February 27, 2010

Will capitalism lead to socialism eventually?

I was asked this question in an interview a year ago. Today morning when I rethought about it, I came up with a more concrete answer now.

No, I don’t think capitalism will ever lead to socialism, as long as the form of human beings remain the same, and there is no extreme and catastrophic events such as technological singularity which by and large render this question meaningless.

For one thing, socialism is grounded on the belief that one day there will be sufficient resources for everyone to enjoy without working. First of all, by sufficient we mean that every human being can consume as much as they want, and that indicates, as the principle of diminishing marginal utility implies, the consumption of every good has reached a level where its marginal utility is zero (so that no one would want to consume anymore; imagine you probably won’t eat a tenth hamburger in a row even if you are paid to). That will probably come true one day for industrial goods like food and clothes. But that is generally not possible for goods whose stock is limited in the natural world and cannot be produced manually due to limitation by the law of nature, such as gold and diamond. Since people cannot all have enough of gold (and not even close to enough), people who have gold will treasure it and demand clearly defined property right, which is a fundamental characteristic of capitalism.

For another thing, besides goods, there are services that can only be provided by human beings to meet a certain standard. In these professions, simply the notion of service by machines, even as competent as humans in accomplishing the job, would render the service two-bit or sometimes worthless. Examples are education, R&D, massage, prostitution, etc. Since there is a demand for these services, there has to be property right to provide ways to pay for these services.

Update on 4/28/2010: I read this article by Jonah Goldberg about capitalism and socialism and find it interesting. “Socialism is a system based upon an assumption about human nature that simply isn’t true.”

February 26, 2010

LaTeX installation in library

Letter to the librarian

Dear Sir/Madam

I am writing to suggest that we have LaTeX, the de facto standard typesetting software used in many technical fields of study (e.g. Math, Physics, Economics etc.), installed on computers in the library. It is widely used in writing papers, reports, and sometimes assignments in technical courses/studies. Thank you.


Han Zhang

February 25, 2010

How to reduce sweatshop labor

BBC: China's Pearl River manufacturing hub 'lacks workers'

This is unprecedented. That means the manufacturers now has to improve the payment for laborers, upgrade their workplace conditions, and/or develop new technologies that require fewer labor to meet the production target. If this trend continues, the number of sweatshops in China will inevitably decrease, without any intervention of labor unions and human rights groups.

See this is where economics come into play. The way to improve the standard of living of laborers is not by boycotting clothes made in China – that normally only does the opposite, since the sweatshop jobs are probably already the best those undereducated laborers can get. The right way is to let the “invisible hand” to adjust the market, like in the case of Pearl River manufacturing industry now. Let the workers have their say.

However it should be noted that this shortage is largely driven by the stimulus package last year. We are still not sure how the trend will continue after the effect of the package dies down.

Philosophers and Economists

I have heard a saying that “Philosophers and economists are the two kinds of people with the most agile minds.” Today I read in Sophie’s World that “Plato believed the state should be governed by philosophers.” However, probably every economist would agree that countries should be governed by economists, or at least politicians well trained in economics.

February 24, 2010

My Old Blog

I found that I do occasionally write something in Chinese that I would like to share with others. Therefore I have restarted my old blog. The feed is here. By the way, please do not expect me to update it often – probably once every few months.

February 17, 2010

February 5, 2010

Summer Storage: Letter to the Student Housing Section

Dear Officer

I am writing to suggest that we eliminate the requirement for students to remove all their belongings from their rooms during summer, both for the convenience of the Student Housing Section and residents, under the following conditions:

1. The students are bound to return the next year;

2. There is no constraint in summer hall rooms and rooms for other functions during summer;

3. The students concerned are willing to stay in their original room in the following year.

The reason I am suggesting this is that, if you ask whichever mainland student who had the experience of packing and unpacking during room transitions and summer storage, they will unanimously complain about how much trouble such processes cause them every year – some would even claim this is the worst experience in their hall life every year.

I understand that the Student Housing Section has its own concerns, which I formulate are probably confined to the following:

1. There are extra income generated by summer hall and other renting services of hall rooms;

2. Emptying the rooms facilitate the room inspection process;

3. The rooms need to be checked every year for defects caused by residents such that proper deduction from the caution money fund could be carried out;

4. Personal belongings are not safe locked in the room for too long;

5. There are students who are willing to change their rooms every year for this or that reasons.

These are the reasons I can think of now. (Should there be any other, please inform me so we can think of solutions together.) Here are my solutions to the corresponding questions:

1. There are many extra rooms left empty during summers and relatively few summer residents. The rooms of former residents who will not live in the hall next year are more than sufficient to accommodate all summer residents;

2. Emptying the rooms is not necessary for room inspection. I have seen rooms effectively inspected before residents’ belongings being packed;

3. There are two solutions to this problem:

a. As explained in 2, it is feasible to carry out the room inspection and assess the damages without emptying the room;

b. A probably smarter solution is to carry out the room inspection only when the residents are leaving, i.e. at the end of their last year of residence, and assess the room damages and debit the caution money fund the amount accumulated for all years of residence;

4. In fact, every winter vacation, most mainland students just leave their belongings in the rooms as they are for a period sometimes as long as a month, and I haven’t heard any claim against lost items (but such claims do arise regarding summer storage). Also, it is easy for students to bring along with them or lock away valuable items during the summer if this is of much concern;

5. We can still arrange new rooms to students with such needs as before, but this work load should be significantly reduced.

And the benefits to the Student Housing Section as well as residents are:

· Saving the substantial amount of time and effort that Student Housing Section staff and returning residents have to make every year for summer storage, and avoiding the risk of injury that sometimes occur during the process of packing (considering the incredibly bulky luggage some students have, such incidents should not be difficult to imagine);

· The Student Housing Section’s work required to allocate rooms every year can be reduced;

· Congestion in the storage rooms can be alleviated;

· The occurrence of occasional lost items claims concerning summer storage can be significantly lessened;

· The extraordinary wear and tear of the elevators during luggage transportation periods could be minified;

· Once my luggage was tainted by water during the storage period and partially destroyed, probably because of swilling rains. If properly stored in the dorm room, such occasions should not occur since there is sufficient space for placing belongings away from the windows.

These are the benefits and solutions to potential problems I can think of now, and I welcome discussions as for other related issues. As a matter of fact, in mainland China, virtually all college students remain in the same room for as long as their undergraduate programs last, and this has not caused much problem in its own regard as far as I understand. This has effectively demonstrated the feasibility of my suggestion above.

Thank you for your attention.


Han Zhang