Monks and economic development

Monks and economic development

One person on our trip who has spent a lot of time in Cambodia remarked, as we drove down to Siem Reap, that you’re seeing a lot fewer monks here than you used to. Her best guess as to why is peace and economic growth; becoming a monk is a way to survive when you have nowhere else to go. I can’t find any good figures on the number of monks in Cambodia. On the other hand, I can’t find any good figures on anything here; even GDP figures are fairly crude guesses about what is going on. It’s better to watch things like infant mortality and literacy, which are comparatively easy to count. And perhaps we should also be counting the number of orange-wrapped figures in every crowd.

—Megan McArdle

Sweet and sour pork or chicken biryani

There is one crucial difference between China and India, and a perfect example of it is coated in black tarmac and runs east and west through (the Chinese city) Hefei. China is a brutal place to live in if you are on the bottom rung, but there is an exit.

And, just as important, there is a real possibility of a job at the other end. India’s 1.1 billion population is rapidly catching up with China’s 1.3 billion. But India has only about 10 million manufacturing jobs, compared with about 150 million in China.

So, there are simply more opportunities in China to improve your life (and I haven’t even mentioned India’s restrictive caste system). The growing service sector in India—in software development, in call centres and service centres—is great if you are already middle class and speak English. But what about possibilities for the hundreds of millions of illiterate peasants? It seems to me that India is trying to reach modernism without passing through the industrial revolution.

Now, as the cost of manufacturing rises in China, we are starting to see some manufacturing relocating to India. The country’s retail sector is opening up, too, and India is in the midst of other major economic changes. So, in the near future, more opportunities of escape from rural poverty may be provided, in which case the balance will tip in India’s favour.

In the end, I conclude that I do not want to be a Chinese peasant or an Indian peasant. But if I have to take a side, despite all the massive problems of rural China, I’ll go for the sweet and sour pork over the chicken biryani.

—Rob Gifford

Highway blues

As I drove west on Route 66 (in the US), I witnessed the vivid fruit of economic illiteracy—five miles of stalled east-bound traffic.

The congestion was not the result of an accident. In fact, since this was a Friday, traffic was probably better than average. Morning after morning, Monday through Friday, there are miles of commuters sitting in their cars lamenting their sad fate.

The darkly funny thing about this spectacle is that every economist in the country knows how to fix it!

In case you haven’t heard, here’s the solution: raise the price when demand is high. High-tech easy passes make it possible to collect tolls without tollbooths, or even slowing down.

Why doesn’t the world embrace the obvious solution? Once again, the blame falls squarely on voters’ anti-market bias. Most people think of tolls as pure transfers, devoid of incentive effects. A politician who proposed the economists’ solution could kiss his career goodbye.

In short, congestion is a state of mind. Drivers have a slow commute because their minds are stuck in the mud of economic illiteracy. What will it take to tow them out?

—Bryan Caplan

Born to be happy

Children of entrepreneurs are not only two to three times more likely to open their own business—according to a new paper based on surveys in Europe, Canada and the US—but they also report being happier than their less-entrepreneurial peers.

—Chris Monasterski