"The human brain is the anthropoid equivalent of the peacock's tail."

Economist.com always has some interesting articles. This one, Blatant benevolence and conspicuous consumption, is an interesting review on the studies done by a Dr. Miller, who proposes that men and women do good deeds to attract the attention of the opposite sex.

Dr. Miller tested two groups of people: one was shown attractive photos of the opposite sex and was told to write about a romantic date with that person in the photo, the other group was shown photos of buildings and was asked to write about the weather.

It turned out that the people in the first group, whether its male or female members, are more likely to spend money or time on charity than the second those in the second group. Two other related tests also yield approving results.

So it appears that what we do is to show off to the opposite sex; and so it seems that homo economicus has grown weaker and weaker.

And those of us who are still single, BEWARE :)

I haven't finished this book yet, but I am impatient to make this report.

This book helps me to be aware of my life, and to express the power I felt from the book, I need to go no further than quote these two paragraphs:

"But now I try not to divide my time into parts anymore. I consider my time with Joey and Sue my own time. When I help joey with his homework, I try to find ways of seeing his time as my own time. I go through his lesson with him, sharing his presence and finding ways to be interested in what we do during that time. The time for him becomes my own time. The same with Sue. The remarkable thing is that now I have unlimited time for myself!"'

This link leads to the excerpt that contains the lines quoted above.

For me, these two short paragraphs are especially touching. I was doing exactly the same thing Allen used to do: seeing my time with those that were close to me as a burden--something that I must get through. If I were able to see this point and start to care and love, I would not have lost what I cherished and feel lonely at times.

If you feel much the same after reading the excerpts, I strongly advice you to find this book and read it. The joy you get from reading the book and being aware that you are reading this book is beyond your experience. There is a Chinese version entitled 正念的奇迹, which may come in handy as, for us, many Buddhism terms are better understood in Chinese than in English.

A world of static comparative advantage and free trade favors the rich and the strong--those with natural resources and high levels of productivity in major growth industries. ... Free trade, like free competition, has political as well as economic content: taken literally it is a system that enhances the power of the powerful and makes it all the more difficult for the poor to catch up.

--Bruce Scott*, Creating Comparative Advantage

It has been about two weeks since I first read Bruce Scott's Creating Comparative Advantage in International Economics and international Economic Policy: A Reader (see my book list) compiled by Philip King. Ever since I finished the article I've wanted to write something about the inspirations it gave me; yet there have been many tasks on hand during these two weeks, which has postponed any comments to be made on Scott's article. As now I am writing this, I find myself short of any detailed memory of that article, and reference becomes harder to make; yet this two-week delay is not all bad, because I've had extra time to think deeper and broader about the matter discussed in that article, therefore many new thoughts have been developed. The original questions which appeared in my first reading have grown into a big pool of problems, which had confused me about any validity to write such a short blog article to deal with them all. But now I only wish to write an easy article to remind me of all the initial inspirations, which later can serve as the starting point for any future works dealing within the same scope. That is, I would like to establish a signpost before I start the journey. And here we'll see what that journey is.

It started with my International Trade course, a course marked by historically significant milestones, chronically: Smith, Ricardo, Heckscher, Ohlin, etc. Somewhere along the way I began to doubt the comparative advantage theory developed by Ricardo and expanded by Heckscher and Ohlin. At first it was the price theory behind it that interested me most. As assumed by Smith and Ricardo, Labor is the only factor of production, the base which value and price are built upon. However, when Ricardo discussed international trade, he seemed to have forgotten this price theory, and relied more on the quite modern Supply-Demand theory. In my perception there is inconsistency here.

Later I also noticed that the costless reallocation of resources within a country does not have any real life application. It might be possible to substitute a farmer with a butcher, but you can never do the same with a software engineer and a best-seller writer.

Strictly speaking, none of Ricardo's assumptions underlying his theory of comparative advantage holds in reality. I was glad that I had come thus far to discover this, and to see his theory with an critical eye. Still, if his theory itself is beneficial to the modern society, there would be nothing wrong to adjust those assumptions and follow his course.

However, Bruce Scott's Creating Comparative Advantage elevated my view on Ricardo theory to a new level. Old as his article is, his point is new and enlightening to me. Through analysis of Japan's development in the 70's and 80's, he concluded that the comparative advantage theory can be misleading in this modern world. Like my perception, the Ricardian model flaws at its basic assumptions; yet in Creating Comparative Advantage, Bruce points out that it's not rational to follow the Ricardian course, that is, free trade may not be the best policy for every country; on contrary, it might be the best for countries, especially less-developed countries to set up trade barriers.

The main point is that in today's rapidly changing world, Ricardo's static comparative advantage model is no longer applicable; we need a dynamic one instead. Scott argues that if Portugal pursued the specialization in wine and Britain in cloth, Portugal would not gain from the trade for long. Because cloth was a more advanced product at that time than wine, specialization in wine would keep Portugal a less developed country. This may have described the exact case of Portugal's slow development over the centuries, but surely this could not have been desirable if those Portugal Kings could survive to see this outcome; then they would perhaps revise their policy to produce cloth, no matter what Britain was producing.

Bruce uses Japan as an example to illustrate his point. Although Japan was comparatively labor-intensive and the U.S. capital-intensive, Japan pursued an trading strategy that induced much criticism from free-traders. Although it might not seem profitable for Japan at first, and certainly unfavorable for the U.S. at any time, the long-run effect on U.S.-Japan trade was impressive, and Japanese economy took on a speed unimaginable and incomprehensible by the Westerners.

According to the Ricardian model, Japan should focus on its labor-intensive industries, as many other Asian countries have done. There's no reason why Japan should ever establish any tariff or non-tariff trade-barriers, which would only lead to mutual loss. However, it turned out that only U.S. was the apparent loser. Contradict to Ricardo's positive-sum game, the truth is that it is possible to win the game at the expense of one's partner. This mercantilistic trading pattern may not seem agreeable to the U.S. and other developed countries, just as the Ricardian pattern turns out to be a blessing in disguise for developing countries.

Bruce gave many statistic as well as commentary proofs to support his view; and indisputably it makes sense in the current circumstance. Japan had utilized what it could to make arrangements for the structure and direction of its development; the result was remarkable. It proved to some extent that a plan for the economy is economically feasible, and free-trade is a belief unproved, and is of course not universally applicable.

However, at the time when Bruce wrote the article, he could not expect Japan's economy to fall in the 90's; but it did. There's much left to explain. Although I am not sure what caused the stagnation in Japan, I have a feeling that it has something to do with its economic policies. Will free-trade win in the end?

There are also questions for China. It struck me that the way people speculate on China is very much similar to the way the observed Japan 15 years ago. In many aspects China is like Japan, but still the two countries are different. I have been considering whether Japan's model can be a good example for China. Has China taken the right course? We have focused mainly on labor-intensive industries, while India on tech-intensive ones. Who will thrive in the future? There are too many questions to ask, price theory, trade policies, government intervention, resource allocation, capital mobility, etc., some theoretical, some practical, some of which may have well been solved long ago, some have no satisfactory answers, and some untouched. Still, for myself, I would like to answer them all if I can.

This is the starting line.

*    Bruce Scott is the Paul W. Cherington Professor of Business Administration at Harvard Business School.

Sow an act, and you reap a habit. Sow a habit, and you reap a character. Sow a character, and you reap a destiny.

—Charles Reade

Today is marked an anniversary in my calendar, because today I finished reading Discover True North - A 4-Week Approach to Ignite Your Passion and Activate Your Potential, a book I regarded as “a guide I’ve come to find convincing enough to follow with eagerness and soberness,” and I still think so. It is a very special experience to have some books change my life; and although I believe that many of you have met this kind of book in your life, the sentiments could be quite different. This is the second book.

The first one is Narzißmus, Das innere Gefängnis (Narcissism, the Inner Prison*), written by Heinz-Peter Röhr, a German psychologist. This book released me from egoism, and enabled me to do what I deemed as right without fear, and thus my life became really meaningful again, because I cast away the very sophisticated way of living and opened myself up. That was 3 years ago. Now I am almost as normal as everyone else, and this time I find it necessary to be different again, because in the course of opening up and making many new friends, I come to realize that I have been gradually alienating myself. So I set myself a life goal, and in pursuing this goal I shall not be afraid of loneliness, if loneliness is necessary to achieving my destiny. This state of mind resembles the egoistic notion, but is different substantially. And at this stage I found in my collection this book; and the 4-week quick approach together with a rather persuasive preface made me determined to follow the course.

And now the 4 weeks have passed silently: not all are satisfactory, but the experience is nevertheless revolutionary. As I scan the contents again, six topics find their trace in my brain.

1. Self-esteem

After the breaking down of egoism, I gradually sank into the marsh of self-contempt—not very obvious though, but in everything I did, especially those things which seemed brilliant, I was seeking the approval of others to fill in the empty reserve of confidence. For a long time I never realized this problem, but the book showed me that there was a way out, that I should not compromise what I deserve, that I can cultivate an inspiring circle of relationships.

2. Follow my heart

Yes, I had a dream. However, without the determination to realize the dream, it will always just remain a dream. There are times when people just don’t think you can do what you dream about, and even the closest ones will disagree with your true potential, and this can be destructive. Don’t take me wrong. I’m not saying that you can be whatever you want to be, but you have the potential to be what you believe yourself can be: the difference is that in the latter case you have thought clearly. So in this case, you should follow your course of the heart.

3. Envision

Future becomes more concrete when you make a descent effort to see it. Because there is actually no physical passage and signposts to your destination, it’s plainly common that you will lose your way in fulfilling your highest potential. To actively envision your future can greatly help you find your way.

4. Pace my life

I had felt a desperate need of time before, and I still do, but now I will not try to set myself frantic timetables which I simply could not follow, and I will not try to do too many things too quickly. This time I’m practical, knowing that everything needs time to accomplish, and I can abide the slow progress, because once my goals are set, there aren’t so many things to do as before, which allow me the gentle pace that lends a lot of confidence to me.

5. Focus

Taking the pace also means a intense focus. One piece of work at a time, I tell myself; and this brings about my emphasis on Momentum: grasp the best time to do the right work.

6. Commitment and action

The book boasts its action-driven methodology, and this is the main power-up I received from it—that whatever I think, I will commit myself and take action—and that is what can make the reading experience fruitful. Without this ultimate commitment, all effort would be in vain.

As I write this, I am recommending the book to you, and I can also take a brief review on what I’ve learned. I will come back to this book constantly, because it is a life-time guide, and a life-transforming process does not happen overnight—it requires long term attention.

I hope you find this writing helpful; at least it can demonstrate my view on a meaningful life. And sometime in the future I may find this book no more applicable, and that time will be another pivot in my life, but surely this point will be met on the road pointed out by this book: Discover True North - A 4-Week Approach to Ignite Your Passion and Activate Your Potential.

* The title is translated by me, as I’ve found no existing English translation of it.