WPR's The New Rules: Extended Life Expectancy Globalization's Next Political Battleground

Human life expectancy at birth, which remained stunningly fixed for thousands of years before suddenly doubling over the course of the 20th century, now seems destined to experience a similarly bold leap across the 21st century. When it does, it will shift human thinking about population control from its present focus on the outset of life to the increasingly delayed final curtain. The problem is that the technological advances that will make extending life expectancy possible are likely to come far faster than our political systems -- including the democracies -- can handle. 

Read the entire column at World Politics Review.

Christmas, actually . . .

FT story that reminds me of scenario I ginned up as part of Wikistrat teaser for simulation looking at rising consumerism in East Asia and its impact on various consumer products and food & bev industries.

I can't remember the first time I was in China during the Christmas holiday, but it was probably close to a half decade ago, and I was stunned by how much people embraced the whole concept while treating it as an essentially non-religious holiday.  I mean the country has a huge winter festival holiday (Lunar New Year) that runs in the Jan-Feb timeframe, so how could they pick this up too?

Well, it's that rising middle class that seeks more outlets for its downtime and money. So the Chinese are picking up all sorts of foreign/Western holidays on top of the ones they already celebrate.  Fairly American, actually.

The quote from local expert:

Christmas is like Chinese New Year, even poor people have to celebrate it. Hotels, kindergartens, schools, supermarkets, they all have Christmas decorations. As people born after the 1980s and 1990s grow up, the [Christmas] culture is having a growing influence.

So inscrutable, these people!

Plus, this year, Chinese decorations companies are surviving the downturn in the West by selling far more at home.

Chart of the Day: LATAM doing it right in the Middle

Great and expansive front-page WSJ feature from 15th.

Disappointing to the anti-globalization crowd, but it's been very, very good to LATAM, decreasing its poor and increasing its middle class in a steady fashion since Cold War's end.

A realistic snapshot:

The expanding middle is benefiting from a strong period of economic growth—fueled by high commodity prices in many countries—along with more aggressive social programs with a decided focus on education.

But the advances are still tenuous, and the possibility of a global recession haunts the prospects of los emergentes—the emerging ones—as marketers call the newly minted middle-class members.

Protecting what's gone on there is such a huge - even worldwide - responsibility. Ditto for Africa.

We don't do it out of anything but common sense. Check out the rising demand function:

This is the opportunity we piss away with our insane "war on drugs."

The world is booming and all we see is fear.

WPR's The New Rules: 3-D Printing Could Ease Strains of Global Population

According to the United Nations, today marks the birth of the world’s 7 billionth person, an event sure to cause great angst among the many surviving Malthusians who still believe that humanity’s ingenuity and the planet’s resources are both finite. But thanks to globalization’s continued advance and the modernization it enables, roughly four-fifths of humans live in societies with falling birth rates and half live in societies featuring lower than replacement-rate fertility. So we now know that the trajectory of global population growth will proceed somewhat more slowly toward our eighth and ninth billions, and that we may never reach the 10th.

Read the entire column at World Politics Review.

When politics stops being "low," the middle class-fueled "progressivism" kicks in

Theodore's respectable and well-to-do New York-based Dutch family was aghast when, as a young man, he told them that he wanted to go into politics. But he was swept up in an emerging progressive age that was directly fueled by America's rising middle class.

India is at the same point now.

Great quote today in NYT:

"We've been told since our childhoods, 'Politics is bad, don't get into politics.' But the point is that somebody has to clean it up. We can't just scold people."

PARTHO NAG, on a new activism among the middle class in India.

Politics considered bad. Somebody has to clean it up.

There's your progressive impulse in a nutshell.

WPR's The New Rules: Time to Worry About Over-Eating, not Over-Population

The real clash of civilizations in the 21st century will be not over religion, but over food. As the emerging East and surging South achieve appreciable amounts of disposable income, they're increasingly taking on a Western-style diet. This bodes poorly for the world on multiple levels, with the most-alarmist Cassandras warning about imminent resource wars. But the more immediate and realistic concern is the resulting health costs, which will inevitably trigger a rule-set clash between nanny-state types hell-bent on "reining in" a number of globalized industries -- agriculture, food and beverages, restaurants, health care and pharmaceuticals -- and those preferring a more free-market/libertarian stance.

Read the entire column at World Politics Review.

Chart of the Day: globalization's greatest victory

The rise of a global middle class, as depicted by The Economist (HT, Richard Jefferson).

People ask, what did America do for the world? It set the conditions for this to happen - and then it defended that system from those who would do it harm. The US is only world power in history whose primary goal has been the peaceful rise of other great powers through trade and development.

The simplest equation on making sufficient food happen

From WSJ interview with Peter Brabeck-Letmathe, CEO of Nestle. 

The global middle class means a good billion more have recently had the opportunity to access meat - high protein of choice, especially for growing bodies. When you want meat, it's a 10-times multiplier on grains or vegetables.

Do-able, says the CEO, if you follow one simple rule: "no food for fuel."

Other two rules: don't fear genetic advances and DO charge for water.

Besides some geographic adjustment on climate change, that's really it. We can handle the new demand without problems, no matter what the fear-mongers tell you. But we can't simultaneously chase "energy independence," which is doofus amidst all the other skyrocketing commodity interdependencies, because we cannot will ourselves into not caring about the Gap.

Simple solutions requiring decent political leadership, which appears - on a global scale right now - to be our one great unrenewable resource.

Chart of the day: Filling in the gaps on emerging economies = economic dynamic of century

It is THE amazing achievement of US grand strategy that we've created the conditions by which the chart of the direct left unfolds. If ANYBODY tells you that globalization is bad or unfair or says similar things about US "empire" since WWII, then simply show them the slide on the left, because it knocks those lies right out of the ballpark.

Or to be more succinct: the US-created and -enabled globalization process never replicated the dynamics of colonialism - i.e., kept the poor down. It did the exact opposite. The rest is just whiny bullshit propagated by little minds who refuse to accept it. We built a world order that enabled the rise of a global middle class, which means near-universal democracy is in the works (there will remain bedroom communities for the nonviolent rejectionists - we'll just ask them to put orange reflector signs on their buggies).

Further down, you see the legacy gaps in capabilities that will be invariably filled in over the coming 2-3 decades. That's when the resource constraints push the world into resource utilization of an entirely different caliber, but that too will be a good thing.

Chart of the day: World's biggest ag producers

From FT story about effort of world policymakers to set up transparent info system on ag to avoid speculation, etc.  Good luck with that.  Farmers the world over tend to be tight-lipped, whether family or corporate.

What I found interesting about chart.  China, of course, is a huge ag producer, second only to US and not that far behind.  Problem is, of course, that China has 4 times as many people, so it's not really an exporter of note and, like India, consumes most of what it produces and then must import additionally (India less so, but as its middle class grows and climate change makes growing harder, it will follow China into a significant dependency).  EU is decent exporter, and then you get into the familiar South American and Black Sea countries, plus Canada and Pakistan (the former being more like US - a big exporter, and the latter less so because of its large population).  

So you see, just a handful of countries do the bulk of the producing and when you take out the self-consuming, the pool gets even smaller.

Again, water is crucial for the 21st century, and the West Hem has roughly 3 times as much as it needs - by population, so the West largely feeds the East, meaning protecting the food supply in the West becomes important in an age likely to feature biological terror.

The food-land equation

From Jason Clay, World Wildlife Fund in a NYT debate on population:

We currently use 33 percent of the Earth's surface for food.  As 25 percent isn't usable (deserts, cities, roads) and 12 percent is set aside for national parks and the like, we continue to expand the food production frontier each year.  At the current rate of habitat loss, after 40 years, we will have "eaten" nearly all the remaining natural habitat on the planet.  Whatever is sustainable with 7 billion people will not be with 10 billion.

So you add up 33 + 12 + 25 and you're talking 30 percent of the surface that theoretically gets exploited. Population growth (we hit 7 billion around Halloween) to come by 2050 (40 years) is approximately 2.5 (not 3 to make 10B), but let's take the three and say we'll have 40% more people.  

Honestly, considering how low yields are in most ag environments around the world, the notion that we can't support 40 percent more if we boost current land yields and get access to good land freed up by global warming/climate change (unmentionable to any WWF because of the species loss that will necessarily occur) is a huge supposition, given recent history.   For example, America now produces 50% more corn on the same land as it did in 2000.  Remember the corn fields you ran through as a kid.  Impossible today!  Why?  Dense rows of plants.

Clay then goes on to sound ominous notes about food production in 2100 due to per capita (he has to switch his argument there because the pop growth will level off and end mid-century) and he comes up with this meaningless stat that we'll "need to produce an amount of food that is 2.5 times the amount that all human societies have produces in the last 8,000 years."  That one is a pure scare tactic.  Human population was negligible until about 200 years ago and hunter-gathering was the prime route for a major portion of that sub-billion population, so stacking up the previous 7,800 years of ag production is a goofy standard.  Almost as unintelligent as saying we've got more humans alive today than have ever lived!

I do like the stats on the land use, so I blog to remember.

Chart of the day: A global middle class drinks coffee

FT story on how producing countries (mostly Gap) and emerging markets (mostly New Core) are driving an expansion in coffee consumption globally.  

Coffee demand globally is described by one expert as being at a "turning point":

Demand in western Europe and the US is nearing a plateau, while consumption in emerging markets is rising strongly, particularly in coffee-producing countries.

Brazil is considered the exemplar of the trend, and as readers of this blog will note, I've posted in the past about its rapidly expanding middle class and the stunning growth in food consumption there (both more volume and moving up the caloric chain).

Tea is kind of weird:  both high- and low-brow, meaning the rich love their tea and the poor depend on it in much of the world. But the middle class likes its coffee - its stimulus package every ayem.

Good news for producers.

Being the global demand center has its perks

FT story on how "China influence on design growing fast."

Fundamental tenant of my vision since the late 1990s:  when the global demand center shifts in an industry, everything changes for that industry.  Now, it's Chinese tastes and desires that shape design, not so much the American consumer.   Yes, some customization by market, but the underlying dynamics shift.

At the Shanghai car show that opens today, General Motors and PSA Peugeot Citroën will both launch global models for the first time in China, a symbol of how the car industry’s centre of gravity continues to shift to the mainland, the largest car market.

But it is not just about launching the new-generation Chevrolet Malibu or Citroën DS-5 first in China, to attract more Chinese buyers.

The shift goes both ways.

When GM on Monday unveiled its Buick Envision SUV concept car, it revealed a car designed in China, for the world.

Chinese tastes are increasingly influencing the design of cars driven not just in China, but around the world.

China is having the greatest influence on luxury cars.

Demand for premium cars is soaring in China, making it crucial for luxury carmakers to satisfy them first.

When Mercedes-Benz set out to design a new S-Class luxury saloon, to hit showrooms in 2014, Daimler flew 100 Chinese consumers to customer clinics in Germany and the US to ensure they had input in the car’s design.

But the Chinese car boom is shaping the look of some mass-market cars too.

When General Motors designed its LaCrosse saloon, the brand, which is popular in China, devised a roomy and plush rear seat of the kind that Chinese owners – many of whom have chauffeurs – prefer.

“It’s a natural extension of the size and importance of the China market,” Kevin Wale, head of GM in China, says.

Ed Welburn, GM head of global design, says: “The trends here in China are having an influence on the design of our brands, but it is not a case of China dictating what cars are driven in Detroit.

“The influence is more subtle.”

Mr Welburn says one of the reasons Buick has become so successful in China – where owning a Buick is a status symbol – is that its fluid lines are more oriental in feel than the angular shapes of some other global auto models.

“China connected with Buick in a very positive way because . . . Buicks have a lot of flow in their design and Chinese artwork and calligraphy have a lot of flow,” he says.

“I’ve encouraged the design team here to . . . continue to play that up, and they have used that aesthetic in every detail [of the Envision SUV concept car], to give the same kind of feeling you get with a jade sculpture.”

Mike Dunne of Dunne & Co, an Asian motor industry consultancy, says: “Five years ago, no one would have imagined that China would have surpassed the US as the largest market.

“But now it’s natural that these cars are being developed for Chinese customers and sold globally.

This is such an amazing change in just a decade, but it signals globalization's immense power.  It is evidence such as this that always makes me laugh when people posit globalization's retreat because of this or that policy in the West, or the dividing up of the internet, etc.  There are some profound forces at work here and they mostly have to do with greed for a better life.  It's a demand function - not a supply one.

Chart of the Day: World grain consumption

WSJ from early March.  

Good example of the impact of the rising global middle class.

Also tells you something about the timing of the 2.0/Facebook Revolutions in food-dependent Arab world.

Chart of the day: Cinema B.O. reflects globalization of mass media

Per my many past posts on the subject, a great chart showing how flat domestic US box office is (hovering around $10B mark), while DVD sales have come and gone and Blu-Rays aren't filling the gap as Internet- and cable-delivered (virtually indistinguishable when it comes to the home) take over with their much-thinner margins (none of that being shown on this Economist chart).

Thus, why it's so crucial to Hollywood that foreign B.O. has more than doubled in last decade, and shows all signs of taking off even more.

Why?  As with most things, it's the emergence of the global middle class.  Think to when movies took off in America (1920s) and then realize how sustaining they were even during the Great Depression (escapism), thus all bottom-of-the-pyramid logic plays here too.

WPR's The New Rules: America Need Not Fear Connectivity Revolutions

A lot of international relations theories are being stress-tested by events in the Arab world right now, with some emerging better than others. Two in particular that are worth mentioning are Ian Bremmer's 2006 book, "The J Curve," which predicts a dangerous dip into instability when closed, authoritarian states attempt to open up to the world; and Evgeny Morozov's new book, "The Net Delusion," which critiques the notion that Internet connectivity is inherently democratizing. (In the interests of transparency, I work as a consultant for Bremmer's political risk consultancy, Eurasia Group, and penned a pre-publication blurb for Morozov's book.)

Read the entire column at World Politics Review.

Africa: a place NOT to leave alone

George Friedman's new book, "The Next Decade," presents his usual shtick that looks suspiciously like a rerun of WWII (as all his stuff does).  We are made to believe the Japanese threat is still there (Friedman is still trying to justify his early 1990s book that said war with Japan was inevitable), that China will fragment (oh so InterWar), and that Russia and Germany will ally in a frightening Molotov-Ribbentrop way (no kidding!  that's why we must quickly ally with Poland!).

But the bit that got me was his chapter on Africa, which he entitled, "A place to leave alone."  Why?  By his geopol standards, it isn't coherent enough to create a dominating challenger to US global empire, so no reason for US to go there whatsoever.

Interesting perspective.

I would tell you that Africa is going to be the ground zero for globalization's economic and network integration over the next 2-3 decades, as in, a very happening and increasingly coherent place.  But no, no hegemonic dragons for the US to slay.

And you have to ask yourself: is that all there is to US grand strategy?  Preventing the rise of challengers and asserting primacy?  Because I thought that path got explored fairly aggressively in Bush-Cheney to almost nobody's satisfaction.  And are we, on the basis of such thinking, simply supposed to ignore major chunks of the world?

Again, brilliant stuff if your goal is to shape Eurasia prior to, during and following WWIII there (read Friedman's hilarious "Moonraker" war between Japan and the US on the dark side of that celestial body in his "Next 100 Years"), but my reading of US grand strategy since around 1900 is all about creating that open door-cum-post WWII international liberal trade order-cum-the West-cum-the global economy-cum-globalization.  To me, the goal of primacy (deflecting all rising would-be competing great powers) is entirely unAmerican. It's simply not who we are as a people or what we've done these last several decades as a superpower.

But Friedman completely ignores the concept and reality of globalization, preferring his stated dream that Americans finally realize they're running a world empire (honestly! he's sticking with this fantasy after the Global Financial Crisis revealed a world a bit more balanced than he cares to admit).  Check out either book and you will see virtually no references to globalization (albeit one on globalization in the 16th century in "Next 100 Years") - as if he simply doesn't "do" globalization.  And that's why his books have a weird, back-to-the-future feel whereby we're still worried about Russo-German schemes to rule the world!

Better than reading Friedman's WWII redux material, check out the WSJ's running serial on the emergence of the middle class in Africa, hence my chart of the day:

This is why Wal-Mart doesn't consider Africa "a place to leave alone," nor should any serious global corporation.

Nor, frankly, should the US.

We have to be able to see a world for what it is, not for what we're conditioned to look for.  Friedman still sees the world in terms of great powers balancing each other out of the 1920s-1930s, because that's what he was classically trained to see.  But I ask you, how is his persistence in spotting what he wants to spot any different from a religious type who keeps seeing "clear evidence" of the Book of Revelations in events in the Middle East?  Both of these characters have their preferred storyline from the past, and by God, they ain't swapping it out for anything!

To me, that's not teaching people how to think strategically, but the exact opposite.  It's providing a familiar, fixed box and then encouraging readers to lop off those limbs of the world body that do not fit this Procrustean bed - like Africa.

And unfortunately, that sort of approach yields a solid 2-3% capture of globalization's fascinatingly dynamic and complex reality.  Get smart at viewing that holistically and you've got a grip on the world as we know it.

Or you can fantasize that America's grand strategy of this decade is thwarting Japan's resurrected militarism and Russo-German schemes to dominate the heartland of Europe!  

Achtung baby!

Friedman's memo to China:  you're conquering the world all wrong!

China to Friedman: very true, and completely irrelevant.

WPR's The New Rules: "The Battle for Islam's Soul"

Beginning with the Iranian Revolution in 1979, the West has viewed the Middle East and North Africa primarily through the lens of radical fundamentalist political movements. That perspective has narrowed our strategic vision ever since, conflating Shiite with Sunni, evangelicals with fundamentalists, Persians with Arabs, Islamists with autocrats, and so on. But recent events in Tunisia and Algeria remind us that the vast bulk of history's revolutions are fueled by economics, not politics. In this, the struggle for Islam's soul is no different than that of any other civilization in this age of globalization's rapid expansion.

Read the entire column at World Politics Review.

WPR's The New Rules: Globalization, Air Hubs and the City of Tomorrow

H.G. Wells’ futuristic 1933 classic, “The Shape of Things of Come,” predicted a post-apocalyptic world in which humanity’s recovery would depend on the airplane as the primary mechanism for both travel and political rule -- the benevolent “dictatorship of the air.”  The book reflected Wells’ prescient fears of catastrophic world war and his faith in technology’s capacity to tame mankind’s worst instincts.  

A book due out in March entitled, “Aerotropolis: The Way We’ll Live Next,” is the closest thing to a real-world vision to rival that of Wells. The book, written by journalist Greg Lindsay, is based on the visionary ideas of business professor John Kasarda, a latter-day Wells who dreams of building future cities around airports instead of the other way around.

Read the entire column at World Politics Review.

On food, Asia can't keep pace with rising middle class demand

WSJ story on how Asia's food demand continues to rise while the amount of land devoted to food production is pretty much capped this decade due to urbanization and planned investments just aren't happening as envisioned (so yield per acre not rising enough to cover the delta in demand).

The plan was to dramatically boost farm investment in Asia's developing countries after the scary price spikes in 2007-08, which may be remembered in the same way as the original OPEC price spikes of the early and late 1970s--a harbinger of a permanently tight market where any de-synching of demand and supply leads to real and perceived crises of the highest order (as in, governments fear for their regime stability).  

Examples of the investment:  opening up land previously considered marginal and improving farm-to-processor infrastructure (mostly roads and storage facilities).  The big hold-up, unsurprisingly, is the financial crisis.  Then there's the usual uncertainty on land ownership and fears of environmental ruin.  

Why things won't get so bad globally this time around:  grain stores are up and the economy is weaker, but these are temporary conditions that do not obviate the strong underlying trends.  As one researcher on rice puts it in the piece, "2008 was not just a blip, this is the way things will be, with repeated shocks."

The financial crisis, in my mind, caught Asia about a decade too early--not enough rules and not enough positive evolution on politics (especially the talent level of leadership) and not enough development of financial markets (in terms of being more fluid and responsive).  Asia in general is still burdened by rules and leadership and mindsets better attuned to extensive growth (throw in more stuff!) and the ag scene calls for intensive-growth answers (much higher yields on same amount of land).  The Philippines, as the piece notes, produced 92% of its rice in 2000, but is already down below 80% today.  That gap will only grow, because most dreams of getting access to unused land won't come true (the urbanization going on is likewise intense) and even if access is had, yields won't be so high without serious investment.

In the end, all the brave talk about food self-sufficiency in Asia is just nonsense; ain't never gonna happen. But Asia certainly could do better, so that the demand doesn't outstrip local supply too intensely too fast.  We've seen more than a few Asian states move into that outsourcing trend of renting or buying up nice farmland overseas (in Africa, for example), but that only buys you a whole new load of responsibilities that I think a lot of these countries--especially China--are ill-prepared to follow through on.

I remember driving from Addis Ababa down to Awassa in southern Ethiopia and seeing huge chunks of the best farmland sort of tarp'd off--as in, covered on all sides and seemingly roofed with simple metal skeletons wrapped in this thin but opaque poly skin (I assumed the topsides where clear enough to let in the bulk of the sunlight).    It was a stunning sight to behold:  all this open, rich farmland still operated in very early 20th century terms and then these huge, fenced off and covered up tracts where--apparently--a whole new level of effort was being made.  Unsurprisingly, I saw labor barracks nearby with a Chinese flag flying out front.

Now, you can say, this all works so long as the local government makes it work, but if a food crisis really comes along and the local population is suffering in a way that's undeniable in terms of global news coverage, then that thin poly cover-up won't be enough to keep that food production secret and safe.  And China will find itself unusually responsible for what comes next in places like Ethiopia.

And that's when the whole "non-interference" things gets revealed as so much empty talk.  There is no way China rises and becomes what it is becoming without have huge interfering effect all over the planet, and people will hold it responsible for all that change--both the good and bad.  

Don't get me wrong:  I think China's impact will be overwhelmingly positive overall, as the sustained demand for resources does plenty to jump start and fuel development in places like Africa in ways that the boom-and-bust cycle previously offered by the West did not.  But with the good will come the bad, and that means China gets dragged into all sorts of uncomfortable dynamics it has previously sought to avoid.  

This is why I argue that serious strategic partnership with the U.S. is hardly just in America's short- and medium-term interest (due to its current straining to meet its global security obligations). Over the long term, it's far more in China's interest. Back in "Blueprint," I said America needed to "lock in China at today's prices," but the obverse is equally true now:  prices will never be lower and China will never find a more pragmatic leader than Obama, because if he loses in 2012, expect the usual "apres moi, le deluge!" reactions to kick in. 

This is another example of why I think the 2010s are a turning-point decade--as in, get it right and globalization's future is secured, but screw it up, and far different global pathways are made possible.  Inside all those dynamics, the US-Chinese relationship is the long pole in the tent:  get it right and nothing can go wrong, but get it wrong and nothing will likely go right. Why?  The rise of the global middle class means there will be so little slack in so many systems, that it'll feel like we're collectively in constant crisis.  This environment yields the "keeping all the balls in the air" mindset currently on display at State with Clinton (who needs to aspire to higher goals than just this).  The same is unfortunately true in Beijing.  All this kicking-the-cans-down-the-road lack-of-ambition serves the world poorly at this moment of great structural change: everybody of note seems to avoid leadership.

But there's no question about China becoming far more of a global leader; it has no choice.  The question is how much of this leadership emerges pro-actively from Beijing, and how much is teeth-pulling from the rest of the world.

China's JFK is yet to emerge, but he was one of the "heroes of the future" I cited at the end of "Blueprint for Action":  the leader who steps up and asks China to think less of what the world owes it (after all those decades of "humiliation" and the long slow climb back up from widespread poverty) and more about what China owes the world.  That moment/leader will be a defining dynamic for the 21st century and how the world evolves.

And food is more likely to drive that process than energy or anything else.