We have all heard the story of Goldilocks; the blonde little girl who sneaks into the home of hyper intelligent bears and tries their porridge. And we all know how good bear porridge is. So over the course of her meal she finds one to be too hot, one too cold and the last is just right. The story leaves us with a sense that the best things in life are always somewhere in the middle.
This concept of success being rooted in the middle of two extremes is quite common. Astronomers often refer Earth as being in the “Goldilocks Zone” of the galaxy, in that it’s not too far and not too close to the sun. Buddhism as well shares in this idea with its philosophy of “The Middle Way”, which states that there is something to be gained from staying in the middle of two extremes.
Whether it was intentional or not much of Asia seems to be benefiting from this principle at the moment. The continent has seen massive advancements in the last few decades, much of which has come in the form infrastructure and urban development. However, in spite of such growth, many Asian nations have yet to fully bloom into full fledged “first world” societies.
China still has the vast majority of its population living in poverty with 71% of its people living on less that $5 per day. For those unwilling to do the math that is $150 per month, 1,800$ per year. The glamorous life in Shanghai is certainly the exception, not the rule.
Similarly can be said for Thailand, one of the fastest, if not the fastest, growing economy of the last ten years. Buildings have gone up, airports have been made, high speed metro lines installed but the country as a whole still remains in an overall state of poverty.
An image of the Bangkok Transit System in downtown Bangkok.
This is what is so interesting at the present time. We know that the eastern economies are rapidly growing, but they have yet to transform into fully developed nations. Western economies, on the other hand, are in a deep recession, but have yet to fully collapse into a state similar to that of an undeveloped country. It almost seems as if both regions are currently locked into a state of flux, a purgatorial phase in the economic Samsara of birth- bubble- crash. Their ascent and decent seemingly locked in place, as if each were tethered to the other, preventing the counterparts growth and collapse.
If we were to analyze how we got into this position, it might be fair to say that Western economies are a victim of their own success. As their economies’ grew, so did the requirements to sustain them. Western societies require the support giant armies to secure their nation’s economic interests,corporate monsters, and massive welfare states. Over the years, these systems have become convoluted, lethargic, and bureaucratic.
Ergo the inevitable cycle of life and role of evolution. Things get older, they get disorderly, and ultimately, they fall apart. What comes after is something simpler, younger and more efficient; less bogged down by burdens life inevitably tacks on its creations.
So according to the capitalist ecosystem, poverty is the soil of the future. It’s fresh soil, meaning its simple and without preconditions. It has no red tape, no strings attached. It is freer and more ready to act, there are fewer rules, fewer bureaucrats and lower taxes. It is, in many ways reaping the benefits of neglect. The western world is a thick forest of activity, where any new life is forced to grow up in the shadow those that came before it. This makes for the growth of new life difficult. How can something reap the energy it needs to grow when the soil has been drained of nutrients and the sun is blocked by all the older, larger life. New life requires open space, fresh soil and access to the sun. Things that you will not find in developed societies, but can in undeveloped ones.
It can be seen in this picture that the while the forest canopy is thriving, life on the ground is relatively barren.
So what exactly are the great conditions these third-world eastern societies possess? The first and foremost would be cheap labor. If you’re going to pay someone a job that anyone can do, you might as well do it at the lowest cost. In Thailand, it is still possible to pay workers less than a dollar an hour. This makes for an attractive location for manufacturing industry. Why would Toyota pay a Japanese worker, $15 an hour and provide comprehensive benefits when he can pay a guy 50 cents an hour in Thailand and provide no benefits.
This treatment also extends into workers rights. Anyone who has ever seen a construction project in Asia knows that there a plethora of safety violations. That’s because safety equipment is expensive and procedures slow down work. So why do we do it in the west? Not because we are nicer people, but because we will be sued out-the-ass a worker gets hurt on the job. In Asia, there is ultimately no repercussion if an employee is injured or killed on the job. In Thailand, the families of workers killed in construction projects are routinely offered between $800 and $2000 dollars per death.
There is also an authoritarian iron fist which has the ability to smash through bureaucratic red-tape and conflicting interests. If China wants to build a hydro-electric dam in the place of a village, it merely sends out a government ordinance commanding all local people leave, and then demolishes the village. There are no lawsuits, no historical protections or regard to rights violations. It is merely the interest of the centralized government. When it wants to do something, it does something, swiftly and without resistance.
This image depicts the aftermath of forced evictions.
This contrasts greatly with the United States where any change is met with a variety of restraints. For a building to go up a myriad of safety standards are to be met, local residents interests are to be taken into consideration, environmental standards are to be applied.
Borimor explains the complexity of American development.
It instead must go through the lengthy process of trying to please all the people all the time. Washington, D.C has been talking about extending its orange metro line one stop for ten years and China is set to build the tallest building in the world in three months.
But it can’t be all bad right? There has to be some reason we have all these road blocks and paper work. Yeah it slows down down growth, but it is meant to control it, right? As should be known, that the definition of uncontrolled growth is cancer.
The idea of what growth means has divided human thought down the line for centuries. That perspective being that we are a community first, and a business second. We are the United States of America , not the United States of America Inc. We see each other as neighbors and friends first, than customers and clients.
And it is for this reason that we attempted to harness the growth of our nation during the early industrial age. We put in laws eliminating child labor and unacceptable work conditions. We instituted minimum wage and organized labor. We decided to interfere with the natural forces of economics in order to improve the lives of people living within our community.
What came later was both a blessing and a curse. As Marx predicted, many of our industries packed up and moved to “greener pastures”. Limits on the methods of productivity incurred lower profits thus causing the mass exodus of much of the nations manufacturing industry. In order to maintain the profits, similar conditions would also need to be maintained. Industries required places where you could still make people work 16 hours a day with no overtime, where you could make them sleep in a dorm room inside the company, or keep people in a mental state of such unhappiness that they required suicide nets to keep those fed up with the conditions from killing themselves and bringing unwanted attention to the company.
Image of ‘suicide nets’ at Foxxcon factory in China
So we sacrificed. We gave up our manufacturing industry because the growth it was bringing wasn’t worth it. It was soul-stealing, much in the same way that slavery was. We gave it up because we knew growth like that would end up killing us as a society, and as i mentioned before, if you believe in the principle, we are a society first and a business second.
Enter the East a place where much of life is a throw-back to the early 20th century. And in the current time, it pays to be like the past. Or at least at 8-9% per year. While the West in struggling to find solid ground in its own white paper economy, the east over there actually making shit. And it doesn’t get lost and funneled away in an intangible mist of stock exchanges. It goes into the workers hands every month. Real money, made from making real shit. Not service induced money sitting printed off of a pile of debt. The people of undeveloped world are not in debt because they live in poverty, because they go home and sleep in rickety houses with large extended families. Because they don’t all own cars and big houses with HD TV’s. It stays in their hands and out of credit cards.
And doesn’t life like that sound kind of shitty? Well according to the modern consumerist perspective it certainly does. And there used to be a worse trade-off than that. It used to be that countries which had access to the manufacturing sector were denied access to the luxuries and infrastructure provided by the educated western class. However this is beginning to change.
Enter the Goldilocks Zone, and what I believe is the driving force behind Asian growth at the moment. Asia is currently in a position where they have enough money to gain access to the Western Educated class while at the same time having access to cheap labor and authoritative control. This means they are in a position where they have the best of both worlds, right in the middle, where conditions are just right for growth.
An example of this can be seen in the Thai metro rail system, or what is referred to as the BTS (Bangkok Transport System). The BTS was constructed using technology completely independent of Thailand. Thailand did not require a highly efficient education system which could produce engineers capable of designing such a project. All it needed was enough capital to contract those who did. In this case a Canadian engineering company. Then with the pain of a third-world country trying pay a first-world price out of the way, Thailand could go on to supplement the costs with its cheap labor and authoritative control. This would in-effect, make the project proportionately affordable in comparison to what it would in a western state. And as the current rate of development shows, it seems quite a bit more affordable.
So the affordability (cheap labor) of these projects attracts investors, which then initiates the rapid growth, but how long will the porridge stay hot? When these projects get built they will require a host of white collar positions to manage the operations. Meaning that every industry dependent on low wage labor, is by virtue of its own growth, creating a class of higher paid educated people to inhabit the country. People who will raise the standard of living, forcing those currently living below that standard into a welfare state, thus eliminating the poverty rich soil which gave birth to such development.
Thailand’s prime minister, Yingluck, has already taken action instituting Thailand’s first minimum wage, A hefty ten dollars per day. One would expect this trend to continue as Thailand slowly follows the path of other developed nations. How this will affect the Thai economy , however, is not completely known. One can be sure that the minimum wage requirement is now an added cost to the manufactures, who will now, rightly or not, raise the price of their products.
One can already see the effects of such legislation in Thailand’s pork industry. As the costs of doing business are increased so does the cost of the product. The government then, faced with this rising cost, is then forced to answer an uncomfortable question, “Is the raised cost of pork in accordance with the standard of living as a whole?” According the Thai government, it was not, therefore prompting them to make the decision to buy from the heavily subsidized corporate farms of the United States. This then enrages the pig farmers as they are unable to sell back to their own people and will soon to be without jobs.
Thai pig farmers protest US pork imports.
This could be a sign that in the future, the porridge might begin to cool down . As a nation develops and it’s poverty begins to shrink, as does the benefits that poverty brings to the economy. Capitalism will always view poverty as a “good deal”, so when the poverty goes away, the good deal will too.
So what will these once poor countries do without the paradoxically advantageous conditions? Well the West handled it by utilizing education as a means for training high-end service based economies. However, as of late, we’ve seen many of these “high-end” services become diversified and outsourced for much lower wages. Technical positions such as graphic design, web design, software engineering can now be replicated at a much lower cost in other countries. The big innovative ideas of Silicon Valley hold strong, but for how long? And what about the future of these service based jobs in Western economies. With advances foreign education countries, now basic level service jobs in the technical fields can be supplied at much lower costs, thus dragging down western wages. Add to that a population of people who are accustom to a much lower standard of living than their western counter parts.
So could it be that the destiny of the East and the West is to in fact pull each other inward, closer to some middle ground; a flat world? A place between the hot and the cold. And if that is in fact the case, we must then ask, is such an evolution even be a good thing? On the one hand you have a large group of people who are now lifted out of poverty, but are unable to achieve traditional western standard of living; and on the other, you have a generation of people who have in the past achieved a high quality of life now suddenly finding their livelihood’s diluted and their standard of living dropping. From the macro point of view the latter would seem more attractive, but you’d have to ask yourself- as an individual, what you would be willing to give up.
That maybe the case, or it may not. It may be that Asia is only experiencing a fleeing rush of success. And that instead of continual growth causing a shifting of the world world scales, the growth is merely washing over them like a wave on the beach. And like a wave, the benefits they are experiencing will eventually flow back into the ocean from which they came.
The wave itself is coming in the form of modernity, and supported by, the principle that the smallest numbers are always easiest to double. And upon hearing that you might think, “hey, Sherman Newbalance, owner and creator of Newbalance shoes, what the fuck are you talking about?” Well what I mean is, If I gave you an apple, one apple, and I said go double the amount of apples it would be quite easy. Unless you live in some appleless universe, in which case I feel quite sorry for you. And if you were to continue doing this, it would remain quite easy until the numbers eventually get quite high. Doubling 200 apples will not be so easy, and so forth.
So if we were to equate this in forms of development we might look at a village in rural China. The village is without any major infrastructure and only has minimum modern conveniences such as running water and electricity. If you build a highway, a train station or run a pipeline through it, you may have effectively doubled the size of that village’s GDP. However, if you wanted to continue doubling the size, the efforts would become increasingly difficult, as the projects would require exponentially more resources.
So when the IMF make prophesizes about a countries growth based on their current growth rates it is not exactly to be trusted. Extrapolation based on a microcosm of information should not be applied so broadly regarding the future of a state. It’s the same as a doctor predicting the growth of a human based on how it appears in it’s infancy. If people did that they would have said you’d be 20 feet tall by the time you turned ten.
The image displays the rapid growth of humans during their infancy and the drop off as the child matures. If one were to project the child’s growth based on the first two years, they would be giants by the time their 20.
So after the low hanging fruit is picked, after the untouched resources have been molested what will be left over? Well perhaps a state similar to that of the West. Except unlike the West, Eastern states like China and India, have 1.3 billion people.For the effects of deindustrialization to take place in populations this large, the consequences could be devastating. Unemployment equals uprising.
And Asia seems to be quite aware of this fact as a mind-blowing amount of over-employment can be seen all over the place. You can walk into any 7-11 and routinely see 5 workers standing around with one cashier. Restaurants often have twenty employees standing around one or two tables.
As the minimum wage increases, as technology downsizes the need for human labor; Asia, with it’s large populations and uncomfortable levels of poverty seems particularly vulnerable to these effects. What will these countries do when it’s too expensive to hire 20 waitresses to stand around at a restaurant? What will these countries do when it’s cheaper to buy automated checkout machines than pay cashiers? Unemployment is the root of rebellion and the ability for many of these regimes to stay in power is anchored to their citizens ability to stay busy.
So with such large numbers of people being brought into a market place that seems increasingly less dependent on a human work force, societies will have to tread lightly to ensure that progress does not necessarily devolve into mere, change. Ahead lie many challenges brought about by the seemingly positive demographic shifts. The once ignorant, peasant societies of feudal Asia have now become educated and integrated into the global system. They have allowed their manufacturing base to serve as a catalyst into the service based industry creating a middle class. However, it is not yet known whether this growth will continue or whether it’s even permanent.