Monday, January 4, 2010

The very good news we love to ignore….

Readers know I am a fan of aggregator / interpreter economist Tyler Cowan…. the following is a great example of aggregating and blogging at its best… as well as being an important story in its own right.
"Fruitful Decade for Many in the World"

Tyler Cowen

My NYT column today is about how good the last ten years have been for China, India, Indonesia, Brazil, and much of Africa. It is not, as Time magazine has suggested, the worst decade in human history. Here is a brief excerpt:

One lesson from all of this is that steady economic growth is an underreported news story — and to our own detriment. As human beings, we are prone to focus on very dramatic, visible events, such as confrontations with political enemies or the personal qualities of leaders, whether good or bad. We turn information about politics and economics into stories of good guys versus bad guys and identify progress with the triumph of the good guys. In the process, it’s easy to neglect the underlying forces that improve life in small, hard-to-observe ways, culminating in important changes.

Here is Alex's earlier post on African success in the decade. In addition to growth statistics, I see much of the developing world as having demonstrated a much higher than expected level of social and political cohesion. Excerpt:

Since 2007, according to Goldman Sachs, the biggest emerging markets—Brazil, Russia, India and China—have accounted for 45% of global growth, almost twice as much as in 2000-06 and three times as much as in the 1990s.

Arnold Kling notes: "Even in the United States, the fact that people are living healthier longer represents an improvement above and beyond the GDP statistics."

I did not have enough space to discuss the question of growth rates versus per capita growth rates, but here are a few relevant points:

1. Babies are pretty cheap to feed. In the short run, if your economy grows, and at the same time produces more infants, the adults are still better off.

2. In the longer run, developing countries are making the "demographic transition" quicker and more dramatically than had been expected. Mexico is an extreme example of this more general point. So if you are very worried about overpopulation (not my view), there still has been plenty of good demographic news in the last decade. Economic growth in the developing world will not be "swallowed up" by rising population.

3. "More children" can be a legitimate way for a country to enjoy higher living standards.

4. Social indicators such as water and sanitation in households are generally higher in the afore-cited countries, over the last decade. That's further evidence for #1.

Again, I'd like to stress the general point that most American-born economists are not sufficiently cosmopolitan in their thinking and writing.

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