Why No Place's Industrialization Looks Like Any Other Place

Corporate conquests, raw materials, industrialization and economic development... I'm beginning to think that African classrooms should be receiving USA 1970s high school history textbooks.

Histories differ, context differs, trade relationships differ, languages differ, currency differs.  The development of Western Guangdong Province looks nothing like the development of coastal Shenzhen. The WSJ reported last week that Viet Nam would not instantly replace China as an outsource.  In Harvard Business Review this month, author Ndubuisi Ekekwe of the African Institution of Technology and Fasmicro Group published an essay with the headline "Why Africa's Industrialization Won't Look Like China's".

It's not a bad short essay, but it could have been even shorter. If the western edge of one Chinese Province looks nothing like the eastern edge, why on earth would we expect a whole continent to develop by the pattern of eastern Shenzhen?

Ekekwe seems to imply that China opened Shenzhen zone and presto.  Having studied African and Asian and South American transformations from "third world" to "lesser developed nations" to "emerging markets", and having studied the industrialization of the United States between 1800 and 1940, I can attest that the only way to write a short essay is to predict it will be different.  Africa lacks the whole Japan, Taiwan, S. Korea war economics, diaspora context that led to the "Asian Tigers" of the late 1900s. But, if you look at people as individuals, and see what they are doing, you can recognize patterns that are not out of place on any continent because they are, by definition, out of place in that place.  Things are happening in some places in Africa the way they happened in Vietnam and Peru and India, perhaps.  But if it's a broad topic like "Industrialization", Texas did not develop as New Jersey did.

What is interesting about the article is where it predicts the future, and how Artificial Intelligence and Robotics will alter the "cheap labor" assumed to be the key to China's industrialization and growth. 

I would add that the secondhand or secondary economy, trade in used goods, is also going to impact paths to development. 50 years ago there were basically 1 billion rich people reselling and donating to 3 billion people in "emerging markets" (with a billion on the sidelines, too poor for secondhand). Today, there are roughly 4 billion (by the standards of the 1960s) rich people reselling and donating to 3 billion (with only a half billion on the outskirts). Imagine running your dad's 1960s used car dealership when half his customers now buy new cars, and there are 3 other used car dealerships in town.

If I were asked to make a prediction, I'd suggest that Africa's future wealthiness will occur differently than anyplace else. And that one end of Ghana (to the north) will develop differently than another (south). But if I were asked to make a prescription, I'd agree with two of Mr. Ekekwe's - transport infrastructure and education - and add a third... one that is a rare gem of fake economics transposed from the top a mere 147 years ago, but which I've always argued (since high school) robs emerging continents of America's path to the world stage.  Raw Materials.  King Copper. 

The end of the "copper barons" reign on the USA economy, which drove development of railways and telecommunications (telegraph roads) out west, arguably ended 100 years ago after the great labor war in Bisbee Arizona.


The USA had seen its relevance to the new "electric" world economy tied up with unlicensed, unbridled, copper mining.  Those mines would lead to great environmental catastrophe (14 of the 15 largest Superfund sites at the end of the century). Under the theory that raw material, like copper, is less "intellectual property" and creates fewer jobs per ton, the USA passed the General Mining Act of 1872. The Act was a page in the playbook of genocide of native Americans (during the Apache Indian Wars of the same year), and plan to populate the Gadsen Purchase (AZ and NM, where my great grandfather was in the Indian Service). It was also a giveaway to wealthy "robber barons", like those that control too much of the wealth in Africa's raw material economy.  The high school textbooks of Arizona and Montana look a lot like the anti-colonial textbooks in Africa.

My prescription to developing Africa would be amend General Mining Act of 1872 and the World Bank, and IMF policies based on subsidized natural resources to promote intellectual value added / manufactured goods. Force extraction industries to charge as much as the raw material is worth, making copper more like "rare earth metals" which play hardball with supply and demand forces.  And tightly control the environmental damage, charging as much as it takes to develop sites in a way which defends Africa's delicate inland ecosystems.

I accept the point that Artificial Intelligence, Robotics, and the "market cannibalization" of secondhand sales have made employment per ton less exponential over extraction. My hope is that raw material mining and petroleum extraction can, like agriculture, be made into something less painful to look at, less dependent on child labor and slave labor, and a source of sustainable renewable profit.  If every nation is "industrialized", it becomes less of a stigma to be King of raw material or agriculture.  When every kid in every slum on planet owns a smartphone (and a backup flip phone as well), the vision of "industrialization" imagined by Deng Tsao Ping in the 1990s needs a facelift.

There are only so many "economies".  As "industrial" becomes less of a Hollywood buzzword, and sustainable ag and circular economies of reuse and repair catch up, Africa will have nothing to be ashamed of whether it's making CPU chips, copper cathode, or cotton blouses or the best coffee on the planet.  It should start by marketing itself as the Economy of the Happiest Humans On Earth.  People are happier there. That's something we should try to copy.


No comments: