30 comments on “Well, yes….

  1. It’s like the relative poverty bollocks. Live somewhere where the average income is $10 million and you only earn $2 million, you’re poor. Live somewhere where everyone earns $100, there is no poverty.

  2. DocBud>

    Unless you have a lot of labour imports into wherever you live from outside – so not really everyone earning $10m – then the person on $2m is going to be poor.

  3. “Move to Rwanda”

    Actually, I’d guess that for Andreeson and people having similar intelligence and ambition, that move would work out pretty well. Not as well as in SF mind you, but they’d do a lot better than most people in Rwanda – for exactly the same reasons they have done a lot better than most people in the US.

    And I’d guess moving to Rwanda would not work out so well for the people in San Francisco who he thinks are so unequal now.

  4. A great way to lessen inequality in San Francisco would be to loosen the lunatic restrictions placed on development and which have sent the price of renting or buying property beyond the means of a substantial part of the population.

  5. Docbud>

    Sorry, I was confusing your first and second sentences. But in that case, aren’t you comparing two situations that aren’t alike?

  6. would like to think it was deliberate that the editor allowed the interviewer to come across as a soundbite educated clown.

  7. A fascinating interview, but when it came to this:

    “You’ve described the middle class of the 20th century as a myth.

    There are two middle classes. There’s the historical middle class—which is the bourgeoisie—starting in the, like, 1600s. This was the businesspeople and the traders, the merchants, the butcher, the baker, the general-store manager, the guy who was going off to China to go get silk and bring it back. Businesspeople.

    But in the 1940s something really significant happened, which is we bombed the rest of the industrialized world. And so the industrial base of Germany was obliterated. Japan was reduced to rubble. The rest of Continental Europe was bombed. England was bombed. The industrial base of the world was bombed. The one major industrial country that wasn’t bombed was the United States. So the United States became the monopoly producer of industrial goods.

    The army bombed the American middle class into existence?

    It was an accident of history. We had a window of opportunity which we took full advantage of. We had this window from basically 1945 to 1966, 1968, in which we were basically running unopposed. In that window, all kinds of wonderful things happened. One of the things that happened was the rise of this new idea of the middle class, which there was no historical precedent for, which was college-level wages for high-school-level education. As long as there’s no competition, it’s all well and good. The minute the Japanese show up, the minute the Germans show up, it just all falls apart.”

    it did rather set off my economic history bull detector. I didn’t think UK industrial production was too badly affected by the blitz, and the European “Economic Miracle” post-war wasn’t mostly the reconstruction of bombed-out factories but rather a population shift from agriculture to the cities which had already happened decades earlier in Britain. Or is he right and my memory wrong?

  8. @ MBE
    US (and Swedish) industry got a massive boost during 1939-45 from export demand from the UK and German-occupied territories (and 1941-5 from the Soviet Union). UK industrial production was badly hit by the Blitz, albeit much less than London housing which got all the publicity, Germany was devastated and Japan, Russia and nearly every combatant suffered damage.
    If you look at industries that supplied consumer goods which were in demand post-war, you will see the sort of pattern that Mr Andreessen is describing. North and South America, apart from Canada, cheerfully consumed and produced consumer goods while the rest of the world was at war until Hitler declared war on the USA; the combatant nations switched as far as possible to armaments, shipping (to replace those sunk) and defence. So the USA and Sweden had a massive start in 1945, running a mile ahead when everyone else hit the ground and thought no 1 priority was to build houses for the survivors to live in.
    *My* memory is not of an *European* “economic miracle” but of a German one under Adenauer and Erhard. I don’t know when Germany had its shift from agriculture to the cities but I have assumed it was under Bismarck since Germany was seriously competing with the UK in engineering and chemicals from 1900.
    I am not decrying the Marshall Plan but since it was largely funded from the money paid by the UK to the USA to protect the USA …

  9. john77: That’s right, yes. Also people forget that the eastern part of German, which wasn’t bombed quite as flat, was systematically looted by the Russians. All the industrial plant and a small but significant number of trained and skilled operators, packed up and shifted to the Urals.

  10. john77

    You are certainly at least partly wrong. It’s true that the Wirtschaftswunder was a specifically German term, and a specifically German event. But it coincided with Les Trente Glorieuses of strong growth in France, il miracolo economico in Italy, the rekordåren in Sweden (admittedly, whose economy had not been so badly affected by the war), and stronger than all of them, the Greek economic miracle.

    My memory has somewhat failed me though – economists call it the Golden Age of European Growth rather than the “European miracle”. There is an interesting essay on this by Nicholas Crafts and Gianni Toniolo, in the Cambridge Economic History of Modern Europe, 1870 to present – which is a cracking read by the way, so I’m disappointed I remember so little of it!

  11. Jari Eloranta and Mark Harrison, in the Cambridge Economic History of Modern Europe, 1870 to present, attempt to quantify the impact of WW2 on the European and Japanese economies.

    Industrial fixed assets in West Germany were only depleted by 17%, in Italy by 10% but in Japan by 34%. Also significant is what they call, in rather grizzly language, the percentage destruction in “human assets” – 1% in the UK and Italy, 6% in Japan, 9% in Germany, 19% in the USSR.

    They also note that European countries that took part in WW2 recovered noticably faster than in WW1 – even the vanquished.

    Neutral countries recovered to their pre-war GDP in, on average, 1.3 years (versus 3.4 years post-WWI). Victorious countries recovered in 1.5 years (an average for USSR and UK; contrasted to 3.4 years for the WWI victors). Even countries that had suffered severe damage during defeat had recovered from WW2 within, on average, 4.4 years – much better than the 9.7 years for the First World War. Eloranta and Harrison suggest that the relatively “lightning speed” recovery from the war was a harbinger of the Golden Age of European growth.

  12. As for the transition from an agrarian to industrial economy, obviously Britain had reached the culmination of this change earlier than other European powers. Crafts and Toniolo (also in the Cambridge Economic History of Modern Europe) put the sectoral employment share for agriculture in the UK in 1950 at just 5.3%, so it didn’t have far to fall.

    Other European countries were either far behind, or very far behind indeed, so some of the post-1950 economic growth can be put down to a shift in the labour share from agriculture to industry, and later services.

    Pre-war German industrial might didn’t mean their agricultural revolution had been completed. As late as 1950, almost a quarter (23.2%) of Germans worked in agriculture. By 1974 this had fallen to 7%, while the share who worked in industry had risen from 42.9% to 46.7% and services from 33.9% to 46.3%.

    But other European countries, even ones you may have thought of as fairly well-developed, underwent even more dramatic changes. Giving the 1950 and 1974 labour shares for agriculture, and the change in percentage points, we find:

    Italy: 42.2% to 17.5% (fall of 24.7%)

    France: 31.5% to 10.6% (fall of 20.9%)

    Austria: 32.3% to 13.0% (fall of 19.3%)

    Denmark: 25.1% to 9.6% (fall of 15.5%)

    Netherlands: 17.8% to 5.7% (fall of 12.1%)

    Switzerland: 16.5% to 7.5% (fall of 9%)

    Belgium: 12.2% to 3.8% (fall of 8.4%) – but for a relatively developed nation, more impressive still when seen as the sector being cut to less than a third of its previous side.

    One in every 4, 5 or 6 people in some large countries moving off the land in less than the space of a generation! For some countries which were less developed, there are some even more extraordinary changes; in other cases, the transition off the land has taken until relatively recent times to come to completion.

    Finland: 46.0% to 16.3% (fall of 29.7%)

    Spain: 48.8% to 23.2% (fall of 25.6%) … by 2004 this had fallen further to 5.5%.

    Ireland: 39.6% to 22.8% (fall of 16.8%) … by 2004, just 6.4%.

    Portugal: 48.4% to 34.9% (fall of 13.5%) … by 2004, just 12.1%.

    Greece: 48.2% to 36% (fall of 12.2%) … by 2004, just 12.6%. Quite a stunning decline, though still not down to the 12.4% agricultural share that Belgium had in 1950!

  13. “I am not decrying the Marshall Plan but since it was largely funded from the money paid by the UK to the USA to protect the USA …”

    This is utter nonsense, the UK was the biggest recipient of Marshall Plan aid.

    The UK ‘funded’ nothing. It got a 98% write-off on what it owed the US for lend lease. (Hancock,W. K. and Gowing, M. M., The British war economy (1949))

    It then borrowed $60bn at todays prices on a 50 year repayment plan and blew the lot on the creation of the welfare state and nationalisation rather than use it to rebuild like rest of europe did.

  14. John Fembup – £Actually, I’d guess that for Andreeson and people having similar intelligence and ambition, that move would work out pretty well.£

    Ahh, someone who has not been to Rwanda. I would expect that he would survive, maybe, three weeks. After which he would be hacked to death by some random yoof for his shoes. And that is if he employs a truck load of security.

  15. MyBurningEars- “it did rather set off my economic history bull detector.”

    I agree it sounds worrying. And it also passes the buck. It says there was nothing the US could have done or could do now. Which is obvious bollocks. If you want college-level wages for high school-level education, stop illegal immigration. Bring back IQ tests for employees – so that businesses do not have to rely on a college education as a proxy. Toughen the f&&k out of college courses so that they are not glorified day care in virtually every non-STEM subject. The same for High School. Stream High Schools.

    America is not poorer, even relatively poorer, because of the Chinese. The West has repeatedly inflicted massive damage on itself and refuses to face that fact.

  16. My point, Dave, is that, insisting on defining poverty based on some measure of inequality, be it relative poverty or the Gini coefficient, leads to absurd conclusions, as in this case which was artfully put down by Andreessen. In the UK, people who have much more than their non-poor parents and grandparents are defined as poor because they are not as well off as their neighbours.

    Nobody will move from a less equal society to a more equal one if their individual circumstances will get worse. Quite the opposite, people will move from one of these supposedly more equal countries to one of the less equal, evil, western, capitalist countries as evidenced by the extent of economic migration. Many of those moving, who have the resources to pay people smugglers, will see their relative economic position go down in their new society.

  17. @SMFS “Ahh, someone who has not been to Rwanda. I would expect that he would survive, maybe, three weeks. After which he would be hacked to death by some random yoof for his shoes. And that is if he employs a truck load of security.”

    Sorry, but this is bullshit.

    I have been to Rwanda, several times. It is not very dangerous at all. The people are generally very friendly and open. There’s a chance you’ll be pick pocketed in Kigali but if a local sees it happen they will chase the thief on your behalf and won’t accept any reward when they bring your wallet back. In fact, they will apologise on behalf of their country.

    There are longer term health issues – malaria being the main one – and you don’t want to be sleeping with the locals without condoms because of ‘SIDA’. Also some terrorism, but you’re probably at more risk of that in London.

  18. Interested – “Sorry, but this is bullshit.”

    Let’s see, White people get attacked and driven out of virtually every other African country. The only ones with sufficiently large White populations -South Africa, Kenya and Zimbabwe – are either facing a concerted campaign or massive government indifference to violence perpetrated against them. The only famous White person to live in Rwanda was Dian Fossey. How did that work out for her? What is Rwanda’s crime rate like?

    http://www-rohan.sdsu.edu/faculty/rwinslow/africa/rwanda.html

    According to the INTERPOL data, for murder, the rate in 1999 was 45.08 per 100,000 population for Rwanda, 1.00 for Japan, and 4.55 for USA. For rape, the rate in 1999 was 35.93 for Rwanda, compared with 1.47 for Japan and 32.05 for USA. For aggravated assault, the rate in 1999 was 114.31 for Rwanda, 15.97 for Japan, and 329.63 for USA. The rate for motor vehicle theft in 1999 was .31 for Rwanda, compared with 34.01 for Japan and 412.70 for USA. (Note: data were not reported to INTERPOL by the USA for 1999, but were derived from data reported to the United Nations for 1999) No total could be given for the index crimes because data for three crimes, robbery, burglary, and larceny were not given for Rwanda.

    So they have ten times the murder rate of the US. Even though the government is clearly incapable of collecting adequate data and so even that is probably an under-estimate. (although the US figure is probably wrong)

    But it is nice that car theft is so low. Can’t think why that might be.

    “In fact, they will apologise on behalf of their country.”

    I have not been to Rwanda. I have colleagues who have. Every one of them was robbed. However if I have a point, my colleagues’ anecdotes being no better than anyone else’s, it is that don’t go overboard. Yes, perhaps I am enjoying freedom from political correctness a little too much. But you are verging on a Happy Natives And Their Colourful Dancing narrative.

    There is no where in the world where it is safe for White people to live among reasonable numbers of Black people. I do not say that with anger or with pride. It is just a fact. Ask Dian Fossey.

  19. Fossey may have been the only famous white person to have lived in Rwanda (I don’t know, and it depends what you mean by ‘famous’) but there’s an obvious problem with that statement.

    Lots of white people live in Rwanda, quite happily.

    Beyond that, I’m not saying Rwanda is like Henley, just that this statement was literally ridiculous:

    “Ahh, someone who has not been to Rwanda. I would expect that he would survive, maybe, three weeks. After which he would be hacked to death by some random yoof for his shoes. And that is if he employs a truck load of security.”

    It’s also a bit strange to open your remark with the observation that a given person has not been to Rwanda (the implication being that they do not understand the place because of that) when you have also not been to Rwanda.

  20. john77: my comments would have made more sense if the first one had come out of the moderation queue. Put too many links in. Sorry. Excluding links it ran like this:

    You are certainly at least partly wrong. It’s true that the Wirtschaftswunder was a specifically German term, and a specifically German event. But it coincided with Les Trente Glorieuses of strong growth in France, il miracolo economico in Italy, the rekordåren in Sweden (admittedly, whose economy had not been so badly affected by the war), and stronger than all of them, the Greek economic miracle.

    My memory has somewhat failed me though – economists call it the Golden Age of European Growth rather than the “European miracle”. There is an interesting essay on this by Nicholas Crafts and Gianni Toniolo, in the Cambridge Economic History of Modern Europe, 1870 to present – which is a cracking read by the way, so I’m disappointed I remember so little of it!

  21. Interested – “Fossey may have been the only famous white person to have lived in Rwanda (I don’t know, and it depends what you mean by ‘famous’)”

    Well name some others then.

    “but there’s an obvious problem with that statement. Lots of white people live in Rwanda, quite happily.”

    Lots? There are fewer than 3000 White people – assuming that anyone with a French passport is White which is a bit of a stretch – in the entire country. How many of them do you think are victims of crime?

    “Beyond that, I’m not saying Rwanda is like Henley, just that this statement was literally ridiculous:”

    Well give Henley time. You have not shown why it is ridiculous. I have shown reasons, as weak as they may be, why it is not. You have done nothing.

    “It’s also a bit strange to open your remark with the observation that a given person has not been to Rwanda (the implication being that they do not understand the place because of that) when you have also not been to Rwanda.”

    The implication seems to be something known only to you. Stick with what I say.

  22. @ Joe Blow
    You are either just so ignorant that you do not know what I am talking about, or you are deliberately bullshitting.
    Lend Lease started it 1941, two years after the war started, after the Battle of Britain. The USA provided zero credit until it was clear that Germany could not invade and conquer
    FDR demanded that Britain pay in gold and sell its US investments to pay for armaments until it had run out of money
    Try reading http://en.wikipedia.org/wiki/Lend-Lease
    Notably “”If the British can give us some security for what we give them.”

  23. @ MBE
    Your comments *did* make sense although you have omitted “thirteen wasted years” (the UK’s fastest growth period since they started gathering statistics on GDP) from your list of quotations. However I was pointing out that the USA had a virtual free run on developing consumer goods industries while the combatant nations were switching everything over to defence industries and basic food.
    It took years to build/re-build factories for consumer goods and Attlee’s mob was more interested in controlling than expanding the means of production so rationing and price controls ensured there was little, if any, incentive to build new production facilities. When my parents moved back to England in 1953 I could buy US-produced “ice-cream soda” but not Ir’n Bru, the only post-war consumer durables in the house were the coal-burning stove and the washing machine – made by Bendix in the USA. [During the 1950s they gradually replaced nearly all of them and my father gave me his bike when I went to university].

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