April 23, 2010
The first time as labour, the second time as capital.
This is interesting. Back in the 19th century, when Southern Pacific and Central Pacific were building transcontinental railroads in the USA, they used Chinese labourers when they hit California. Here’s a very Web 1.0 page on the subject. Precis-ing it madly, the interesting bits are:
- When Charles Crocker of the Central Pacific was asked how small and weak Chinamen would be up to the heavy physical labour of building railroads, he said “They built the Great Wall, didn’t they?”
- Irish labourers were paid thirty dollars a month each and given free accommodation. The Chinese got a dollar extra but no acco.
- The railroad companies were excited about using Chinese labour because they did not practice slavery or peonage, but had a labour agency system. The Age of Gold, a book I read a few years ago, mentioned that the railroad owners were largely northerners and antislavery; and also that the question of granting statehood to California helped trigger the US Civil War.
The Wikipedia page on Chinese American History (badly needs cleanup) points out that things weren’t quite as rosy as that:
- The labourers usually couldn’t afford passage to America and booked their ticket against future wages. Their wages were then withheld until the ticket was paid for. And you thought TDS was bad.
- White labourers responded with fury and racism at this competition, and the Yellow Peril meme was born.
Eventually, the Chinese labourers also started working in fisheries and agriculture, and established a massive Chinatown in San Francisco.
Cut to today. China is now offering investment and technical expertise to build California’s high-speed rail line.
That New York Times article in the link has a full circle narrative, and saying that China is now bringing technology and money instead of labour; but given the way the Chinese operate, they’ll probably bring in the labour as well. (Alas, no citations to offer here except private emails about what’s going on at Mundra port and my own observation about the Huawei office in Mumbai)
The really interesting part is on Page 2 of the article:
China’s mostly state-controlled banks had few losses during the global financial crisis and are awash with cash now because of tight regulation and a fast-growing economy. The Chinese government is also becoming disenchanted with bonds and looking to diversify its $2.4 trillion in foreign reserves by investing in areas like natural resources and overseas rail projects.
“They’ve got a lot of capital, and they’re willing to provide a lot of capital” for a California high-speed rail system, Mr. Crane said.
I have a conspiracy theory that infrastructure is only the beginning, but more on that in a separate post.
4 Comments | Infrastructure, Links, Yellow Peril | Tagged: anaheim, california gold rush, capital, central pacific, charles crocker, chinatown, chinese immigration, civil war, high speed rail, infrastructure finance, investment, labour, leland stanford, los angeles, maglev, railroad, san francisco, schwarzenegger, southern pacific, stimulus, Technology, union pacific, Yellow Peril | Permalink
Posted by Aadisht
January 21, 2008
This Boston Globe oped (free registration might be required) is astonishing. The author, somebody named Jeremy Kahn, has violated the Sominism-cheat-sheet and Neelakantan’s guide to writing about India left, right, and centre. He appears to have actually understood the nuances of what he’s writing about! And he doesn’t mention caste, growing inequality, pollution, or elephants on the road even once!
OK, that’s the sarcasm out of the way. Seriously, the oped is a very good read. It’s about how Third World conditions are forcing cellphone companies, banks, and Tata Motors to innovate and come up with low-cost technology, and how this means that design and innovation is now splitting up and being driven by two different things: luxury in the First World, and productivity and low costs in the Third World. In the bargain, First World and Third World innovation are both leading to high technology, and the Third World is now actually in a position to export technology to the First World.
This might seem like a classic example of the Third World struggling to catch up with the First. After all, people in the United States and Europe have been using ATM cards and the Internet for years to perform the simple banking tasks Das is only now able to do. But look again: The technology used to bring slum-dwellers like Das their first bank accounts is so advanced that it isn’t available to even the most tech-savvy Americans – at least not yet.
This represents a stunning reversal of the traditional flow of innovation. Until recently, consumers in the Third World also had to tolerate third-rate technology. Africa, India, and Latin America were dumping grounds for antiquated products and services. In a market in which some people still rode camels, a 50-year-old car engine was good enough. Innovation remained the exclusive domain of the developed world. Everyone else got hand-me-downs.
And as they do, companies are confronting the unique challenge of making high-tech products cheaply enough to make a profit. In some cases, this means shifting jobs for talented designers and engineers to the developing world – not just to save labor costs, but in order to better understand the markets they are now trying to reach.
“Developing markets offer the best opportunity for global firms to discover what is likely to be ‘next practice,’ as contrasted with today’s best practice,” Prahalad has written. “The low end is a new source of innovation.”
In a globalized world, people in emerging markets want first-class products – but at prices they can afford. Meeting that demand, particularly in countries where basic infrastructure is weak, requires more creativity than designing a product for a more advanced, affluent market.
Read, read. It’s worth the two-minutes it takes to register.
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Posted by Aadisht