Sunday, March 11, 2012

Friedman on Taiwan

The NYTimes hosts another commentary by Tom Friedman, which just makes me want to wail and gnash my teeth.... He scribes:
EVERY so often someone asks me: “What’s your favorite country, other than your own?”

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?
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.

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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14 comments:

Anonymous said...

I am tired of your repeated bias against KMT and its contribution to Taiwan's economic success long before DPP even existed. American money did contribute to some of Taiwan's success, not it's NOT the real reason behind Taiwan's economic success. Just look at how many failed states in the middle East, Central/South America or the Philippines which had received way more aid money from the Uncle Sam over the years than Taiwan did. What good did that money do to those countries. If the government power failed to set the right economic policies, implement an education that reward ability and smarts, willing to change its political systems when the time is right, its people always suffer (even up to this day) no matter what kind of money or influence the Great Uncle Sam throw at them.

drop-by said...

Your comment about that Vietnam War made concret industry prosperous hit the point. Whenever there was a major war breaking out around Taiwan, a new industry always blosoms in Taiwan.

From a rational economic being's view, Taiwanese businessmen should really welcome war instead of fearing it. Imagine if a war broke out between APEC and China, US will definitely equips Taiwan with some latest unmanned technology. Some money to make here.

Anonymous said...

President Ma would agree with Friedman. Taiwan is alo his 2nd favorite country. As for which of the USA or China is his current favorist country. He leaves that decision open hindging upon which one would offer a better protection for his true identity.

Michael Turton said...
This comment has been removed by the author.
Michael Turton said...

I am tired of your repeated bias against KMT and its contribution to Taiwan's economic success long before DPP even existed.

I'm tired of the ignorance of my commenters. Please do some reading on the economic history of Taiwan. A good start is Ho's _Economic Development of Taiwan 1860-1970_. Another key book would be Jacoby's _US Aid to Taiwan_. I doubt very much that you'll take the time to study before you comment here, so I'm making these suggestions for the remainder of my readers.

I'll just put a citation from the conclusion of his analysis of the effects of US aid.

"Aid more than doubled the annual rate of growth of Taiwan's GNP, quadrupled the annual growth of per capita GNP, and cut thirty years from the time needed to attain 1964 living standards."

The interesting thing about 1964 is that it is around the time that per capita income finally regained the level it had known in the late 1930s under the Japanese, after the hit from war and the postwar looting of Taiwan, as well as the transfer of the government in exile to Taiwan.

Good luck with your reading. If you need more suggestions I will be happy to provide them

Lilmo said...

We can argue till the cows come home on whether US aid is the key contributing factor to Taiwan's development. But the simple fact that the neo-Marxist "dependency theorists" have treated Taiwan as THE "deviant case" proves that things are far more complicated than a direct correlation between foreign aids and a country's GDP growth. If nothing else, Taiwan's decreasing economic inequality during a period of rapid growth would make the country stand out as one unique case that defies all "dependency theory" hypotheses on the ill effects of foreign aid.

Michael Turton said...

I don't think there is any doubt of that without US aid Taiwan would have never been able to achieve anything like its current level of GDP per capita. In the 50s and well into the 60s 85-90% of the budget went to the military. It was US aid that provided the capital to agriculture that got the farmers going. US aid stabilized the currency, covered the trade deficits, and protected Taiwan from the CCP. US aid personnel also forced the KMT gov't to incorporate a Taiwanese business sector and private capitalism, and identified promising businessmen. US aid personnel (along with technocrats in the KMT) were responsible for pushing the switch from import-substitution to export-orientation. The industrial districts were a US idea. Taiwan had preferential access to US markets and its own quota for college students. Etc etc etc.

We can argue, but the US Aid-wasn't-crucial side won't have a very good time of it :)

Michael

Anonymous said...

"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 have no qualifications in windbaggery and thus defer to you in all matters as you are in the research/education business, but wonder how Canada, Finland, or NZ do so well. I doubt they can fudge their OECD scores so much more effectively than US might. Part of me thinks they just aren't the types to cheat, so are you casting aspersions on our Asian hosts and neighbours as score fluffers?

Thank you for all your work here. You rank up with Matt Taibbi, and Amy Goodwin on my daily must reads. There are so few good deep sources on Formosa in English. Thanks again.

Michael Turton said...

Part of me thinks they just aren't the types to cheat, so are you casting aspersions on our Asian hosts and neighbours as score fluffers?

Here's why: the international assessments are locally controlled. The tests are sent to local schools for distribution. Now imagine if you are a local schoolmaster. You know which classes are good even if they are not outright tracked/triaged, as is done at many many schools. Are you going to distribute the tests randomly, or hand them off to the best classes? Now multiply your answer by all the schools receiving the test. I can't prove it, but I know how Taiwan works.

Michael

Anonymous said...

Can't we assume everybody does this fudge? But more importantly why doesn't the US do it then to not be in the (relative) crapper....or is Bill Maher right?

Anonymous said...

Friedman's article = paternalistic twaddle

Jenna Cody said...

http://www.mcsweeneys.net/articles/create-your-own-thomas-friedman-op-ed-column

It's like Choose Your Own Adventure of Pseudointellectualism!

Unknown said...

I like reading your post as I am interested in reading what foreigners think of Taiwan and its people.

"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."

One apparently cannot literally describe Taiwan as a barren rock -- no country in fact is/should be. But i think most of the locals would consider Taiwan to be devoid of natural resources, not completely but to a large extent. We rely mostly on imports on almost everything. When you speak of the water resource, Taiwan's river typically has a long dry season and when it rains, it frequently floods -- not a very "good" river. The statement of Taiwan being a barren rock (or something to that effect) might have appeared in school textbooks in the 60-70s. However, the kind of statement really impresses on me that one must be diligent and work hard to succeed in life. I think Taiwan owes its economic success (if any) in part to the virtue of the diligence of its people, a widely accepted and deemed virtue of the Taiwanese people.

Anonymous said...

Friedman is such a windbag. He's like a caricature of himself at this point.