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What If Tibet Was Free?
April 29, 2008
Although there have been many calls for a free Tibet recently, I have not seen any analysis on what a free and independent Tibet would look like. The consensus seems to be that as soon as the Tibetans throw off the yolk of the Chinese oppressors, Tibet will be pretty much the same as today, but better. However, Tibet as an independent nation would be a vastly different place than the Tibetan Autonomous Region of the People’s Republic of China (TAR). By looking at the state of Tibet today, and the results of recent “breakaway” countries, it is possible to determine what Tibet might look like if all of the Olympic Torch protesters got their way. Since this site is called “A Geek Talks About Money,” and not “A Geek Talks About Buddhism” nor “A Geek Talks About Politics,” I will mostly cover the economic effects of a free Tibet. I’m also going to make the (rather large) assumptions that Tibet separates from China peacefully, with no bloodshed on either side, and that the independent Tibet will have the same borders as the TAR.
How is Tibet Doing Now?
Currently, Tibet is the Cuba to the People’s Republic of China’s Soviet Union. With only 2.7 million people spread out over 1.2 million square kilometers, Tibet is one of the poorest regions in China. The Chinese government pumps billions of dollars into the Tibetan region, from highways to dams to railroads. Tibetans are exempt from government taxation, and the Beijing government provides 90% of the Tibetan regional government’s operating expenditures. Mostly due to government intervention and tourism, the Tibetan economy has grown at an annualized rate of 12% since 2000, more than doubling annual GDP from 12 billion RMB (US$ 1.7 billion) to 29 billion RMB (US$ 4.1 billion) in 2006. Tourism has given a major boost to the Tibetan economy, with more than 2.5 million people visiting the Tibetan Autonomous Region in 2006 alone. Thanks mostly to the new Qinghai-Tibet railroad, foreign trade has increased to US$ 393 million, but the Tibetan economy still largely consists of subsistence agriculture.
Early Effects of a Split
Although the precise effects would be quite variable, depending on the policies adapted by the new leaders and the method of separation, it’s probably safe to say that there would be strained relations with the People’s Republic of China in the years after separation. There may be hard feelings against the Han minority in Tibet (around 6% of the population), leading them many of them to return to China. This would be a disaster, because when a business-owning minority is exiled from a country, from the Jews in England to whites in Zimbabwe, the economy is consistently dragged down.
As Tibet’s economic growth has been sustained by massive infusions of cash and economic aid from the People’s Republic of China, the new leaders of Tibet would have a difficult choice ahead of them. They would have to either rapidly reduce government spending or drastically cut back on government programs. There is not nearly enough money to maintain current expenditures without massive foreign aid. This would likely not come from the United States, as it has too much to lose with trade in China and little to gain. In fact, it is a good bet that many nations will refuse to recognize Tibet, just as no countries recognized Tibet during its period of de facto independence from 1912 to 1950. The situation would be similar to the current situation with the Republic of China (Taiwan) as all but 23 countries have refused to recognize it . As Taiwan is an active exporter and has a GDP approximately 165 times the size of Tibet’s, it is likely that even fewer nations will recognize Tibet.
Although more more tourists may want to visit Tibet in the years following independence, tourism numbers will probably decrease. Currently, the only airline offering international flights to Tibet is Air China, although there are plans for Royal Nepal Airlines to operate a Nepal-Tibet link. With the Maoists in charge of Nepal, providing a link to a former Chinese province may not be a top priority. Creating new air routes will take time and effort, especially to a place with as many challenges (location, altitude, environment, and topography) as Tibet.
Land routes from India, Pakistan, and Nepal exist, but are very dangerous, often closed, and cannot handle large amounts of traffic. Tourism, which provides a large amount of foreign capital to Tibet, would slow to a trickle, further reducing the amount of money available to Tibet’s new government.
The first few years of independence for Tibet would likely be marked by little to no economic growth, if not economic contraction. Even if there are no problems with the weather (as occurred in the ‘97-’98 season, when three million head of livestock died due to harsher than normal winter conditions), humanitarian assistance may be needed as industry declines and is replaced by people returning to nomadic pastoralism (as occurred in Mongolia following the removal of massive Soviet aid). This may lead of overgrazing and environmental problems later.
Long-Term Effects
If Tibet split from China today, it would have the 147th largest economy in the world, right above Suriname and right below Togo. In other words, it would have a lower GDP than any one of the fifty states in the United States. It would have very little clout in world trade circles.
China may eventually come to the conclusion that having a stable border state between itself and India is a good thing, and return to providing aid to Tibet as a foreign country, as well as normalizing diplomatic relationships with an independent Tibet. Unfortunately, there will not be nearly as much of an impetus to help as when Tibet was part of their country.
Without Chinese intervention, the economy would probably shift away from industry and more towards subsistence agriculture (as this was the “traditional” economic platform before the Chinese came in 1951). Again, this is the same situation that occurred in Mongolia after the collapse of the Soviet Union. An economy consisting of subsistence agriculture is much more volatile, more likely to be in need of humanitarian assistance, and definitely not likely to grow at the current 12% annual rate.
As a landlocked and difficult to reach country, trade will be vastly reduced unless a deal is struck with China. The routes into the Sichuan and Qinghai provinces would have to be re-opened, but if China levies any import or transport duties, it is difficult to see how physical Tibetan exports would be economical.
There remains the possibility of Tibet trying to become a “cyber-power,” providing services through the Internet as parts of India and Mongolia have done. However, with more than half of its citizens illiterate and only 16% owning a computer, this may be more difficult than it seems at first blush. Tibet’s new government would need to maintain and upgrade a country-wide system of education in order to provide workers for a knowledge-based economy. This will be difficult to set up immediately post-independence, due to the number of competing demands for government money and the drying up of Chinese aid, and so would only be possible as a long-term goal.
On the plus side, Tibet has large deposits of gold, salt, and copper. If the current commodities boom continues, these could provide an economic boost to an independent Tibet. Tibetan authorities may be able to manage the extraction of these materials better than the Chinese government. Due to the difficult climate and remoteness of the region, though, commodities prices may have to remain high to make extracting these materials economical. Again, routes through either Nepal/India would have to be improved, or the Tibetans would have to be economically dependent on Chinese routes.
Conclusion
Economically, an independent Tibet would be a greatly reduced Tibet. It would be very difficult to maintain the current standard of living for ordinary people. The GDP of Tibet would most likely contract in the years post-independence, and not grow nearly as quickly as it has as a part of China. Although there may be other benefits to an independent Tibet, from an economic standpoint, it would most likely be a disaster.
Let the Engineers Rule!: The Alternate Economic System of Technocracy
April 28, 2008
Ever wonder what society would be like if it wasn’t run by politicians and economists, but by engineers and scientists? If every part of society could be developed from the ground up, including borders and locations of cities, by technicians who could optimally plan the most efficient use of resources? If fiat money were abolished and replaced with something more advanced? In the 1920s and 1930s, a man named Howard Scott and a group called Technocracy decided to plan out a system devoted to reaching economic efficiency via empirical studies and evidence. Technocracy Incorporated is not remembered much today, but at its peak had over half a million members in California alone. Some of the most notable Technocracy advocates include M. King Hubbert (originator of Hubbert Peak Theory, or “peak oil”), Thorstein Veblen, (economist and author of Theory of the Leisure Class) and Upton Sinclair (author of The Jungle).
What is Technocracy?
Technocracy is the system of thought that holds that as society progresses, the old Price System of using tokens of debt (”money”) is no longer a reasonable way to sustain a society. Technocracy seeks a zero growth economy based on efficient use of resources, especially energy, and the abolition of relics of the traditional past, such as the democratic political system and the borders of nation-states. They believe that these constitute an inefficient allocation of resources, which leads to the illusion of scarcity. Therefore, if societies could be re-organized into Technates (energy-independent regions with a sufficiently qualified engineering population), that humans would move to a post-scarcity society. That is, goods and services would be practically free, due to the fact that society would be able to easily produce anything required for minimal cost.
How Would Everyday Life Be Different from Today?
Private ownership of most things, aside from personal belongings, would come to an end. However, most anything you need will be available for your use, including communications devices, transportation, etc. Large metropolises such as New York will dwindle as their reasons for existence - trade and commerce - are eliminated. People will live in smaller, more self-efficient and spread-out pre-planned communities called Urbanates. It would be easier to get around in these population centers, as they would be planned to be easily navigable and walkable instead of the hodge-podge of inefficient development that cities have seen in the past. Traditional social life would not change, and any social legislation (problems not related to the conversion of energy to produce for the populace, such as divorce, gay marriage, etc.) would be passed by Technate-wide referendum.
One of the main results of the move to Technocracy would be a vast increase in the amount of leisure time. As people would receive the current equivalent of $500/day in energy credits, more than could possibly be spent, the only reason for working would be the approval of one’s peers. Retirement would be possible (but not mandatory) at age 45. People could work on anything they wanted, resulting in a flourishing of culture as never before. Citizens of the Technate could spend time learning anything that they wanted to at school throughout the course of their lives. Education would become a lifelong drive, not something to do at the beginning of life in order to learn a skill to survive.
Traveling in the Technate, both within an Urbanate and to other areas, would be incredibly easy due to a Technate-wide system of canals (”Continental Hydrology”), high-speed rail and air transport, and widely available individual vehicles. All of these vehicles would be designed to be as energy efficient as possible.
What About Money?
The monetary system as we know it would no longer be used. Instead, people would get “energy credits;” each unit would equal a unit of energy used to run the society. They could not be saved or earned, but only distributed equally among the citizens of a Technate by the planners. They would be distributed according to the needs of the populace, as determined by the Technate planners. The first advantage of this system is that ecological costs are automatically included in the “cost” of items, since energy is the main resource used by citizens. The second advantage is that socioeconomic problems will be eliminated, or at least greatly reduced, by the broad socioeconomic equality produced by the equal distribution of energy credits. Finally, energy credits would be like the “gold standard” - they could not appreciate or depreciate in value since they are directly mapped to a unit of energy. Thus, a Technate would have no issues with inflation or debt.
How is the Technocratic Economic System Different from Communism?
Technocracy advocates argue that both communism and capitalism are outgrowths of a scarcity mentality, and exist to live with scarcities instead of working to eliminate them. Also, traditional communist thought holds that the State will “wither away” once society is ready for it to happen. However, Technocracy thinks that their version of a “state” (actually, the Technate) is permanent. People may be equal on an economic basis, by everybody receiving the same amount of energy credits, but there is a meritocratic system of advancement through the Technate. They believe that people will want to advance up the ladder due to both intrinsic motivation and to get more respect from their peers. It is possible to cite examples such as Wikipedia, the free software movement, and other actions that people contribute to without monetary reward. They argue that personal initiative will flourish like never before, as people will no longer have to rely on the archaic scarcity mentality that limits their choices in life.
How Would Relations With Other Regions Work?
There would be a”Sequence,” or profession, that would work similarly to an expanded version of our present day Foreign Service. They would work to offer assistance to any regions of the world that had an emergency, no strings attached.
For foreign trade, any items that were needed from a foreign country would be obtained via a barter-like system. However, since the Technate would be able to produce basically everything that its citizens need, this would most likely be a rare occurrence.
For individual citizens traveling abroad, people would receive the equivalent of their energy credit usage in foreign currency when they leave the Technate. All extra foreign currency would be relinquished upon returning to the Technate.
Citizens who wished to leave the Technocracy would be free to do so, either permanently or on vacation. In addition, tourists and students would be invited to see the Technate in action and learn more about introducing Technocracy in their own homelands. Although the minimizing of trade between the Technate and other areas makes it seem as if this is an “isolationist” theory of economics, this is due to the lack of a Price System and thus, lack of need to trade. Technocracy would maintain and enhance the two-way flow of information between the Technate and other areas of the world.
How Would the Leaders be Chosen?
The antiquated concept of letting the masses decide who is the best person to lead them will be replaced by a process similar to the way corporations promote technical personnel today. Those who are the best at their current positions and are found, via objective methods, to be the best candidates for the next higher position will be promoted. Recommendations from both above and below will play a major part in the promotion process. This way, a system in which those who are at best at doing what they do for society will play a larger and larger role in that society.
Criticisms of Technocracy
The first and most major criticism of Technocracy is that the Earth does not support their concept of a post-scarcity society. There will always be more things that people can consume and want to own than the Earth can conceivably produce. Technocracy advocates retort that their studies show that there is sufficient energy to convert to a post-scarcity society, and that energy is the limiting factor in most production equations.
Another criticism of Technocracy is that it provides no incentives to better oneself or progress in society based on hard work, consequently de-legitimizing work and going against human nature. Technocracy advocates assert that the incentives under Technocracy would merely be different, not nonexistent. In a post-scarcity society, people would work to earn praise and self-respect, instead of monetary rewards. An example is the world of science, where scientists work hard to make great discoveries for personal fame.
Critics also note that due to the low unemployment rate in developed countries, there is an obvious need for many people to be working. This means that one of Technocracy’s basis premises - that machines can take over for most production, and that work in general will be greatly reduced - is flawed. However, many professions in today’s capitalist society are irrelevant under Technocracy, such as finance, marketing, and advertising, and most industries are wasteful due to competition. By streamlining these sources of production and eliminating needless jobs, people will have more leisure time to enjoy life.
For More Information
Please see the website of Technocracy, Inc.
Want to Learn More About Communism?
April 27, 2008
These days, most of the nations of the world have decided on a capitalist economic system, if not always enthusiastically (see dirigisme). It wasn’t that long ago, though, that many different alternative economic systems were competing for the attention of nations. If you’re interested in alternative economic theories, you can’t do much better than communism. Whether you’re interested in Eurocommunism, Juche, or Pro-Albanian Marxist-Leninism, most serious studies of communism begin with the works of Karl Marx. Now, the first ten volumes of The Complete Works of Marx are available online.
Who is Benefiting from the Mortgage Crisis?
April 24, 2008
The US banking system is facing a meltdown, thousands of ordinary people are losing their homes, and real estate agents and construction workers are losing jobs left and right (and front and behind and above and below). However, some people are making a killing right now, thanks to the ongoing mortgage crisis. Today, we list 6 groups that are finding the silver lining in the mortgage crisis cloud.
A Sweet Yet Forgotten Commodity Surge
April 23, 2008
If you’re living in the United States or Europe, you’ve probably had some today… or within the last few days. Forget achieving independence in producing it, though; your country does not cultivate any of it. In fact, the “Saudi Arabia” of this commodity is West Africa, which produces almost half of the world’s supply. Prices have risen 42% in the last two years, leading to record prices, and futures prices have jumped 25% in two weeks. Yes, the world is facing a major shortage… of cocoa.
