This fascinating insight was buried in my overdue reading pile from the last few weeks. It’s a snippet from The Economist about different kinds of rewards and their effect on employee behaviour.
It’s a story that has lessons for every manager trying hard to motivate staff, as it shows how people react more vigorously if they believe they will lose something they are already entitled to if they slack off (think perhaps: equity participation rights) vs. something extra that they might gain if they work harder (say, bonuses).
For me, there was a China connection in it straight away. Right. OK, so the original study was done on a Chinese electronics factory. But, actually, that’s not the connection I see. My connection has to do with a larger “group-sense” or “nation-sense” of self-belief and entitlement. I see this as potentially applying on a macro-level.
Allllrrright, so taking this from a microeconomic to a macroeconomic level:
Question: Which nation right now feels most entitled to a superiority over other nations, that it does not wish to surrender? Which economy actually considers that it will forfeit something if it takes its foot off the pedal?
Your answer would probably be the US.
But, interestingly, it might even be China.
I think both answers are right. The US, over the last half-decade century or more, has been the country “to beat” and, naturally, sees itself as so. It is an indisputable superpower. Why should it give ground to any other nation in terms of economic let alone political (or even cultural) superiority. However, over time, the US has lost its competitive advantage in labour costs (among other things) to other parts of the world, especially the Chinese.
Now to the other side. These days, the Chinese no longer have a sense of being an underdog. They have a sense of entitlement.
Previously, the Chinese might have seen themselves as pursuing an American level of achievement (an unfortunate echo here of the Great Leap Forward’s disastrous “catch up with America” slogan).
Post the Global Financial Crisis, the chips have fallen somewhat differently. The Chinese seem bent on seizing their moment in history to become equals or better to the Americans.
Let’s not have any illusions about the Chinese economy; for all its growth, it is still a lot smaller than the American economy (about 55% its size, based on 2009 GDP figures).
Still, applying this compelling little study to the real world: Is it conceivable that the Chinese will fight all the harder to maintain what they see as a new “status quo”, than previously when they saw economic might as something they were working towards?
A century ago, the Chinese, with much promise, successfully overthrew a feudal dynasty yet still collapsed into infighting, a destructive civil war and revolution, with a devastating aftermath. Is the sense of entitlement this century around stronger? Sufficiently stronger??
Hmm.
Maybe I am being too simplistic in distilling a neat little observation from a couple of economists into an ingredient to becoming an economic superpower?
I’d be happy to be argued out of it.
5 Comments
A fascinating post Geraldine, may I react to it in an even more macro direction by adding time and imperium – a more useful term than empire, that tends to relate to geographic control – and then remind ourselves that the shift of power from one people/place to another is perpetual.
Then if we look at the pride of being a part of the imperium… the pride of being part of what is right… (military) might being right.
People enjoy being part of the most successful country/power of their time: Romans, Spanish, Brits, – have all enjoyed knowing that they were the ‘best of the best’.
Did they relish losing the pleasure of their pre-eminence – no; could they do much about it – no; can Americans work harder to prevent it – no.
China might think it has the right to take the batten of imperium but India is a mighty democracy that grows at an equivalent pace.
Interesting times…
uk visa – thank you for the additional insights.
For some reason, I picked up on this report from a Minnesota newspaper editorial. It brings home some of the (understandable) fears that many “ordinary” Americans feel about China.
http://mankatofreepress.com/editorials/x1237945141/Our-View-Chinas-supremacy-is-not-inevitable
You’re right – a shift in “imperium” as you say, is difficult on the incumbent. Drilling back down to the micro/individual level, one realises that this means collaterol damage on quite a scale.
And as for India…that’s for another blog!
Little stat I picked up on today in a post by Niall Ferguson in the Financial Times: http://www.ft.com/cms/s/ac26eb9a-f30a-11de-a888-00144feab49a,dwp_uuid=73adc504-2ffa-11da-ba9f-00000e2511c8,print=yes.html — some experts claim that China will overtake the US economy by 2027.
But in all of this — and even on a phone call with some Indian call centre reps in Hyderabad this fine Sunday morning — no one talks about India with as much depth and urgency, not to mention the other BRICs on the wall. How is this possible? China, China, China on the mind…
Interesting times indeed, uk visa!
Just very quick and unprofessional, but it seems to me that the sense of control may be the pivotal point here:
In Central Europe (Germany, not least), there tends to be a strong sense of entitlement coupled with the even stronger feeling that it’s out of our hands, fighting were rather futile, the young generation will have it worse anyways. In this combination, the fear of loss is a total de-motivation.
The USA at least has the strong current of entrepreneurialism, plus (maybe) immigration shaking things up – an influx of people coming to achieve a better life (through work) rather than simply have a better life.
China is usually hailed as extremely optimistic, but from what I hear in talks, there is a lot of fear about employment. The combination, though, may be a promising one: You have a sense of entitlement based on development that is still happening, as well as an attitude that is (widely) still that you simply have to do whatever you can to get ahead. On the downside, you get corruption, abuse of power, a certain arrogance that seems to be developing in politics; on the upside, people who will make do, work, and see that it’s possible to get ahead…
Gerald Schmidt, thank you for the additional angle on this. I agree with your observations (though I can’t comment on Germany and Central Europe), in particular I agree that the Chinese have a mix of short-term pessimism and long-term optimism. Whether this results in a sense of control or entitlement – maybe it is just semantics in the end – since those who believe they have a measure of control over their own destinies will be more likely to feel entitled to a brighter future.