south africa

Markets in everything those new service sector jobs

TITUSS BURGESS doesn’t like to travel and says he knows “zero” about South Africa, which would seem to make him an unlikely host for a 10-day tour of that nation, especially one that costs nearly $27,000 a head. But on a chill March night, the actor, best known for his role as Titus Andromedon on the Netflix series “Unbreakable Kimmy Schmidt,” patiently posed for selfies with travel journalists at a Manhattan wine bar to kick off Heritage Tours’ new Spotlight Series of trips. The company describes the tours as “immersive small-group experiences enhanced by the presence of expert personalities and influencers.”

…While Mr. MacMillan says that the hosts for his trips were chosen for their connection to the destinations, the link can seem tenuous. Courtney Reed, who played Princess Jasmine in Disney ’s “Aladdin” on Broadway will be hosting a trip to Spain focused on wine, fashion and food. She’s never been to Spain, but is “extra thrilled” about going. “I think my role is just to provide social ambience,” she said. “I’m a very easygoing person and I can create extra flair just having fun and appreciating our surroundings. I’m like a cheerleader….We’re going to have a blast!”

…Other travel companies are hitching their wagons to stars who don’t merely gild the travel experience, but add bona fide knowledge or expertise. “There’s only so much caviar and champagne you can give passengers, so we like to enrich their experience in an intelligent way,” said Barbara Muckermann, chief marketing officer of Silversea Cruises. The cruise line, which has at least one expert lecturer on each of its ships, invited nine artists, writers and other creative types including authors Paul Theroux, Pico Iyer and Saroo Brierley to make appearances during its 133-day World Cruise 2019. Besides giving lectures, each is contributing to a commemorative anthology that Silversea line is creating for the passengers.

There is more at the link, by Kevin Doyle at the WSJ, via the excellent Samir Varma.

Sunday assorted links

Monday assorted links

The Ethics of Resistance to State Injustice

The excellent Jason Brennan with a short introduction to his new book, When All Else Fails: The Ethics of Resistance to State Injustice:

Imagine a situation in which a civilian commits an injustice, the kind against which you believe it is permissible to use deception, subterfuge or violence to defend yourself or others. For instance, imagine your friend makes an improper stop at a red light, and his dad, in anger, yanks him out of the car, beats the hell out of him, and continues to strike the back of his skull even after your friend lies subdued and prostrate. May you use violence, if it’s necessary to stop the father? Now imagine the same scene, except this time the attacker is a police officer in Ohio, and the victim is Richard Hubbard III, who in 2017 experienced just such an attack as described. Does that change things? Must you let the police officer possibly kill Hubbard rather than intervene?

Most people answer yes, believing that we are forbidden from stopping government agents who violate our rights. I find this puzzling. On this view, my neighbours can eliminate our right of self-defence and our rights to defend others by granting someone an office or passing a bad law. On this view, our rights to life, liberty, due process and security of person can disappear by political fiat – or even when a cop has a bad day. In When All Else Fails: The Ethics of Resistance to State Injustice (2019), I argue instead that we may act defensively against government agents under the same conditions in which we may act defensively against civilians. In my view, civilian and government agents are on a par, and we have identical rights of self-defence (and defence of others) against both. We should presume, by default, that government agents have no special immunity against self-defence, unless we can discover good reason to think otherwise.

I think it helps in answering this question to think of other countries say South Africa under Apartheid or China today among the Uighur in Xinjiang province…then be consistent. Note that resistance to state injustice may be unwise even when it is ethical.

Meet the Pioneers

Here are the winners from the first Pioneers tournament, summarized here:

In the short 3 months since its launch, Pioneer has garnered a global reach. Our first tournament featured applicants from 100 countries, ranging from 12 to 87 years old. Almost half of our players hailed from countries like India, UK, Canada, Nigeria, Germany, South Africa, Singapore, France, Turkey, and Kenya. Projects were spread across almost every industry — AI research, physics, chemistry, cryptocurrency and more.

They are a remarkably impressive group, here is one example:

Clark Urzo (23, Philippines)

Clark is making a programming language for physics. The idea is to enable anyone who can code to contribute to serious physics research (for example, simulations of gravitating systems). This opens up the field to the wondrous forces of open source and promotes open and accountable science along the way.

Noteworthy: Clark has an insanely impressive trajectory. He learned to code when he was 12. By 16, he was doing Laplace transforms, tinkering with Arduinos, reading Marx and Nietzsche, and taught himself conversational German. He co-founded a VR company by 19.

Or:

Harshu Musunuri (18, USA)

Harshu is creating synthetic materials to improve the diagnosis, treatment, and prevention of sepsis, a leading cause of death in hospitals around the world. Unlike other approaches, these materials don’t require refrigeration and enable low-cost toxin capture in resource-poor settings.

Noteworthy: Harshu comes from a humble background: she was born to an electrical engineer and an elementary school math teacher in a small village in South India. But her work is anything but humble. In her short career, she’s done research with NASA’s JPL, built a seizure detection app for epileptic patients and is now working on a project with the potential to save thousands of lives. She’s also a hacker at heart: when she lacked the formal lab tools to braze at high temperature, she used the exhaust vent of a ceramic kiln.

The overall lesson is that there is a great deal of undiscovered talent out there, and also that some people are out there discovering it!  And if you wish to apply to round two, just follow the instructions at the top link.

Procurement and compliance costs (from the comments)

From my time in both the military and healthcare I can say that the biggest problem are the compliance costs.

For example, I have a phone app that allows me to send texts. We pay very good money to have said app. It does nothing that my phone cannot innately do – except be HIPAA compliant. EMR software is clunky, an active time suck, and adds little or no value … but we are required by law to use it. In each case there are scads of less specific programs out there which are insanely cheaper and more functional, but those programs cannot justify the costs of becoming compliant for a small niche of their business.

In the military we had similar difficulties. If you want systems to be secure, you need to pay extra as the marketplace does not do real security for consumer goods. Likewise, if you worry about logistical tails, building in assured access drastically increases costs.

And I fully suspect that prices will continue to diverge. As ever more of the internet ends up in a giant interconnected mess there will be fewer people able to code in a secure fashion. There will be fewer parts of the ecosystem that can be used by security conscious actors.

Then we get to actual procurement itself. People worry that arcane institutions will somehow make off with lots of money and spend it either poorly or nefariously. Absent easily observed price and cost data in both sectors we began developing rules. These rules drive firms out of the market (e.g. we needed some light interior remodeling to comply with a regulation that specified inches between things, the contractor who has been most affordable and highest quality refused to bid because the hassle on his side was too great). Eventually the rules become too complicated and you start needing specialists to interpret them. Costs skyrocket and firms abuse rules to pad profits. Then the lawyers get involved and things get more expensive. Again, medical and military consumers become a captive market facing greater monopoly as fewer firms can navigate the thicket of rules to even try to make money.

Then we have the problem that people look at these sectors and say that it is public money. All public money should help with goal X (e.g. going “green”, affirmative action, boycotting South Africa/Israel, patriotism, “America first”) and then we become even more overly constrained. Find vendors who meet one hurdle is hard, finding ones that meet 30 is nigh unto impossible unless the vendor is engineering the firm to market solely to this niche – and charging monopoly rates as his reward.

Any single thing would not be too bad for prices, but the marketplace in general is diverging from military and healthcare. Even education is diverging with mandates in FERPA and political business constraints. We have pretty effectively restricted supply, why exactly would we not expect an increase in cost?

That is from “Sure.”

Envy and status in politics

2. People will oppose policies that benefit themselves and their community if they think it will lower their within-group status. 

McClendon uses survey data from South Africa and the United States to show that status motivations change the way that people think about redistributive economic policies. This is even true within ethnic groups, including marginalized ethnic groups like African Americans. As McClendon notes:

“The worse off people are than their coethnic neighbors, the more supportive they are of greater redistribution (regardless of how personally costly this support is); the better off people are than their coethnic neighbors, the less supportive they are of redistribution.”

In other words, even when a policy might make someone materially better off (by, say, improving their housing conditions), they are likely to oppose it if the government doing so for everyone in their community would harm their relative status position.

That is from Laura Seay at The Washington Post, drawing on work from the new Envy in Politics, by Gwyneth H. McClendon.  I have just ordered that book.

*Divided: Why We’re Living in an Age of Walls*

That is the new book by Tim Marshall, yes Trump and Israel and the like, but it goes much further than that.  Here is one excerpt:

Since 1971, Assam’s population has more than doubled, from 14.6 million to over 30 million, much of which is due to illegal immigration.  Hindu nationalists have argued that the area might have a Muslim majority by 2060.  In 2015 there were 19 million Hindus and 11 million Muslims, nine of the twenty-seven districts being Muslim majority.  Equally importantly, the 2017 census showed that people who are ethnically Assamese are now a minority in the state as a whole, and as people continue to arrive their proportions will continue to drop.

This is a depressing but thought-provoking book.  Bangladesh, by the way, is smaller than the state of Florida, but has 165 million people.  And I had not known there are about 800,000 Nigerians in South Africa.  You can order the book here.

The safety net in Ethiopia

They are participants in Ethiopia’s Urban Productive Safety Net Project, which was launched in 2017 and is among the largest social programmes in sub-Saharan Africa (outside South Africa) designed specifically for urban areas. About 400,000 poor Ethiopians in 11 cities are already enrolled. The government hopes it will eventually help 4.7m people in almost 1,000 towns. Beneficiaries are selected by a neighbourhood committee based on how poor and vulnerable they are. In addition to the paid work, they also receive training. Those who want to start their own businesses are given grants.

Safety-nets, in one form or another, have proliferated across Africa in recent years. Spending on them in sub-Saharan Africa now amounts to about 1.5% of GDP (see chart). In Tanzania 10% of the population is covered by its safety-net (at a cost of just 0.3% of GDP)…

Ethiopia’s programme is a step towards building a national social-security system that will, in time, replace a hotch-potch of small ones. It builds on Ethiopia’s flagship rural safety-net, which is the largest of its kind on the continent and covers some 10m poor people in the countryside (out of a total population of about 102m). The government has committed $150m to fund the new scheme and the World Bank has stumped up the remaining $300m needed for the first five years. Ethiopia hopes that within ten years it will no longer need help financing the programme.

Here is more from The Economist.  You can think of this as further evidence of state capacity in Ethiopia.

Why isn’t the Indian caste system more protested in the United States?

About one-sixth of India is Dalits, or “Untouchables.”  And while Western criticisms of caste segregation are a long-standing observation about India, I hardly hear serious complaints over the last two decades or so.  In contrast, the apartheid system of South Africa met with demonstrations, boycotts, campus activism, frequent dialogue, and so on.  Why don’t we see some modified version of the same for the Indian caste system?  No matter how you compare its relative oppression to that of South Africa, it still seems like a massive system of unjust and opportunity-destroying segregation, and an efficiency-loser as well.  Here are a few hypotheses, not intended as endorsements but rather speculations:

1. The caste system is simply too difficult for most Americans to understand, whereas apartheid could be represented more readily in what I dare not call simple black and white terms.

2. Most of the Indians who migrate to the United States are higher caste or at least middling caste, and they sway American opinions of India in a way that South African migrants to the USA never did.

3. Libertarians don’t want to focus on the caste system because it persists without active government support being the main driver.  Democrats don’t want to focus on the caste system because Indian-Americans are often leading supporters and donors.  It doesn’t feel like a Republican issue either.  So who is there to push this one for domestic ideological reasons?

4. Talking about the caste system makes harder the (justified, I should add) program of raising the status of non-minority whites in America.

5. Talking about the caste system would focus light on caste-based discrimination in the United States, and distract attention from other domestic issues.

What else?  Overall I find this a disappointing topic to ponder.  Perhaps all politics, like envy, really is local after all.

I am indebted to Sujatha Gidla for a useful conversation on this topic.  My formal Conversation with her will be up in a bit, I still recommend her book on caste, Ants Among Elephants: An Untouchable Family and the Making of Modern India.

Ghana-Gandhi sentences of the day

Ghana has said it will remove a statue of Mahatma Gandhi from a university campus in the nation’s capital where it had sparked protests over the leader’s allegedly racist attitudes.

The statue, which was unveiled by Indian President Pranab Mukherjee during his visit to Ghana in June, was meant to symbolize friendship between the two countries, according to Ghana’s Ministry of Foreign Affairs. But professors and students at the University of Ghana called the statue “a slap in the face” because of Gandhi’s “racist identity.” They started an online petition calling for the statue’s removal.

The petition, which had more than 1,700 supporters on Thursday, cited letters Gandhi wrote during his time in South Africa as evidence that he advocated for the superiority of Indians over black Africans. It also took issue with his use of the derogatory term kaffir to refer to native Africans and criticized the lack of statues of African heroes and heroines on campus.

Here is the full story, noisy video at the link, via the excellent Samir Varma.

India, Modernity, and the Great Divergence

India, Modernity, and the Great Divergence: Mysore and Gujarat (17th to 19th C.) is exactly what the title promises.  This 700 pp. or so book by Kaveh Yazdani, teaching in South Africa, is not published within the traditional network of outlets.  Yet from my perusal of the first 100 pp. or so it seemed quite promising, plus it has excellent endorsements, for instance:

“Yazdani has made a great addition to scholarship on the Great Divergence. His analysis of military, economic, technical, and political advances in Mysore and Gujarat – two of the most commercially advanced areas of 17th and 18th century India – sheds new light on the nature and complexity of the differences between contemporary Indian and European states. No analysis of the Great Divergence will be credible without taking Yazdani’s research, and Indian developments, into account.”
– Jack A. Goldstone, Hazel Professor of Public Policy, George Mason University, Fairfax

Recommended, to some of you, let’s hope it gets a broader circulation.  We do indeed live in a golden age for economic history.

Ji Haan, Minister

One of the unfortunate legacies of British colonial rule in India is a permanent civil service that tends to subvert any change that it deems against its interests, even when such change is promoted by elected officials. This is one reason why change in India is often two steps forward, 1.9 steps back. A case in point is India’s newly passed Goods and Service Tax (GST).

The GST was supposed to solve a long-standing problem of Indian intra-national trade. Unlike say the US common market, Indian states erect tariff and non-tariff barriers against the products of other states. As a result, production is allocated inefficiently–Indian firms with high costs hide behind barriers and produce too much while Indian firms with low costs can’t expand sales to other states and so produce too little.

(Canada, by the way, also has this problem. It’s often cheaper for a Canadian firm to ship to the US than to another province in Canada. You can find similar problems in Southern Africa where it is cheaper for South Africa to import produce from South America than from Zambia, as this excellent video discusses.)

trucksIn addition to the inefficient allocation of production, barriers to internal trade have also raised India’s transportation and logistics costs.

At the Walayar checkpoint in southern India, lines of idle trucks stretch as far as the eye can see in both directions along the tree-lined interstate highway, waiting for clearance from tax inspectors that can take days to complete.

Delays are so bad that textile entrepreneur D. Bala Sundaram has stopped sending his trucks to the international container terminal at nearby Cochin, instead diverting them hundreds of kilometres to a smaller regional port and onwards via Sri Lanka…

Overall:

Two-thirds of India’s freight travels by road. But only 40% of the travel time is consumed by driving, according to the World Bank. The rest is spent on waiting at state border checkpoints, paying state government levies and dealing with regulatory bureaucracies that vary from state to state.

The sad irony is that India spends billions improving its roads only to force its trucks to stop at state border checkpoints, sometimes for days, undermining the gains from the investment in roads.

The GST was going to simplify all this with a single umbrella tax creating one-tax, one-nation. Alas, the dream is being subverted. The law created a GST council of federal and state ministers and through this council the GST is rapidly becoming more complex and convoluted. First, one-tax was changed into four and with numerous exemptions the final number may end up being more like seven or eight.

Second, as I witnessed traveling between Uttar Pradesh and Rajasthan recently, the trucks are still lining up and may continue to do so:

The revolution the proposed goods and services tax (GST) promised might not be all that rosy because it would be hobbled by the need for an e-permit to be flashed at inter-state borders as the states insisted the old analogue practises continue.

The states seem to have gotten their way and will continue with the old ‘permit raj’ system, undermining one the biggest gains of GST.

The E-permit, by the way, sounds modern but don’t be fooled. Like India’s e-visa there is really nothing e about it–it’s just modern labeling for an old system.

Eventually the GST will be beneficial to India but it’s two steps forward, 1.9 steps back.

China wage fact of the day

Average hourly wages in China’s manufacturing sector trebled between 2005 and 2016 to $3.60, according to Euromonitor, while during the same period manufacturing wages fell from $2.90 an hour to $2.70 in Brazil, from $2.20 to $2.10 in Mexico, and from $4.30 to $3.60 in South Africa.

Chinese wages also outstripped Argentina, Colombia and Thailand during the same time, as the country integrated more closely into the global economy after its 2001 admission into the World Trade Organisation.

…Manufacturing wages in Portugal have plunged from $6.30 an hour to $4.50 last year, bringing wage levels below those in parts of eastern Europe and only leaving them 25 per cent higher than in China.

That is from Steve Johnson at the FT.

Tuesday assorted links