Monday, January 30, 2012

Here's something to worry about

The Atlantic reports on a new drug resistant bacteria in India caused by overuse and misuse of antibiotics.  Apparently in India, drugs are distributed without prescriptions so people take them when they are not needed, leading to drug-resistant mutations.  Furthermore, the poor cannot afford to take full regimens of drugs.  Maybe the Gates Foundation can lend the subcontinent a hand. 

Monday, January 23, 2012

Don't Fear the Dragon

My friend Dan Gorfine at the Milken Institute recent wrote this blog post about inherent weaknesses in China's system of state capitalism.  It's worth reading his take on how corruption and other factors in China highlight the superiority of the United States and other free market economies.  It is also worth thinking about in the larger context of hysteria surrounding China and fears that it will dominate the twenty-first century. 

In terms of economic strength, too much emphasis is placed on comparing the size of the Chinese economy versus that of the US.  They are apples and oranges; China has four times as many people.  A more valuable measure of comparative prosperity is GDP per capita.  As the listings of GDP per capita show, the United States is ranked in the top 10 among countries worldwide.  This should be impressive because it is by far the largest of the countries in the top 10.  Many other nations at this tier are oil-rich monarchies and other microstates.  (The US also ranks highly in median household income, which is a more useful measure of welfare throughout the country as this statistic is less skewed by high-end earners, however I don't have comparable Chinese numbers.) 

Comparing US GDP per capita to Chinese demonstrates how economically superior we are.  Scroll down the list all the way into the 90's to find China.  China holds a place among feared economic forces such as Jamaica and Albania.  The growth in China in the past twenty years is unprecedented in world history.  However, China has been able to grow so much because it started down so far; it has done a lot of catching up and it has a lot more to do.  China will continue to improve its condition, but demagoguery about its strength should be put in perspective.  

On the military front, US forces will continue to be vastly superior to Chinese for any foreseeable future.  There is no reason to think that China would willingly enter an armed confrontation with the US.  Some fear that Chinese military might is increasing.  However, Chinese submarines are very loud - louder than 20 year old Russian subs.  This makes them easy to track, and therefore, sink.  And China has its first aircraft carrier, but it is a recycled Ukrainian ship that is little more than a training vessel, and no match for any one of America's 11 carriers.  To be sure, China is only going to progress from this point, but the US has a strong head start and is not resting on its laurels. 

Ultimately, China and the US benefit from each other's growth.  Economic transactions are not zero sum games.  The US should be inspired by Chinese growth to stay sharp and continue to push forward in science, technology, and business, but it does not need to do so in fear.

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