Dec 19,2013

Links Roundup: Pensions, Shenzhen, MOOCs, and More

+ Kari Kohn

Over 200m tonnes of cargo come and go here every year, fueling the hyper-speed development of a city that was nothing more than a fishing village 35 years ago – and is now a teeming metropolis of 15 million people.“A new high-rise every day and a new boulevard every three,” was Shenzhen’s motto in the early 1990s, as towers sprouted from rice fields at what became known as “Shenzhen speed.” Now, sprawling below us, are the defunct sheds that helped to make that possible: the furnaces, production plants and storage yards of the old Guangdong Float Glass Factory, the world’s largest manufacturer of curtain-wall glazing until it closed in 2009.“This place was the seed of modern China,” says Bouman, sweeping his arm over the Shekou Industrial Zone, where the factory sits. The tip of this peninsula at the bottom of the Pearl River Delta was the testing ground for what would become the country’s first Special Economic Zone in 1979. It was where China first flirted with land reform and private enterprise, a deregulated laboratory that would soon foster an amorous embrace of free-market capitalism, cementing Shenzhen’s position as the country’s “Trailblazing Ox”.

City and State Pension Problems

San Diego now spends more than twenty per cent of its operating budget on pensions; San Jose spends a quarter of its budget on them....How did states and cities get into this jam? By following Mark Twain’s famous dictum: Never put off till tomorrow what you can do the day after tomorrow. In principle, providing for pensions isn’t difficult: governments set aside money every year to fund them, just as workers contribute a percentage of their salary every year. But that means raising taxes or spending less on things that voters like, so politicians often just let pension contributions slide, passing the bill on to future taxpayers. Politicians are adept at rationalizing such irresponsible behavior. When markets are up and pension funds are flush, they say that there’s no need to add money. When times are bad and tax revenue drops, they say that they can’t afford contributions.

The Shortfalls of MOOCs: Face-to-Face Interaction

But the most compelling reason why MOOCs fall short was this: “One thing that Coursera doesn’t do well is teach non-cognitive skills,” Ng said. “There are studies that suggest that 80 percent of your income are due to non-cognitive skills: teamwork, ethics, the ability to regulate anxiety. It’s an open question whether Coursera can develop technology to teach non-cognitive skills. By contrast, universities do a much better job.”

New Methods, Progress, and Inequality

But new methods can harm those with vested interests in the old ones, and the vested interests can use their political power to block competition and progress. Professor Deaton explains how “the emperors of China, worried about threats to their power from merchants, banned oceangoing voyages in 1430,” adding, “Similarly, Francis I, emperor of Austria, banned railways because of their potential to bring about revolution and threaten his power.”Progress begets inequality, and the resulting inequality can either encourage more progress or impede it, or both.

East vs. West: Biggest Cities Over Time

Here’s an interesting chart going way back to 4000 BC showing the population of the biggest cities in the western and eastern worlds. It comes from Ian Morris’ book “Why The West Rules — For Now.”