On using Historical Perspective Devices

5. General

On using Historical Perspective Devices

Welcome to the fifty-eighth edition of ‘3-2-1 by Story Rules‘.

A newsletter recommending good examples of storytelling across:

  • 3 tweets
  • 2 articles, and
  • 1 long-form content piece

Let’s dive in.

𝕏 3 Tweets of the week

Democrats in the US just need to look for the right norm – global leaders – to feel better about their President’s approval ratings!

Interesting perspective on how home-schoolers might have an advantage in certain areas!

Good use of contrast to share a difference between investors and founders.

📄 2 Articles of the week

a. ‘China’s Record Manufacturing Surplus’ by Brad W. Setser, Michael Weilandt and Volkmar Baur

For all the talk about manufacturing moving out of China post the Covid-19 pandemic, the reality is different:

… some still understate China’s dominance of global manufacturing trade – and are misled by the current discourse about “fragmentation.” Shifts in China’s bilateral trade data with the U.S. are sometimes considered evidence that China’s centrality to global manufacturing supply has fallen.

​In fact, China’s post-pandemic surplus in manufacturing – which has now reached about two percent of world GDP – far exceeds the peak surpluses run by export powerhouses like Japan and Germany. More importantly, China’s surplus shows no signs of shrinking. While there was a pause in the expansion of the surplus in 2023, that only came after a huge jump between 2018 and 2022. And now, Chinese policy continues to emphasize upgrading China’s capacity in advanced manufacturing as a major driver of future growth.

Source: CFR

Which sectors are leading China’s continued export growth? Auto is a key area – both electric and ICE:

For example, China’s exports of autos – both EVs and internal combustion engines – have soared. BYD out-produced Tesla in Q4 2023 and is now looking to secure its long-term profitability by increasing its exports.

​But for all the attention given to China’s surging EV exports, around two-thirds of the 5 million cars that China exports annually are powered by gasoline or diesel.

Cleantech is an area of dominance:

China’s dominance in clean technology manufacturing is far broader: it manufactures 80 percent of the world’s solar panels, a higher share of solar wafers, and most of the capital goods needed to make solar panels. It not only produces more wind turbines than anyone, but its wind turbine components are increasingly used by other turbine producers.

So why are these economists concerned? Because, given the current domestic economy troubles in China (driven by the real estate sector), they worry that China may cut rates and depreciate the yuan…:

The IMF thinks China’s equilibrium level of housing investment is about half of what it has been in the past. Fair enough. It believes that China needs a rather enormous (7.5 percentage points of GDP) fiscal consolidation to stabilize off-budget debt levels. And it wants China to rely on a more price-based monetary policy (code for cutting rates) and increase its exchange rate flexibility (code for letting the yuan depreciate).

…Leading to a further boost to its export competence (and reliance):

Standard econometric estimates (derived from work done at the IMF) would suggest these policies, if adopted, would raise China’s current account by 4 percentage points of China’s GDP, or close to a percentage point of world GDP. Given China’s comparative advantages, such an adjustment would mean yet another rise in China’s surplus in manufactures. Excess capacity would turn into excessive reliance on exports to make up for shortfalls in internal demand.

b. ‘UK Conservatives are way more liberal than US Republicans on every measure’ by John Burn-Murdoch (tweet thread)

In this fascinating tweet thread, Financial Times chief data reporter John Burn-Murdoch tells a story with data – of how conservatives in the UK differ significantly in their views from their counterparts in the US.

This simple chart shows that UK conservatives are not only more liberal than US Republicans, but also US Democrats:

Source: FT

Another surprising data point on life expectancy – Blacks in the UK actually do better than their White counterparts:

How many people know that while black Americans live 4 years fewer than whites, black Britons live longer than their white compatriots? In other words, it’s not being black that lowers life expectancy, it’s being black in America

Source: FT on Twitter

This below chart is such an inventive way to show so many data points and yet keep it easy to grasp the key message (tip: see it in landscape more on your phone):

Tens of millions of Americans live in cities whose neighbourhoods are still significantly segregated by race. This is true of very few British cities, and London is more genuinely diverse/mixed than ~any major US city.

Source: FT on Twitter

For all the charts, notice how John writes a clear message on top and uses colour smartly to highlight the key points.

📄 1 long-form read of the week

a. ‘The World’s Biggest Crisis Is the End of Scarcity’ by Francis J Gavin

If the above articles made you feel a bit depressed about the state of the world, may I interest you with some historical perspective?

I loved how Prof. Gavin uses the good ol’ alien visitor framing to set the context:

Imagine an alien observer, sent undercover to Earth every half-century, to account for the status of human life on the planet. What would she convey to her extraterrestrial colleagues about 2024?

Since the imaginary alien is visiting every 50 years, the years it would be observing are: 1974, 1924, 1874, 1824 etc.

How would an alien have assessed Earth in 1974 – perhaps not so well, surmises Prof. Gavin:

In 1974, the world’s leading democratic power, the United States, was in geopolitical retreat and domestic disarray, while the authoritarian Soviet Union appeared increasingly powerful. The most populated state in the world, a Mao Zedong-led China, possessed an economy barely above subsistence level, while the second most populous nation, India, was scarcely better. The global economy suffered from both inflation and slow growth, marked by a chaotic international monetary and financial system. Wars or the threat of wars, both civil and interstate, were ever present in every part of the globe. Nuclear Armageddon hung like a sword of Damocles over the planet.

But here’s the kicker – if the alien compared 1974 with 1924 (or any period with the half-century report before that) it would find that things have gotten unimaginably better on earth:

1974’s report, however, was absolutely Pollyannaish compared to 1924’s. One horrific world war had concluded while laying the seeds for another even more murderous. Imperialism shaped the international order, as a significant percentage of the world’s population was ruled or exploited by European capitals thousands of miles away. A steep economic depression had just ended but was only a precursor to a far deeper, more devastating financial collapse a few years later. Racism, misogyny, and intolerance were the norm. This, however, was paradise compared to the previous chronicle. 1874’s report pointed out that global life expectancy was only 30 and that few living people had not, at some point in their life, been visited by personal and communal violence, deadly disease, misrule and misgovernance, and the threat of famine and disaster. Each preceding half-century report was, in fact, more dire than the last.

Here’s where things get tricky. Despite so much progress, the world is grappling with a new set of challenges. Ironically, it’s the success in taming scarcity that has laid the seeds for the current set of issues:

But the success in creating a more prosperous, informed, and secure world for humanity has, unexpectedly, generated a whole new set of planetary challenges that, if not resolved, threatens disaster, if not human extinction.

​The remarkable progress in generating unimaginable levels of wealth, information, and security has created the new, more vexing, and arguably more dangerous problems of plenty—unexpected and potentially catastrophic challenges that were created, ironically, by humanity’s impressive efforts to tame scarcity.

The article then goes on to talk about the factors that led to global prosperity and the resultant challenges.

The author wraps up with some stern advice from the alien to current global leaders…:

How would our alien friend end her report? She would point out that the institutions, practices, theories, and policies that successfully tamed scarcity – and that dominated current debates – were woefully ill-suited to meet the problems of plenty. The costs of failing to update core, often unspoken assumptions about how the world works and what matters would be highlighted, and that by preparing for the last war, Earth might tragically and unnecessarily get it. Her report would chide the thinkers and statesmen of 2024 for obsessing over the return of great-power competition and regurgitating the works of geopolitical thinkers like Mahan and Mackinder in order to control oceans and land that, if the problems of plenty are not confronted, may be dying and uninhabitable before long.

…but concludes on a hopeful note:

She reminds herself, and wishes the citizens of the planet could remember, that few living in 1974, 1924, or 1874 could have imagined the extraordinary progress earthlings have made since. Which, perhaps against her better judgment, gives her hope that she will get to visit in 2074 and be impressed once again.

That’s all from this week’s edition.

Photo by Diana Polekhina on Unsplash

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