Why ideas – not labor or capital – will decide countries’ economic success in the future

New World Order

Labor, Capital, and Ideas in the Power Law Economy

By Erik Brynjolfsson, Andrew McAfee, and Michael Spence

Recent advances in technology have created an increasingly unified global marketplace for labor and capital. The ability of both to flow to their highest-value uses, regardless of their location, is equalizing their prices across the globe. In recent years, this broad factor-price equalization has benefited nations with abundant low-cost labor and those with access to cheap capital. Some have argued that the current era of rapid technological progress serves labor, and some have argued that it serves capital. What both camps have slighted is the fact that technology is not only integrating existing sources of labor and capital but also creating new ones.

Machines are substituting for more types of human labor than ever before. As they replicate themselves, they are also creating more capital. This means that the real winners of the future will not be the providers of cheap labor or the owners of ordinary capital, both of whom will be increasingly squeezed by automation. Fortune will instead favor a third group: those who can innovate and create new products, services, and business models.

The distribution of income for this creative class typically takes the form of a power law, with a small number of winners capturing most of the rewards and a long tail consisting of the rest of the participants. So in the future, ideas will be the real scarce inputs in the world — scarcer than both labor and capital — and the few who provide good ideas will reap huge rewards. Assuring an acceptable standard of living for the rest and building inclusive economies and societies will become increasingly important challenges in the years to come.

LABOR PAINS

Turn over your iPhone and you can read an eight-word business plan that has served Apple well: “Designed by Apple in California. Assembled in China.” With a market capitalization of over $500 billion, Apple has become the most valuable company in the world. Variants of this strategy have worked not only for Apple and other large global enterprises but also for medium-sized firms and even “micro-multinationals.” More and more companies have been riding the two great forces of our era — technology and globalization — to profits.

Read more » Foreign Affairs
Learn more » http://www.foreignaffairs.com/articles/141531/erik-brynjolfsson-andrew-mcafee-and-michael-spence/new-world-order

 

Assam killings: ‘I saw my two sisters, brother killed… I ran into the jungle’

By: Express News Service Written by Samudra Gupta Kashyap | Sonajuli-phulbari (sonitpur)

Eighteen-year-old Nilima Baskey was picking up the clothes put out for drying when she heard gunshots in her neighbour’s house. Even as she tried to find out what was happening, she saw at least seven uniformed men walk into the courtyard of her house, opening fire in all directions.

“I saw my two sisters and a brother killed on the spot. My father-in-law and mother-in-law, who were sitting on the verandah, were also hit. I somehow managed to run away into the jungle. I ran until I reached the next village. As I was describing what had happened, I continued to hear gunshots, accompanied by shouting and crying, from my village,” said Baskey.

Besides her three siblings — seven-year-old twins Sita and Ram and two-year-old Suki — Baskey also lost her mother, Dalham Hasda, and cousins Luski Tudu and Kalyani Tudu. “Today, I came to know that Baha Baskey, my mother’s sister, and her two children were also killed,” she said.

Baskey is among the over 2,000 Adivasis who have taken shelter at the Tinisuti High School, about 10 km from Sonajuli. While she managed to escape, the others were not so lucky. As many as 31 people from her village were killed in the attack on Tuesday evening. Among the victims were 15 children, two of them below two years of age.

Charan Kiskoo, 60, lost four family members — a daughter and three grandchildren. “Luckily, my wife Menaka had gone to visit a relative in another village. But what will she remain alive for…. we have lost our daughter and grandchildren,” said Kiskoo, holding a spear and a dao (machete) with which he hopes to protect himself if the attackers come again.

The militants are reported to have come from the north-west direction, close to the Assam-Arunachal Pradesh inter-state border. Both Kiskoo and Baskey said there were 20-30 militants.

“They were wearing army uniform, so people first thought they were army jawans,” said Lakhinath Hembrom, another survivor.

Meanwhile, the protests against the attacks took a violent turn on Wednesday as mobs burnt houses belonging to both Bodo and Adivasi families in the area. While houses belonging to Bodos of Balidanga — who had fled last evening after the attack on the neighbouring Adivasi village — were first set on fire this morning, smoke and fire soon rose from Sonajuli-Phulbari and other Adivasi villages by afternoon.

Read more » The Indian Express

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Making of Twenty First Century State

States and wars are an outcome of each other. A state has justified legitimacy over the use of violence to maintain peace and order in a justice oriented manner for the healthy regulation of socio-economic activities.

By Zulfiqar Shah

Wars are the history (or ‘his-story’ in terms of feminism) of our generations. The notion of a peaceful, harmonious, war-free, non-racists, non-extremists and non-chauvinistic world however has to find an appropriate path for the materialization not through the slogans but essentially through the real, practical and pragmatic transformations and reforms within and around the human society, and essentially within the state apparatus of the countries.

Juxtaposing to the theoretical aspects of anarchism, the time has not yet come for human society to cede from the institution of the state, because it will ultimately happen through the evolutionary process of transformation in and around the human society and the societal institutions. Therefore, a new world would be impossible without certain sets of reforms within existing state-apparatus in the various human societies. This ultimately would change and re-determine the nature and health of society-state relation and interaction.

Unmaking of warsWars, in the form of feuds, historically were the business of collective communities in the pre-class formation of society. Later on, this role was undertaken by the warlords of the fiefdoms andtribes. Due to industrialization and urbanization of human society on the broader scale, wars became a fundamental characteristic of the early nation-states. Today, war-making is no doubt a sole realm of the state authorities. The decisions of war-making todayare takenin accordance with the proclaimed national, regional, continental and international interests.In the political course of contemporary socio-economic history, a twofold set of stakeholders has emerged around the world that have a decisive say in the war-making process – the inter-dependence of weapon and natural resources industry, and narrowly limited states owned think tank groups.

The contours of this twofold phenomenon are basically the practices of a non-representative process of determining and defining the national interests, and the unsustainable strategies to attain these interests. An unsustainable strategy is a prolonged international engagement in a region or country which does not have appropriate exist strategy; has lesser or no human damages; minimum or no specific impacts on the ecology; and the indigenous population friendly framework. The broader loopholes in the strategic engagements, war-making around the world and unsustainable strategies for attaining interests have given birth today to a kind of global anarchy.

There can be two important aspects of possible global transformation in the context of state-society relations, and particularly with reference to the broader world peace. The world powers and the countries that have heavy-weapon industry may consider the investment and industrial infrastructure transformation to certain extent from weapon industries into soft defense technology so that at least niche of the trade and market demand factors behind the war-making may be minimized.

Since the developing countries are gradually becoming self-reliant in the basic heavy weapon industries, which is mostly owned by the states in the developing countries, the weapon industry into the developed world would ultimately shirk in upcoming decades due to natural reduction in the demand.

Read more » MeriNews

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