1. international Trade
a. Federal Direct Investment by other countries was a heavy influence on the growth of China. The country experience a gradual increase in exports around 1993. Foreign investments played a crucial role in China's legendary expansion. For example in 1998 China was the largest exporter in the world, however if FDI was taken out China's rank would drop to 15th largest. Another factor that contributed to China is its comparative advantage in labor. It is much cheaper to produce labor intensive goods in China than to produce in the United States. Therefore China mainly imports raw materials and assembles them to produce larger parts for export. Today China is arguably the largest exporter in the world. Its top 3 trading partners are the United States, Japan and Hong Kong. The country's top exports consist of power generation equipment, electrical machinery and oil seeds and oleaginous fruits.
b. China's imports were significantly higher than its exports in the early 1990s. The reason for the unbalance was due to the country's heavy dependence on importing a majority of their goods. However as the country began to grow rapidly, the economy grew and as a result China was able to focus on its domestic production. By the late 1990's the rate of imports were similar to the rate of exports. Today China is a significant importer and contributes to world trade. Its top 3 imports consist of toys, games, electrical equipment and power generator equipment. The countries top 3 imports are from South Korea, Japan and Taiwan.
2. The official currency in China is the Yuan Renminbi. One U.S dollar is equivalent to 6.22 Yuan Renminbi. The country has a history of multiple series consisting of changes to the Yuan and bank notes. The printing of Yuan is managed by the China Banknote and Minting.
3. China has had a history of restricting anyone in the country or outside of the country from immigrating and emigrating. Due to these restrictions, there has not been a significant source of immigration from the country. However during the mid 1990's the country started to allow groups of people immigrate from the country through excuses. For example in 1960 China allowed approximately 100,000 people to migrate to Hong Kong. The most significant source of emigration and immigration is done through over sea countries near China.
4. China had the latest entry to the World trade Organization. For years there has been conflicts regarding numerous negotiations to allow China to become a member of the WTO. In order to gain membership, the country had to go through many policy changes to allow a more open economy. One significant policy change led to the government's pursuit to combine communism with capitalism. This combination resulted in the birth of the country's socialist market, which drastically opened the economy for trade. Some of China's allies include North Korea, Pakistan and Myanmar.
Thursday, April 25, 2013
Tuesday, April 23, 2013
News Summary 2: Chinese Auto Buyers Grow Hungry for Larger Cars
1. China has been the largest car market in the world since 2009. Over recent years, consumers preferences have shifted from smaller compact vehicles to bigger vehicles. As a result of this consumer preference shift, it has increased the country's oil import bill drastically. Due to increase in the quantity of oil demanded, it has had a direct correlation in adding to China's pollution. The increase in demand for oil has raised political concerns, especially in Beijing, as policy makers attempt to limit oil consumption.
2. As consumer preference leans toward bigger vehicles, this has increased the demand for vehicles to the right. As a result of the increase, price has risen as well as quantity supplied. Thanks to the increase in price, car manufacturers have greatly benefited, while consumers experienced a loss. S.U.V sales have increased by 49% in March, and have projected sales of 21 million vehicles over the course of the year. General Fords is anticipating the market to increase by 30 million cars and trucks. Government spending in turn increases since it has to import more oil in order to meet the demand of the consumers.
3. Consumer preference towards having larger vehicles led to this problem. An option or a resolution may be to provide consumers with an incentive such as a discount, to purchase more compact and fuel efficient vehicles. Policies that may improve the situation is to restrict the amount of oil imports into the country. This is ultimately increase the price of oil and potentially increase taxes on oil consumption.
Link to Article: http://www.nytimes.com/2013/04/22/automobiles/autoshow/chinese-auto-market-shifts-toward-larger-cars.html?ref=china
2. As consumer preference leans toward bigger vehicles, this has increased the demand for vehicles to the right. As a result of the increase, price has risen as well as quantity supplied. Thanks to the increase in price, car manufacturers have greatly benefited, while consumers experienced a loss. S.U.V sales have increased by 49% in March, and have projected sales of 21 million vehicles over the course of the year. General Fords is anticipating the market to increase by 30 million cars and trucks. Government spending in turn increases since it has to import more oil in order to meet the demand of the consumers.
3. Consumer preference towards having larger vehicles led to this problem. An option or a resolution may be to provide consumers with an incentive such as a discount, to purchase more compact and fuel efficient vehicles. Policies that may improve the situation is to restrict the amount of oil imports into the country. This is ultimately increase the price of oil and potentially increase taxes on oil consumption.
Link to Article: http://www.nytimes.com/2013/04/22/automobiles/autoshow/chinese-auto-market-shifts-toward-larger-cars.html?ref=china
Thursday, April 18, 2013
Extended Writing Paragraph
The store was very resourceful and diverse in
the merchandise it sold. Each department of the store had its own color
as well as a slogan specific to the products. Any market innovation that lowers search costs, such as the advent of electronic commerce, makes markets more efficient. people waste less time and money on search (46). Organization, the internet and distribution has had lasting benefits on consumers and the market as a whole.
Reinventing the Bazaar: A Natural History Of Markets
a. In 2000, Bill Gates highlights the impacts of the internet on our modern economy at the World Economic Forum. He states that markets are "based on the sellers finding the most appropriate buyer" (48). Before the internet was invented, finding the most appealing price of a good was costly in terms of the time it took consumers to find the appropriate buyer. It was also costly for sellers to get information about the prices that consumers were demanding. Sellers faced "cost of production and of establishing a distribution network." (48). The internet added a new dynamic that evolved the marketplace, information became available at a finger tip. In our modern economy, the internet has allowed corporations to bypass the "middle man" and do business directly with the consumer. The internet has revolutionized the transactions and relations between the seller and buyer. This is evident in the daily transactions that we, the consumers make over the internet through online markets such as Amazon, eBay and other various sites.
b.Transaction costs by definition is the exchange and purchase of a good between the buyer and seller. The author states that the information and the time it took to gain knowledge of the market place is a small transaction cost on its own. These small transaction costs accumulate over time because the time it takes consumer to make comparisons between merchants is too costly. Therefore each seller can be considered as a monopolist, because they are able to lock in consumers and leave little room for bargaining. The remaining transaction costs arise from "difficulties of observing quality''. Although the internet have eliminated small transaction costs of time, it by no means ''created a perfectly frictionless market. Instead it has heightened the need for buyers to be able to trust sellers" (50).
c.There are two main problems that arises with imperfect information. First, consumers are at a loss because they do not have the proper knowledge of the price a good. The consumers realize the cost of the time it would take to make proper comparisons between different sellers. Therefore they become locked in to the first seller they interact with and thus have a disadvantage. The second, is the price fluctuation between sellers of the same good or service. Although they have the upper hand in a transaction, they are at a disadvantage because they can not properly measure their potential revenue from a sale. The ultimate consequence then, is that imperfect information causes the market to be inefficient.
b.Transaction costs by definition is the exchange and purchase of a good between the buyer and seller. The author states that the information and the time it took to gain knowledge of the market place is a small transaction cost on its own. These small transaction costs accumulate over time because the time it takes consumer to make comparisons between merchants is too costly. Therefore each seller can be considered as a monopolist, because they are able to lock in consumers and leave little room for bargaining. The remaining transaction costs arise from "difficulties of observing quality''. Although the internet have eliminated small transaction costs of time, it by no means ''created a perfectly frictionless market. Instead it has heightened the need for buyers to be able to trust sellers" (50).
c.There are two main problems that arises with imperfect information. First, consumers are at a loss because they do not have the proper knowledge of the price a good. The consumers realize the cost of the time it would take to make proper comparisons between different sellers. Therefore they become locked in to the first seller they interact with and thus have a disadvantage. The second, is the price fluctuation between sellers of the same good or service. Although they have the upper hand in a transaction, they are at a disadvantage because they can not properly measure their potential revenue from a sale. The ultimate consequence then, is that imperfect information causes the market to be inefficient.
Tuesday, April 16, 2013
A Fez of the Heart: Travels around Turkey in Search of a Hat Assignment
a. I found the passage "since I have not been in Pomegranate long enough...Life used to be fun... now its just business..." (pg 11) to be the most interesting. In this passage the author summarizes how the influx of tourist, immigrants and modernization have erased the traditions of Pomegranate. Depictions of the people and city through the media have wrongly perceived the ideals of Pomegranate. A major influence that have changed Pomegranate is the influx of tourism. Over the years tourist have ignored traditions of Pomegranate and instead have persistently used their own customs. It is surprising to see how much a place can change with in a short span of 20 years, its "twenty-year transformation, it seemed that pomegranate had lost more than it had gained". Customs, tradition, food and ideology have been covered by influence of new generations.
b. Culture, tradition and customs changed as the city became more prosperous. In the economic perspective, change is necessary for a city to grow. Such change is evident in the transformation of the market system in Pomegranate. Traditional market stalls have been replaced by "Naf-Naf, Chanel, Moschino, Lacoste and other departmental stores". However change can be very negative, as it has caused new generations to forget and replace traditional customs that have been passed down for generations. Therefore economics and culture can be viewed as having an inverse relationship. As economics increase the value of culture decreases, among future generations that have become more modernized.
c.The Great Wall of China has been a popular tourist attraction for many years. People all over the world visit this wall for its historical value and sheer size. It is also considered to be one of the seven wonders of the world. The Forbidden City is another popular tourist attraction. People come to this historical site for its structural elegance, and isolated beauty. There are two characteristics between these two popular attractions that draws people. First, both these tourist icons is precious and have rich history. Second, none of these historical icons can be compared to anything else around the world.
b. Culture, tradition and customs changed as the city became more prosperous. In the economic perspective, change is necessary for a city to grow. Such change is evident in the transformation of the market system in Pomegranate. Traditional market stalls have been replaced by "Naf-Naf, Chanel, Moschino, Lacoste and other departmental stores". However change can be very negative, as it has caused new generations to forget and replace traditional customs that have been passed down for generations. Therefore economics and culture can be viewed as having an inverse relationship. As economics increase the value of culture decreases, among future generations that have become more modernized.
c.The Great Wall of China has been a popular tourist attraction for many years. People all over the world visit this wall for its historical value and sheer size. It is also considered to be one of the seven wonders of the world. The Forbidden City is another popular tourist attraction. People come to this historical site for its structural elegance, and isolated beauty. There are two characteristics between these two popular attractions that draws people. First, both these tourist icons is precious and have rich history. Second, none of these historical icons can be compared to anything else around the world.
Part Three: Tourism
Today China has become one of the most important destinations in Asia and is ranked 6th in the world for tourism. Annually the country attracts an average of 55 million visitors from all over the world and the volume of tourists continues to grow. Top tourist destinations are Beijing, Shanghai, Xian, Hong Kong, and a few more around the country. Currently there are two specific tour routes, the first resembles a shape of an "S" because it leads tourist through inland China crossing Beijing, Shanghai, Xi'an, Suzhou and Hanzhou. the second route resembles a crescent shaped because it leads tourists to the coastal regions such as Liaodong, Shandong peninsulas and the Yangtze river. The reason for the development of these two routes is to give tourist a deeper impression and historical knowledge of China. Other factors include a growing environmental effort across the country.
Major tourist attractions include;
| Great Wall of China, located in Beijing. |
Forbidden kingdom, located in the heart of Beijing
 Yalujiang National Park, located in Liaoning  Zhangjiajie National Park, located in Hunan Aside from national parks the country has a number of nature preserves. Below are some examples across various locations. Songshan National Nature Reserve (Beijing)  Zhalong National Nature Reserve (Heilongjian)
China is a vast land filled with historical sites and artifacts. There are many museums that are placed across cities in China, which makes it difficult to rank them according to importance. However there are notable museums that attracts more tourists than others. Here is a list of the top five museums according to popularity.
1. Shaanxi History Museum is located in Xi'an and is considered to be the first huge modern museum in China. Visitors can expect to see a range of over 300,000 items, which mainly consists of artifacts dated back to the Tang dynasty.
2. Beijing Capital Museum was constructed and opened to the public in 1981. It is a art museum housing a variety of items from imperial China and other artifacts across Asia. It is considered to be one of the leading cultural institutions despite its lack of popularity compared to other museums.
3. Shanghai Museum is located in the Huangpu district of Shanghai. The museum has an emphasis of ancient Chinese art.
4. Henan Museum is located in Zhengzhou and is a history/art museum. It is home to more than 130,000 pieces of cultural relics collected through out the history of China.
5. Nangjing Museum is one of the largest museums in the country. The infrustructure is unique in the way that it combines ancient architectural design from the Liao-Dynasty and western styles.
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Thursday, April 11, 2013
Part two: Economics
1. GDP : $12.38 trillion
2. GDP per capital : $9,100
3. Life expectancy for Male: 72.82 and Female: 77.11
4. Population below poverty line: 13.4%
5. Literacy rate (2012)
Male: 96%
Female: 88.5%
Total Population: 92.2%
6.Unemployment Rate (2012): 6.4%
7.Inflation (2012): 2.6%
Research
1. Due to its enormous land mass, it is not a surprise that China is very rich on resources. Land used for farming is about 10% of total land mass. Agriculture is focused heavily near the north east where it is distributed through the Yangtze, the Sichuan Basin and the Pearl River Delta. The country is home to one of every 150 kinds of minerals that is known today. The country is known to have the largest deposits for tungsten, antimony, titanium, vanadium, zinc and several other minerals. Aside from agriculture, China has over 67,500 sq km of water, which provides for fish, shrimp and other aquatic organisms. Average rainfall with in the country amounts to 6 trillion cubic meters. Total water resources is 2.8 trillion cubic meters, which makes China have the 6th largest water supply in the world. The country is definitely rich on resources, however because of its large population, resources per capital is relatively low.
2. China has a enormous work force of 795.4 million. Compared to the world, the country has the largest work force. Education in China is primarily public and is provided by the Ministry of Education. All students are required to attend school for at least 9 years, and the government will typically fund students for 6-9 years.The school system varies from province, for example in one province middle school is 4 years long but in another province it is only 3 years.
3.The country experienced a rapid change in its infrastructure, technology and industries over the past decades. The most important influence to the countries success was due to foreign direct investment (FDI). Essentially FDI was the boost that gave the country a leap forward in its economy. The country experienced a sharp incline on exports and imports in 1994 and have experienced a surplus ever since.The countries growth has been legendary over the decades, by 2010 the country became the largest exporter in the world.
Today the country is still the fastest developing country by far, it's growth rate is on average 6.6% above the world.
2. GDP per capital : $9,100
3. Life expectancy for Male: 72.82 and Female: 77.11
4. Population below poverty line: 13.4%
5. Literacy rate (2012)
Male: 96%
Female: 88.5%
Total Population: 92.2%
6.Unemployment Rate (2012): 6.4%
7.Inflation (2012): 2.6%
Research
1. Due to its enormous land mass, it is not a surprise that China is very rich on resources. Land used for farming is about 10% of total land mass. Agriculture is focused heavily near the north east where it is distributed through the Yangtze, the Sichuan Basin and the Pearl River Delta. The country is home to one of every 150 kinds of minerals that is known today. The country is known to have the largest deposits for tungsten, antimony, titanium, vanadium, zinc and several other minerals. Aside from agriculture, China has over 67,500 sq km of water, which provides for fish, shrimp and other aquatic organisms. Average rainfall with in the country amounts to 6 trillion cubic meters. Total water resources is 2.8 trillion cubic meters, which makes China have the 6th largest water supply in the world. The country is definitely rich on resources, however because of its large population, resources per capital is relatively low.
2. China has a enormous work force of 795.4 million. Compared to the world, the country has the largest work force. Education in China is primarily public and is provided by the Ministry of Education. All students are required to attend school for at least 9 years, and the government will typically fund students for 6-9 years.The school system varies from province, for example in one province middle school is 4 years long but in another province it is only 3 years.
3.The country experienced a rapid change in its infrastructure, technology and industries over the past decades. The most important influence to the countries success was due to foreign direct investment (FDI). Essentially FDI was the boost that gave the country a leap forward in its economy. The country experienced a sharp incline on exports and imports in 1994 and have experienced a surplus ever since.The countries growth has been legendary over the decades, by 2010 the country became the largest exporter in the world.
Today the country is still the fastest developing country by far, it's growth rate is on average 6.6% above the world.
Tuesday, April 9, 2013
China's Housing Shortage
China is home to 1.7 billion people, which makes it the most populated country in the world. Along with increasing number of immigrants entering the country, China has recently experienced a shortage in the housing market simply because land is very limited. In response to the housing situation the government announced a new step up urbanization campaign. Thousands of crowded neighborhoods are being cleared out in an attempt to free up space for urbanized neighborhoods. A large amount of migrant workers live in various container boxes in an area known as the "container neighborhood". These people not only live, but also conducts their daily business all in one container.
The new leaders of China is estimating to spend 6$ trillion on infrastructures such as buildings and houses. They are expecting about 400 million people to become urbanized in the future. However by investing in such infrastructures means that many people will become homeless in the short run. One of the main reasons why these people choose to live in such crowded areas is because of cheap rent. Most people cannot afford the high rent rates that will be seen in urbanized rental units (2,000 renminbi compared to 400 renminbi). By removing the villages with in cities is also removing the people who have been the heart of providing economic grounds for immigration.
Over the past couple of years crowded rental units within Beijing have been clearing up, which forces a majority of its inhabitants out. An important issue of such removal is the fact that it creates a shortage. As a result of limited housing, the rental price increases. In order for prices to be driven back down to equilibrium, the government or the housing market must produce more homes to meet the demands of the people. Another indirect effect of the shortage is that the cost of labor is beginning to rise. For decades, thanks to cheap rent provided by private housing has been able to keep the cost of labor relatively low. Therefore rent and labor can be seen as complimentary goods.
The cause of the housing shortage in China is partly due to the governments poor planning and also partly due to the increasing amounts of immigrants residing within the country. Perhaps government subsidies to contractors, could give them an incentive, while making it cheaper to build more homes. Another possibility is for the political party to focus on short term losses as well as long term gains.
link to article: http://www.nytimes.com/2013/04/01/business/global/in-chinas-urbanization-worries-of-a-housing-shortage.html?pagewanted=2&_r=0&ref=businessandeconomy
Sunday, April 7, 2013
Part one: Culture
China
Sports
China has made a huge accomplishment in badminton, it holds 88 medals, only 2nd to the USA.
| Wang Xiaoli and Yu Yang playing in the 2012 London Olympics |
Table tennis is another favorite competitive and recreational sport
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| Zhang Jike is one of China's iconic players. Zhang is playing in the 2008 Beijing Olympic Finals
Although the China is not as strong in Basketball compared to other popular sports. It is still a very popular sport, thanks to the Chinese Basketball Association and notable players such as Yao Ming
Tennis may not be the most popular sport in China, but Li Na’s
achievements has made her a hero in her home country, China.
Music
Most traditional music is played on solo instruments or
small ensemble groups. Instruments include flutes, cymbals, gongs and drums.
Ethnic Han Music is a traditional style that consists of playing many different
variations of a single melodic line.Opera has been a major influence over the course of Chinese history. It is by far one of the most popular forms of music and art. The most notable of all operas is the Beijing Opera.
Other popular forms of music consists of genres in C-pop (Candopop and Mandopop), Rock, Heavy Metal and Hip-Hop.
Sweet and Sour pork
Ma Po Tofu , one of my personal favorites
There is a great diversity of religious beliefs,
the main religioins are Buddhism, Taoism, Islam, Catholicism, and Protestantism.
National Holidays and Traditional Customs
Chinese new year is one of the most popular and widely celebrated holiday of China. It is notably one of the biggest festivals which is filled with food, celebration and fire works. Other Festivals include the Qingming Festival, a traditional custom involving people making offerings to their ancestral graves. Duanwu Festival which is composed of a dragon boat race and consumption of dumplins wrapped in lotus leaves called Zhongzi. The Mid-Autumn
Popular TV shows and Movies
Popular movies include: Popular TV series include:
City of Life and Death A Bite of China - A Documentary style
Bodyguards and Assasins on the history of food and culture. Shinjuku Incident Cliff - A Chinese spy series. In The Mood for Love Fu Chen - urban workplace series
Some of the most notable actresses and actors
Online Forums for Expatriates (Links)
Type of Government (political leaders and political parties)
China is a communist country, its political parties consists of the Chinese Communist Party (CCP),
which ultimately controls eight other independent small parties. Despite being a communist country, the
government over the course of several decades has sought to combine communist ideology and
capitalism into the country's socialist market known today.
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Thursday, April 4, 2013
Reinventing the Bazaar Ch1
Markets have been around since history has began. There are hundreds of different kinds of markets such as fish, cloth, agriculture, manufacturing, and etc. Markets have changed dramatically over the course of its many years of existence. It constantly reinvents itself to become more efficient, and resourceful. One can compare markets to natural selection which is a process that essentially eliminates species who are not "fit" enough to pass their genes to their future offspring. Only those that are the fittest live on to successfully pass it genes onto its offspring. Thus a funnel of efficient, successful, and adaptive species arise over many years of evolution. Markets play a similar role by reinventing itself over the course of history. With each reinvention the market becomes more efficient, and shapes itself for the future.
Today, it is safe to say that almost everyone has been to a market and have interacted with transactions. Although they have been to the market and can visualize what it is, I would assume few could provide an explanation of what truly a market place is. What is a market? What are the components that make up a market? Although I have experienced being in a market, even I was unsure of the true characteristics that made a market. According to McMillan, "a market for something exists if there are people who want to buy it and people who want to sell it. The dictionary defines a market as a meeting together of people for the purpose of trade by private purchase and sell, and a public place where a market is held".
The components or characteristics that form a market is through its transaction. In transactions "decision-making autonomy is key. Participation in the exchange is voluntary; both buyer and seller are able to veto any deal." Although the market place is relatively free, "its people are still constrained by limited resources and by the rules of the market place itself." Therefore a definition of a market transaction is "an exchange that is voluntary: each party can veto it, and (subject to the rules of the marketplace) each freely agrees to the terms."
Although the market place is the thriving place for transactions people have different opinions and aspects of the market place. McMillan states "Markets provoke clashing opinions. Some people revile them as the source of exploitation and poverty. Others extol them as the front of liberty and prosperity." In a market place or any other transaction filled area, people have different limitations on their wealth and the ability to purchase goods.The wealthy have more power over what good can be sold to whom and tend to trade with those with equivalent wealth. The rich have more freedom and those who are "poor, the freedom that is essence of markets may be very circumscribed. Bargaining power between buyer and seller is sometimes quite unequal." It is the inequality or the border between poverty and wealth that is defined within the market that raises distrust of such a market.
Sometimes the distrust can be traced between the sellers themselves. For an example in our modern economy technology is the engine for innovation and delivers desired products to the market. With increasing competition there are many instances of sellers "stealing" or "using" intellectual property for their own benefits.With no non-market action such as government intervention to prevent unequal competition, market failure arises. It is this aspect of the market that may cause other people to distrust non-market action. Although I have not observe these opinions in person, I have observe these opinions through the media. I personally lean towards the opinions of people who distrust non-market action, because I believe that in order to have a perfectly competitive market, it needs government intervention time to time to lay out the ground rules related to copy rights and intellectual property. Although too much government intervention can sometimes hurt the market more than it can help it. A market place can be both harmful or unambiguously beneficial, it is not until a market place can find a balance or equilibrium in order to thrive.
McMillan states " a typical market is born and grows like football. It evolves spontaneously driven by its participants. It can operate with little or no formal structure-but only up to a point. To reach a degree of sophistication, its procedures need to be clarified and an authority given the power to enforce them." Although it is true that in order for a market to thrive it needs to be relatively free, but this does not mean that it can grow on forever with out proper guidance. Rules of the economic place where a market exist is set in order to guide a market to reach its full potential. If no rules are enacted and the market is completely free of any limitations it will fail to reach its potential. In terms of football a "absolutely free market is like folk football, a free for all brawl" oppose to a real market (rules and limitations) "is like American football, an ordered brawl." Out of the many rules we have in our modern market, I believe intellectual property right and copy right as well as policies designed to protect our domestic market (if necessary) are the most important rules of a market.
Today, it is safe to say that almost everyone has been to a market and have interacted with transactions. Although they have been to the market and can visualize what it is, I would assume few could provide an explanation of what truly a market place is. What is a market? What are the components that make up a market? Although I have experienced being in a market, even I was unsure of the true characteristics that made a market. According to McMillan, "a market for something exists if there are people who want to buy it and people who want to sell it. The dictionary defines a market as a meeting together of people for the purpose of trade by private purchase and sell, and a public place where a market is held".
The components or characteristics that form a market is through its transaction. In transactions "decision-making autonomy is key. Participation in the exchange is voluntary; both buyer and seller are able to veto any deal." Although the market place is relatively free, "its people are still constrained by limited resources and by the rules of the market place itself." Therefore a definition of a market transaction is "an exchange that is voluntary: each party can veto it, and (subject to the rules of the marketplace) each freely agrees to the terms."
Although the market place is the thriving place for transactions people have different opinions and aspects of the market place. McMillan states "Markets provoke clashing opinions. Some people revile them as the source of exploitation and poverty. Others extol them as the front of liberty and prosperity." In a market place or any other transaction filled area, people have different limitations on their wealth and the ability to purchase goods.The wealthy have more power over what good can be sold to whom and tend to trade with those with equivalent wealth. The rich have more freedom and those who are "poor, the freedom that is essence of markets may be very circumscribed. Bargaining power between buyer and seller is sometimes quite unequal." It is the inequality or the border between poverty and wealth that is defined within the market that raises distrust of such a market.
Sometimes the distrust can be traced between the sellers themselves. For an example in our modern economy technology is the engine for innovation and delivers desired products to the market. With increasing competition there are many instances of sellers "stealing" or "using" intellectual property for their own benefits.With no non-market action such as government intervention to prevent unequal competition, market failure arises. It is this aspect of the market that may cause other people to distrust non-market action. Although I have not observe these opinions in person, I have observe these opinions through the media. I personally lean towards the opinions of people who distrust non-market action, because I believe that in order to have a perfectly competitive market, it needs government intervention time to time to lay out the ground rules related to copy rights and intellectual property. Although too much government intervention can sometimes hurt the market more than it can help it. A market place can be both harmful or unambiguously beneficial, it is not until a market place can find a balance or equilibrium in order to thrive.
McMillan states " a typical market is born and grows like football. It evolves spontaneously driven by its participants. It can operate with little or no formal structure-but only up to a point. To reach a degree of sophistication, its procedures need to be clarified and an authority given the power to enforce them." Although it is true that in order for a market to thrive it needs to be relatively free, but this does not mean that it can grow on forever with out proper guidance. Rules of the economic place where a market exist is set in order to guide a market to reach its full potential. If no rules are enacted and the market is completely free of any limitations it will fail to reach its potential. In terms of football a "absolutely free market is like folk football, a free for all brawl" oppose to a real market (rules and limitations) "is like American football, an ordered brawl." Out of the many rules we have in our modern market, I believe intellectual property right and copy right as well as policies designed to protect our domestic market (if necessary) are the most important rules of a market.
Monday, April 1, 2013
Why Did Human History Unfold Differently on Different Continents For The Last 13000 Years?
Jared Diamond repeatedly questions himself in search of an answer to why human development advanced at different rates among different continents. What advantages or disadvantages did these continent have that the others did not? Why did historical advances occur for one continent and not the opposite?
Through out the discussion Diamond occasionally points out the importance of history and what influenced the history on these different continents as they did. In order to provide an explanation for his answer he looks thousands and thousands of years back to history where humans first began to develop. He points out that empires (such as Eurasia) with iron tools dominated stone tool using tribes during the period of 1500 AD.
Another question rises following an answer. What gave Eurasia the advantage it needed in order to develop sophisticated tools compared to continents using primitive tools such as North America? During the period between 11000 BC to 1500 AD there were major differences in equality among continents. These differences in development consisted of agriculture, herding and more importantly a complex political organization. It were these aspects that have been found to have developed much earlier in Eurasia than it had in North America. Again another question is left unanswered. What was the cause of such different rates of development among varying continents?
Resources, domestication, distance and proximity of size were the key reasons explaining the different growth rates. Eurasia's key advantage was of its latitude. The continent was orientated east to west oppose to North America's North to South. Due to the constant climate of Eurasia, a great variety of species and plants are able to migrate across the land, which in turn are more readily available to be domesticated by the people. Diamond stated in order for domestication to be successful a species must meet certain requirements such as having a stable food supply that humans can provide, a rapid growth rate, willingness to breed in captivity and etc. Eurasia stable climate made these requirements accessible for certain species to be domesticated. North America however did not have a stable climate, instead it had a varying climate that most species could not adopt to if it migrated to the north or the south. Thus the people were very limited to the species it could domesticate which ultimately led to an disadvantage.
Diamond provided evidence that continents that are close together tend to be more advance than continents that are isolated. This is because a population that is able to communicate among neighboring populations are more likely to invent new technology that can greatly increase its development. For an example Eurasia was the biggest continent and thus had a greater population compared to North America. Already the chances an individual among Eurasia's population is higher than one in an opposing continent. However the most important reason why Eurasia was more advanced was due to the fact that technology tends to come into a population rather than come out from one.
It is true that Eurasia was able to conquer North America due to resources, that lead to steel swords, guns and domesticated animals. However the deciding factor was ultimately determined by an influxation of germs that came with Europeans. Germs such as small pox and measles had never before been exposed to native Americans, thus their immune system had no guard against these new diseases. Germs were responsible for killing roughly 95% of the total population of Native Americans. With such a devastating blow to the continents population, they were no match for the Europeans. Diamond concludes that the factor that attributes to varying developing rates are not biological differences but rather continental differences.
Today such discoveries are evident in the global economy. For example China has grown legendary over the course of two decades. Its size, location, and resources are mainly responsible for its rapid growth. Countries that are closer to bordering countries tend to trade more with each other than countries that are more distant. Larger countries that have larger economies develop faster than countries with smaller economies. Lastly countries with more resources tend to be richer than those with less resources, which directly correlates with continental differences.
Through out the discussion Diamond occasionally points out the importance of history and what influenced the history on these different continents as they did. In order to provide an explanation for his answer he looks thousands and thousands of years back to history where humans first began to develop. He points out that empires (such as Eurasia) with iron tools dominated stone tool using tribes during the period of 1500 AD.
Another question rises following an answer. What gave Eurasia the advantage it needed in order to develop sophisticated tools compared to continents using primitive tools such as North America? During the period between 11000 BC to 1500 AD there were major differences in equality among continents. These differences in development consisted of agriculture, herding and more importantly a complex political organization. It were these aspects that have been found to have developed much earlier in Eurasia than it had in North America. Again another question is left unanswered. What was the cause of such different rates of development among varying continents?
Resources, domestication, distance and proximity of size were the key reasons explaining the different growth rates. Eurasia's key advantage was of its latitude. The continent was orientated east to west oppose to North America's North to South. Due to the constant climate of Eurasia, a great variety of species and plants are able to migrate across the land, which in turn are more readily available to be domesticated by the people. Diamond stated in order for domestication to be successful a species must meet certain requirements such as having a stable food supply that humans can provide, a rapid growth rate, willingness to breed in captivity and etc. Eurasia stable climate made these requirements accessible for certain species to be domesticated. North America however did not have a stable climate, instead it had a varying climate that most species could not adopt to if it migrated to the north or the south. Thus the people were very limited to the species it could domesticate which ultimately led to an disadvantage.
Diamond provided evidence that continents that are close together tend to be more advance than continents that are isolated. This is because a population that is able to communicate among neighboring populations are more likely to invent new technology that can greatly increase its development. For an example Eurasia was the biggest continent and thus had a greater population compared to North America. Already the chances an individual among Eurasia's population is higher than one in an opposing continent. However the most important reason why Eurasia was more advanced was due to the fact that technology tends to come into a population rather than come out from one.
It is true that Eurasia was able to conquer North America due to resources, that lead to steel swords, guns and domesticated animals. However the deciding factor was ultimately determined by an influxation of germs that came with Europeans. Germs such as small pox and measles had never before been exposed to native Americans, thus their immune system had no guard against these new diseases. Germs were responsible for killing roughly 95% of the total population of Native Americans. With such a devastating blow to the continents population, they were no match for the Europeans. Diamond concludes that the factor that attributes to varying developing rates are not biological differences but rather continental differences.
Today such discoveries are evident in the global economy. For example China has grown legendary over the course of two decades. Its size, location, and resources are mainly responsible for its rapid growth. Countries that are closer to bordering countries tend to trade more with each other than countries that are more distant. Larger countries that have larger economies develop faster than countries with smaller economies. Lastly countries with more resources tend to be richer than those with less resources, which directly correlates with continental differences.
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