power grabs, but religion has always been a better recruiting tool than the truth. So it is with the Moslem extremists some of whose religious devotion is highly questionable.
As usual, you thinking and reasoning is superb……all the best….AM Sphere: Related Content
Your blog comments are excellent. I am largely in agreement as you know.
Only one caveat is suggested, and it is on a slightly different subject. The Western media, in its secular bent and determination to ridicule faith, has increasingly lampooned Christianity. As you will recall, the Brooklyn Museum of Art exhibited a picture of Jesus Christ in a bottle of urine and in another instance there was the Virgin Mary shown with elephant faeces splattered over her. Although there have been strong vocal objections, there has been no real violence. As a result I suspect the media has developed increasing comfort in ridiculing faiths of all kinds.
As a Christian, I object to ridicule of my faith and pretenses of art that are vulgar and untrue, and I suspect even moderate Moslems interested in helping their people evolve into the modern world also resent ridiculing media acts concerning the Prophet Mohammed (PBUH). Although the real fight is internal within Islam, we still do not need to provide any unnecessary ammunition for the extremists to provoke violence and use their quest for power as a way to recruit supporters with religious excuses. Like most so-called religious wars, the real motivations were either commercial or territory and power grabs, but religion has always been a better recruiting tool than the truth. So it is with the Moslem extremists some of whose religious devotion is highly questionable.
As usual, you thinking and reasoning is superb……all the best….AM Sphere: Related Content
Tuesday, July 04, 2006
HOW ONE CAN SAVE MONEY WHILE SAVING THE ENVIRONMENT (Lights)
It is really very simple:
1. Count how many ordinary ("incandescent") light bulbs you have in your home (and in your office)
2. Keep firmly in mind that an ordinary 60W bulb costs (in the US, where energy is cheap) up to USD 25 in electricity bills per year – by contrast an energy-saving bulb (a compact fluorescent light or CFL) can reduce the electricity bill by up to USD 20 PER YEAR. Since an ordinary bulb costs around USD 1.00, while an energy-saving bulb costs USD 6, your total saving in the first year of installing an energy-saving bulb will be USD 15 per bulb installed.
3. The average life-span of an ordinary bulb is around 5 months OF USSE (approx 750 and 1000 hours). By contrast, energy-saving bulbs last on average 12 times longer (that is, around five years of use). If you take replacement costs into account, you save a further six USD.
Therefore the total saving, over the average life-span (5 years) of an energy-saving bulb is USD 81. And the logical thing to do would be to immediately throw out all your ordinary bulbs and instead install energy-saving bulbs.
Immediately. Because you start saving money as soon as you start using an energy-saving bulb rather than an ordinary bulb.
In most houses, lighting accounts for approximately 15 per cent of the electricity bill, so this is certainly worth paying attention to if, like most people, you have a relatively fixed income.
So the simple set of steps outlined above helps you to save money, but how does it help the environment?
Well, 90 per cent of the energy used by an ordinary bulb generates heat rather than light (that is to say: 90% of the energy is wasted). Energy-saving bulbs generate up to 70 per cent less heat.
If every American home switched their five most-used light fittings to energy-saving bulbs, this would save the US economy USD 6bn, and reduce global greenhouse gases by nearly half a million tons.
The light used for homes and offices is a major cause of climate change and also creates "light pollution", which means that city children grow up never seeing the stars.
All the above thoughts are occasioned by the release of "Light’s Labour’s Lost" a new publication from The International Energy Agency (IEA) which sets out the policies that will be needed to implement energy-efficient lighting technologies, and to reduce energy waste and CO2 emissions. The IEA claims that this is the first detailed global analysis of the energy used for lighting, and review of the technologies, such as High-Brightness (HB) Light Emitting Diodes (LEDs), that could be implemented to reduce energy consumption.
The simple low-energy light bulb and other efficient lighting systems could prevent a cumulative total of 16 billion tons of carbon from being added to the world's atmosphere over the next 25 years, according to the publication.
Moreover, far from costing money, the implementation of these already-available technologies could save more than USD 2,500 bn. Sphere: Related Content
1. Count how many ordinary ("incandescent") light bulbs you have in your home (and in your office)
2. Keep firmly in mind that an ordinary 60W bulb costs (in the US, where energy is cheap) up to USD 25 in electricity bills per year – by contrast an energy-saving bulb (a compact fluorescent light or CFL) can reduce the electricity bill by up to USD 20 PER YEAR. Since an ordinary bulb costs around USD 1.00, while an energy-saving bulb costs USD 6, your total saving in the first year of installing an energy-saving bulb will be USD 15 per bulb installed.
3. The average life-span of an ordinary bulb is around 5 months OF USSE (approx 750 and 1000 hours). By contrast, energy-saving bulbs last on average 12 times longer (that is, around five years of use). If you take replacement costs into account, you save a further six USD.
Therefore the total saving, over the average life-span (5 years) of an energy-saving bulb is USD 81. And the logical thing to do would be to immediately throw out all your ordinary bulbs and instead install energy-saving bulbs.
Immediately. Because you start saving money as soon as you start using an energy-saving bulb rather than an ordinary bulb.
In most houses, lighting accounts for approximately 15 per cent of the electricity bill, so this is certainly worth paying attention to if, like most people, you have a relatively fixed income.
So the simple set of steps outlined above helps you to save money, but how does it help the environment?
Well, 90 per cent of the energy used by an ordinary bulb generates heat rather than light (that is to say: 90% of the energy is wasted). Energy-saving bulbs generate up to 70 per cent less heat.
If every American home switched their five most-used light fittings to energy-saving bulbs, this would save the US economy USD 6bn, and reduce global greenhouse gases by nearly half a million tons.
The light used for homes and offices is a major cause of climate change and also creates "light pollution", which means that city children grow up never seeing the stars.
All the above thoughts are occasioned by the release of "Light’s Labour’s Lost" a new publication from The International Energy Agency (IEA) which sets out the policies that will be needed to implement energy-efficient lighting technologies, and to reduce energy waste and CO2 emissions. The IEA claims that this is the first detailed global analysis of the energy used for lighting, and review of the technologies, such as High-Brightness (HB) Light Emitting Diodes (LEDs), that could be implemented to reduce energy consumption.
The simple low-energy light bulb and other efficient lighting systems could prevent a cumulative total of 16 billion tons of carbon from being added to the world's atmosphere over the next 25 years, according to the publication.
Moreover, far from costing money, the implementation of these already-available technologies could save more than USD 2,500 bn. Sphere: Related Content
Saturday, July 01, 2006
Intellectual Property, Business Entry and Exit Strategies and Structural Change in China - A Case History in the Textile Industry
By sheer coincidence, seconds after posting my blog on intellectual property, I was delighted to recieve a copy of a paper by my friend Brian Porter, on a related subject.
This provides unusual insight into the historical, cycle and competitive dynamics of a global industry, specifically in view of Chinese business practices.
He has kindly given me permission to publish this here but do note that the copyright in the text below belongs to him:
The Implications of Structural Change in China - A Case History in the Textile Industry
(c) Brian K. Porter of Walchwil, Switzerland
This paper details the experience of a foreign equipment supplier during a fundamental shift in China’s domestic market structure. A short summary of the broader implications and lessons which could be learned from the experience is also provided.
As Sales/Product Manager for China, I was responsible for selling the equipment in our company’s product line which dealt with the crystallization and drying of polyester pellets. This thermal process is an integral part of the decentralized manufacture of synthetic fibers from polyester. As with most Asian countries, development of light industry in China has been the precursor to greater economic expansion into other manufacturing sectors. Textiles are a major economic component of the light industry sector.
The Chinese market was unique to others in the Asian region in that the Chinese government, through the Textile Ministry, originally pushed for a decentralization of the synthetic fiber industry in order to maximize local employment and create an indigenous and well-distributed, light industrial base. This created a significant market opportunity for our company, which produced equipment specifically for small to medium sized industrial applications.
As an aside, most other large producers of polyester fibers in the world spin the fiber directly, and in great quantity, after an upstream polycondensation. Our process required that the polyester be first pelletized as amorphous chips. This pelletization would facilitate shipping from a central polycondensation plant to remote locations. The amorphous chips would then require an additional crystallization and drying step before being re-melted and extruded into fiber; a process unnecessary during the direct spinning of fiber.
When I began working for this company in 1989, we had a majority share of the Chinese import market of PET crystallization and drying equipment. By the time I left in 1995, we had no market share. Of course, I don’t want to take the entire blame for this occurrence. I would like to think I maintained and extended the profit stream from this product line as long as possible. In my defense, no other foreign manufacturer has any market share at this point either.
Our success in the market started with the long-suffering efforts of one individual who, at the expense of his marriage, spent the greater portion of his time over a three-year period developing contacts in the market through frequent business trips to China from his German-based headquarters. Eventually, after spending an inordinate period of time banqueting and drinking Mao Tai, he gained the trust and understanding of important individuals in the relevant State Owned Enterprises (SOEs) and Textile Ministry.
This sales manager combined these contacts and relationships to create a “boom” in the company’s equipment sales to China. From the time he began to the time I finished, we had sold more than 180 crystallization and drying lines. Previous to taking the sales position, I was the project manager responsible for implementing projects for our customers in China. This previous project experience provides a somewhat greater overview on the cost positioning of the product during the rise and demise of the product line. I became a sales manager after the former sales manager believed his efforts were not being adequately rewarded and had quit the company.
Profit margins sustained our business throughout the entire duration of sales. There were only two cases where losses were incurred, and these were due to both an excessive shaving of design criteria and stringent demands from the customer for compensation. Before I took over the product line, the company was able to increase prices by 2 - 3% per year due to “inflation”. Unfortunately, this windfall stopped during my tenure.
When I took over Chinese sales efforts, we were negotiating the sale of five-to-seven year old technology. At the time we felt that the Chinese government had been inviting our competitors to openly compete in the domestic market in order to stem the flow of foreign exchange out of the country. This competition would lower the cost of imported equipment to China while we foreigners fought it out amongst ourselves.
We were exporting 100% of the scope of supply of our process from Europe, providing all engineering and design work, holding preliminary design meetings in China with our project engineers, supervising construction activities with a construction manager, providing start-up assistance, with both mechanical and control engineers, and providing all project documentation. We can, for the purpose of illustration, set a market price at this point in time as a datum at 1.0.
The competition between foreign suppliers initially put significant pressure on our own sub-suppliers as we project managers requested that they significantly reduce their prices (higher discounts). This effort was basically an internal exercise, working closely with the purchasing department during occasional visits from our sub-suppliers as we compelled them to lower their prices. Initially, this worked to everyone’s benefit because our suppliers (those that could meet our price/quality level) had a steady income from our expanding orders. Economies of scale could also be generated in their equipment/component production. This small change allowed us to undercut our competitors’ best evaluated bid (we were still more expensive but our technology sold at a premium due to our quality reputation). This development resulted in a savings of around 7%; thus, the new price level was 0.93.
As our competitors followed our lead in the market, we were forced to find our own economies from increased production runs. This effort reduced our in-house production costs. We were effectively cutting our factory’s production profit in order to load production. This resulted in a redundancy of employees in our German factory as cost cutting measures were implemented and lower margins on production were seen. We were then able to take another 5% from project costs, moving the factor to around 0.88.
By this time, the Chinese textile industry had done its market research and had found a supplier in England that could effectively produce and supply a similar process at around 20% less than our minimum price level with only slightly lower product quality. More and more orders were given to them. Negotiations were getting very hectic. Many times our Chinese customers had two or three of us suppliers in as many rooms in a hotel—going from room to room driving our prices to an absolute minimum.
In order to meet these challenging market developments, we started more frequent cooperation with one regional design institute within the Textile Ministry with some help from two other design institutes. These relationships leveraged a few more projects at fair profit margins. The margins also went up because the design institutes started to perform initial design drawings rather than having this done in our own engineering group. They performed these services at a very small premium. Unfortunately, this outsourcing created redundancies in our engineering department.
Immediately before moving into sales, I had helped develop and engineer a new process somewhat similar to that of our competitor. Fortunately for me, being new to the sales group, I did not appear hypocritical in presenting the technology to our customers. I could always claim ignorance of my predecessor’s arguments against the technology. An additional benefit was that I had been the primary force in pushing through, and taking part in, this new products’ development. This new process would have allowed us to initially reduce our sales price by an additional 30%.
Being a good sales manager, I reduced the price level by 10%. We were able to do this and still get projects because we still had the best name in the market and the Chinese had no idea what our production costs for the new process were (this would prove to be short lived). I had also over-designed the production capacity of the process by around 30% in order to insure that absolutely no performance guarantees would be compromised. This move also left an engineering margin to play with as the inevitable forces of competition came into play. This initial 10% reduction moved the factored reference price down to 0.79
My sales efforts became much easier since negotiations, at ever diminishing prices, took place behind the scenes with our local representative, the design institutes and our customers. My negotiations became a pricing formality. Negotiations, which used to take up to a week as we negotiated each individual component’s price in our system, now took around one day on a system pricing basis.
As time passed the Textile Ministry was disbanded in a government restructuring and its former employees were forced to seek outside positions. They went primarily to the regional design institutes which, with these former ministerial level connections, became even more powerful. The design institutes also began designing and producing downstream equipment, and we heard that their personnel were undertaking operation of this equipment in our previously supplied plants.
More and more rumors were being heard that new domestic suppliers were springing up with copies of foreign supplied equipment. We knew of five or six, and we would often get direct spare-part requests for our newest process from obscure parts of China rather than obtaining them from delivered plants through the normal channel of our country organization. We could easily trace the origin of the equipment specifications to recently supplied plants in completely different geographical locations. These were obviously being forwarded to our domestic competitors through some form of broker or agent. I then found personnel from our design institute/alliance partner operating a plant we had recently delivered. They had a domestic version of a German extruder in operation. They assured me that they were not interested in producing our equipment which was actually much simpler to produce than the more complicated extruder.
I once saw a copy of our old process sitting next to one of our new lines. The quality was not up to our standard, and the customer said he was compelled to buy it in order to minimize expenditures.
Over the next year, due to price competition, the remaining 20% margin of our new process was reduced from the price bringing the factor to 0.63. The design margin was then brought down to an acceptable minimum bringing about a further 10% reduction in price to a factor of 0.56.
About this time, we increased our cooperation with the design institutes having them produce all design drawings. We also stopped our on-site preliminary design meetings (which proved unpopular with our project managers). We additionally changed our control system from relay (the Chinese preference) to PLC and trained our mechanical start-up engineer to perform the control system start-up. This saved an additional 15% bringing the factor down to 0.48.
We then went to our factory and asked if they could find methods of reducing the production costs of our main equipment. They claimed the price level was already at an absolute minimum and nothing more could be done.
In a further effort to reduce price, in order to maintain sales volume and satisfy the diminishing market price, I traveled to Malaysia and located an equipment supplier who could manufacture our stainless steel process vessels and other components for 30% of our European price in one-third the delivery time (this reduced price included inspections and quality control). A slight allowance had to be made for the materials used but the quality was comparable to that of equipment made in Europe; and contrary to our factory, they managed to meet scheduled deliveries. As an aside, the additional logistical effort of obtaining the equipment in Malaysia did not negatively affect our total project price because the contracts were F.O.B. and the additional point of origin was negotiated into our supply contract.
After overcoming internal opposition (“we haven’t done that before” and “we will make enemies in the factory”) we gained management approval, and the required assistance from the purchasing department, to acquire the equipment in Malaysia. We had some problems translating the drawings into English (from German) and adapting to more international standards, but this did not radically affect production schedules. This reduced the total system price by another 15% to a factor of 0.41.
We then considered forming a joint venture with the design institute. We talked with a reputable consultant and developed a business plan. The calculated sales volume was unreasonable in its magnitude and the competitive market price of our system could not be met with the relatively high business development and expatriate expenses we would incur. And because of these overheads, the calculated price of the equipment we would produce in China would be higher than the price we were already paying for Malaysian equipment. As a result neither we, nor our partner, were sufficiently interested. Additionally, we were only producing 40% of the total scope of supply of our process internally. And with our external European-supplied component sourcing so high, we clearly could not support the JV concept by shipping low value-added, out-sourced components to China.
About this time (1993) we were hearing that increasing price pressure was coming from domestic suppliers. To us, this made sense because of Zhu Rongi’s clamp-down on domestic investment and expenditures by SOE’s. On one of our projects, on which a down payment had been made, the customer could not honor the Letter of Credit and our equipment sat at the dock with no purchaser. We were effectively powerless to force the issue with our customer due to other Chinese business interests within the company. Fortunately, we found another buyer for the system at-cost in another country.
We were then informed that local competitors were taking over the market and that something drastic was required to maintain market share. I then increased our cooperation with the design institutes turning over all initial design (except design review), construction supervision and start-up, thus, saving an additional 10% bringing the factor to 0.37.
Our China sales started to plummet. We were eventually informed that domestic suppliers had taken over the market and that the price level had dropped to around 0.24. Needless to say the import market had collapsed. We also heard rumors that our alliance partners had started delivering the entire scope of supply for this process.
When this became apparent, I shifted my focus to developing sales of another chemical process of ours to customers in other Asian markets.
It must be pointed out that, even though the profit margins as a percentage of sales remained relatively constant over this time period, the total profit generated from the previously mentioned sales and product development activities continued to fall throughout because the actual sales volume never increased enough to compensate for the less expensive process.
I have spoken with many other sales managers in the China market. And the business cycle I have just described appears to be quite common. This is the strategic “principle of importing, digesting and absorbing” utilized in China to develop a domestic technological base.
As a consequence of this learning experience, it is apparent that the profit to be made from exporting to, and producing equipment in, any rapidly developing country, such as China, comes during the interim period between a technology’s introduction and its eventual domestic diffusion and absorption. Controlling the lead time in the introduction of a technology and controlling the lag time involved with domestic development generates the ability to gain a reasonable profit. Providing the highest technology in the shortest time frame prevents a company from generating long-term income from this market and concurrently creates technological diffusion and absorption difficulties for domestic industry. A foreign company must incrementally introduce its technology into developing markets by flexibly phasing out the import content of its highest technology over time as domestic alliance partners develop the qualified ability to produce it themselves.
If a foreign company can manage to develop profitable domestic production, with supplementary export opportunities, as its technology is optimally introduced, it can consider this as a significant accomplishment. Domestic technology transfer to, and production in, China will be problematic and difficult to control in the short run, therefore, foreign companies should not raise false expectations by developing business plans, production scenarios and sales projections which are overly ambitious. Companies must also not forget that no matter how large a share of the business it owns, the Chinese industries we deal with will, either directly or indirectly, influence the factors of production and leverage them to their liking.
Over time, as China integrates into a more open economic framework, these complexities should diminish, but until this transformation takes place companies should proceed with caution.
As a foreign supplier of specialized equipment into a niche market specific to China or, for that matter, specific to any other relatively isolated market, one has no other choice than to follow the commonly stated concept of “low-price, high-volume”. One should also clearly understand that any niche market which is progressively exposed to international market forces will close out regardless of what one does with stop-gap measures aimed specifically at cost reductions. This is competitive global market dynamism. A pure cost reduction policy is clearly a last ditch effort to milk the last profits from a declining industry while alternatives are developed within a dynamically evolving market.
With sufficient perspective it is easy to see that both our company and the Chinese textile industry were dealing with the same problems. We were only observing the same phenomena from different perspectives. Our combined and integrated efforts define the reality of what was occurring in both the domestic and global markets.
It is clear that the domestic textile industry had to drastically force the price of this process to as low a level as possible. This was the only possibility of maintaining some sort of competitive positioning with regard to international markets. International markets were not burdened with China’s social concept of employment maximization and the cost burden of its decentralized production. Therefore, there was, and is, no global market basis for justifying the additional cost of the crystallization and drying process.
Synthetic fiber from foreign production using direct spinning technology is now, in a trend that must have been readily apparent to China’s former Textile Ministry economists, less expensive than China’s indigenous domestic production. Textiles are being smuggled into China. This development is destabilizing the economics of the initial decentralized production strategy of China’s planners and is undermining the very domestic producers that led the development of China’s light industry and helped create the basis of China’s economic growth since the late 1970’s and early 1980’s.
As an example of what a domestically-based foreign supplier can create when international market developments are considered in strategic planning, a Taiwanese company has now built an enormous direct spinning plant at a joint venture in the coastal region of South China. The economy of scale of this production process has significantly reduced the domestic production price of synthetic fiber (“low-price, high-volume”) and the potential for considerable profits will exist into the future, as domestic industries uncomfortably adapt to the economics of this new global production practice.
One can see many similar ongoing examples of the transition which took place in China’s textile industry. An analogous situation is the current structural change taking place in fertilizer production where outdated and inefficient coal-based urea production is being displaced by modern, large-scale and economically efficient natural gas-based production. Once farming methods can be modernized to accept direct field injection of ammonia fertilizers, urea production will also become a redundant step in a complex integrated agricultural process. And eventually more sustainable agricultural practices could displace ammonia. Such market-driven transitions require controlled structural change in order to maximize economic benefit and minimize social dislocation.
Thus, no country, or industrial sector, can indefinitely remain independent from the realities of the global economy if it wishes to play a part in that economy. Therefore, as (or if) markets continue to open, countries should increasingly integrate their global industries into the international economy using the most cost-effective technological processes available while strategically adapting domestic industries to rapidly growing internal market structures. Concurrently, and perhaps conversely, this has to be done with a “human face” in order to prevent social polarity and disparity.
In China’s case this global adaptation requires significant structural modifications to upgrade State-Owned Enterprises, originally developed purely for domestic production in a closed society, to tomorrow’s international standards. Domestic structural adaptations should be incrementally developed through enlightened central government policy. Globally oriented “strategic pillar industries” require rapid development and integration into an international market structure. This development has to be based on modern, efficient infrastructure. Due to China’s political, economic and social structure, a multi-level, macro-economic, infrastructure adaptation requires a high degree of coordinated central planning, policy making - and funding.
The primary difficulty in adapting to dynamic structural change would appear to be posed, not by the ability to acquire up-to-date technology, but by the difficulty of diffusing modern technology into greater Chinese society, which has up to now been insulated from a modern, market-based economic/technological paradigm. Modern technology and the economic principles associated with it can not be easily separated from the social and mental processes which created them.
As seen in the body of this paper, it is not the ability to just obtain the most modern technology, but the ability to obtain, diffuse and propagate the most cost effective, economically sustainable technology, suited for tomorrow’s global market applications, that determines global economic competitiveness. And can thereby provide the domestic ability to create wealth for social stability and economic welfare.
As foreign companies operating in China we are part and parcel of the same dynamic, interactive system of political economy. Therefore, it would appear that the “key to success” is in learning how to work cooperatively with our Chinese counterparts, at a higher level of business understanding, as we mutually experience productive adaptation to the changes occurring in this dynamic market environment.
Author’s note: It is now early on in the year 2005 and it is readily apparent that the Chinese strategy was not one of just “import, absorb and digest” but rather one of “import, absorb, digest and then export” – ultimately, back into those same countries, and against those companies, that provided the initial technology and management expertise to the Chinese market. Thus, not only has China been the demise of many a company, it has also hollowed out the manufacturing base of the former industrial powers. This has been accomplished by a system that condones and supports the theft of intellectual property on a truly grand scale.
With regard to synthetic fibers we can see that China has undertaken a massive industrialization scheme to achieve global economies of scale and market domination. The only significant drawback to Chinese development strategy is that primary infrastructure can not readily keep up with galloping industrial growth. However we must not forget what Lenin stated: “The West will give us the rope with which we will hang them”. China is still a communist country and will remain a paradox. If one does undertake to invest in China, it is best to have a cautious approach, a conservative implementation plan and an excellent exit strategy. The exit strategy should be capable of being initiated at any point along the implementation or operational path. The worst case scenario should be one based on the failure of finance capitalism and reversion to a more primitive mercantilist system.
Intellectual Property, Business, Entry Strategies, Exit Strategies, Structural Change, China, Case History, Textile, foreign equipment supplier, domestic, market structure, summary, experience, implications, lessons, learned, Sales, Product Manager, decentralized, product line , crystallization, polyester, drying, thermal, process, pellets, integral, manufacture, synthetic, polyester, fiber, Asian, countries, development, light industry, decentralization, Textile Ministry, government, employment, indigenous , base, small to medium, opportunity, equipment, market, industrial applications, polycondensation, pelletized, amorphous, chips, shipping, extruded, crystallization, re-melted, direct spinning, PET, 1989, 1995, marriage, contacts, business trips, German, headquarters, State Owned Enterprises,
Mao Tai,
SOEs,
trust, positioning, rise, demise, margins, technology, boom, competition, loss, start-up assistance, engineering, design, project engineers, supervising, construction manager, mechanical, control engineers, project documentation, competition, design institute, Malaysia, Zhu Rongi, mercantilist, foreign exchange, market research, system pricing, stainless steel, inspections, PLC, quality control, joint venture, outdated, fertilizer, Brian K. Porter , production, agricultural, ammonia, market-driven, modern, inefficient, coal, urea, efficient, modernized, large-scale , natural gas, farming, direct field injection, ammonia, redundant, complex, integrated, process, sustainable, displace, transitions, Guptara Sphere: Related Content
This provides unusual insight into the historical, cycle and competitive dynamics of a global industry, specifically in view of Chinese business practices.
He has kindly given me permission to publish this here but do note that the copyright in the text below belongs to him:
The Implications of Structural Change in China - A Case History in the Textile Industry
(c) Brian K. Porter of Walchwil, Switzerland
This paper details the experience of a foreign equipment supplier during a fundamental shift in China’s domestic market structure. A short summary of the broader implications and lessons which could be learned from the experience is also provided.
As Sales/Product Manager for China, I was responsible for selling the equipment in our company’s product line which dealt with the crystallization and drying of polyester pellets. This thermal process is an integral part of the decentralized manufacture of synthetic fibers from polyester. As with most Asian countries, development of light industry in China has been the precursor to greater economic expansion into other manufacturing sectors. Textiles are a major economic component of the light industry sector.
The Chinese market was unique to others in the Asian region in that the Chinese government, through the Textile Ministry, originally pushed for a decentralization of the synthetic fiber industry in order to maximize local employment and create an indigenous and well-distributed, light industrial base. This created a significant market opportunity for our company, which produced equipment specifically for small to medium sized industrial applications.
As an aside, most other large producers of polyester fibers in the world spin the fiber directly, and in great quantity, after an upstream polycondensation. Our process required that the polyester be first pelletized as amorphous chips. This pelletization would facilitate shipping from a central polycondensation plant to remote locations. The amorphous chips would then require an additional crystallization and drying step before being re-melted and extruded into fiber; a process unnecessary during the direct spinning of fiber.
When I began working for this company in 1989, we had a majority share of the Chinese import market of PET crystallization and drying equipment. By the time I left in 1995, we had no market share. Of course, I don’t want to take the entire blame for this occurrence. I would like to think I maintained and extended the profit stream from this product line as long as possible. In my defense, no other foreign manufacturer has any market share at this point either.
Our success in the market started with the long-suffering efforts of one individual who, at the expense of his marriage, spent the greater portion of his time over a three-year period developing contacts in the market through frequent business trips to China from his German-based headquarters. Eventually, after spending an inordinate period of time banqueting and drinking Mao Tai, he gained the trust and understanding of important individuals in the relevant State Owned Enterprises (SOEs) and Textile Ministry.
This sales manager combined these contacts and relationships to create a “boom” in the company’s equipment sales to China. From the time he began to the time I finished, we had sold more than 180 crystallization and drying lines. Previous to taking the sales position, I was the project manager responsible for implementing projects for our customers in China. This previous project experience provides a somewhat greater overview on the cost positioning of the product during the rise and demise of the product line. I became a sales manager after the former sales manager believed his efforts were not being adequately rewarded and had quit the company.
Profit margins sustained our business throughout the entire duration of sales. There were only two cases where losses were incurred, and these were due to both an excessive shaving of design criteria and stringent demands from the customer for compensation. Before I took over the product line, the company was able to increase prices by 2 - 3% per year due to “inflation”. Unfortunately, this windfall stopped during my tenure.
When I took over Chinese sales efforts, we were negotiating the sale of five-to-seven year old technology. At the time we felt that the Chinese government had been inviting our competitors to openly compete in the domestic market in order to stem the flow of foreign exchange out of the country. This competition would lower the cost of imported equipment to China while we foreigners fought it out amongst ourselves.
We were exporting 100% of the scope of supply of our process from Europe, providing all engineering and design work, holding preliminary design meetings in China with our project engineers, supervising construction activities with a construction manager, providing start-up assistance, with both mechanical and control engineers, and providing all project documentation. We can, for the purpose of illustration, set a market price at this point in time as a datum at 1.0.
The competition between foreign suppliers initially put significant pressure on our own sub-suppliers as we project managers requested that they significantly reduce their prices (higher discounts). This effort was basically an internal exercise, working closely with the purchasing department during occasional visits from our sub-suppliers as we compelled them to lower their prices. Initially, this worked to everyone’s benefit because our suppliers (those that could meet our price/quality level) had a steady income from our expanding orders. Economies of scale could also be generated in their equipment/component production. This small change allowed us to undercut our competitors’ best evaluated bid (we were still more expensive but our technology sold at a premium due to our quality reputation). This development resulted in a savings of around 7%; thus, the new price level was 0.93.
As our competitors followed our lead in the market, we were forced to find our own economies from increased production runs. This effort reduced our in-house production costs. We were effectively cutting our factory’s production profit in order to load production. This resulted in a redundancy of employees in our German factory as cost cutting measures were implemented and lower margins on production were seen. We were then able to take another 5% from project costs, moving the factor to around 0.88.
By this time, the Chinese textile industry had done its market research and had found a supplier in England that could effectively produce and supply a similar process at around 20% less than our minimum price level with only slightly lower product quality. More and more orders were given to them. Negotiations were getting very hectic. Many times our Chinese customers had two or three of us suppliers in as many rooms in a hotel—going from room to room driving our prices to an absolute minimum.
In order to meet these challenging market developments, we started more frequent cooperation with one regional design institute within the Textile Ministry with some help from two other design institutes. These relationships leveraged a few more projects at fair profit margins. The margins also went up because the design institutes started to perform initial design drawings rather than having this done in our own engineering group. They performed these services at a very small premium. Unfortunately, this outsourcing created redundancies in our engineering department.
Immediately before moving into sales, I had helped develop and engineer a new process somewhat similar to that of our competitor. Fortunately for me, being new to the sales group, I did not appear hypocritical in presenting the technology to our customers. I could always claim ignorance of my predecessor’s arguments against the technology. An additional benefit was that I had been the primary force in pushing through, and taking part in, this new products’ development. This new process would have allowed us to initially reduce our sales price by an additional 30%.
Being a good sales manager, I reduced the price level by 10%. We were able to do this and still get projects because we still had the best name in the market and the Chinese had no idea what our production costs for the new process were (this would prove to be short lived). I had also over-designed the production capacity of the process by around 30% in order to insure that absolutely no performance guarantees would be compromised. This move also left an engineering margin to play with as the inevitable forces of competition came into play. This initial 10% reduction moved the factored reference price down to 0.79
My sales efforts became much easier since negotiations, at ever diminishing prices, took place behind the scenes with our local representative, the design institutes and our customers. My negotiations became a pricing formality. Negotiations, which used to take up to a week as we negotiated each individual component’s price in our system, now took around one day on a system pricing basis.
As time passed the Textile Ministry was disbanded in a government restructuring and its former employees were forced to seek outside positions. They went primarily to the regional design institutes which, with these former ministerial level connections, became even more powerful. The design institutes also began designing and producing downstream equipment, and we heard that their personnel were undertaking operation of this equipment in our previously supplied plants.
More and more rumors were being heard that new domestic suppliers were springing up with copies of foreign supplied equipment. We knew of five or six, and we would often get direct spare-part requests for our newest process from obscure parts of China rather than obtaining them from delivered plants through the normal channel of our country organization. We could easily trace the origin of the equipment specifications to recently supplied plants in completely different geographical locations. These were obviously being forwarded to our domestic competitors through some form of broker or agent. I then found personnel from our design institute/alliance partner operating a plant we had recently delivered. They had a domestic version of a German extruder in operation. They assured me that they were not interested in producing our equipment which was actually much simpler to produce than the more complicated extruder.
I once saw a copy of our old process sitting next to one of our new lines. The quality was not up to our standard, and the customer said he was compelled to buy it in order to minimize expenditures.
Over the next year, due to price competition, the remaining 20% margin of our new process was reduced from the price bringing the factor to 0.63. The design margin was then brought down to an acceptable minimum bringing about a further 10% reduction in price to a factor of 0.56.
About this time, we increased our cooperation with the design institutes having them produce all design drawings. We also stopped our on-site preliminary design meetings (which proved unpopular with our project managers). We additionally changed our control system from relay (the Chinese preference) to PLC and trained our mechanical start-up engineer to perform the control system start-up. This saved an additional 15% bringing the factor down to 0.48.
We then went to our factory and asked if they could find methods of reducing the production costs of our main equipment. They claimed the price level was already at an absolute minimum and nothing more could be done.
In a further effort to reduce price, in order to maintain sales volume and satisfy the diminishing market price, I traveled to Malaysia and located an equipment supplier who could manufacture our stainless steel process vessels and other components for 30% of our European price in one-third the delivery time (this reduced price included inspections and quality control). A slight allowance had to be made for the materials used but the quality was comparable to that of equipment made in Europe; and contrary to our factory, they managed to meet scheduled deliveries. As an aside, the additional logistical effort of obtaining the equipment in Malaysia did not negatively affect our total project price because the contracts were F.O.B. and the additional point of origin was negotiated into our supply contract.
After overcoming internal opposition (“we haven’t done that before” and “we will make enemies in the factory”) we gained management approval, and the required assistance from the purchasing department, to acquire the equipment in Malaysia. We had some problems translating the drawings into English (from German) and adapting to more international standards, but this did not radically affect production schedules. This reduced the total system price by another 15% to a factor of 0.41.
We then considered forming a joint venture with the design institute. We talked with a reputable consultant and developed a business plan. The calculated sales volume was unreasonable in its magnitude and the competitive market price of our system could not be met with the relatively high business development and expatriate expenses we would incur. And because of these overheads, the calculated price of the equipment we would produce in China would be higher than the price we were already paying for Malaysian equipment. As a result neither we, nor our partner, were sufficiently interested. Additionally, we were only producing 40% of the total scope of supply of our process internally. And with our external European-supplied component sourcing so high, we clearly could not support the JV concept by shipping low value-added, out-sourced components to China.
About this time (1993) we were hearing that increasing price pressure was coming from domestic suppliers. To us, this made sense because of Zhu Rongi’s clamp-down on domestic investment and expenditures by SOE’s. On one of our projects, on which a down payment had been made, the customer could not honor the Letter of Credit and our equipment sat at the dock with no purchaser. We were effectively powerless to force the issue with our customer due to other Chinese business interests within the company. Fortunately, we found another buyer for the system at-cost in another country.
We were then informed that local competitors were taking over the market and that something drastic was required to maintain market share. I then increased our cooperation with the design institutes turning over all initial design (except design review), construction supervision and start-up, thus, saving an additional 10% bringing the factor to 0.37.
Our China sales started to plummet. We were eventually informed that domestic suppliers had taken over the market and that the price level had dropped to around 0.24. Needless to say the import market had collapsed. We also heard rumors that our alliance partners had started delivering the entire scope of supply for this process.
When this became apparent, I shifted my focus to developing sales of another chemical process of ours to customers in other Asian markets.
It must be pointed out that, even though the profit margins as a percentage of sales remained relatively constant over this time period, the total profit generated from the previously mentioned sales and product development activities continued to fall throughout because the actual sales volume never increased enough to compensate for the less expensive process.
I have spoken with many other sales managers in the China market. And the business cycle I have just described appears to be quite common. This is the strategic “principle of importing, digesting and absorbing” utilized in China to develop a domestic technological base.
As a consequence of this learning experience, it is apparent that the profit to be made from exporting to, and producing equipment in, any rapidly developing country, such as China, comes during the interim period between a technology’s introduction and its eventual domestic diffusion and absorption. Controlling the lead time in the introduction of a technology and controlling the lag time involved with domestic development generates the ability to gain a reasonable profit. Providing the highest technology in the shortest time frame prevents a company from generating long-term income from this market and concurrently creates technological diffusion and absorption difficulties for domestic industry. A foreign company must incrementally introduce its technology into developing markets by flexibly phasing out the import content of its highest technology over time as domestic alliance partners develop the qualified ability to produce it themselves.
If a foreign company can manage to develop profitable domestic production, with supplementary export opportunities, as its technology is optimally introduced, it can consider this as a significant accomplishment. Domestic technology transfer to, and production in, China will be problematic and difficult to control in the short run, therefore, foreign companies should not raise false expectations by developing business plans, production scenarios and sales projections which are overly ambitious. Companies must also not forget that no matter how large a share of the business it owns, the Chinese industries we deal with will, either directly or indirectly, influence the factors of production and leverage them to their liking.
Over time, as China integrates into a more open economic framework, these complexities should diminish, but until this transformation takes place companies should proceed with caution.
As a foreign supplier of specialized equipment into a niche market specific to China or, for that matter, specific to any other relatively isolated market, one has no other choice than to follow the commonly stated concept of “low-price, high-volume”. One should also clearly understand that any niche market which is progressively exposed to international market forces will close out regardless of what one does with stop-gap measures aimed specifically at cost reductions. This is competitive global market dynamism. A pure cost reduction policy is clearly a last ditch effort to milk the last profits from a declining industry while alternatives are developed within a dynamically evolving market.
With sufficient perspective it is easy to see that both our company and the Chinese textile industry were dealing with the same problems. We were only observing the same phenomena from different perspectives. Our combined and integrated efforts define the reality of what was occurring in both the domestic and global markets.
It is clear that the domestic textile industry had to drastically force the price of this process to as low a level as possible. This was the only possibility of maintaining some sort of competitive positioning with regard to international markets. International markets were not burdened with China’s social concept of employment maximization and the cost burden of its decentralized production. Therefore, there was, and is, no global market basis for justifying the additional cost of the crystallization and drying process.
Synthetic fiber from foreign production using direct spinning technology is now, in a trend that must have been readily apparent to China’s former Textile Ministry economists, less expensive than China’s indigenous domestic production. Textiles are being smuggled into China. This development is destabilizing the economics of the initial decentralized production strategy of China’s planners and is undermining the very domestic producers that led the development of China’s light industry and helped create the basis of China’s economic growth since the late 1970’s and early 1980’s.
As an example of what a domestically-based foreign supplier can create when international market developments are considered in strategic planning, a Taiwanese company has now built an enormous direct spinning plant at a joint venture in the coastal region of South China. The economy of scale of this production process has significantly reduced the domestic production price of synthetic fiber (“low-price, high-volume”) and the potential for considerable profits will exist into the future, as domestic industries uncomfortably adapt to the economics of this new global production practice.
One can see many similar ongoing examples of the transition which took place in China’s textile industry. An analogous situation is the current structural change taking place in fertilizer production where outdated and inefficient coal-based urea production is being displaced by modern, large-scale and economically efficient natural gas-based production. Once farming methods can be modernized to accept direct field injection of ammonia fertilizers, urea production will also become a redundant step in a complex integrated agricultural process. And eventually more sustainable agricultural practices could displace ammonia. Such market-driven transitions require controlled structural change in order to maximize economic benefit and minimize social dislocation.
Thus, no country, or industrial sector, can indefinitely remain independent from the realities of the global economy if it wishes to play a part in that economy. Therefore, as (or if) markets continue to open, countries should increasingly integrate their global industries into the international economy using the most cost-effective technological processes available while strategically adapting domestic industries to rapidly growing internal market structures. Concurrently, and perhaps conversely, this has to be done with a “human face” in order to prevent social polarity and disparity.
In China’s case this global adaptation requires significant structural modifications to upgrade State-Owned Enterprises, originally developed purely for domestic production in a closed society, to tomorrow’s international standards. Domestic structural adaptations should be incrementally developed through enlightened central government policy. Globally oriented “strategic pillar industries” require rapid development and integration into an international market structure. This development has to be based on modern, efficient infrastructure. Due to China’s political, economic and social structure, a multi-level, macro-economic, infrastructure adaptation requires a high degree of coordinated central planning, policy making - and funding.
The primary difficulty in adapting to dynamic structural change would appear to be posed, not by the ability to acquire up-to-date technology, but by the difficulty of diffusing modern technology into greater Chinese society, which has up to now been insulated from a modern, market-based economic/technological paradigm. Modern technology and the economic principles associated with it can not be easily separated from the social and mental processes which created them.
As seen in the body of this paper, it is not the ability to just obtain the most modern technology, but the ability to obtain, diffuse and propagate the most cost effective, economically sustainable technology, suited for tomorrow’s global market applications, that determines global economic competitiveness. And can thereby provide the domestic ability to create wealth for social stability and economic welfare.
As foreign companies operating in China we are part and parcel of the same dynamic, interactive system of political economy. Therefore, it would appear that the “key to success” is in learning how to work cooperatively with our Chinese counterparts, at a higher level of business understanding, as we mutually experience productive adaptation to the changes occurring in this dynamic market environment.
Author’s note: It is now early on in the year 2005 and it is readily apparent that the Chinese strategy was not one of just “import, absorb and digest” but rather one of “import, absorb, digest and then export” – ultimately, back into those same countries, and against those companies, that provided the initial technology and management expertise to the Chinese market. Thus, not only has China been the demise of many a company, it has also hollowed out the manufacturing base of the former industrial powers. This has been accomplished by a system that condones and supports the theft of intellectual property on a truly grand scale.
With regard to synthetic fibers we can see that China has undertaken a massive industrialization scheme to achieve global economies of scale and market domination. The only significant drawback to Chinese development strategy is that primary infrastructure can not readily keep up with galloping industrial growth. However we must not forget what Lenin stated: “The West will give us the rope with which we will hang them”. China is still a communist country and will remain a paradox. If one does undertake to invest in China, it is best to have a cautious approach, a conservative implementation plan and an excellent exit strategy. The exit strategy should be capable of being initiated at any point along the implementation or operational path. The worst case scenario should be one based on the failure of finance capitalism and reversion to a more primitive mercantilist system.
Intellectual Property, Business, Entry Strategies, Exit Strategies, Structural Change, China, Case History, Textile, foreign equipment supplier, domestic, market structure, summary, experience, implications, lessons, learned, Sales, Product Manager, decentralized, product line , crystallization, polyester, drying, thermal, process, pellets, integral, manufacture, synthetic, polyester, fiber, Asian, countries, development, light industry, decentralization, Textile Ministry, government, employment, indigenous , base, small to medium, opportunity, equipment, market, industrial applications, polycondensation, pelletized, amorphous, chips, shipping, extruded, crystallization, re-melted, direct spinning, PET, 1989, 1995, marriage, contacts, business trips, German, headquarters, State Owned Enterprises,
Mao Tai,
SOEs,
trust, positioning, rise, demise, margins, technology, boom, competition, loss, start-up assistance, engineering, design, project engineers, supervising, construction manager, mechanical, control engineers, project documentation, competition, design institute, Malaysia, Zhu Rongi, mercantilist, foreign exchange, market research, system pricing, stainless steel, inspections, PLC, quality control, joint venture, outdated, fertilizer, Brian K. Porter , production, agricultural, ammonia, market-driven, modern, inefficient, coal, urea, efficient, modernized, large-scale , natural gas, farming, direct field injection, ammonia, redundant, complex, integrated, process, sustainable, displace, transitions, Guptara Sphere: Related Content
The role of Intellectual Property in antiquity and in history, versus IP's role today
An important and, fortunately for most people, quite readable book on the economic history of intellectual property was published last year, THE DEMOCRATIZATION OF INVENTION: PATENTS AND COPYRIGHTS IN AMERICAN ECONOMIC DEVELOPMENT, 1790-1920 (New York: Cambridge University Press, 2005. ix + 322 pp. $60 (cloth), ISBN: 0-521-81135-X). The author, Dr B. Zorina Khan, is an associate professor of economics at Bowdoin College, and a Research Associate of the National Bureau of Economic Research - both in the USA.
Not surprisingly, her book is full of facts and of factual analysis and those who are interested in a technical discussion of those will I am sure find them easily elsewhere. My interests in this piece are more practical, philosophical and substantial, so I will sketch the key elements of her book (from my point of view) below, before going on to discuss these elements.
Khan documents the role of intellectual property institutions (patents and copyrights) in the economic and technical progress in the West. Her survey (in her second chapter) of the legal history of patent systems in France,
England, and the United States is fascinating. Compared to France, the
American system was less arbitrary. Compared to the English system, the American one was far less costly, and made it possible for ordinary Americans to obtain a patent relatively easily and quickly.
In her fourth chapter, she demonstrates that, as a result, patenting per capita increased, because of an increase in the proportion of individuals who patented - not because of a greater likelihood of invention by an elite. The rise of patenting also correlates with market expansion, urbanisation, access to means of transportation, and so on.
In chapters 8 she revisits some of the ideas above, to show that the American copyright system produced widespread access to intellectual output in contrast to the French model which assumed that inventors had "natural rights" to their work. This is not a surprising contrast since French society was probably the most individualistically-oriented society of all at this point in history.
Chapter ten is a summary of Dr Khan's conclusions and explores possible relationships between differences in patent systems and the differences in economic outcomes for these countries.
The author clearly has a magisterial command of the relevant literature and historical sources, both American and European. Moreover, she has a flair for telling stories and that will make it easier, even for readers who are not good with mathematics, to relate to her discussion of the hard numbers.
Now I come to matters that Dr Khan does not explore systematically, but which seem to me essential to discuss in the context of public policy for out time.
The notion of intellectual property (IP) and intellectual property rights (IPR) began to solidify around the mid-1700s and can be seen as the result of a continuing effort, since the Protestant Reformation, to establish the rule of law and to apply the Bible's teachings regarding the human right to make, to name and to possess (for purposes of stewardship).
Alternatively, the creation of the notion of IP rights can be seen, as Marxists and Socialists tend to do, as part of the effort by the global elite to possess and exploit (for selfish purposes) new ideas and inventions.
Dr Khan's view is more mainstream (which is not to say, as I will argue below, that that view is right): she thinks that IP has both encouraged invention and wealth creation.
Clearly, ruling values in any society play a role in determining which view of IP one accepts: in all traditional societies, IP was always considered something that was for the benefit of the community as a whole. Otherwise, for example, the creation of a new musical instrument such as the piano or the guitar could have been enjoyed only by those who invented and those who could afford to pay a fee to the inventor to reproduce such inventions (this is of course distinct from merely being able to afford to buy these inventions once they have been manufactured or reproduced).
Similarly, the creation of a raga in Indian music or the creation of a symphony by Beethoven could only have been enjoyed by those who gave a fee to the estate of the inventor (the notion of an estate was fundamentally reshaped by the notion of IP).
Indeed, most of what we enjoy in the world of music and literature and cuisine and gardens would have been impossible if IP had existed in the form it does today. For example, if John Bunyan had been able to get IP rights on the invention of the novel form, then everyone who has ever written a novel would have had to pay IP fees to the estate of John Bunyan, making that one of the richest estates in the world, and severely limiting the number of novels that would have been published.
These are what might be called "macro-inventions" as distinct from "micro-inventions" (as Joel Mokyr termed them).
In our time, the question of the validity of IP rights as a net contributor to wealth-creation and human happiness has been brought to the fore by two totally different sorts of developments: first, the AIDS crisis and the question of whether IP rights should be waived for medicines used to treat such disasters; and, second, by the widespread, almost routine, violation of IP rights by China and the role of that in enabling China's accummulation of profit.
There is considerable evidence that in the case of the AIDS crisis, though it does create difficulties in terms of precisely how this might be implemented, the sympathies of most people in the world are with the AIDS victims (and potential victims) rather than with the pharma companies which own the IP rights to these medicines.
It is also fairly clear that world opinion at present is against the violation of IP rights by Chinese (and other) fakers of brand names and IP-protected products such as computers.
However, though it has created a huge problem for the music industry, I find evidence divided regarding whether most people in the world regard as acceptable the copying and passing on of music to friends for their iPod or other MP3 players (and what constitutes a friend, anyway?).
My own view is that IP rights have indeed played an important role in creating technological progess, but I retain an open mind regarding whether we would have not progressed even faster without them.
Just imagine how much progress humanity would have made if the first inventor of a wheel had been able to get IP rights. Patents and copyrights have always been less important to human progress than copying without having to pay a fee to do so.
Intellectual Property, antiquity, history, THE DEMOCRATIZATION OF INVENTION, PATENTS, COPYRIGHT, AMERICAN, ECONOMIC DEVELOPMENT, economic history, New York, Cambridge University Press, Zorina, Khan, professor, economics, Bowdoin College, National Bureau of Economic Research, technical, progress, England, the United States, legal, France, institution, philosophical, arbitrary, costly, per capita, elite, correlate, market, expansion, urbanisation, access, transportation, Guptara,
individualistic, contrast, French, model, inventors, natural rights, work, society, sources, literature, historical, European, mathematics, public policy, intellectual property rights, IPR, Bible, 1700s, Protestant , Reformation, rule of law, stewardship, Marxists, global elite, Socialists, wealth creation, values, reproduced, manufactured, traditional, benefit, community, creation, pay, musical, instrument, piano, guitar, invented, afford, fee, reproduce, inventions, selfish, possess, exploit, Guptara, Beethoven, raga, Indian, music, symphony, estate, literature, cuisine, gardens, John Bunyan, novel, macro-inventions, micro-inventions, Joel Mokyr, China, human, happiness, AIDS, crisis, waived, medicines, disasters, violation, accummulation, profit, evidence, pharma, companies, industries, computers, fake, brand name, world opinion, products, copying, wheel, MP3, iPod, Guptara Sphere: Related Content
Not surprisingly, her book is full of facts and of factual analysis and those who are interested in a technical discussion of those will I am sure find them easily elsewhere. My interests in this piece are more practical, philosophical and substantial, so I will sketch the key elements of her book (from my point of view) below, before going on to discuss these elements.
Khan documents the role of intellectual property institutions (patents and copyrights) in the economic and technical progress in the West. Her survey (in her second chapter) of the legal history of patent systems in France,
England, and the United States is fascinating. Compared to France, the
American system was less arbitrary. Compared to the English system, the American one was far less costly, and made it possible for ordinary Americans to obtain a patent relatively easily and quickly.
In her fourth chapter, she demonstrates that, as a result, patenting per capita increased, because of an increase in the proportion of individuals who patented - not because of a greater likelihood of invention by an elite. The rise of patenting also correlates with market expansion, urbanisation, access to means of transportation, and so on.
In chapters 8 she revisits some of the ideas above, to show that the American copyright system produced widespread access to intellectual output in contrast to the French model which assumed that inventors had "natural rights" to their work. This is not a surprising contrast since French society was probably the most individualistically-oriented society of all at this point in history.
Chapter ten is a summary of Dr Khan's conclusions and explores possible relationships between differences in patent systems and the differences in economic outcomes for these countries.
The author clearly has a magisterial command of the relevant literature and historical sources, both American and European. Moreover, she has a flair for telling stories and that will make it easier, even for readers who are not good with mathematics, to relate to her discussion of the hard numbers.
Now I come to matters that Dr Khan does not explore systematically, but which seem to me essential to discuss in the context of public policy for out time.
The notion of intellectual property (IP) and intellectual property rights (IPR) began to solidify around the mid-1700s and can be seen as the result of a continuing effort, since the Protestant Reformation, to establish the rule of law and to apply the Bible's teachings regarding the human right to make, to name and to possess (for purposes of stewardship).
Alternatively, the creation of the notion of IP rights can be seen, as Marxists and Socialists tend to do, as part of the effort by the global elite to possess and exploit (for selfish purposes) new ideas and inventions.
Dr Khan's view is more mainstream (which is not to say, as I will argue below, that that view is right): she thinks that IP has both encouraged invention and wealth creation.
Clearly, ruling values in any society play a role in determining which view of IP one accepts: in all traditional societies, IP was always considered something that was for the benefit of the community as a whole. Otherwise, for example, the creation of a new musical instrument such as the piano or the guitar could have been enjoyed only by those who invented and those who could afford to pay a fee to the inventor to reproduce such inventions (this is of course distinct from merely being able to afford to buy these inventions once they have been manufactured or reproduced).
Similarly, the creation of a raga in Indian music or the creation of a symphony by Beethoven could only have been enjoyed by those who gave a fee to the estate of the inventor (the notion of an estate was fundamentally reshaped by the notion of IP).
Indeed, most of what we enjoy in the world of music and literature and cuisine and gardens would have been impossible if IP had existed in the form it does today. For example, if John Bunyan had been able to get IP rights on the invention of the novel form, then everyone who has ever written a novel would have had to pay IP fees to the estate of John Bunyan, making that one of the richest estates in the world, and severely limiting the number of novels that would have been published.
These are what might be called "macro-inventions" as distinct from "micro-inventions" (as Joel Mokyr termed them).
In our time, the question of the validity of IP rights as a net contributor to wealth-creation and human happiness has been brought to the fore by two totally different sorts of developments: first, the AIDS crisis and the question of whether IP rights should be waived for medicines used to treat such disasters; and, second, by the widespread, almost routine, violation of IP rights by China and the role of that in enabling China's accummulation of profit.
There is considerable evidence that in the case of the AIDS crisis, though it does create difficulties in terms of precisely how this might be implemented, the sympathies of most people in the world are with the AIDS victims (and potential victims) rather than with the pharma companies which own the IP rights to these medicines.
It is also fairly clear that world opinion at present is against the violation of IP rights by Chinese (and other) fakers of brand names and IP-protected products such as computers.
However, though it has created a huge problem for the music industry, I find evidence divided regarding whether most people in the world regard as acceptable the copying and passing on of music to friends for their iPod or other MP3 players (and what constitutes a friend, anyway?).
My own view is that IP rights have indeed played an important role in creating technological progess, but I retain an open mind regarding whether we would have not progressed even faster without them.
Just imagine how much progress humanity would have made if the first inventor of a wheel had been able to get IP rights. Patents and copyrights have always been less important to human progress than copying without having to pay a fee to do so.
Intellectual Property, antiquity, history, THE DEMOCRATIZATION OF INVENTION, PATENTS, COPYRIGHT, AMERICAN, ECONOMIC DEVELOPMENT, economic history, New York, Cambridge University Press, Zorina, Khan, professor, economics, Bowdoin College, National Bureau of Economic Research, technical, progress, England, the United States, legal, France, institution, philosophical, arbitrary, costly, per capita, elite, correlate, market, expansion, urbanisation, access, transportation, Guptara,
individualistic, contrast, French, model, inventors, natural rights, work, society, sources, literature, historical, European, mathematics, public policy, intellectual property rights, IPR, Bible, 1700s, Protestant , Reformation, rule of law, stewardship, Marxists, global elite, Socialists, wealth creation, values, reproduced, manufactured, traditional, benefit, community, creation, pay, musical, instrument, piano, guitar, invented, afford, fee, reproduce, inventions, selfish, possess, exploit, Guptara, Beethoven, raga, Indian, music, symphony, estate, literature, cuisine, gardens, John Bunyan, novel, macro-inventions, micro-inventions, Joel Mokyr, China, human, happiness, AIDS, crisis, waived, medicines, disasters, violation, accummulation, profit, evidence, pharma, companies, industries, computers, fake, brand name, world opinion, products, copying, wheel, MP3, iPod, Guptara Sphere: Related Content
Monday, June 26, 2006
John Edwards: Just one more Democratic hopeful for U.S. President?
A highly-readable article by Bob Herbert extols "The vision of Edwards" in The New York Times a couple of days ago (22 June 2006): http://www.iht.com/bin/challenge.php?URI=http://iht.nytimes.com/protected/articles/2006/06/22/opinion/edherb.php (this requires registration, which is free for the first 14 days)
Herbert says, "However one feels about his proposals, it's worth paying attention to the fact that John Edwards is asking Americans to step up and meet important commitments".
Edwards questions whether the minimum wage in the US is adequate, what to do about 37 million Americans living in poverty (by US standards), how to get housing for a million working class folk, whether unions should be encouraged again, withdrawing at least 40,000 troops from Iraq immediately with further steady reductions "so that the Iraqis can take control over their own lives", and how to avoid sacrificing individual liberties and civil rights in the struggle against terrorism by Al Qaeda and other such groups.
As Herbert suggests in his article, whether one agrees or disagrees with Edwards' point of view on such topics is not as important as the fact that a US Presidential hopeful should begin to speak about tough issues such as these.
However, as a British passport holder of Indian origin working in Switzerland, it appears to me that there are some even more key issues to which Edwards and other Presidential hopefuls need to pay attention:
- reforms in the US election and wider political system in order to make it more democratic and accountable to the people of the United States;
- the effects of NAFTA, and the right shape for any agreement at the Doha Round of the WTO talks;
- what to do about the declining US dollar (which involves restructuring the entire US approach, over the last several decades, among other things to savings, credit, consumption, fiat money, and taxation; and
- how to create a level playing field that reduces global environmental degradation and climate chaos, and builds more egalitarian, prosperous, healthy, and politically free societies around the globe.
That is a truly amibitious agenda. But that is the minimum that needs to be tackled by anyone who aspires to be a world-class statesman today rather than a mere American politician.
John Edwards, Democratic, President, article, Bob Herbert, The vision of Edwards, New York Times, Americans, minimum wage, poverty, standards, housing, working class, unions, troops, Iraq, individual liberties, civil rights, terrorism, Al Qaeda, Presidential hopeful, British, Switzerland, Indian, reforms, US election, democratic, accountable, NAFTA, WTO, Doha, talks, agreement, Guptara, savings, credit, consumption, fiat money, taxation, restructuring, climate chaos, global, environmental, degradation, egalitarian, prosperous, healthy, globe, free, societies, Guptara, agenda, minimum, world-class, statesman, American, politician, world, Guptara Sphere: Related Content
Herbert says, "However one feels about his proposals, it's worth paying attention to the fact that John Edwards is asking Americans to step up and meet important commitments".
Edwards questions whether the minimum wage in the US is adequate, what to do about 37 million Americans living in poverty (by US standards), how to get housing for a million working class folk, whether unions should be encouraged again, withdrawing at least 40,000 troops from Iraq immediately with further steady reductions "so that the Iraqis can take control over their own lives", and how to avoid sacrificing individual liberties and civil rights in the struggle against terrorism by Al Qaeda and other such groups.
As Herbert suggests in his article, whether one agrees or disagrees with Edwards' point of view on such topics is not as important as the fact that a US Presidential hopeful should begin to speak about tough issues such as these.
However, as a British passport holder of Indian origin working in Switzerland, it appears to me that there are some even more key issues to which Edwards and other Presidential hopefuls need to pay attention:
- reforms in the US election and wider political system in order to make it more democratic and accountable to the people of the United States;
- the effects of NAFTA, and the right shape for any agreement at the Doha Round of the WTO talks;
- what to do about the declining US dollar (which involves restructuring the entire US approach, over the last several decades, among other things to savings, credit, consumption, fiat money, and taxation; and
- how to create a level playing field that reduces global environmental degradation and climate chaos, and builds more egalitarian, prosperous, healthy, and politically free societies around the globe.
That is a truly amibitious agenda. But that is the minimum that needs to be tackled by anyone who aspires to be a world-class statesman today rather than a mere American politician.
John Edwards, Democratic, President, article, Bob Herbert, The vision of Edwards, New York Times, Americans, minimum wage, poverty, standards, housing, working class, unions, troops, Iraq, individual liberties, civil rights, terrorism, Al Qaeda, Presidential hopeful, British, Switzerland, Indian, reforms, US election, democratic, accountable, NAFTA, WTO, Doha, talks, agreement, Guptara, savings, credit, consumption, fiat money, taxation, restructuring, climate chaos, global, environmental, degradation, egalitarian, prosperous, healthy, globe, free, societies, Guptara, agenda, minimum, world-class, statesman, American, politician, world, Guptara Sphere: Related Content
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