EVERY so often someone asks me: “What’s your favorite country, other than your own?”First, kudos to Tom for even mentioning our forgotten fair isle. But for a guy whose second favorite place is Taiwan, he sure doesn't know anything about it.
I’ve always had the same answer: Taiwan. “Taiwan? Why Taiwan?” people ask.
Very simple: Because Taiwan is a barren rock in a typhoon-laden sea with no natural resources to live off of — it even has to import sand and gravel from China for construction — yet it has the fourth-largest financial reserves in the world. Because rather than digging in the ground and mining whatever comes up, Taiwan has mined its 23 million people, their talent, energy and intelligence — men and women. I always tell my friends in Taiwan: “You’re the luckiest people in the world. How did you get so lucky? You have no oil, no iron ore, no forests, no diamonds, no gold, just a few small deposits of coal and natural gas — and because of that you developed the habits and culture of honing your people’s skills, which turns out to be the most valuable and only truly renewable resource in the world today. How did you get so lucky?”
Taiwan is not a barren rock, but a large and complex island whose riches have been obvious to eager settlers, colonialists, and investors for nigh-on four centuries. The island is blessed with a superabundance of water, a key component of almost every industrial and agricultural process, fertile agricultural land, rich forest resources, and a long tradition of complex economic activity and participation in world markets.
His point about gravel is a laughable misunderstanding. As I noted six years ago in a long post on gravel, the import of gravel into Taiwan is the result of exporting it to Japan in the 1970s and more importantly, of the insatiable demand from our construction-industrial state sociopathology, whose goal appears to be to carpet the entire island in concrete. After all, the entire west coast is a plain consisting largely of a thin layer of soils overlaying vast beds of gravel wash brought down from the central mountain range or deposited by the ocean over the last few million years by the ocean. Imported gravel is not a sign of a lack of resources but rather a symptom of distress, of a political economy gone off the rails.
How did Taiwan get so lucky? A healthy bit of luck was being incorporated into the US security arrangements in East Asia. The US sought to make an example of Taiwan and showered it with all sorts of aid. In the 1950s it was US experts who pushed for reductions in the military budget and incorporation of a robust private sector into the KMT vision of a Party-State dominated economy. In the 1960s the Vietnam war drove the development of the island's concrete industries. Not until 1989 was Taiwan removed from the list of nations that received export privileges for the US market.
Friedman's major point about human capital is correct (about the only thing in the piece that is), but it would have been nice if it had been properly contextualized with two major points: first, the "education system" is not merely the government-run school system but encompasses a gigantic range of cram schools. It is virtually impossible to find writing on Taiwan (and Asian) education in the mainstream media that sturdily confronts the existence of a parallel but gray educational system (for example, a recent gem on class size from The Economist). Asian school systems produce high test scores in part because the students are trained to take tests, in part because they go to school up to seven days a week as high school exams approach, and in part because, I have long suspected but can't prove, the international test score assessments are gamed to produce the expected high scores.
I'm really tired of not seeing the cram school world mentioned in articles on East Asian educational attainment. Yes, Taiwan has improved its human capital; education and literacy were widespread in the pre-KMT period (see Tsurumi's Japanese Colonial Education in Taiwan, 1895-1945), and of course, this improvement was contingent on the US giving Taiwan a special quota for college students from Taiwan that enabled Taiwanese entrepreneurs both to educate promising family members and connect to the all-important US market. Friedman's piece would have been far more useful and interesting had it started with the point about human capital and economic growth (a commonplace in the scholarly literature) and then moved on to discuss how Taiwan educates its children, to put that human capital growth in its proper perspective. And if he had refrained from a cheap political shot about debt to make the more useful and serious point about America underfunding its educational systems in order to carry on pointless, stupid wars in the Middle East.
ADDED: Jenna also comments extensively on Friedman's ridiculous characterization of Taiwan
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