h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

Good article Clive.

Good article. A couple of points: China has to maintain it's growing economy because it's people are still dirt poor and if they decide to revolt there would be massive conflict. To maintain the growth it needs coal and oil, hence the support of the Sudanese.

Iraq announced this week it intends producing 12m barrels of oil a day by 2015. That is 4 times the Saudi production. Peak oil? And if anybody doubted what the Iraq invasion was all about now we know.

Peak Oil is about the peak in production* and access to cheap oil. Just because the Iraqis can pull out a whole bunch quickly doesn't mean that Peak Oil hasn't happened.

* i.e. it's not about the end of oil, that will happen somewhere down the line. But the important bit for the overdeveloped countries is that we expect our economies to grow at a certain rate based on cheap oil, and the cheap oil will be getting less over time after peak (at the same time as we are wanting more).


>>China has to maintain it's growing economy because it's people are still dirt poor and if they decide to revolt there would be massive conflict<<

I'm not so sure. By dirt poor do you mean hungry and substandard living, or are you meaning they don't have a car and dvd in each household? China has been sustainably producing food for thousands of years (unlike the West), so in many ways it's much better off than the rest of us. I don't know much about poverty there (other than things like people in cities are being exposed to toxins from having to burn our plastic because they don't have good labour laws). But there are many low tech peoples in China who wouldn't consider themselves poor. Doesn't mean they don't want cars etc, but I'm not sure that would be the cause of a revolution there.

Average income in China is under $6,000 a year. That's not rich at all kea. The govt in China has hitched their wagon to economic growth; without it they've effectively lost whatever mandate they have. I think, kea, that having a warm house, plenty of food, and being able to watch TV or go online.

Btw, I remember reading something a while back that energy usage really jumps when GDP hits $8000 per capita, because it's then that DVDs and cars start to become very common. That's about three years away in China's case.

>>
Average income in China is under $6,000 a year. That's not rich at all kea
<<

How do you know? I would have thought income had to be understood within the context of cost of living.

A better initial indicator for me would be how many people are going hungry and what are the reasons.

AFAIK, China has already reached the same ratio of cars to population as the West.

Are you seriously saying that everyone in the world earning less than $6,000 a year is living in poverty? And that having a car and dvd means that one isn't living in poverty?

China also holds an awful lot of mineral reserves ~ many of which the West can't buy eslewhere. Currently China is picking who she sells to...

I was under the impresion that China was a very big importer of raw materials . I doubt it exports or hoards much at all .

Average income in China is under $6,000 a year. That's not rich at all kea
<<

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It does depend, obviously. But warm, comfortable homes cost money. Medicine costs money. Off the top of my head, I'd say that poverty involves spending all your money on food, shelter and medicine, and not being sure if you'll have enough. Hoping your kids don't sick for financial reasons is not to be applauded, not at all.

It doesn't just mean *not* having enough.


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I didn't say that. Post 24 mentioned cars and DVDs cos you mentioned them in post 23

Surely what kea was trying to say was that: In your part of the world, that much a year may be pretty poor but there are places where it would be untold riches.

Mark Twain pointed it out in A Yankee at the Court of King Arthur. Bigger pay in the city doesn't necessarily mean a better standard of living in the city.

What food can you buy with an hour's pay? That's a better measure.

(or how many Mars Bars, or Big Macs?)

Hi RtB, kea probably was, yeah. And many people would rather be relatively rich in a poor country than poor (but better off in absolute terms) in a rich country.

D'you know that economists actually use Big Macs to help work out different costs of living in different countries?

Pedro, yup It used to be Mars bars before macs got to be as or more widespread.

But I'd still prefer the food buying power (if anyone could be bothered to work out all the different staples around the globe).

Rod

Here's the explanation of the Big mac index taken from The Economist. They started the index I think about 10 years ago.

Big Mac Index

Burgernomics is based on the theory of purchasing-power parity, the notion that a dollar should buy the same amount in all countries. Thus in the long run, the exchange rate between two countries should move towards the rate that equalises the prices of an identical basket of goods and services in each country. Our "basket" is a McDonald's Big Mac, which is produced in about 120 countries. The Big Mac PPP is the exchange rate that would mean hamburgers cost the same in America as abroad. Comparing actual exchange rates with PPPs indicates whether a currency is under- or overvalued

The trouble there is that the Big Mac is a luxury good in some countries, and is marked up accordingly.

Yes, Bouncy, that's why I'd prefer a *basket of staples* vs No of hours work approach.