Today, the average Korean works a thousand hours more a year than the average German. A thousand. ... That is the end of the Great Divergence.
Interpretation
The quote highlights the disparity in work hours between different cultures and its implications on economic outcomes.
Niall Ferguson's quote points to the significant difference in work hours between Koreans and Germans, emphasizing the shift in economic performance and productivity. He suggests that such a divergence in labor intensity marks a pivotal moment in global economic history, where traditional perceptions of economic disparity are being challenged by emerging economies that work longer hours.
In practice
During a lecture on global economics, I could use this quote to discuss labor differences.
It's all very well for us to sit here in the west with our high incomes and cushy lives, and say it's immoral to violate the sovereignty of another state. But if the effect of that is to bring people in that country economic and political freedom, to raise their standard of living, to increase their life expectancy, then don't rule it out.
If the financial system has a defect, it is that it reflects and magnifies what we human beings are like. Money amplifies our tendency to overreact, to swing from exuberance when things are going well to deep depression when they go wrong. Booms and busts are products, at root, of our emotional volatility.
Civilisation is partly about restraining the male of the species from engaging in the violence of the hunter-gatherer period. But it doesn't take an awful lot to unleash it.
For 500 years the West patented six killer applications that set it apart. The first to download them was Japan. Over the last century, one Asian country after another has downloaded these killer apps- competition, modern science, the rule of law and private property rights, modern medicine, the consumer society and the work ethic. Those six things are the secret sauce of Western civilization.
The West may collapse very suddenly. Complex civilizations do that, because they operate, most of the time, on the edge of chaos.
Over time, the welfare state has become dysfunctional in a surprising way. But in a way it became a victim of its own success: It became so successful at prolonging life, that it becomes financially unsustainable, unless you make major changes to things like retirement ages.
You could not possibly maintain the current level of government taxation without the taxes being hidden, and they are hidden in two very different ways. They are hidden through withholding, but they are also hidden by being imposed on business, supposedly on business, when really, of course, business can't pay taxes, only people can pay taxes.
We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists, and in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step.
When you have a tax system in which most of the exemptions and the lowest rates benefit the richest, all in the name of job creation, all that happens is that the rich get richer.
It turns out that advancing equal opportunity and economic empowerment is both morally right and good economics. Why? Because discrimination, poverty and ignorance restrict growth. We know that investments in education, infrastructure and scientific and technological research increase growth. They increase good jobs, and they create new wealth for all of us.
Money never seems to be interested in strengthening regulatory agencies, for example, but always in subverting them, in making them miss the danger signs in coal mines and in derivatives trading and in deep-sea oil wells.
We all knew this. We all knew that it would take more time than any of us want to dig ourselves out of this hole created by this economic crisis.
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