Webdiary - Founded and Inspired by Margo Kingston

"The Communist Party leadership has decided that in the next decade hairdressers, accountants, karaoke hostesses, tour guides, and movie directors will be the new pillars of economic performance. As investment growth slows and export markets endure their unpredictable business cycles and protectionist moods, China will increasingly rely upon consumption for creation of jobs and income – and the service industry is where most consumption occurs.": Stephen Green

"Is today’s globalizing era coming to an end? If so, it may not necessarily end with a repeat of the slaughters of the last century, but with an economic retrenchment that brings economic stagnation and consigns billions of people to grinding poverty. Various candidates have been proposed for the role of globalization’s assassin. But one little noticed, yet likely, aspirant has been sneaking up on the world economy: the growing tendency to limit the free circulation of people, to 'fence in' the rich world.": Branko Milanovic

"Would you be happier if you were richer? Many people believe that they would be. But research conducted over many years suggests that greater wealth implies greater happiness only at quite low levels of income. ... Perhaps Warren Buffett spent less of his life in a positive mood than he would have if, at some point in the 1960’s, he had quit working, lived on his assets, and played a lot more bridge. But, in that case, he surely would not have experienced the satisfaction that he can now rightly feel.": Peter Singer

"As the current "development round" of trade talks moves into its final stages, it is becoming increasingly clear that the goal of promoting development will not be served, and that the multilateral trade system will be undermined. Nowhere is this clearer than in a provision that is supposed to give the least developed countries almost duty-free access to developed countries’ markets. The coup de grace was delivered by the world’s richest country, the United States, which once again decided to demonstrate its hypocrisy. " Joseph Stiglitz and Hamid Rashid

"The world is a complex and intricate place. So how are we to understand even just a piece of it, say, the United States government and its economic policies? It is a big problem, for the standard sources that I was taught as a child to rely upon – newspapers and television news – are breaking down.": J Bradford DeLong

"Globalization has two driving forces: technology and policy. Thus far, policy has reinforced the flattening effects of technology. As the world’s largest economy, the US has taken the lead in promoting policies that reduce barriers. But events could reverse such policies. Some critics of globalization might welcome such an outcome. But the result, as we saw after 1914, would be the worst of both worlds – reversal of the economic globalization that spreads technology and power, but reinforcement of negative dimensions of military and ecological globalization, such as war, terror, climate change, and the spread of infectious diseases. In that case, the flat world could become a desert." Joseph S Nye

"If the Bolivians do not get fair value for their country’s natural wealth, their prospects are bleak. Even if they do, they will need assistance, not only to extract their resources, but also to improve the health and education of all Bolivians – to ensure long-term economic growth and social welfare." Joseph Stiglitz

"Even when politicians don’t lead, it is still possible for committed individuals and voluntary organizations to change the world. The key is to link a bold idea with a practical and powerful technology, and then to push the idea and technology forward through mass citizen action." Jeffrey D Sachs

"Pressure on China today to push up the value of the yuan against the dollar is eerily similar to the pressure on Japan 30 years ago to make the yen appreciate. Back then, “Japan bashing” came to mean the threat of US trade sanctions unless Japan softened competitive pressure on American industries. By 1995, the Japanese economy had become so depressed by the overvalued yen (endaka fukyo) that the Americans relented and an­nounced a new “strong dollar” policy. Now “China bashing” has taken over, and the result could be just as bad, if not worse." Ronald McKinnon

"Poor oil-rich Russia. It is trying so hard to have its turn as chair of the elite Group of Eight countries taken seriously. Of, course, people who really want to be unkind will point out the absurdity of Russia’s membership in a club that includes the giant economies of US, Germany, Japan, England, France, Italy, and (less so) Canada. Why wasn’t Chinese president Hu Jintao, whose country’s economy is the world’s second largest (when measured at world prices), given a seat at the table instead of Putin? After all, even with all its energy resources, and even with today’s sky-high oil and gas prices, Russia’s national income is only about the size of Greater Los Angeles. ": Kenneth Rogoff

"There are psychological and moral failures at all levels – individuals, firms, unions, insurance companies, and governments. Difficult problems of institutional design compound the difficulty of reforming social-welfare programs. ... These problems are not America’s alone, for they are inherent to all efforts to privatize social welfare. ... We should learn one thing from the example of Tony Snow: the vision of an “ownership society” espoused by Bush is simply not plausible.": J Bradford DeLong

"The IMF’s meeting this spring was lauded as a breakthrough, with officials given a new mandate for “surveillance” of the trade imbalances that contribute significantly to global instability. The new mission is crucially important, both for the health of the global economy and the IMF’s own legitimacy. But is the Fund up to the job?" Joseph E Stiglitz

"Do you want to know which video clip will soon be scaring the daylights out of policymakers throughout the world? In a scenario that looks uncannily like the spread of a global pandemic, the economist Thomas Holmes has prepared a dynamic map simulation showing the spread of Wal-Mart stores throughout the United States. Starting at the epicenter in Bentonville, Arkansas, where Sam Walton opened his first store in 1962, giant boxy Wal-Mart stores have now multiplied to the point where the average American lives less than seven kilometers from an outlet." Kenneth Rogoff

"Africa received $520billion in aid between 1960 and 1997, the equivalent of six Marshall Plans, and finished up even poorer than before. For some 50 years, foreign aid programmes have been a standard feature of Western dealings with the Third World in general and Africa in particular. The ‘goal’ was defined as assisting modernisation and development. Half a century on Africa remains a basket case with levels of poverty rising, not dropping, virtually across the entire continent." Roslyn Ross

"Some people still think of wage subsidies as a welfare hand-out. But these subsidies are very different from social assistance and social insurance programs. Although such programs have been substantial in Europe and the US, the working poor remain as marginalised as ever. Indeed, social spending has worsened the problem, because it reduces work incentives and thus creates a culture of dependency and alienation from the commercial economy, undermining labor force participation, employability, and employee loyalty. What is needed is higher employment and pay through higher demand for the least productive workers." Edmund S Phelps

"Fewer debates over economics would be needed if the world spent more time examining what actually works and what does not. Almost everywhere, debate has raged about how to combine market forces and social security. The left calls for an expansion of social protection; the right says that doing so would undermine economic growth and widen fiscal deficits." Jeffrey D Sachs

As more time passes with neither the value of the dollar declining sharply nor market forces beginning to shrink America’s current-account deficit – which may well reach $1 trillion this year – two diametrically opposed reactions are emerging. Most international finance economists are becoming increasingly frightened that a major international financial crisis could erupt. Indeed, they fear that the scale of that potential crisis is becoming larger and larger." J Bradford DeLong.

"Marks & Spencer, a supermarket and clothing chain with 400 stores throughout Britain, recently announced that it is converting its entire range of coffee and tea, totaling 38 lines, to Fairtrade, a marketing symbol of “ethical production.” The chain already sells only Fairtrade tea and coffee in its 200 Café Revive coffee shops. It is also boosting its purchases of shirts and other goods made with Fairtrade cotton. The announcement came during “Fairtrade Fortnight,” a two-week promotion of Fairtrade products that included speaking tours by farmers from developing countries, telling Britons how Fairtrade has assisted their communities." Peter Singer

"Any good international investment banker knows that the end of April is a bad time to come peddling his services, for that is when the world’s finance ministers return home from the IMF meetings in Washington, chastened that risks to the global economy could spill over into their own backyards. Ministers are too busy recovering from their trauma to think about paying fat fees for big new international bond issues. Who wants to build up debt if there might be a financial crisis around the corner? Better to keep socking away US Treasury bills, even if the return is far lower than on most other investments." Kenneth Rogoff

"Ethical investment or socially responsible investment is about making a conscience decision to direct money into companies that are at least not harmful and ultimately make a beneficial contribution to a more liveable society. Of course there are a wide range of opinions about what constitutes an ethical or sustainable investment. There is certainly a great amount of diversity amongst the ethical and socially responsible investment funds, some have religious convictions, others are traditional investment managers who have recognised the financial value of sustainability and there are deep green managers who take a no compromise approach and only support the strongly positive investments." James Thier

"China is about to adopt its 11th five-year plan, setting the stage for the continuation of probably the most remarkable economic transformation in history, while improving the well-being of almost a quarter of the world’s population. Never before has the world seen such sustained growth; never before has there been so much poverty reduction." Joseph E Stiglitz

"Since 1980, the multi million dollar live animal export industry has come under increasing pressure from animal welfare groups, and on 26 February the Federal Government suspended the live trade to Egypt on animal welfare grounds." Jenny Hume

"Earlier this month, Mikhail Gorbachev celebrated his 75th birthday with a concert and conference at his foundation in Moscow. Unfortunately, he is not popular with the Russian people, who blame him for the loss of Soviet power. But, as Gorbachev has replied to those who shout abuse at him, 'Remember, I am the one who gave you the right to shout'." Joseph S Nye

"As support for President George W Bush in the United States has crumbled over the past year, perhaps the most surprising element is the revolt of economists and observers of economic policy. Last week, Peggy Noonan, a speechwriter for both President Reagan and the first President Bush declared in the Wall Street Journal that had she known what George W Bush’s fiscal policy would be, she would have voted for Al Gore in the 2000 presidential election." J Bradford DeLong

"It’s been said that there are two essential qualifications that a US ambassadorial aspirant must possess: they must be a personal friend of the President and a significant donor to the President’s political party. Diplomacy doesn’t rate a mention." John Richardson

"One of the more surreal sessions at this year's World Economic Forum in Davos had oil industry experts explaining how the melting of the polar ice cap - which is occurring faster than anyone anticipated - represents not only a problem, but also an opportunity: vast amounts of oil may now be accessible." Joseph E Stiglitz

"This month, water once again takes center stage at the Fourth World Water Forum in Mexico City. It is an opportune moment: while much of the world’s attention has been fixed on issues of energy supply and security, hundreds of millions of people in the developing world continue to see the supply and security of fresh water as equally, if not more, important." Katherine Sierra

"For most of the twentieth century, programmers were patently unsuccessful in designing chess computers that could compete with the best humans. A human chess master’s ability to intuit, visualise, and prioritise easily prevailed over the brute force approach of computers. The computers gradually improved, but they still seemed far inferior to the top humans. Or so we thought." Kenneth Rogoff

"In the United States, individual states that follow unsound fiscal policies face a penalty. Their bonds sell at a discount relative to those of better-managed individual states. The higher debt service they must pay serves – to some degree – as a form of discipline against the temptation to spend now and pay later." J Bradford Delong

"The Hong Kong meeting of the Doha Round of trade negotiations has left a palpable sense of frustration in the developing world over the slow pace of agricultural liberalisation agreed to by the rich countries. It may thus appear naive and counterproductive to raise the bar and suggest that we need to go beyond trade and move investment to the top of our priority list. Yet can any “development round” worthy of its name ignore this challenge?" Jean-Michel Severino