Information Revolution - Utopia or Bust?

In response to Wasiq (Reply #: 59):

Dear Wasiq:

Wealth is needed to satisfy basic human needs, wants, and luxuries. Of course, luxuries for one person are simply needs of another person. In Pakistan, millions of people hardly earn their bread (not butter). In America, a lot of dogs and cats enjoy a better standard of living (quality of life) than millions of human beings in other parts of the world. The owners of pets justify the expenses on their pets since the pet is like a child, a faithful friend, a source of happiness, etc. Many owners of pets are even of Indian and Pakistani origins (who, I am sure, have seen a lot of human misery in their countries of origin). In fact, it is a question of ``my`` money and ``I`` have every right to spend it the way I like (no responsibility to community or society). Some ``worthless descendants,`` as you rightly pointed out, inherit the wealth (in whatever way it was earned). Property rights indeed perpetuate disparity over generations.

I am not a determinist. Yet, I do believe that real disparity between the rich and poor is extremely difficult to reduce/minimize. It is not impossible, however. The persistence of disparity often encourages the common people to adopt some dishonest/violent means-such as stealing, robbery, kidnaping, and even bloody revolution. The situation in Pakistan is not hidden from us. One relatively ethical source of change is through education and access to opportunities. The history of (particularly urban) Pakistan suggests that even education is an insufficient basis for acquiring a (reasonable) job since the opportunities for white-collar employment are extremely limited and most people lack sufficient capital to start even a small business. The quantity and quality of opportunities are likely to become much more scarce because the population of Pakistan is expected to double itself within the next 30 years. Are we prepared to deal with the situation in 2030? Do we need to think seriously about the future of our coming generation(s)? If yes, when should we start this process of thinking? Should we, as common people, start thinking and acting or delegate the responsibility to our unscrupulous and unresponsive bureaucrats and politicians?

Sincerely, Bilal Ahmad

TO THE SUPPORTERS of capitalism, here is the apology from the FIRST capitalist, the world bank

World Bank admits to past errors

WASHINGTON: After over 50 years of seeking to reduce poverty and disease

and educate the poor, the World Bank admitted on Wednesday that many of

its past policies were misguided and it needed help to succeed in the

future.

The bank`s annual World Development Report painted a bleak picture of a

developing world which has fallen even further behind rich nations

despite the efforts by the World Bank and others to make the world a

better place to live.

It also said that in many ways the bank had failed in its mission to

improve conditions of poverty, disease and poor education in the

developing world and admitted that it can no carry the burden alone if

its ideas are to work.

``Simple solutions--investments in physical and human capital, for

instance, and unfettered markets- -will not work in isolation,`` the

report said, admitting its past focus had been misguided. ``Governments,

the private sector, civil society, and donor organisations need to work

together in support of broad-based development.``

But the report remained optimistic for the future, laying out a new

policy for the future which builds on the knowledge gleaned from past

successes and failures.

The bank attributed much of its past problems to seeking out a ``magic

bullet`` which would solve the woes of the world`s poor.

``The conceptual frameworks for development of the past 50 years ...

tended to focus too heavily on the search for a single key to

development,`` the report noted. ``When a particular key failed to open

the door to development in all times and places, it was set aside in

search for a new one.``

As an example, the report said projects like building dams--something

the World Bank was prolific in during the 1950s and 1960s--can carry

hidden costs and harm communities through population dislocation and

other cultural and environmental problems.

It also said ``trickle-down economics``--the practice of cutting taxes for

the rich hoping it would benefit the poorer in society--does not work.

But whatever policies were used over the past 50 years, one thing is

certain: poverty continues to rise. Today 1.5 billion people live on an

income of less than $1 a day, up from 1.2 billion people in 1987. The

report forecast the numbers living at that lowest of incomes would reach

1.9 billion by 2015.

The gap between rich and poor has also widened. Between 1970 and 1985

the average per capita income for the world`s poorest countries dropped

from 3.1 per cent of incomes in rich countries to just 1.9 per cent.

``The fact is that we are not winning the battle against poverty, poverty

is increasing,`` World Bank chief economist Joseph Stiglitz told

reporters. ``But I think we do have within our reach the ability to

improve people`s lives,`` he added.

Learning from past successes and failures, the bank said a more

``holistic`` approach was needed to formulating development strategies.

``In some areas the most effective way to improve educational outcomes

for children may not involve increased expenditures on books or teachers

but instead may involve building a rural road or a bridge across a river

to facilitate access to schools,`` the report said as an example.

The bank`s new approach attempts to embrace a more comprehensive

approach which could be adapted for each country. The approach includes

the development of a sound economy but also building stronger legal

systems, banking sectors and other aspects of a nation`s fundamental

structures. (Reuters)

wasiq,

Assigning a net present value to the nature is the difficult task in any economic analysis. At a global level, flurocarbons used as propellents, has been sorted out because of effect on ozone layer, interestingly affects the white skinned more than the black skinned. Global warming, that could drown bangladesh and a few pacefic islands, but is likely to deliver warmer weather in the white ares is on the back burner. Life of a few bangladeshis, difficult to quantify, but the effect of skin cancer on the white is easier.

The value of bio diversity, can we put a value to it. You would have heard this sentence, some thing like this `` when the last tree has been cut, when the last river has been poisoned, when the last fish has been caught will men realise that we cannot eat MONEY``. Like every thing else, the topic we are dealing with is at the core of our being, if you consider the above statement by a native indian proFound, then we have at least an intersection of values.

Tarbela dam the details I donot know. But I can site an example from india, state of kerala. 30 years ago. The plan was to construct, at that time the largest hydro electric project, Shabari Giri dam. The govt wanted it, there was as usual power shortages. But it would have flooded the habitat of the Lion Tailed Macaq. After public intervention the dam project awas cancelled. Well kerala is unique. Hindus worship monkeys. You can draw you conclusion.

As an engineering student I was in support of the dam, i took part in demonstrations in support it along with the electricity board staff. Age does strange things to people.

Response to Wasiq #: 39

You asked why I regard Pakistanis to be followers and not leaders, so please note: Let us define a ``leader`` to be someone who comes up products (conceptual like ideas or values or tangible like IT) that other people willingly adopt. How many products can you count that we have created in 50 years that fall in this category? Prof. Yunus of the Grameen Bank is a leader since he came up with a product (an idea in this case, that poor women can prove to be very credit-worthy, putting to shame the ``elite`` in the same society) that has provided the first real breakthrough in the war against poverty. Try finding another example of such leadership in South Asia or Pakistan. Now look for examples of ``followership`` and you will find that these abound (I do not mean to say that being a follower is bad by any means - we all learn from one another, and only those who adapt survive, it`s just that that is not enough to be a follower).

On capitalism: I think capitalism has ``triumphed`` for now since it is aligned with the reality that people need incentives to work hard for economic security, while socialism is aligned with the fiction that people work for the greater good. Capitalism too will become irrelevent, imho, when it is no longer necessary to work hard for economic security (as is bound to happen, imho, in the coming decades). The Information Economy is, again imho, creating new realities whereby survival will be of those most capable of cooperating with one another.

In response to TAhmed321 (Reply # 53):

Thank you for your extremely generous appreciation of my response to your question (see Replies # 32 and 35). My response was based on my personal expeience and common sense. I think most of the probelms of Pakistan can be dealt with adequately if we learn from our past experiences, use common sense, and be a little creative. The empowerment of the common people of Pakistan is, I think, a prerequisite for a free, stronger, and self-reliant Pakistan.

Sincerely, Bilal Ahmad

This responds to bahmed Reply #35

Dear bahmed,

Your reply to the question ``Why we Pakistanis are followers, and not leaders`` was so good - and so important - that I think it would be the perfect education policy, and indeed the perfect economic development policy, for the country. Since I cannot improve on what you said, I shall do the second best and refer anyone reading this to go back and read your Reply #32.

Sorry for the delay in responding.

In response to Jay (Reply # 50):

Dear Jay:

Jay`s reference to Ivan Illich`s Deschooling Society (1971) is extremely important for understand the relationship between education and social reproduction. There are many Marxist/radical critiques of public education in industrialized societies.

Paul Willis, a British sociologist, has argued that part of the explanation of the fact that working-class kids get working-class jobs (particularly in the United Kingdom) is simply that they want such jobs. They predominantly reject the more ``white-collar`` culture of the school, and the way teachers behave and live does not realistically strike them as something to desire or emulate. In fact, working-class kids get working-class jobs and girls end up doing women`s work (Willis, 1977, Learning to Labor). More detailed insights on the reproduction of a stratified labor force is offered for the British and American contexts by Halsey et al. (1980) and Bowles and Gintis (1976) respectively.

Some scholars have sought to ensure that schooling becomes a more powerful influence than social origin of children (see Bourdieu and Passeron, 1977: Reproduction in education, society and culture; and Bourdieu, 1984: Distinction). Pierre Bourdieu considers ``cultural competence`` necessary to participate in any subculture. He argues that: ``A bachelor who lacks the specific code feels lost in a chaos of sounds and rhythms, colours and lines, without rhyme or reason`` (1984: 2). Bourdieu suggests that cultural competence is a ``cognitive acquirement.`` His contribution shows that understanding particular cultural codes in order to decode them requires detailed ethnography rather than underground theorization. This is exactly what Willis has done for his study of the British kids.

In criticizing the institution of schooling itself, Illich contends that schools privilege certification over actual competence, unreasonably restrict the domain of what counts as worth learning, and prescribe restrictive and unhelpful modes of learning. The New Right has adapted some of the New Left critique of schooling for its own purposes. The New Right is against the agenda setting power of teachers (particularly with the help of their unions) and wants to transfer such power to the parents. This has led to some sort of the breaking up of schooling monopolies and consumer enfranchisement.

Information about Ivan Illich and his works (even the full text of Deschooling Society) is available at Infoseek.go.com.

Sincerely, Bilal Ahmad

In response to Wasiq (Reply # 46):

Dear Wasiq:

I am not sure if I believe in any form of capitalism. If some form of socialism is an alternative to it, I wonder if I would believe in it either. The form of socialism developed in the Soviet Union, China, and several other countries is not the kind I really fancy. Because I live in an essentially capitalist world, I (a la Marx) am more interested in understanding the nature and process of capitalist development. Wasiq, you have asked two important questions pertaining to the future of capitalism and its alternative. I think, the answer of these questions may be found if we examine the historical-geographical development of capitalism.

Pure capitalism is no more in existence. Perhaps it never existed in any society: Marx`s distinction between the capitalist mode of production and capitalist formation. Marx had abstracted the essential nature of, and tendencies in, capitalism: ``Accumulation for accumulation sake; extraction of surplus value; falling rate of profit; crisis of capitalist production; etc.). Marx and Marxist scholars have generally neglected the geographical and spatial dimension of capitalist social relations. Only recently (starting early 1970s), Marxist geographers have made some noteworthy contributions to overcome this weakness in literature (see, David Harvey`s Limits to Capital).

Wasiq, the notion of the success of capitalism is somewhat contentious. It is like half-glass full and half-glass empty problem. In fact, the true beneficiaries of capitalism are just a few, while most others simply struggle to (barely) survive. Anyhow, the apparent success of capitalism cannot be attributed to its purely economic character. The states have played a significant role in dealing with some of its conflicts, contradictions, and crises. We should not, however, forget the role of colonialism, imperialism, and militarism in the historical process of development/underdevelopment.

I think, one of the biggest negative consequence of capitalism is its uneven development. As long as capitalism is alive and well in any form, we will continue to see the coexistence of richness and poverty in our communities, cities, regions, nation, and the world at large. I don`t see the possibility of the rich people to equally or equitably share all their wealth and resources under their control with the rest of the world, let alone with their own country people. The people around the world are increasing acquiring the capitalist culture. This has led to some serious problems (e.g., conspicuous consumption). If we really want to minimize the negative consequences of capitalism, we need to understand it and take sensible measures to tame it. As the European Community has organized itself to both confront and cooperate with the United States, an Afro-Asian or Asian Common Market seems necessary to confront and cooperate with the United States, the European Community, and the rest of the world. In the interest of Pakistan (and other South Asian countries), our first attempt should be to strengthen the SAARC. We need to learn from our own experience (SEATO, CENTO, RCD) as well as the experience of other people around the world.

Sincerely, Bilal Ahmad

During discussions on this artcle, some where I mentioned that the american propaganda has been swallowed lock stock and barrel. The response from a few chowkwalas has been promt, their views are based on articles in respected magazines and journals and not part of any propaganda. The essential element of advertisement sales strategy of publications is that they arrange for `scholarly` articles that promotes the product categories advertised. The IT magazines always promote the Y2K problem, internet is the do all and how beautiful and comfortable the mankind will be all that information.

There was once a `popular` book, De-schooling Society` by Ivan Illich, I dont know whether any of generation X have heard of him.

wasiq,

Capitalism is essentially christian, it is guidede by the central christian premise that humans are superior, all other creations are servents to this great master. It is this idea of domination of all othere creatures that has been the engine of capitalist domination. The native Australians, till 1975 were considered as part of the fauna, were not included in the census, and slaughtered like other ferral animals to make way for economic enterprise like farming and mining, a view consistant with capitalism and the christian world view.

To me environmentalism and green movement are possibly the greatest changes coming to capitalism. The degradation of the planet is for the first time questioning the christian world view, man if it continues the `domination` may not last long. May be the notion of biodiversity, may be the idea that animals and plants have a right to exist eventhough it may not be of any economic benefit is a revolutionary idea that could change the face of capitalism.

In south africa there is ecotourism and wild life shootings, the existence of the wild fauna and flora is justified from a competing resource alocation model. That is a good step, the final one is to drop the economic analysis and siply state that, hey they have a right tro exist.

What happened in canada good be a harbinger of the coming times, the return of large tracts of land to the traditional owners.

Re: Wasiq 41

It seems that being a scientist, you took my comments personally. But I think you should take a more objective look at my arguments. Actually, in your answer to TAhmed321, you have proved my point about the ethical nature of the current scientific culture. I said that science and ethics are not congruent with each other. Let me call the prevalent scientific culture as scientism to distinguish the kind of the scientist I am from the arrogant ones. The immorality really stems from the arrogance as such ``[I would have]felt sorry for God. The theory is correct.`` So scientists are now saying ``Hey, `nature`s` designs are deficient and we can make them better!`` So comes the use imprudent use of genetics. But due to the limited brainpower and the culture of the reductionism scientists fail to look the total picture. For example, a plant was genetically changed to ``improve`` its production, resistant to disease etc. But its pollens became toxic to a particular species of butterfly that eats them. They are disturbing the delicate balance of nature.

If you can take a look at yesterday`s article about the rapid extinction of salmon in the Science Times, it would be enough to convince you that humans` so called progress is destroying the world. So I do not think that the problem is limited to ``some black sheep`` - the problem is with the whole scientific culture.

Second, most of the quotes that are thrown around about science and God are from people with Judeo-Christian background. They have a perception of God not compatible to that of the Muslims. For a Muslim God is not a Supreme Being or anthropomorphic as Quran says; nothing is like Him. For that, I find both of Einstein`s quotes meaningless.

Third, I do not think Einstein is a special case. There has been countless other physicist from Newton to Feynmann who were humbled by Nature`s wonders. I have seen more biologists who are atheists than the physicists. That might be because physicists have a concrete medium of mathematics to work in. Biologists dish out theories based on flimsy evidences.

``First of all evaluators of Linux do not qualify as scientists in any sense of the word. ... What kind of science will you categorize evaluation of Linux as? Which discipline does it fall into? What qualifications of a proper scientific discipline do you think Linux evalution has that makes it a scientific discipline? I am very curious to find out :)``

Computer science! It is not just looking for evreything being printed on the screen as required, e.g., spellings. Some of the features of the modern OS`s are quite sophisticated such as multi-threading and memory management. So I reckon that there should be few computer scientists present among the team of evaluators.

To bilal,

I am extremly thrilled to note that you are also interseted in development economics, once up on a time I was a research student in that. In those days I was enthralled by the dependencia theory, the days of samir amin, and havnt updated eversince.

There are a lot of `confirmed` capitalists on the chowk, sold their souls to percapita GDP and economic growth. In those days some work, pioneering and anti west was being done on new `development` indices. Any idea what is happening these days. I remeber one Mehboobil Haque. At times it would be useful to remind the other chowkwalas, do I have an ally here, that the economic theories they are treating as `science` and truth are only a capitalist version and there are other consistant and equally valid thories.

Re-Wasiq 41

First I would like to comlement you on your exemplary conduct as a chowk writer. Exchange of ideas , or interactivity is really important for a forum like this.

Re- capitalism. I think we have a misunderstanding here. I was not contemplating any

non-capitalist alternatives, but merely pointing out that there are possibilities of empowerment of

communities, and of a turn towards egalitarianism,

within the framework of a capitalist framework.

We can delineate the developmental logic of capitalism by analysing it as a social organisation of production, and as a world system.

It was in this context, that I had pointed out that the absence of capital controls, and the fact that the dominant business houses based in the US are dangerously leveraged, creates the prospect of enormous volatility, and the possibility of changes, which may or may not lead towards the emergence of a captalism with a more human face. The determining factors would relate to the answers we have to the questions put by Bilal in post 34. To contemplate non-capitalist solutions in the prevailing political context would be utopian.

We do have today a conscousness supportive of democracy on an increasingly broad scale. Struggles for gender equality, human rights, rights of children, are increasingly acquiring a global character. This year we saw the unrepresentative Europen bureaucracy humiliated and dismissed by the European parliament, which marks an important step towards checking the democratic deficit in Europe. In canada, as the budget deficit has been checked, the ruling Liberals are returning towards their social democratic roots. At the institutional level, we have seen progress in the enactment of effective legislation against war crimes and political torture. Pinochet continues to cool his heels in London. Last year, the determined initiative of the OECD states to negotiate the global charter of rights for capital , The Multilateral Agreement on Investments(MAI) was nipped in the bud as the proposed text was leaked on the net by a global alliance of popular NGOs, and the OECD governments failed to put up with the resulting anger over its proposals. In the US Congress, there is unanimity among the majority of Republicans and Democrats in opposition to the extension of regional and global free trade legislation. All these developments indicate that it would be premature to dismiss the possibility of positive changes. Right wing political scientists here, have been fuming about the increasing influence of post materialist values in Europe and North America. That is the increasing tendency of people to give greater importance to quality of life issues, than to the attainment of material benefits. I think these number crunchers are on to something, and unlike them, i am pleased about it. In the field directly related to your subject, witness the growing popularity of OS Linux, and its applications. The whole concept of liberation from capitalist intellectual property rights is catching on at the grass roots level.

Re Bilal post 34

I do not have a quarrel with any of your arguments. I had read the Arrighi collection during the late 1980s. I will dust it of the shelf, and examine it again. I remember, that I was struck by the fact that when Wallerstein and his associates do concrete anylyses of concrete situations, they neatly sidestep the restrictive conservative bias of their theoretical approach. But your remarks indicate that i might have missed something. I will read it again.

Re Feroze K. Post 31

The tentacles of the US connection to East Timor reach Australia itself. The Australian Government of Prime Minister Fraser, whose role you cite, came in existence as the result of the unprecedented sacking of the majority Government of labour prime Minister Gough Whitlam, who was guiding Australia during the early 1970s towards a non-aligned path, and was interested in developing an Asian identity for his country. The US was impliacted in his ouster by the Australian Governor general. There is excellent material on the historical developments regarding East Timor on www.lbbs.org .

Re Einstein

It is true that one can have one`s own face of Einstein to love. Mine is his pacifist and socialist side. He was among the founders of the peace research think tank Pugwash. He also wrote the first article in the first issue of Monthly Review, entitled ``Why Socialism?``

In response to Jay (Reply #: 42):

Dear Jay:

Your dissatisfaction with uneven capitalist development is well taken. For the sake of many Chowkwallas, I want to provide a brief theoretical background of some of the points raised by you.

In order to sustain and enhance their economic power, the leading capitalist countries have often devised some novel ideas. One such major effort was made in the 1950s and 1960s in the form of modernization theory (in response to the growing power of the so-called communist regimes, particularly the Soviet Union and China). One noteworthy effort to lure the so-called underdeveloped nations was made by Rostow in his famous ``Stages of Economic Growth: A Non-Communist Manifesto``. Back in the early 1960s, as young University students, some of us were highly skeptical of the usefulness and applicability of ``such`` imported ideas, experience, and propaganda.

In the 1970s, a vigorous debate over the issues of development and underdevelopment began with a radical critique of mainstream modernization theory. As the people of many Latin American countries were made to bear the brunt of modernization theory in practice with the Monroe Doctrine and the postwar Pax Americana, most early critics were of Latin American origin. Frank, in his dependency theory, argued that a powerful core of the world economy exploited a weak periphery to foster an enforced dependency. Frank suggested that the underdevelopment of Latin America was actually a product of an ``active`` peripheral engagement in the world economy. Frank`s dependency theory, in essence, warns against too much and too fast dependent development. Frank`s theory was followed by its criticism and several alternative approaches–such as the theory of unequal exchange, the regulation theory/school, theories of global production, and theories of uneven geographical development. Please note that some of Jay`s observations are in sync with Emmanuel`s theory of unequal exchange.

Emmanuel (1972) argues that inequality between the core and peripheral countries in the world economy should be understood in terms of unequal terms of trade. He rebuts the Ricardian theory of comparative advantage, on which conventional trade theory is based, and which argues that the exchange of commodities is by definition an exchange of equal values to the mutual benefit of both parties. Emmanuel also criticizes Marx`s analysis of commodity exchange. Emmanuel contends that there is a ``hidden transfer of value`` from the periphery to the core, when products are exchanged between low- and high-waged nations. Because of proportionately higher labor costs, commodities from the core generally sell at a higher price than those from peripheral countries. At a specific price level, the high-waged nation receives a greater quantity of labor value from the low-waged economy than the periphery can buy from the core at the same price. The so-called `exchange of equal labor values` on the market is therefore structurally unequal in favor of high-waged core countries. In short, this theory sought to explain the exploitation and underdevelopment of peripheral regions in terms of differential wage structures in an otherwise global market for capital. But, as many critics pointed out, this explanation attributes to Third World countries very little responsibility for their own development. Like dependency theory, unequal exchange theories assign Third World societies a subordinate and ultimately submissive role. Amin thus calls for looking beneath the asymmetries of trade to the fundamental relations of production that engender not just unequal exchange but a more pervasive unequal development.

Shaikh, another noteworthy critic of Emmanuel, argues that a theory located in the exchange sphere fails to capture the root causes (mechanisms) of uneven development. He maintains that, despite the structural patterns of international uneven development to exist, there may be zero or even positive net transfer of value from the underdeveloped capitalist region export sector as a whole. In short, Shaikh rejects Emmanuel`s unidirectional relationship between wage differentials, value transfer, and uneven development.

Where do these theories take us? Perhaps, not too far. This suggests the need for developing theoretically-informed cases studies of the processes of uneven development in specific historical-geographical contexts. But, such studies require scholars trained in various society-centered social sciences–particularly geography, sociology, and critical social theory.

Sincerely, Bilal Ahmad

The general consencus is that capitalism works, it is based on what is considered to be a basic human instinct, greed. Great, it works, but is it sustainable, is it good for the `mankind` or is it good only for the capitalist. How about the poor in the US, the oft quoted example of the capitalist success story, is it good for the 60,000 who get shot and killed every year, is it good for that poor black guy who is in prison, sentenced for 25 years for stealing a slice of pizza.

A global capitalism of the US type is simply not sustainable. That type of capitalism works by extracting the resources form the periferal countries to the centre. It might be news to the chowk capitalist that there is net flow of capital from the third worl to the first world, the interest and the loan payments, flowing back for the `great` help extended to them during the70s.

The real success stories of capitalism in asia is Korea, Taiwan. May be the chowwalas can give a thought, how come these are not members of the UN. Very funny. Must be some conspiracy theory. Then ofcourse, there is Singapore, it is a city state, not a mosel for any country of decent size.

Then there is the unbridled support for foreingn trade, export and that is the key to success, export to the US. For a rich indian to have the luxury of a, because it IT topic, imported IBM computer, it is estimated that a poor fisher man on the coast of Krala will have to fish for six months and sell all of his best cach to the Americans. I have no doubt what so ever, capitalism is good, in the US I can still eat the best of Kerala food.

Dear Goga,

You write that ``It seems to me that for you something scientific automatically implies morality. I would have to disagree. Many scientists have little or no morality.`` I present the following points for consideration:

(a) Isnt science nothing more or less than an profound expression of interest in God`s creation, from the minute world of sub-atomic particles to the vastness of the galaxies to the mysteries and the beauty of living creatures? (b) Isnt the scientific method, namely to start with recognizing that whatever conclusions we draw are based on assumptions, a true expression of humility? Contrast that with the ease with which people will present their speculations as immutable facts. Isnt this humility and recognition of man`s limitations in the face of the majesty of God and his creation a fundamental part of religion and morality?

(c) One of the greatest scientists - Einstein - was, as you probably know, also deeply religious and in awe of God as is evidenced by his many references to God (``God is in the details``, ``God does not play dice with the universe``, ``What is truly important is why God created the universe, the laws through which the universe operates are mere details``, and so forth). And Einstein was no exception among scientists in this regard.

(d) You say that scientists could not survive without grants. If these people (who are unquestionably smart) really wanted, couldnt they easily shift professions and become money-making businessmen? (Incidentally, I am not a scientist myself, I just have a lot of respect for these people).

I rest my case.

On the question of being a follower is OK, I partly agree with you. Trouble is the leader will probably recognize the cliff in time and veer off in time (or fly off) while the follower, by the time he starts thinking about it, is already half-way down the cliff.

Thanks for taking up the two points I made, though, and regards.

In response to TAhmed (Reply #32):

Dear TAhmed:

IT is a great development. Technology and capitalism are not mutually exclusive categories. Nobody has ever denied the positive role of IT. You, however, seem to suggest that the backwardness of Pakistan is due to the neglect of technology.

You have raised a good question: Why we Pakistanis are followers, and not leaders, in the world today? I think, there are several important reasons. Let me identify a few.

First, an important reason is the kind of education that we provide in our schools. In most Pakistani schools, the focus is less on learning and more on simply cramming. I remember, my own sister (as a child) could read her English textbook (The Radiant Way) very fluently. She went to a first rate school in Karachi. Being four years older than her, I was immensely impressed with her command of English language. One day it suddenly dawned upon me that she had memorized the material and she, in fact, was unable to read the text. This is just a simple example.

Second, most of our schools do not focus upon inculcating creativity and leadership qualities. Students, even in our colleges and universities, are rewarded for simply memorizing the material. Students are not encouraged to work on projects and write research papers. Most tutorials and papers are essentially verbatim reproductions from books and, in some cases, research journals.

Third, our schools should provide education in vocations. In most American schools, there are courses on woodwork, electricity, metal work, clay and pottery making, photography, sewing, arts and craft, music, journalism, debating, and a host of other things. American have learned the usefulness of vocational education from the Germans. I think, we need to focus on vocational education.

Fourth, most Pakistani teachers are not adequately educated and motivated. Teachers are paid poorly. So, more promising students do not like to be teachers.

Fifth, leadership and creativity is often a product of our ability to think freely and clearly. Neither Pakistani state nor civil society allows/encourages the freedom to think. I think, leadership is partly a product of our ability to think and act freely and fearlessly.

Sincerely, Bilal Ahmad

In response to Tariq (Reply # 30):

Dear Tariq:

Although I did not use the phrase ``omnipotence,`` the global dominance of capital and the capitalist states cannot be denied. The case of Iraq is a good example of the use/misuse of the combined power of capital and the capitalist states.

Tariq, you are right that capitalism is not a monolith. In fact, capitalism is ``uneven`` where the processes of development and underdevelopment remain entangled in a complex way. Of course, there are ``possibilities of change.`` So you are once again right, but the possibilities are not realistically available to most people in most parts of the world. A lot of sensible planning and hard-work is needed to bring any meaningful social change in any single country. The common people in many parts of the world may or may not be ``helpless on-lookers`` but the common people of Pakistan will remain helpless on-lookers as long as they are not really empowered through at least good governance. Who will ensure good governance in Pakistan? What kind of education and leadership do we need to ensure such a change?

Tariq, I want to draw your attention toward a book on ``Antisystemic Movements`` by Arrighi, Hopkins, and Wallerstein (1989). In basing itself on an analysis of resistance movements since the emergence of capitalism, this short book shows that such movements ``did not impede the consolidation of the modern capitalist world-system.``

``The authors argue that although capitalism generated resistance right from the beginning as it displaced populations, despoiled resources and established global exploitation, until about 1848 the capitalist world-system could crush or outflank an opposition which was dispersed, localized and down to recent times, more adequately organized social and national movements set some limits on capital accumulation, but generally remained confined in their effectiveness to the terrain of the nation-state. Indeed, paradoxically, the successes of the ``old`` social movements helped to boost the power and legitimacy of states while failing to remove the sources of class conflict or to grapple with the consequences of interstate competition.``

Then, in ``taking the year 1968 as a symbolic turning-point, the authors argue that ``new antisystemic movements have arisen which challenge the logic of the capitalist world-system more centrally than ever before. These new movements have a different ethnic and gender composition and different ways of organizing, while their key inspirations show an increasing ability to cross national boundaries. The authors suggest that the new assertiveness of the South, the development of class struggle in the East and the emergence of Rainbow coalitions in different world zones might hold out the promise of a future socialist world-system.`` (Read ``might``hold out . . . ; we instead have seen the kind of changes brought by the demise of erstwhile Soviet Union).

Now, after a decade of the publication of this book, a number of question come to our mind. Is the US hegemony eroding? What kind of alliances (or realignments of alliances) exist between the US, Western Europe, China, Japan, Russia, India, and most rich/powerful Muslim countries? How these developments have affected the world order? Is the capital still centralizing and the labor still marginalizing in most noteworthy nation-states? Is the ability of states to control their civil societies increasing/decreasing? Are the means of control generally peaceful/violent? Are the demands of the disadvantaged social groups in each country generally becoming stronger/weaker? Is the element of social welfare rolling-back in most mixed societies (where the state plays a key role)? Is the quality of life gap increasing/decreasing between the rich and the poor countries of the world? Is globalization a fancy word for the economic, cultural, or political imperialism of an increasing number of people around the world? Is it reproducing an environment of dependency in most crisis-prone nations, like Pakistan? Is there a continuous brain-drain and the flight of capital from less-developed parts of the world?

Regards, Bilal Ahmad

Re: TAhmed321 (32)

``It is the result of technological and scientific progress, not just another capitalist trick``

It seems to me that for you something scientific automatically implies morality. I would have to disagree. Many scientists have little or no morality. Much of the money for university research comes from the private sector. If scientists do not get grants, they are pretty much dead ducks in the academic and research community. Microsoft recently sponsored an study to highlight the flaws in the Linux OS. Of course, the results of the study were in the favor of MS. Another example is that of human genome project. Companies are trying to discover and patent segments of human DNA crucial for developing drugs. Are they really entitle such patents is a big ethical question. It`s not a trick of a chameleon to change color. It`s its nature.

``why we Pakistanis are followers, and not leaders, in the world today.``

Sometimes it is better to be follower for if the leader falls off the clif one might have enough time to stop.

On going through the replies to this article, I am sorry to see that most of the thinking is geared to political issues - capitalism, East Timor, and so forth. The information revolution is clearly more fundamental than that. The information revolution is re-defining politics and economic systems, and not vice versa. It is the result of technological and scientific progress, not just another capitalist trick. The fact that the replies in chowk seem to be missing this point explains why we Pakistanis are followers, and not leaders, in the world today.

Re: Tariq # 30

Bravo !!

Your contention that the international geo-political environment is mirroring the conditions of ante-bellum Europe of 1914 is absolutely correct. After the demise of the cold war, the world is moving away from the ideological polarization of Soviet-American rivlry, which had frozen the status quo into an east-west confrontation. In many ways, international relations are the same today as they were in 1914; fragmented, conflicting, and fluid.

I also agree with you that capitialism, which has an irritating habit of being flexible to changing circumtances, will amend its interests to compliment IT and will thus, not necessarily die out.

As to East Timor, there is much to be answered by the countries, which turned a blind to the problem for the last quarter of a century. In this, I am specifically pointing an accusing finger at Australia`s role in appeasing Jakarta`s oppression in Dili. In this matter, Australia shares a larger proportion of the blame than the United States, because though the United States gave military support to Indonesia, it did so on the argumentive logic of Canberra`s agruments in this case.

Simply said, when Indonesia invaded and occupied East Timor, in wake of Portugal`s withdrawal, Australia welcomed the move, and the consequent subjugation of Timorese rights, because the Indonesian invasion and occupation filled a political vacuum, which might have erupted into a possible civil war. Considering that this was in 1975, the height of the cold war, Australia was not too keen on having a communist inspired insurgency operating only 400 miles from its own coastline.

Canberra sold this idea to the Americans, of Indonesians resisting communism, and perpetuated a problem, which started to simmer and finally boiled over in the last few weeks. The only American interest in East Timor was of resisting communism and since 1989, that logic has been mooted. Hence, when the Americans say that they have no interests in region, and that the Australians should take care of this problem, they are right!

Does this excuse Washington`s lack of inaction? The answer is no, but unlike the situation in Iraq and Yugoslavia, there are no American economic interests in East Timor worth risking American lives. The guiding principle of the American foreign policy is to judge each crisis individually, on a case by case basis, and determine American interests and only then intervene, if necessary.

East Timor, under this assumption, does not qualify.

Sorry for this being so long....!

Re- Bilal #28, Wasiq #25

Hello. Thanks for your comments.

I do not share your view re the omnipotence of the capitalist ruling class. I might be naive, but I see the possibility of enormous changes. Whether these changes lead towards democracy, authoritarianism, chaos, or a combination of all three in different parts of the world, will depend

on the configuration of political power that prevails in each society.

The possibilities of change owe their existence to the following sources:

First- the logic of capitalist development. It is guided by the imperitive to accumulate more and more capital, as an end in itself. The major contradictions which keep asserting themselves and ensure that the ruling class cannot gurantee stability are: 1. The contradiction between the social character of production, and its private appropriation. 2. The related contradiction

between capital and labour, or in other words, our good old fashioned friend, the class struggle.

While the first contradiction creates the tendency towards the development of monopoly capitalism, as bigger fish eat smaller ones, and then compete with eachother for a greater share of the surplus that the market might have the potential to provide. The class struggle imposes limits on this. In addition to these contradictions, during periods in which finance capital has political dominance, we observe enormous volatility, and potential for upheavals. In 1914, finance capital, and monopoly capital fuelled the competition for control over markets, and the realted arms race and military conflict. Eventually, in some societies, fascism was the political form chosen for the resolution of these contradictions, in someothers, it was social democracy. Russia had a communist revolution, and it led in Immanuel Wallerstein`s apt charaxterisation, to its mecantilist withdrawal from the global economy. It was the turmoil fuelled by these contradictions that led the world through the catastrophic experience of the second world war.

Coming to the present, we see economic and political volatility reminiscent of 1914. Finance capital is extremely influential. Last year, the South East Asian economies experienced a meltdown, largely caused by the absence of capital controls, and the resulting flight of hot money. It was the global financial crisis that hit Asia. It was not an ``Asian flu`` caused by ``crony capitalism``. It was government orchestrated rescue of the monster hedge-fund Long Term Capital Management, which prevented the possibility of catastrophic collapse of the U.S. economy, as all the respected financial houses were implicated in crony capitalist style lending to LATCM, for making profits by placing large bets on small movements of capital on the stock exchange. Government studies on the causes of LATCM collapse indicate that not only hedge-funds, but most corporations and financial firms are dagerously leveraged as LATCM was.

We do not have a robust and united capitalist bloc, capable of mobilising militarily for the impossible task of maintaining order every where. Since the invasion of Vietnam, the leading capitalist country, the U.S. has lost the ability to use soldiers as cannon fodder indiscriminately. This is what the U.S. elites refer to as the Vietnam syndrome. They need to justify resort to force. They need an enemy as monstrous as saddam, or Milosovich to justify military adventurism. Even proxy defense of pro-capitalist clients is becoming difficult. It is interesting, that regarding East Timor, even the U.S. is now justifying inaction in stopping the Indonesian army. In the 1960s, it would have provided, as it did in fact, all the help the Indonesian military needed to fix the Timorese. Increased human rights consciousness, and the incompatibility of political democracy with militarism, places restraints on the ability of the capitalist ruling elites to control the political environment.

Sorry, this is getting too long. No the MQM ,and Poonam will not challenge the capitalist system on their own. But even these vulgar nationalist forces, some of which subscribe to the cult of violence, do represent the desire of the people to participate in running their affairs, and their continued influence is reflective of the ruling elites to achieve stable control.

The point is that capitalism is not a monolith. There are, possibilities of change. The struggles of people affected by capitalist exploitation and domination will play a role in determining the future. We, the common people of the world are not helpless on-lookers.

i think the emergence of a technocracy may be the most significant contribution of the information revolution. technology today intimidates the non computer owning, non engineering read ?average? person (still a majority of the American population).

at the beginning of the century, technology was seen as a means for social change and embraced as progress by the masses. today, however, technology is enigmatic except for those chosen few who understand it, and progress is seen by the masses as occurring outside of their sphere of existence.

future divisions among people will not be over class or race or ethnicity, but among those who have and can use information and those who can not. a corollary, then, may be that today`s hackers will be tomorrow?s revolutionary.

How about the disinformation revolution:

I hope people here are not using ``information`` as if all of it is ``good`` and the more one has of it the better it is. Few would argue that there is good information and bad information. There have been several aspects of the modern world, which in the conjunction of rapid information movement seem troublesome. The intellectual hierarchy is the thing of past. It used to be that only few learned had the authority to render judgments and intellectual opinions.

This certainly is not the case now. This has allowed intellectual freedom but at the same time anyone can say anything about anything and send it on information superhighways to be heard by millions. Truth and falsehood had never been so ill defined as in the modern age. People like Jerry Springer are the prophet of the new age. There is something to be worried about.

Further, today`s markets run on real time basis with time critical bits heading to and from financial powerhouses. Yes, there are secure links but ultimately there is the belief that what is being projected on displays is the truth. We have become too complacent and/or proudful for our technology to distinguish real signals from the false ones. The high-speed information exchange, which is the backbone of today’s markets, might trigger its ultimate crumbling.

In response to Tariq (Reply # 24):

Dear Tariq:

Your statement: ``The contradictions . . . are increasingly asserting themselves. These, combined with the struggles of dissident movements and oppressed peoples could change the nature of the global economy. From its present savage capitalist phase, it could evolve into a more benign social democratic one.``

Comment: I wish I could share your optimism. The power of capital has long been increasing in accordance with its logic. What evidence do you have to conclude that the present ``savage`` capitalist phase could evolve into some kind of social democratic one? With the exception of just a few lucky ones, most developing economies (including India and Pakistan) have long been expecting to become developed. Do you think that the movements of MQM and PONAM are going to change the nature of Pakistani economy let alone the global economy? Are you expecting a global upheaval against the so-called capitalist core?

Regards, Bilal Ahmad

``Globalisation``, which primarily refers to the liberalisation of the international financial regime is the result of conscious state policies, adopted by the US and UK since the early 1970s, which have gradually changed the post-War Bretton Woods financial regime which imposed controls on the movement of finance between states. As such, ``globalisation`` should not be viewed with superstitious awe, as a permanent fait accompli. The contradictions inherent in the adventurist and dogmatic neo-liberal view that the free market will on its own resolve the major problems of global civil society are increasingly asserting themselves. These, combined with the struggles of dissident movements and oppressed peoples could change the nature of the global economy. From its present savage capitalist phase, it could evolve into a more benign social democratic one.

Re the role of the internet. Pressure on the state to make access to the internet available in public reading rooms, and libraries could make it really useful for the people in the 3rd world. If the states do not do this, on more limited scale, NGOs and dissidents could try to increase access to it on their own.

I am interested in knowing whether there is interest in Pakistan in the free and democratic

development of alternatives, such as Linux.

To UR,

There is an old economic theory by Milton friedman that under free international trade, the wage rates will become equal. In the case of because IT, because of it ethereal nature, is instentaniously trasportable at low cost, there is an evergrowing trade and the wage rates are tending to level out. A simple help desk job, or a call centre function in the US can be easily tranfered to some one in india. It is unlikely that a plumbing job could be. That is why the plumbers in the US are paid 100 times than the indian counter part, in the case of IT, this is fast declining and I know of cases where the tax paid salaries are comparable.

I do recognise most of the points you raised, particularly the low capital intensity, from a theoretical perspective. From a practical point of view, in the absense of venture capital and the free wheeling individual spirit, hardly any `new` IT companies have come up in India. The largest in India, Tatas, L&T, Infosys, Mahindras and Wipro were all established industrial houses before they ventured into IT. I wonder why the GE and EXON and United technologies did not venture into IT.

Now about China, I completely disagree with your view that chinas industrialisation is pioneered by IT. Far from it, Chinas IT exports are only 20% of Indias, so is the share in the GDP. Chnas economy and all the rest that go with it is a beat up, it is only based on the foreign exchange surplus. It is simply used as a `model` to ask the other countries to allow `export` processing zones, and other forms of subsidy. If you ever cared to look at the price of chineses products in the US supermarkets, allow for the margins (i know it is 120% at the retailer) and other costs, you will realise the product is subsidised, in chinese currency to earn foreign exchange. The way of reporting the GDP, problems of calculating price in a communist economy and my direct observations in china, yes i am inclined to believe that it is a `conspiracy`.

Israel, you should recognise cannot be compared to other countries. To give you an example, the US military budget expense incurred in Israel is treated as the same as that incurred in the US. Now think of the US budget, it is more than a trillion annually, and what can a trivial element of it do the economy of any country.

It is not my intension to devalue or belittle thetremendous contribution of IT professionals who are in say, india and who have and are emigrating to other countries. But I cannot but ignore the parallels in an earlier time, the sugar cane cutters from north india who went to Fiji, The south indian plantation workers who went to Malaysia and srilanka, the farmers who went to Surinam and the traders and miners of South Africa.

Can I not just add another group, THE IT PROFESSIONAL OF USA. will they do anything different from the ones listed above. If so why and how.

My optimism is not because I feel the IT revolution will somehow or the other transform third-world countries into the first world. This may or may not happen. However, I am very optimistic about the opportunities that the IT revolution has created for poor nations. Whether third-world countries take advantage of these opportunities is a different story. But, at least there exist opportunities now for the poor nations, that could never have existed through the industrial revolution.

I have had a chance to work in both the aerospace, and software industries in Pakistan as well as in the US. Aerospace is on the cutting edge of the industrial revolution, while software is on the cutting edge of the IT revolution. The dissimilarities in both these industry, with regard to third world countries, are astounding.

The international aerospace industry has hardly any state or individual level participation from the 3rd world. The deck is stacked highly in favor of the 1st world countries. The infrastructure required to produce one aircraft is astronomical. It requires excellent test facilities, wind tunnels, a well-developed mettalurgy industry, an advanced avionics industry, a gigantic amount of capital etc. etc. This is true for other by-products of the industrial revolution, as well. 3rd world countries can never have access to all these facilities.

However, the IT industry is different. It does not require nearly the same facilities. Due to the microscopic infrastructure requirements (in comparison to the industrial products), it is much easier for 1st world IT nations (basically the US) to shift their software houses into the third world. Individuals from the 3rd world already control a chunk of this industry, in comparison to the 1st world countries (not including the US). I am willing to bet, that the combined market cap of the IT companies, started in the last 10 years, by Indians based in America is higher than the combined market cap of IT companies, started by certain 1st world European coutries, during the same time. AST Research, a company started and run by a Pakistani-American, at its peak, had annual revenues of over 2 billion dollars. I believe (not 100% certain) this is higher than the total annual revenue of the Pakistani IT industry, as a whole.

You cannot look at the IT industry (or any other industry, for that matter), by simply looking at the products produced and exported by 3rd world countries. In this scenario, the 3rd world countries will not immediately be able to match the 1st world countries, due to the reasons mentioned in other replies. You have to take a look at the amount of capital, resources, and institutions controlled, and influenced by 3rd world individuals. Whether not all of them are currently living in the 3rd world will not make too much difference in the long run. Israel, plays a much larger role in the international economy as compared to the size of its population, or to the number of products it exports. That is because, a lot of the economic institutions of the world are controlled by pro-Israel individuals.

So there are definitely more opportunities out there because of IT. The question is how can the 3rd world governments tap into the opportunities that 3rd world individuals have already tapped into. This is the 64 million ruppee question.

So far China is the only country that has succeeded in doing the above. Before the IT revolution, China was a third world country, with a per capita income less than that of Pakistan. Its technological exports consisted of unreliable copies of Russian defence, and aircraft technology. Its main source of export were simple items like pencils, and children`s toys. After the IT revolution, China is on its way out of the third world, and destined to become an economic power. It certainly did not do this by selling cheap pencil sharpeners. It also did not do this by exporting proprietary software. Hardly any of the major software programs are written by Chinese companies. It did so by utilizing the human resource capital of professinals, both inside and outside China. India sends over four times as many software engineers to US, as does China. However, the amount of money pouring back into China per US-based Chinese software engineer is much higher than his/her Indian counterpart. Also, the amount of foreign investment flowing into the Chinese IT industry is much higher than that flowing into India, or Pakistan. Why? Becuase, the Chinese govt. is playing its cards right; the Indian govt. is playing its cards only partially right; the Pakistani govt. is not playing its cards, at all. The way to attract foreign investment is not by offering high interest rate bonds, or by relying on the goodwill of expatriates. It is done by offering the correct business climate that can tap into the IT skill and money, controlled by 3rd world individuals, all over the world. Pakistanis and Indians would love to invest in their countries of origin, if they were provided the proper business climate. This is human nature.

The IT revolution has given the 3rd world countries access to the economic pie, that the industrial revolution could never have provided.

Re: Wasiq

I do not think, ``The actual outcome will be somewhere between the extremes that people are apt to go to in their projections.``

Infact, I see just the opposite. There will only be extremes. The third-world countries that get IT (no pun intended) will surf the IT wave out of the third world. The poor countries that do not get it, will be wiped out by this wave, and sink even furthur into the third-world black hole. I do not see a middle ground.

Re: Jay

Your point about the high-rate bonds was answered above. That is a very naive way to convince businessmen to invest in their countries of origin. Almost as naive as the, ``Qarz utaro, Mulk sawaron.`` scheme started by Nawaz Sharif. The reason money does come into these schemes from the middle east is, because the middle eastern Pakistani and Indians send the money to support their home-based relatives.

Re: sac

I read both books by Yourdon. I remember his name to be Ed Yourdon, but I must be mistaken. In both his books, he mentions the impact and importance of 3rd world engineers in the IT revolution.

Dear SR:

To quote you:

``I`ve noticed references to it in other messages, but I doubt if either of the writers has as yet read the book. (My copy is on its way from amazon.com by UPS Ground.)``.

Notice any inherent contradiction in your reply my friend? Please get some jolt cola or whatever libation you need to loosen up and don`t mess up what seems to be a very entertaining discussion.

Also the chowk staff should be careful about infringing copyright laws when they allow verbatim copies of Prefaces to a book to be published on their websites.

Going back to the article at hand,I would argue that software is a commodity just like cars.

Whereas the high-end stuff may continue to some out of Silicon valley or Seattle(:-)), the low-end stuff may end up in places like Bangalore or Singapore. The growing trend toward server-centric programming may actually accelarate that trend. I would highly recommend Peter Yourdon`s 2 books(something titled the Death of the American programmer and then the Rebirth(?) of the American programmer) that delve in greater detail on the subject.

Interesting discussion!

I think it was Jay and UR who were debating about the nature of American economy, which was becoming increasingly Information Technology based and thus, creating more wealth than most other countries for the USA.

This is highly true and the fact of the matter was that since the middle 1980s and then from the 1990s, Americans have ``cornered`` this market and are now well into what can termed as an information industry and that they are well poised to control the global flow of information.

This is where I would like to add a caveat to this scenerio. There was an interesting interview with US Secretary of Labor, on one of those of Sunday talk-show circuits, which I accidently surfed into, thanks to Wasiq and the interest his article prompted in me on this topic.

According to the US SecLabor, the US economy in is becoming global in the information sector and it is by far the fastest growth industry in the nation, thanks to new emerging technologies as internet etc. However, the down side to this, shown by a Labor Dept. internal study, was that this info economy`s strenght is based on foreign workers who have H1-Bs for temporary work in the US. According to Labor Dept. data, US schools and colleges are not producing the required numbers of graduates, which this info industry requires and hence, in the future it will see a slow, but marked down turn, because of what can be called as a recession as the industry levels out and a new round of growth can not be generated due to a lack of skilled American employees.

This then nicely compliments the recent Congressional attempts, by both Republicans and Democrats, to increase the cap of H1-Bs for foreign workers in computers and to create a new class for student visas, for science, which would enable a student to work and study at the same time. Though the Americans business see this a viable alternative, to a lack of American talent, to recruit foreign workers, the American government is becoming increasingly concerned, because though these foreign workers generate wealth for the American IT sector, their talents are ``fluid``, that is open to international job mobility and hence, not subject to American control and in fact, pose a ``brain drain`` for the American IT industry.

This is specically worrisome to the Americans in the defense R&D spheres, given the recent case at Los Alamos, that these foreign workers pose a threat to the security of the United States, but to ban them from working, would in fact mean crippling and degrading its own defense, because there are very Americans with required skills to replace the foreign workers in the US without causing severe internal problems for the IT industry in the States.

This is becoming a serious problem and it is igniting considerable interest and so far, this problem has fully escaped the notice of the press in these Ego-Centric States.

To UR

The general discussion is about the fortunes of the countries, not the ones who emigrate. There is a demand for software engineers, met by immigrants to the US, and most of them are from the third world, primarily from India. No doubt about it, it is good for the ones in the Us, but how good is it for india. Leaving aside the `brain drain` rhetoric, in economic terms the effects are near zero. The relatively high salaries in the west is accompanied by high expenses and expectations, the net result is fun transfers from the US is negligible when compared to those, the `un-educated` workers from the middle east.

A good example is the `Resurgen India Bonds``, 80% of it was itt was subscribed by the middle east workers while the US indiancontribution was less than 3%. I do not deny the intangible benefits of indians being in the US.

One of course should not forget the parallels of the present indian emigration to that in the earlier times. Majority in Surinam and Fiji are indian origins, may be in those days I am sure those fortunate indians also might have echoed your sentiments, but all that happened is they got integrated into the host country.

Now about the Microsoft comparisons. I believe that the market capitalisation of MS cannot be usefully compared to the GDP. GDP is the annual production in the country, which at best can be compared to the turn over, or total revenue of MS. The total productive assets of a country, even a small country will be much larher than that of MS.

To SR

I know of one person who doesnt share the truth uttered by Soros, that is Malaysian PM Mahatir Mohammed. At a time when currency speculation is wreaking havoc in the small economies where people are loosing real jobs, when the amout of money flowing in the speculative funds are comparable to the total forign exchange earnings of countries like Thailand, it is depressing to see the ramblings of a speculator and gambler, occupying so much of space on the chowk. Of course, success is every thing, and everything is money which gives one the right expound a world view.

Dear Wasiq,

What a great theme you`ve touched upon. Before anything else, I`d just like to post excerpts from George Soros` recent book titled ``The Crisis of Global Capitalism``. I`ve noticed references to it in other messages, but I doubt if either of the writers has as yet read the book. (My copy is on its way from amazon.com by UPS Ground.) What Soros says is quite relevent to one major aspect of the discussion here: global economy in the next century.

What follows are George Soros words, not mine.

In The Crisis of Global Capitalism, Soros dissects the current crisis and economic theory in general, revealing how theoretical assumptions have combined with human behavior to lead to today`s mess.

Introduction

This book seeks to lay the groundwork for a global open society. We live in a global economy, but the political organization of our global society is woefully inadequate. We are bereft of the capacity to preserve peace and to counteract the excesses of the financial markets. Without these controls, the global economy is liable to break down. The global economy is characterized not only by free trade in goods and services but even more by the free movement of capital. Interest rates, exchange rates, and stock prices in various countries are intimately interrelated, and global financial markets exert tremendous influence on economic conditions. Given the decisive role that international financial capital plays in the fortunes of individual countries, it is not inappropriate to speak of a global capitalist system.

Financial capital enjoys a privileged position. Capital is more mobile than the other factors of production and financial capital is even more mobile than direct investment. Financial capital moves wherever it is best rewarded; as it is the harbinger of prosperity, individual countries compete to attract it. Due to these advantages, capital is increasingly accumulated in financial institutions and publicly traded multinational corporations; the process is intermediated by financial markets. The development of a global economy has not been matched by the development of a global society. The basic unit for political and social life remains the nation-state. International law and international institutions, insofar as they exist, are not strong enough to prevent war or the large-scale abuse of human rights in individual countries. Ecological threats are not adequately dealt with. Global financial markets are largely beyond the control of national or international authorities. I argue that the current state of affairs is unsound and unsustainable. Financial markets are inherently unstable and there are social needs that cannot be met by giving market forces free rein. Unfortunately these defects are not recognized. Instead there is a widespread belief that markets are self-correcting and a global economy can flourish without any need for a global society. It is claimed that the common interest is best served by allowing everyone to look out for his or her own interests and that attempts to protect the common interest by collective decision making distort the market mechanism. This idea was called laissez faire in the nineteenth century but it may not be such a good name today because it is a French word. Most of the people who believe in the magic of the marketplace and the merits of unlimited competition do not speak French. I have found a better name for it: market fundamentalism.

It is market fundamentalism that has rendered the global capitalist system unsound and unsustainable. This is a relatively recent state of affairs. At the end of the Second World War, the international movement of capital was restricted and the Bretton Woods institutions were set up to facilitate trade in the absence of capital movements. Restrictions were removed only gradually and it was only when Margaret Thatcher and Ronald Reagan came to power around 1980 that market fundamentalism became the dominant ideology. It is market fundamentalism that has put financial capital into the driver`s seat. This is, of course, not the first time that we have had a global capitalist system. Its main features were first identified in rather prophetic fashion by Karl Marx and Friedrich Engels in the Communist Manifesto, published in 1848. The system that prevailed in the second half of the nineteenth century was in some ways more stable than the contemporary version. First, there were imperial powers, Great Britain foremost among them, that derived large enough benefits from being at the center of the system to find it worthwhile to preserve it. Second, there was a single international currency in the form of gold; today there are three major currencies - the dollar; the German mark, which is soon to become the euro; and the yen - which are rubbing against each other like tectonic plates, often creating earthquakes, crashing minor currencies in the process. Third, and most important, there were certain shared beliefs and ethical standards, which were not necessarily practiced but were nevertheless quite universally accepted as desirable. These values combined a faith in reason and a respect for science with the Judeo-Christian ethical tradition and on the whole provided a more reliable guide to what is right and what is wrong than the values that prevail today.
Monetary values and transactional markets do not provide an adequate basis for social cohesion. This sentence may not make much sense to the reader as it stands, but it will be expounded in the book. The nineteenth-century incarnation of the global capitalist system, in spite of its relative stability, was destroyed by the First World War. After the end of the war, there was a feeble attempt to reconstruct it, which came to a bad end in the crash of 1929 and the subsequent Great Depression. How much more likely is it, then, that the current version of global capitalism will also come to a bad end, given that the elements of stability that were present in the nineteenth century are now missing? Yet a calamity could be avoided if we recognized the deficiencies of our system and corrected them in time.

How did these deficiencies arise and how could they be corrected? These are the questions I propose to address. I argue that the global capitalist system is a distorted form of an open society and its excesses could be corrected if the principles of open society were better understood and more widely supported. The term open society was given currency by Karl Popper in his book Open Society and Its Enemies. At the time the book was published, in 1944, open society was threatened by totalitarian regimes such as Nazi Germany and the Soviet Union, which used the power of the state to impose their will on the people. The concept of open society could be readily understood by contrasting it with the closed societies that totalitarian ideologies fostered. This remained true right up to the collapse of the Soviet empire in 1989.

The open societies of the world - commonly referred to as the West - exhibited considerable cohesion in the face of a common enemy. But after the collapse of the Soviet system, open society, with its emphasis on freedom, democracy, and the rule of law, lost much of its appeal as an organizing principle and global capitalism emerged triumphant. Capitalism, with its exclusive reliance on market forces, poses a different kind of danger to open society. The central contention of this book is that market fundamentalism is today a greater threat to open society than any totalitarian ideology.

This statement is rather shocking. A market economy is an integral part of an open society. Friedrich Hayek, the greatest twentieth-century ideologist of laissez faire economics, was a firm believer in the concept of an open society. How can market fundamentalism threaten open society?

Let me make myself clear. I am not saying that market fundamentalism is diametrically opposed to the idea of open society the way fascism or communism were. Quite the contrary. The concepts of open society and market economy are closely linked and market fundamentalism can be regarded as merely a distortion of the idea of the open society. That does not make it any less dangerous. Market fundamentalism endangers the open society inadvertently by misinterpreting how markets work and giving them an unduly large role to play.

My critique of the global capitalist system falls under two main headings. One concerns the defects of the market mechanism. Here I am talking primarily about the instabilities built into financial markets. The other concerns the deficiencies of what I have to call, for lack of a better name, the nonmarket sector. By this I mean primarily the failure of politics and the erosion of moral values on both the national and the international level.

I want to say at the outset that I consider the failures of politics much more pervasive and debilitating than the failures of the market mechanism. Individual decision making as expressed through the market mechanism is much more efficient than collective decision making as practiced in politics. This is particularly true in the international arena. The disenchantment with politics has fed market fundamentalism and the rise of market fundamentalism has, in turn, contributed to the failure of politics. One of the great defects of the global capitalist system is that it has allowed the market mechanism and the profit motive to penetrate into fields of activity where they do not properly belong.

The first part of my critique concerns the inherent instability of the global capitalist system. Market fundamentalists have a fundamentally flawed conception of how financial markets operate. They believe that financial markets tend toward equilibrium. Equilibrium theory in economics is based on a false analogy with physics. Physical objects move the way they move irrespective of what anybody thinks. But financial markets attempt to predict a future that is contingent on the decisions people make in the present. Instead of just passively reflecting reality, financial markets are actively creating the reality that they, in turn, reflect. There is a two-way connection between present decisions and future events, which I call reflexivity.

The same feedback mechanism interferes with all other activities that involve cognizant human participants. Human beings respond to the economic, social, and political forces in their environment, but unlike the inanimate particles of the physical sciences humans have perceptions and attitudes that simultaneously transform the forces acting on them. This two-way reflexive interaction between what participants expect and what actually happens is central to an understanding of all economic, political, and social phenomena. This concept of reflexivity lies of the heart of the arguments presented in this book. Reflexivity is absent from natural science, where the connection between scientists` explanations and the phenomena they are trying to explain runs only one way. If a statement corresponds to the facts, it is true; if not, it is false. In this way, scientists can establish knowledge. But market participants do not have the luxury of basing their decisions on knowledge. They must make judgments about the future and the bias they bring to bear influences the outcome. These outcomes, in turn, reinforce or weaken the bias with which the market participants began.

I contend that the concept of reflexivity is more relevant to financial markets (and to many other economic and social phenomena) than the concept of equilibrium, on which conventional economics is based.

Instead of knowledge, market participants start with a bias. Either reflexivity works to correct the bias, in which case you have a tendency toward equilibrium, or the bias can be reinforced by a reflexive feedback, in which case markets can move quite far from equilibrium without showing any tendency to return to the point from which they started. Financial markets are characterized by booms and busts and it is quite amazing that economic theory continues to rely on the concept of equilibrium, which denies the possibility of these phenomena, in face of the evidence. The potential for disequilibrium is inherent in the financial system; it is not just the result of external shocks. The insistence on exogenous shocks as a kind of deus ex machina to explain away the frequent refutation of economic theory in the behavior of financial markets reminds me of the ingenious contrivances of spheres within spheres and divine forces that pre-Copernican astronomers used to explain the position of the planets instead of accepting that the earth moves around the sun.

Reflexivity is not a widely accepted concept, at least in mainstream thinking, and it will take more than a few sentences to explore all its implications. It will occupy much of Part I of the book. In Part II of the book, I then use this framework to draw some practical conclusions - about financial markets; about the world economy; and about such broader issues as international politics, social cohesion, and the instability of the global capitalist system as a
whole.

My second main line of argument is more complex and more difficult to summarize. I believe that the failures of the market mechanism pale into insignificance compared to the failure of what I call the nonmarket sector of society. When I speak of the nonmarket sector, I mean the collective interests of society, the social values that do not find expression in markets. There are people who question whether such collective interests exist at all. Society, they maintain, consists of individuals, and their interests are best expressed by their decisions as market participants. For instance, if they feel philanthropic they can express it by giving money away. In this way, everything can be reduced to monetary values.

It hardly needs saying that this view is false. There are things we can decide individually; there are other things that can only be dealt with collectively. As a market participant, I try to maximize my profits. As a citizen, I am concerned about social values: peace, justice, freedom, or whatever. I cannot give expression to those values as a market participant.

Let us suppose that the rules that govern financial markets ought to be changed. I cannot change them unilaterally. If I impose the rules on myself but not on others, it would effect my own performance in the market but it would have no effect on what happens in the markets because no single participant is supposed to be able to influence the outcome. We must make a distinction between making the rules and playing by those rules. Rule making involves collective decisions, or politics. Playing by the rules involves individual decisions, or market behavior. Unfortunately the distinction is rarely observed. People seem largely to vote their pocketbooks and they lobby for legislation that serves their personal interest. What is worse, elected representatives also frequently put their personal interests ahead of the common interest. Instead of standing for certain intrinsic values, political leaders want to be elected at all costs - and under the prevailing ideology of market fundamentalism, or untrammeled individualism, this is regarded as a natural, rational, and even perhaps desirable way for politicians to behave. This attitude toward politics undermines the postulate on which the principle of representative democracy was built. The contradiction between politicians` personal and public interests was, of course, always present, but it has been greatly aggravated by prevailing attitudes that put success as measured by money ahead of intrinsic values such as honesty. Thus the ascendancy of the profit motive and the decline in the effectiveness of the collective decision-making process have reinforced each other in a reflexive fashion. The promotion of self-interest to a moral principle has corrupted politics and the failure of politics has become the strongest argument in favor of giving markets an ever freer reign. The functions that cannot and should not be governed purely by market forces include many of the most important things in human life, ranging from moral values to family relationships to aesthetic and intellectual achievements. Yet market fundamentalism is constantly attempting to extend its sway into these regions, in a form of ideological imperialism. According to market fundamentalism, all social activities and human interactions should be looked at as transactional, contract-based relationships and valued in terms of a single common denominator, money.

Activities should be regulated, as far as possible, by nothing more intrusive than the invisible hand of profit-maximizing competition. The incursions of market ideology into fields far outside business and economics are having destructive and demoralizing social effects. But market fundamentalism has become so powerful that any political forces that dare to resist it are branded as sentimental, illogical, and naive.

Yet the truth is that market fundamentalism is itself naive and illogical. Even if we put aside the bigger moral and ethical questions and concentrate solely on the economic arena, the ideology of market fundamentalism is profoundly and irredeemably flawed. To put the matter simply, market forces, if they are given complete authority even in the purely economic and financial arenas, produce chaos and could ultimately lead to the downfall of the global capitalist system. This is the most important practical implication of my argument in this book.

There is a widespread presumption that democracy and capitalism go hand in hand. In fact the relationship is much more complicated. Capitalism needs democracy as a counterweight because the capitalist system by itself shows no tendency toward equilibrium. The owners of capital seek to maximize their profits. Left to their own devices, they would continue to accumulate capital until the situation became unbalanced. Marx and Engels gave a very good analysis of the capitalist system 150 years ago, better in some ways, I must say, than the equilibrium theory of classical economics. The remedy they prescribed - communism - was worse than the disease. But the main reason why their dire predictions did not come true was because of countervailing political interventions in democratic countries.

Unfortunately we are once again in danger of drawing the wrong conclusions from the lessons of history. This time the danger comes not from communism but from market fundamentalism. Communism abolished the market mechanism and imposed collective control over all economic activities. Market fundamentalism seeks to abolish collective decision making and to impose the supremacy of market values over all political and social values. Both extremes are wrong. What we need is a correct balance between politics and markets, between rule making and playing by the rules.

But even if we recognized this need, how could we achieve it? The world has entered a period of profound imbalance in which no individual state can resist the power of global financial markets and there are practically no institutions for rule making on an international scale. Collective decision-making mechanisms for the global economy simply do not exist. These conditions are widely acclaimed as the triumph of market discipline, but if financial markets are
inherently unstable, imposing market discipline means imposing instability - and how much instability can society tolerate?

Yet the situation is far from hopeless. We must learn to distinguish between individual decision making as expressed in market behavior and collective decision making as expressed in social behavior in general and politics in particular. In both cases, we are guided by self-interest; but in collective decision making we must put the common interest ahead of our individual self-interest even if others fail to do so. That is the only way the common interest can prevail.

Today the global capitalist system still stands near the height of its powers. It is certainly endangered by the present global crisis, but its ideological supremacy knows no bounds. The Asian crisis has swept away the autocratic regimes that combined personal profits with Confucian ethics and replaced them with more democratic, reform-minded governments. But the crisis has also undermined the ability of the international financial authorities to prevent and
resolve financial crises. How long before the crisis starts sweeping away reform-minded governments? I am afraid that the political developments triggered by the financial crisis may eventually sweep away the global capitalist system itself. It has happened before. I want to make it clear that I do not want to abolish capitalism. In spite of its shortcomings, it is better than the alternatives. Instead, I want to prevent the global capitalist system from destroying
itself. For this purpose, we need the concept of open society more than ever.

The global capitalist system is a distorted form of open society. Open society is based on the recognition that our understanding is imperfect and our actions have unintended consequences. All our institutional arrangements are liable to be flawed and just because we find them wanting we should not abandon them.

Rather we should create institutions with error-correcting mechanisms built in. These mechanisms include both markets and democracy. But neither will work unless we are aware of our fallibility and willing to recognize our mistakes.

At present there is a terrific imbalance between individual decision making as expressed in markets and collective decision making as expressed in politics. We have a global economy without a global society. The situation is untenable. But how can it be corrected?

This book is quite specific with regard to the deficiencies of financial markets. With regard to the moral and spiritual fields where market fundamentalism is squeezing its way into the nonmarket sector, my views are, of necessity, much more tentative.

To stabilize and regulate a truly global economy, we need some global system of political decision-making. In short, we need a global society to support our global economy. A global society does not mean a global state. To abolish the existence of states is neither feasible nor desirable; but insofar as there are collective interests that transcend state boundaries, the sovereignty of states must be subordinated to international law and international institutions.

Interestingly, the greatest opposition to this idea is coming from the United States, which, as the sole remaining superpower, is unwilling to subordinate itself to any international authority. The United States faces a crisis of identity: Does it want to be a solitary superpower or the leader of the free world? The two roles could be blurred as long as the free world was confronting an ``evil empire,`` but the choice now presents itself in much starker terms. Unfortunately we have not even started to consider it.

The popular inclination in the United States is to go it alone, but that would deprive the world of the leadership it so badly needs. Isolationism could be justified only if the market fundamentalists were right and the global economy could sustain itself without a global society. The alternative is for the United States to forge an alliance with like-minded nations to establish the laws and institutions that are necessary to the preservation of peace, freedom, prosperity, and stability. What these laws and institutions are cannot be decided once and for all; what we need is to set in motion a cooperative, iterative process that defines the open society ideal - a process in which we openly admit the imperfections of the global capitalist system and try to learn from our mistakes.

It cannot happen without the United States. But conversely, there has never been a time when a strong lead from the United States and other like-minded countries could achieve such powerful and benign results. With the right sense of leadership and with clarity of purpose, the United States and its allies could begin to create a global open society that could help to stabilize the global economic system and to extend and uphold universal human values. The opportunity is waiting to be grasped.

(...continued immediately below...)

...(continuation from above)

(Following is the preface of Soros` book)

PREFACE

My original aim in writing this book was to expound the philosophy that has guided me through life. I had become known as a successful money manager and later on as a philanthropist. Sometimes I felt like a gigantic digestive tract, taking in money at one end and pushing it out at the other, but in fact a considerable amount of thought connected the two ends.

A conceptual framework, which I had formulated in my student days long before I became engaged in the financial markets, governed both my money making and my philanthropic activities.

I was greatly influenced by Karl Popper, the philosopher of science, whose book Open Society and Its Enemies made sense of the Nazi and communist regimes that I had experienced at first hand as an adolescent in Hungary. Those regimes had a common feature: They laid claim to the ultimate truth and they imposed their views on the world by the use of force. Popper proposed a different form of social organization, one that recognized that nobody has access to the ultimate truth. Our understanding of the world in which we live is inherently imperfect and a perfect society is unattainable. We must content ourselves with the second best: an imperfect society that is, however, capable of infinite improvement. He called it open society, and totalitarian regimes were its enemies.

I absorbed Popper`s ideas about critical thinking and scientific method. I did it critically and I came to differ with him on an important point. Popper claimed that the same methods and criteria apply to both natural and social sciences. I was struck by a vital difference: In the social sciences, thinking forms part of the subject matter whereas the natural sciences deal with phenomena that occur independently of what anybody thinks. This makes natural phenomena
amenable to Popper`s model of scientific method, but not social phenomena.

I developed the concept of reflexivity: a two-way feedback mechanism between thinking and reality. I was studying economics at the time and reflexivity did not fit into economic theory, which operated with a concept borrowed from Newtonian physics, namely, equilibrium.

The concept of reflexivity came in very useful to me when I became engaged in managing money. In 1979, when I had made more money than I had use for, I established a foundation, called the Open Society Fund I defined its objectives as helping to open up closed societies, helping to make open societies more viable, and fostering a critical mode of thinking.

Through the foundation, I became deeply involved in the disintegration of the Soviet system. Partly as a result of that experience and partly on the basis of my experience of the capitalist system, I came to the conclusion that the conceptual framework I had been working with was no longer valid. I sought to reformulate the concept of open society. In Popper`s formulation, it stood in contrast with closed societies based on totalitarian ideologies, but recent experience taught me that it could be threatened from the opposite direction as well: from the lack of social cohesion and the absence of government.

I expressed my views in an article titled ``The Capitalist Threat,`` published in the February 1997 issue of The Atlantic Monthly. This book, which I started writing shortly thereafter, was meant to be a more thorough elaboration of those ideas. In my previous books, I had relegated my conceptual framework to an appendix or served it up buried in personal reminiscences. Now I felt that it deserved a direct hearing. I had always been passionately interested in understanding the world in which I lived. Rightly or wrongly, I felt I had made some progress and I wanted to share it.

The original plan for this book was, however, disrupted by the global financial crisis that began in Thailand in July 1997. I was exploring the flaws of the global capitalist system but I was doing it in a leisurely fashion. I was fully cognizant of the Asian crisis - indeed my fund management company anticipated it six months before it happened - but I had no idea how far-reaching it would turn out to be. I was explaining why the global capitalist system was unsound and unsustainable but until the Russian meltdown in August 1998, I did not realize that it was in fact disintegrating. Suddenly my book took on a new sense of urgency. Here I had a ready-made conceptual framework in terms of which the rapidly evolving global financial crisis could be understood. I decided to rush into print.

My view of the current situation was summed up in the Congressional testimony I delivered on September 15, 1998, where I said, in part, as follows: The global capitalist system which has been responsible for the remarkable prosperity of this country in the last decade is coming apart at the seams. The current decline in the U.S. stock market is only a symptom, and a belated symptom at that, of the more profound problems that are afflicting the world economy. Some Asian stock markets have suffered worse declines than the Wall Street crash of 1929 and in addition their currencies have also fallen to a fraction of what their value was w