Monday, May 7, 2007


Long time, no post. I finished reading Naked Economics, it didn't take me more than a week. I still highly recommend it. It did have lots of interesting points on globalisation.

One is the notion of human capital. From a macro-economic point of view, one of the best thing a country can do is to invest in its people - education, health-care and the like. The return of investment as measured in cold cash is worth it.

One example of this is the fact that countries that are rich in natural resources don't fare particularly well in the long run - because they haven't had to invest in human capital. Another example is a research facility of well-educated engineers and scientists that has to close down. A local disaster in the short run, but the engineers and scientists are highly motivated individuals that soon find something else to do. If the facility is not simply bought by a large corporation that has no other interest in the facility than its human capital.

Another point concerns one of the dark sides of capitalism. Creative destruction - those who cannot compete cannot survive. Instead of fighting this built-in ground rule, the author suggests that the transition period be made less severe by retraining the involved workers and support from the authorities. Focusing on the future instead of the past.

From the point of view of the Far East sweatshops, the author notes that the people working in these shops would not be there if it weren't for the fact that they are better than the alternatives. I think that's simplifying things (*ahem*, did anyone mention the word "exploitation"?), but nevertheless an interesting point to ponder.

In other news, I upgraded to the new Ubuntu version at work. More incremental improvements, as always.

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