Why Asia Will Overtake America

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Asians manufacture cheap televisions and sophisticated home theater audio systems. Americans buy them. Then we use them, expensively. The cost in forfeited productivity of watching television is greater than any other single waste factor in the West’s economy. The only thing that comes close is Web media. TV consumes on average 4 to 5 hours a day of every American’s life. The statistics are really amazing.

Web-based time consumption is catching up, especially among teenagers. Teens spend between 7 and 8 hours a day on media-related leisure.

I watch TV maybe an hour a day. I watch more these days than I did for over 35 years. I bought a big-screen HDTV and cable in 2008. I watch maybe three one-hour dramatic shows — no ads (fast forward) — plus Sunday Morning (no ads), and maybe one free movie. I try to watch 30 minutes of Yes, Minister re-runs on Netflix, plus at least one Jeeves & Wooster from Netflix. When Foyle’s War or the sequel is on, I watch. That’s about it. This is the wind-down from my work day, which begins at 4:30 a.m. and ends — maybe — at 7:30 or 8 p.m., 6 days a week.

I don’t waste a lot of time.

WASTING TIME IN 3D

Out of curiosity, I went to a Best Buy store over the weekend to see just how impressive the new Panasonic 3D TV is. It’s impressive. I saw the smallest model of the 4 models: 50 inches. The image is exactly like Avatar‘s was.

Panasonic has priced it to sell: $2,500. For a new technology that is in competition with high-end 2D sets selling for close to $2,000, this is cheap. You have to buy a 3D Blu-Ray player. Panasonic sells one for $400. You get only one pair of glasses. Additional sets are $150 each. They are electric. That’s where Panasonic will make its initial profit.

There are very few 3D DVD’s out there. But the 2D quality of the set is excellent. It’s a plasma TV.

I am an expert in 3D. When I was ten years old, my grandmother took me to see Bwana Devil, the first modern 3D movie. We each donned a pair the famous polarized paper glasses to see what was one of the most boring movies of all time. The movie made a lot of money. This led to the 3D craze, which lasted about three years. Then CinemaScope replaced it. From then on, 3D was limited to Epcot.

I always liked 3D movies. I thought the polarizing technology was primitive, but worth it. The red-blue glasses version was not.

The main defect of the 3D experience is that the brightness of the film is muted by the lenses. This is true of the Panasonic TV technology.

As far as I can see, there is one final step to complete the TV experience: 3D without lenses. I expect that within a decade. After that, it’s the holodeck or nothing at all. We have 7.1 surround sound. That’s all that my ancient ears need. If we get bright 3D viewing with no lenses, we will finally face reality: there is no technical improvement to make TV any better. TV will have to stand on its own from then on. It probably will.

Unless they hook up electrodes to our brains to internalize the sitcom laugh tracks, the technology of TV is about to hit a limit. It’s gone about as far as it can go.

Why anyone would want to watch 98% of what is on TV today, in 3D or 2D, is beyond me. I understand that big screen sports will be great in 3D. But I am a marginal sports fan. As my boss, Leonard E. Read, used to say: “I am not interested in which unionized team wins.” As for reality TV shows in 3D, they would bore me as thoroughly they do in 2D. The same is true of the network news.

Television is the incarnation of commercialism: something done magnificently that should not be done at all. It is nothing short of amazing technologically. Yet the content is of marginal value. As an escape, the technology delivers. It is disguised as free. It is not free, because our time isn’t free. Television marketers have implemented one of the two most effective marketing phrases: “It’s free.” (The other is “all you can eat.”)

THE POWER OF STORIES

We love stories. Our parents used them to amuse us and teach us. The Old Testament is mostly a series of stories. Good advertising is mostly stories. Sometimes they are success stories. Sometimes not. A recent example that I regard as highly effective promotes a European product. We have the product in the USA, but it is not marketed in this form. After you see this ad, you will not forget the product.

One of the earliest stories I can remember is The Little Engine That Could. Mothers have read that story to small children for over a century. It teaches perseverance. While I always thought the story was fake, because it listed spinach as one of the good things to eat, I think it shaped my behavior. Optimism regarding difficult projects is basic to success. The little engine thought it could succeed, and it did. This is the heart of entrepreneurship. I can recall no other story of my childhood with the same clarity, other than Tootle, the opposite of the little engine that could. Tootle was the engine that went off the tracks to spend time among buttercups alongside the tracks. The train master put him through a program of behavior modification to change him. I got the message early. Hard, risky work pays off. Alternatively, flakes will be dealt with.

Americans are spending too much time among the buttercups. Asians aren’t. I think some form of behavior modification is imminent. Americans will have to get back on the track. They have gone off the track. Competition from Asia will modify American workers’ behavior — the workers who can keep their jobs.

Asians have profitably sold us the tools necessary to roll off the tracks. The tools are cheap. They are dazzling. They cost so little. They are addictive. In the 1850’s, the West used opium to undermine China’s political resistance to the importation of Western goods. That was how Warren Delano, Franklin Delano Roosevelt’s grandfather, made the family fortune in the 1860’s. Asians are returning the favor. The plug-in drug is in 99% of all American homes. (I want to assure you that I can quit at any time. I am only a social viewer.)

The quality of the stories on TV is not the highest. The big sellers these days are murder mysteries. Other popular stories deal with lesser crimes. The good guys solve the cases. Our faith in the crime-solvers is restored, episode by episode. They work for the government. Private investigators are not around these days. There is no equivalent of Nick Charles, Philip Marlowe, or Mike Hammer. There is no Jim Rockford or Tom Magnum, let alone Sherlock Holmes. There was only one series, ever, on a bounty hunter: Wanted: Dead or Alive. That was Steve McQueen’s passport to the big screen. He joined the cops with Bullitt.

A man nearing death will not recall most of his accomplishments. He will remember some good decisions and some bad ones, but he will not remember many TV shows. He is more likely to remember some really good ads. The TV show is a way to get ads in front of people, and the ads, minute for minute, take more creativity. Now we fast-forward through the ads. This is another nail in network TV’s coffin — assuming that anyone still used nails to make coffins.

Good stories shape us. I still think in terms of movie segments. Some men think in terms of The Godfather. I think in terms of Westerns, especially Shane. Casablanca is our Hamlet. But when we fill our lives with formulaic stories whose only message is “don’t turn that dial,” meaning “don’t click that remote,” they do not have to be good stories. The stories that are designed merely to entertain and not to reinforce fundamental moral themes in life are not worth listening to, unless they serve as a teetotaller’s version of a nightcap before bedtime.

TIME AS CAPITAL

How is it that Asia has had a huge trade surplus with the United States? Because its people work long hours. They are finally getting access to capital. This capital increases their productivity. The tools they need to compete are made available through thrift. Then they put capital to use in a long work week. They have little time for leisure. They are at work many hours per day.

In contrast, Americans are losing capital through consumer debt and withdrawal from the labor force. I don’t mean unemployed people. I mean underemployed people. The person who watches TV for 4 hours a day is consuming his most precious capital: time.

When we see a society committed to work, we see a society that has the basis for economic growth. If people work hard to get ahead, they will accumulate capital. Their work will become more efficient. If they work merely to buy spare time for play, then they will not experience economic growth.

Asia is growing economically, because of the people’s future-orientation. The United States is barely growing, because of its present-orientation. We see this in the waste of time associated with entertainment. This is a culture-wide phenomenon. It has been accelerating in the West for at least 85 years. The rise of radio and the movies marked the transition. World War II delayed the advent of the entertainment culture. The 1950s produced the first teenage subculture. It had its own movies, music, and entertainment. Why? Disposable income from parents and part-time jobs. The money went into our pockets. That was my generation. We spent as children spend, but we spent more money than children ever had spent in history. We got used to entertainment. The counter-culture, 1965—70, was even more committed to entertainment. It even turned cultural revolution into entertainment.

This happened all over the West. It was not a uniquely American phenomenon. The student revolt in France in 1968 was worse than anywhere else.

We now live in a nation that has suffered capital consumption. Foreigners are providing capital for us. Asians buy something like 40% of Treasury debt sold to the public. This will not go on indefinitely.

When we learned to waste time and money in our youth, we developed bad habits. These bad habits are not easily broken. Asians never developed these bad habits. The youth of Asia headed for the cities to get jobs, not entertainment.

CONCLUSION

Once China’s real estate bubble has popped, it will be time to move capital into the region that is committed to future-orientation. These people are not just hard workers. They are not merely high-return workers when given capital. They are uniquely future-oriented. This is new to Asia. It is part of the Western influence: Fabian socialism in India and Marxism in China. Both systems limit economic growth, but they are both linear and highly future-oriented: the kingdom of central planning society. When central planning is abandoned because of its inefficiency, the concept of linear history remains.

This shift from West to East is not going to be reversed without something like a religious transformation in the West. Asia is adopting the West’s concept of linear time. Meanwhile, the West is abandoning it: “Eat, drink, and be merry, for tomorrow we die.”

Do not put all of your capital in shares of a sinking ship.

Gary North [send him mail] is the author of Mises on Money. Visit http://www.garynorth.com. He is also the author of a free 20-volume series, An Economic Commentary on the Bible.

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