Tuesday, December 20, 2005

Chinese 'Fire-Cars' and the WTO

Has anyone that speaks Chinese ever meditated on the Chinese term for train, "Huo Che" in Mandarin, "Fo Tseah"in Cantonese? Fire Car, the literal translation, naturally refers to the age in which coal-fired engines ruled the tracks. But the name also seemed to imply something negative or ominous. Certainly, there were those that simply thought they were bad luck, or more often, thought that the laying of tracks for them disturbed their ancestors' graves and thereby the fortunes of their village.

I've been reading Peter Fleming's (yes, 007 Ian Fleming's brother) book entitled "The Siege at Peking", a journalistic account, sixty years on, of the Siege of the Legations in Beijing during the Boxer Rebellion. In it, he describes the reasons for domestic Chinese opposition to the railroad as being more than simply culture or superstitions:
The foreign businessmen who negotiated the [foreign railroad] concessions were often boors; the overseers who supervised the work were often bullies. Though the railway might on a long view bring prosperity as well as progress, it immediately threatened the livelihood of thousands. Carters, chair-bearers, muleteers, camel-men, innkeepers, and other humble folk faced, or thought they faced, ruin. Junks and the ponderous houseboats of officials could not pass under the [railroad] bridges, so that riverine trade-routes which had flourished for centuries were interrupted. Minor functionaries who controlled and preyed on traffic using the roads and waterways found their importance and their illicit revenues sharply reduced...

Similar feelings were evoked, and similar distress and dislocation caused, by the steamships which made their appearance on the Yangtse and other inland waterways. In cotton-growing districts the importation of foreign piece-goods killed the market for native products; the hand-loom or the spinning wheel could no longer be relied on to keep the wolf from countless doors.
Fleming meant this as background for why thousands of Shandong men left their fields, donned outlandish red robes, thought they were impervious to bullets, and screamed "Sha! Sha!" as they hacked their way through unarmed Chinese Christian converts.

But this passage brought home to me the enormous implications to an entire society that resulted from technological application and the railroad. No one in China today would deny the utility or the benefits of the railroad, but its effects were profound and in the short-term, often negative to existing trades and transport solutions - particularly those that refused to adapt, hidebound in tradition. Those that did not adapt, could no longer make a living.

I feel there is a great similarity between the dislocations brought about by the railroad, which are efficiency/productivity and trade gains brought about by technology, and the trade and consumer gains that occur as a result of a reduction in tariffs brought about by the WTO. Particularly as we live in an age of rising energy costs, keeping inflation down through tariff reductions should be a laudatory measure. In the long run, more aggregate resources of a society, both in terms of its money and its people, can be applied to more productive or value-added areas. But just as with technology dislocations brought about by the steam engine, by electricity, mass production or the Internet, there are short-term losers created by tariff reductions.

I was reminded of these issues of course by the riotous Koreans on my patch last weekend. Why don't WTO protesters demonstrate against the Internet? It has certainly hurt many kinds of traditional retailers that have failed to come up with an effective Internet strategy. It is because there is a societal consensus that technological progress is generally good, and even when it is perceived to be neither, it is also regarded as inevitable.

The invention of the PC put most typists out of work, but none of us (who can remember it) would willingly go back to the days when typing skills were paramount. Perhaps there will be a day too, when we think back to these opening years of the 21st century, and say: yeah those were the years when prices actually came down. Would you rather be paying 50% more for your DVD player? Didn't think so. Don't be so quick to condemn the WTO.

No comments: