The Real Capital

This article by Thomas Friedman caught my eye. This article is not about Pakistan. Pakistan is not mentioned even once in the article. This is not about South Asia, or militant Islam, or the war on terror. It is about none of the ideological war between the religious right wing ideologies and the secular ideals that we espouse at PTH.

 A cursory glance and we realize why United States is the biggest economic and scientific power in the world. Let me say that I have selective admiration of the United States. I am critical of United States’ opportunistic foreign policies. I however realize that world has seen an enormous scientific and economic development under the vastly expanding global democratic capitalistic society that is led by the United States. We are living in the most fruitful scientific evolutionary times in all of the human history where the scope of technology is increasing at an exponential rate in a matter of decades. We are also living in one of the wealthiest times of human history, where the world GDP per capita almost tripled between 1900 and the year 2000. To give you some comparison, the yearly growth rate of GDP per single person was close to zero up to the year 1700 from the earliest human times.

 The scientific and economic advances are joined at the hip. Science allows us to become more efficient, produce more and most importantly, explore more. Technology doubles in its scope and computational power in almost one decade. An average cell phone now holds more computing power that was available to the NASA spacecrafts some 40 years ago. All of this allows us to produce more at the same, or even less price. It allows us to increase the output exponentially with the aid of scientific innovations and efficient processes.

 The strength of the modern economic system is not money. The Amount of money in an economic system is not at all indicative of the wealth of the economy. US economic strength comes from the human capital that is carefully nurtured in this modern superpower. The United States practices a capitalistic economy where the biggest capital remains the human capital. This capital is allowed the protection of law, given complete equality in the eyes of the state, given protection for its rights by the constitution and the bill of rights, and then allowed to explore its potential.

 It is not the massive military complex of the United States that can keep the place of this nation as a super power some five decades from now. India and China are rapidly progressing economically and according to a few aggressive forecasts, they will overtake United States as the biggest economic powers in less than three decades from now. The future of the United States will be determined by how this country stays true to its ideals of democracy, free speech and its investment in the human capital that will become scientific innovators and business leaders of tomorrow.

 None of these prosperity measures of course only applies to the United States. Any country that invests in its human capital should expect the real prosperity down the road due the only investment that really matters. Pakistan with its 170 million residents can learn to invest in educating its youngsters now and be a major player in the world in coming years due to its high human capital induced wealth. We can work together toward the ideals of democracy, equal rights, free speech, education and investment in the biggest asset that we ever had: the Pakistanis themselves.  

 (AZW)

 

From The New York Times

By Thomas Friedman, published March 20, 2010

http://www.nytimes.com/2010/03/21/opinion/21friedman.html?src=me&ref=homepage

Went to a big Washington dinner last week. You know the kind: Large hall; black ties; long dresses. But this was no ordinary dinner. There were 40 guests of honor. So here’s my Sunday news quiz: I’ll give you the names of most of the honorees, and you tell me what dinner I was at. Ready?

Linda Zhou, Alice Wei Zhao, Lori Ying, Angela Yu-Yun Yeung, Lynnelle Lin Ye, Kevin Young Xu, Benjamin Chang Sun, Jane Yoonhae Suh, Katheryn Cheng Shi, Sunanda Sharma, Sarine Gayaneh Shahmirian, Arjun Ranganath Puranik, Raman Venkat Nelakant, Akhil Mathew, Paul Masih Das, David Chienyun Liu, Elisa Bisi Lin, Yifan Li, Lanair Amaad Lett, Ruoyi Jiang, Otana Agape Jakpor, Peter Danming Hu, Yale Wang Fan, Yuval Yaacov Calev, Levent Alpoge, John Vincenzo Capodilupo and Namrata Anand.

No, sorry, it was not a dinner of the China-India Friendship League. Give up?

O.K. All these kids are American high school students. They were the majority of the 40 finalists in the 2010 Intel Science Talent Search, which, through a national contest, identifies and honors the top math and science high school students in America, based on their solutions to scientific problems. The awards dinner was Tuesday, and, as you can see from the above list, most finalists hailed from immigrant families, largely from Asia.

Indeed, if you need any more convincing about the virtues of immigration, just come to the Intel science finals. I am a pro-immigration fanatic. I think keeping a constant flow of legal immigrants into our country — whether they wear blue collars or lab coats — is the key to keeping us ahead of China. Because when you mix all of these energetic, high-aspiring people with a democratic system and free markets, magic happens. If we hope to keep that magic, we need immigration reform that guarantees that we will always attract and retain, in an orderly fashion, the world’s first-round aspirational and intellectual draft choices.

This isn’t complicated. In today’s wired world, the most important economic competition is no longer between countries or companies. The most important economic competition is actually between you and your own imagination. Because what your kids imagine, they can now act on farther, faster, cheaper than ever before — as individuals. Today, just about everything is becoming a commodity, except imagination, except the ability to spark new ideas.

If I just have the spark of an idea now, I can get a designer in Taiwan to design it. I can get a factory in China to produce a prototype. I can get a factory in Vietnam to mass manufacture it. I can use Amazon.com to handle fulfillment. I can use freelancer.com to find someone to do my logo and manage my backroom. And I can do all this at incredibly low prices. The one thing that is not a commodity and never will be is that spark of an idea. And this Intel dinner was all about our best sparklers.

Before the dinner started, each contestant stood by a storyboard explaining their specific project. Namrata Anand, a 17-year-old from the Harker School in California, patiently explained to me her research, which used spectral analysis and other data to expose information about the chemical enrichment history of “Andromeda Galaxy.” I did not understand a word she said, but I sure caught the gleam in her eye.

My favorite chat, though, was with Amanda Alonzo, a 30-year-old biology teacher at Lynbrook High School in San Jose, Calif. She had taught two of the finalists. When I asked her the secret, she said it was the resources provided by her school, extremely “supportive parents” and a grant from Intel that let her spend part of each day inspiring and preparing students to enter this contest. Then she told me this: Local San Jose realtors are running ads in newspapers in China and India telling potential immigrants to “buy a home” in her Lynbrook school district because it produced “two Intel science winners.”

Seriously, ESPN or MTV should broadcast the Intel finals live. All of the 40 finalists are introduced, with little stories about their lives and aspirations. Then the winners of the nine best projects are announced. And finally, with great drama, the overall winner of the $100,000 award for the best project of the 40 is identified. This year it was Erika Alden DeBenedictis of New Mexico for developing a software navigation system that would enable spacecraft to more efficiently “travel through the solar system.” After her name was called, she was swarmed by her fellow competitor-geeks.

Gotta say, it was the most inspiring evening I’ve had in D.C. in 20 years. It left me thinking, “If we can just get a few things right — immigration, education standards, bandwidth, fiscal policy — maybe we’ll be O.K.” It left me feeling that maybe Alice Wei Zhao of North High School in Sheboygan, Wis., chosen by her fellow finalists to be their spokeswoman, was right when she told the audience: “Don’t sweat about the problems our generation will have to deal with. Believe me, our future is in good hands.”

As long as we don’t shut our doors.

28 Comments

Filed under China, Democracy, India, Science, USA

28 responses to “The Real Capital

  1. Gorki

    Hear Hear!!

    AZW, you have hit the nail on the head.

    Societies are never made great by military conquest, or else we all would be speaking Mongolian today nor by natural resources or else the oil rich Sheikdoms would have been the arbitrators of our Universe; it is human capital, pure and simple.

    Any society that takes care of its citizens and has most of its citizens vested in it instinctively defended by all its citizens and eventually overcomes war and famine natural disasters and economic melt downs.
    America may not be the perfect society but certainly is the best and fairest to its citizens by so far by a large margin. As Mark Twain once said in another context, the reports of its demise are highly exxagerated.
    I believe that its best days are still ahead of it.

    Regards.

  2. B. Civilian

    gorki

    is it because only free and educated humans can re-adapt and re-invent themselves and their nation, if need be? neither military conquest nor natural resources can do that easily.

    while i fully agree that america is very good and fair to her citizens – a great democracy, can i reserve the right to not term her quite the ‘fairest’ and ‘the best’ in the world, yet?😉

    world influence might be a very good indicator, but perhaps not the best. it’s not the only one either. in fact, it carries the risk of an overgrown ego militating against adaptability and re-invention. otoh, if a less ‘influential’ nation has something good to offer, it might be less known and not emulated because ‘naqal kay liye bhi aqal chaahiye’. or as they say in technology, those who adapt to innovation require to be almost as innovative as the original innovator.

  3. Mustafa Shaban

    Very good article….immigration is very important, especially when the most talented of people come together, mainly chinese, indian , pakistani and other people of the far east. But its a long time until the new talented generation gets to decide economic and foriegn policy. China will surpass the US as the biggest economic power because its economic policy is much more sound than the US economic policy. I see the Far East as going really far especially China. US needs to redevelop its production capabaility and reindustrialize itself, instead of depending on a service economy, wich is not a good idea. The strong economies are alwayz those which have a strong manufacturing base like China and unlike US, which shifted it to China.

  4. whitherpakistan

    US is not a capitalist society. The scientific achievements you speak of are all subsidized entirely by the government with tax payer money and developed in the public sphere. It is only when they become profitable that they are handed over to the private sector in order to be sold to the public (the interent for example). The public pays for the cost, takes the risks, pays the price, and reaps none of the profits. It is socialism for the rich, not capitalism.

  5. DCMediagirl

    One word:

    L-I-T-E-R-A-C-Y

    There is no better way to free people from slavery than to educate them. That’s why totalitarian states prefer their populations to remain ignorant and superstitious. Ignorant people can also be dangerous and a potential threat to society. Exhibit A: Fox News viewers. Exhibit B: “Tea Party” activists in the U.S.

  6. Mustafa Shaban

    @DC Media Girl: You are right and its not necassarily lack of formal education that keeps people ignorant and easy to control, even distractions like sports , over entertainment can keep people unaware of current issues. The elite use all kinds of methods to keep people from getting involved politically in the nations affairs.

  7. Mustafa Shaban

    sports, i meant having loads of events and tv shows in many different areas including sports, keeps people busy

  8. Mustafa Shaban

    @whitherpakistan: I agree with you to a certain extent.

  9. Raj

    its not literacy — other wise China would have been a free society … its culture ..
    societies with better culture can produce more humane individuals then educated ones .. Hitler and Osama are prime examples of it ..

  10. DCMediagirl

    Raj: China’s culture is one of the oldest in the world. Germany was a beacon of culture for years before Nazism. What are you talking about?

  11. fair mind

    Literacy free society.
    Check British newspaper article
    The Independent, UK
    March 24, 2010
    Saudi woman poet lashes out at clerics in ‘Arabic Idol’
    Abu Dhabi judges praise courage of writer who dared to criticise hardliners
    By Archie Bland
    Wednesday, 24 March 2010

  12. B. Civilian

    DCMediaGirl

    Raj is saying that mao, hitler and osama were products of their respective/native cultures. that ‘better cultures that produce more humane individuals'(!?) do not produce any murderers, rapists, thieves, liars, bigots etc.. or dictators, usurpers or tyrants.

  13. B. Civilian

    @MS

    “having loads of events and tv shows in many different areas including sports, keeps people busy”

    you reminded me of gen zia ulhaque’s news conference after his maiden overseas visit (of course to china). i think it might have been his first ever press conference too ie where the press were allowed to ask questions. he was asked what did he plan to do about the enormous challenges and issues faced by the country. zia calmly told the nation that if pakistanis cut down by one paan and one cigarette a day, most of the country’s problems would be solved!

    zia was after all the closest thing we have had to a khalifa. i guess you know who is referred to as a khalifa in the vernacular. why am i not surprised that something from you should remind me of him.

  14. AZW, while the ability of America to attract and nurture human capital is admirable, I think both you and Friedman are getting it wrong here.

    It is indeed true that the prosperity of a section of American society and much of its global allure is due to the environment present for technological advancement and its commercialization. But really the real engine of the American economy are/were people who form the sinews of this industrialized country. The factory workers, small business owners and managers who keep the engine ticking. It is their professionalism and also ability to consume collectively as homogeneous one, that gives the American economy the size and scale to be what it is.

    The names in the article by Friedman, are more the result of a selective immigration policy that basically allowed only the most technically competent minds from India and China into the country. A better measure of American equality and ideals would be to see how the children of Hispanic immigrants from Mexico and Latin America do, because chances are that they will form the part of American society that joins the police forces, starts a small business, works in a factory that actually make things.

    By the way the three greatest (in a worldwide impact sense) ideas that have come from America in the last 10 years are wikipedia, facebook and youtube, and none of them came from kind of people Friedman talks about.

  15. AZW

    Whither Pakistan:

    On the contrary, your very example shows the capitalistic aspect of the development of the internet, and how it has benefited the public like never before. Let me explain it below:

    The Defense Advanced Research Projects Agency (DAPRA) invented the internet around 1968 to allow defence research departments in various universities to stay in touch with each other. For the next 20 years the network remained confined to a very few number of computers connected to each other. They communicated, but no one exactly benefited from the technology apart from handful of people.

    In 1988, the service was opened to commercial internet service providers and web took off right away. By 1995, it was the private sector that had come up with the world wide web, search engines, commercial transactions, personal communications and information sharing software on the internet. A network whose rate of user growth remained stagnant for 20 years under a government body control had 1.7 Billion users within the next 20 years.

    The economic impact of internet has been significant and there was a Harvard Business School paper that tried to quantify it in terms of US dollars:

    1. Employment value. The Internet employs 1.2 million people directly to conduct advertising and commerce, build and maintain the infrastructure, and facilitate its use. Each Internet job supports approximately 1.54 additional jobs elsewhere in the economy, for a total of 3.05 million, or roughly 2 percent, of employed Americans. The dollar value of their wages is about $300 billion, or around 2 percent of U.S. GDP.

    2. Payments value. The direct economic value the Internet provides to the rest of the U.S. economy is estimated at $175 billion. It comprises $20 billion of advertising services, $85 billion of retail transactions (net of cost of goods), and $70 billion of direct payments to Internet service providers. In addition, the Internet indirectly generates economic activity that takes place elsewhere in the economy. Using the same multiplier as for employment, 1.54, then the advertising-supported Internet creates annual value of $444 billion.

    3. Time value. At work and at leisure, about 190 million people in the United States spend, on average, 68 hours a month on the Internet. A conservative valuation of this time is an estimated $680 billion.
    http://hbswk.hbs.edu/item/6268.html

    You cannot possibly say that US government had any way or form subsidized internet. Internet and the whole economy that has spawned around it has been a huge contributor to the US government itself in terms of direct tax dollars, as well as in terms of the auxiliary economic growth that has been centered around the knowledge sharing and growth that was made possible by the internet. All of the above figures in the Harvard study point out the massive employment benefits of the internet in the US and around the world. The multiplier effect from internet has been truly remarkable.

    US government can be actually accused of being too slow to let internet enter the public sphere. Had internet been in the private sector by the 1970s, who knows where the technology would have been now.

    Vikram:

    US is not genetically testing its immigrants to filter only the best and brightest. All of those kids were second or third generation immigrants who came to US, worked hard and found that the society offers their kids to explore their potential to the fullest.

    And you are correct; it is not just the immigrant families that are only responsible for the innovation and scientific progress. Your example of Facebook and Wikipedia proves my point. US (and most of the Western economies) are geared towards investing in human capital, whether it is a graduate student from Pakistan, a second generation American Indian, or a regular white kid from a southern state. When they have potential, and when they are afforded opportunity, as Friedman says, magic happens.

    I do not disagree with your assertion about the hard working blue collar and white collar working who keep the economy humming. Yet the society needs innovators, groundbreakers, and entrepreneurs to enhance a knowledge-based economy. These individuals take risks to generate wealth, create new jobs and foster innovation in the society. To give you an example, a 21 year old college dropout named Steve Jobs founded Apple with his 26 year old partner Stephen Wozniak. Researchers in the University of California Irving estimated that only Ipod has created some 41,000 direct jobs. They have not even counted the parallel jobs created due to the industry that caters to ipod accessories, or those who market and sell this device.

  16. AZW, I am not disagreeing with your basic point, yes Western societies do a much better job of investing and protecting their human capital than our own societies. What I am saying is that children of immigrants winning spelling bees and science competition is not an example (or atleast not a good one) of such an investment.

    The real investment is in the generally good academic environment in most American universities, where kids can really learn, not just from books but also from each other. And the freedom the average worker has in talking and communicating with his boss etc.

    I think we both agree on the basic principle and idea, but disagree about how it manifests itself.

  17. B. Civilian

    and DARPA only ‘donated’ the internet backbone, as it was then (ie mainly the cross-antlantic undersea link), to the academic community because it was no longer of any use to them. so it wasn’t really a case of public money subsidizing private enterprise. not in this case.

  18. Mustafa Shaban

    @B. Civilian: First of all I do not consider Zia Ul Haq as a islamic leader, all he did was promote islamic fundamentalism ,which I am against. His rule was not good. Some people attribute his rule to the beginning of the decline of Pakistans situation. At times he stood up to the Americans and I admire that but otherwise his other policies were not good.

    I am not trying to say that there should be no music, tv shows or movies, I encourage these things, but only to a certain extent. It goes to an extreme when the average american ends up spending 5 hours on facebook or 5 hours playing video games and watching tv without being aware of whats going on around him/her and what is the state of affairs of the nation. Everybody is responsible to protest any government action that tramples on the rights of the people and remain vigilant so that the government does not go astray.

    Watch Micheal Moore movie Capitalism A Love Story. Many scholars give the example that Micheal gave in the movie. Micheal Moore draws parallels between Rome and US. Rome was powerful and great because of its strong domestic policy and rule of law and military power. People were prosperous. But there came a time when curropt elites started to sieze power and politicians started to become curropt, the people didnt like it, so the leaders thought of ways to distract the population away from the curroption and state affairs. They employed many ways including 2 very powerful ones. Military adventures that sent people abroad was one distraction. The other was games, especially in the Collesseum , games of blood, and gore, different kinds of games to keep the population busy. I am not saying we shouldnt have entertainment in our daily lives, but we should not let it take up so much of our attention that we are not aware of our surroundings. It should help us relax only, not distract us. The movie also highlights many of the flaws in American Capitalism. Its an important movie to watch.

    A scholar, I am not sure but I think he was a media professor in New York University famously stated that America is the most over entertained and uninformed populace in the world. This statement is repeated by many people. It is very true.

  19. DCMediagirl

    @ B. Civilian: Thanks for that clarification. Maybe Raj just watched “Avatar.” The Na’vi are the only culture I’m aware of that never produced murderers or rapists etc.

  20. Midfield Dynamo

    @Mustafa Shaban
    Zia who had chain smoked all of his life, eventually decided to kick the habit to the extent that no one in his company could smoke. Once in the audience of Sabri Qawwal, the grapevine said that there was to be no smoking because the angels would not descend in a polluted atmosphere, no mention of the secret sipping that Sabri had to indulge in throughout the evening. If only Zia had still been smoking, Sabri would have made sure that the angels descended despite…
    I am not making slight of high offices but only highlighting how power must impose all it can even in the most trivial of matters. It loses respect for the general will, however, should the general will be the power then those holding high office would be cognizant of such demands.
    Anyway no man is too great from too close, Zia achieved the impossible and yet committed some inexcusable blunders.

  21. Raj

    DCMediagirl

    A Culture is a result of an ideology- Mao and Hitler were result of Nazism , AND communism respectively.
    culture is not judged by its criminals ( thieves and rapist ) but by the leaders (Mao & Hitler)and society (conservative,radical and Narrow-minded)it produces . you have Iran , Saudi Arabia and China . they have enormous economic power and massive literacy rate , yet these are insecure and autocratic societies .

    I hope you understand the difference between Mao and rapist ..

    The reason Pakistan is suffering is because of its inability to develop a culture which can accept democracy .

  22. B. Civilian

    “The reason Pakistan is suffering is because of its inability to develop a culture which can accept democracy .”

    raj, show me when and how did the people of pakistan refuse to accept democracy. what you are claiming is tantamount to saying that people are murdered because they are unable to accept life. what about the murderer? do you or do you not know the meaning of the words dictator, usurper, tyrant?

  23. Raj

    raj, show me when and how did the people of pakistan refuse to accept democracy.

    Isnt Pakistani History enough to tell you that ?
    democracy is not a solution but a way to find a solution. it is a social culture to accept “others” point of view . its about willingness to accept difference & diversity in a society.

    “what about the murderer? do you or do you not know the meaning of the words dictator, usurper, tyrant?”

    We all know . tyrant and dictators are reflection of society . Hitler was supported by German society . don’t forget he was a Hero for them . Mao was a result of Chinese Social movement.

  24. B. Civilian

    which pakistani dictator participated in a general election? which one headed any kind of social movement? when and how did pakistani society show acceptance of a dictator?

  25. Luq

    >We all know . tyrant and dictators are reflection of society

    Modi is a reflection of Indian society Raj?

    Luq

  26. AZW

    Isnt Pakistani History enough to tell you that ?

    democracy is not a solution but a way to find a solution. it is a social culture to accept “others” point of view . its about willingness to accept difference & diversity in a society.

    Raj, on the contrary, Pakistan’s political history shows the resilience of a nation that has time and again refused to let the military boots guide it for too long.

    The army has tried to subvert the political process repeatedly but even the Army itself has to live under umbrella of democracy to validate their rule. And not before too long, the military inspired controlled democracy or Islamic democracy give way to the civilian democracy. The problem (that we are repeatedly trying to highlight in various threads related to General Kiyani) is that Pakistanis appreciate democracy, want their voices to be heard, yet are uncomfortable with loud dissentions, and an optically misleading chaos that the democracy brings. Right wing media eggs on those insecurities, an opportunist military leader fills in the void, military coups take place on average once every 12 years in Pakistan.

    There is nothing to be compacent about when it comes to democracy in Pakistan. But it is clear that Pakistanis have not turned over and allowed brutal dictatorships like that of Husni Mubaraks, Moammar Gadafis and Shah of Iran to rule them for long periods of time. The present Pakistani culture is marked with loud dissentions, open press and free judiciary. These are not hallmarks of a society that is allergic to democracy.

  27. Raj

    B. Civilian

    which pakistani dictator participated in a general election? which one headed any kind of social movement? when and how did pakistani society show acceptance of a dictator?

    May be you are right .. From general Ayub to Zia , Musshraf , and now kiyani .. Pakistani society opposed these non democratic rulers . But we dont know how come they end up ruling the majority of pakistani Political history . May be Najam Sethi has some Answers –

  28. Raj

    Luq
    March 26, 2010 at 8:44 pm

    >We all know . tyrant and dictators are reflection of society
    Modi is a reflection of Indian society Raj?

    Yes He is ..
    http://economictimes.indiatimes.com/opinion/policy/Emulate-Gujarats-agricultural-success/articleshow/4493375.cms
    he has been charged for Crimes. however in India people are innocent till proven guilty in court