Week 10 Blog Post

A recent plan has passed in Hong Kong to raise rent for low income tenants by 10%, to offset this increase the government has also supplied a stimulus to allow them to not have to pay this month's rent. The government in Hong Kong has already provided low income housing with 2 months of free rent, raising the total to 3 months on the year. The fact that low income tenants haven't had to pay a quarter of their rent this year has led to outrage across the region, and demanding them to pay. This stimulus does not come to much surprise after considering that median monthly rent in Hong Kong is a surplus of $1,500 compared to the $152 median average in the United States. This outrage has led to a public persecution of people taking advantage of welfare housing in this area.

This article is interesting because it shows another situation where subsidies are being misused and providing people with a way to take advantage, much like the Texas cotton situation presented in Rivoli's book.  This article is also interesting because it provides an interesting insight into the difference in the distribution of wealth between an area like Hong Kong and a much larger area like the United States. Welfare housing refers to a median of $150 rent a month, while in Hong Kong it applies to a median average of over $1,500, by considering these two statistics alone it is easy to see how the population of Hong Kong worth of public support is in a whole different bracket compared to the United States.

http://www.cnbc.com/id/47640064

Reflection

After going through 10 weeks of class and covering a wide variety of topics, it is not clear to me that the information about the financial crises that have occurred throughout history is the most applicable to understanding how the world works. This topic was something that was relatively unknown to me until this class, and after delving into a deeper dissection the problems with the global economy can be easy to identify after looking at these problems. A country could strengthen it's economy by strengthening domestic consumption while at the same time expanding trade routes.

After this class my interest in foreign exchange markets, arbitrage, and in the economy in Hong Kong in general.  I would really like to know more about how trading in foreign exchange markets works and how much of an opportunity there is to make a profit in these markets. I also have learned a lot about Hong Kong that I was unaware of and reading the articles about the economy has really provided me with a great opportunity to learn about the culture and country.

I would strongly recommend this class to anyone who is planning on studying abroad. It provides you with a great reason to actually do a lot of research about your country before you leave (and the due dates really give you a great incentive to not procrastinate about doing it). This class really taught me a lot about  Hong Kong and other foreign countries that I would not have ever been aware of without it. This class has been a great learning experience and I would definitely take it again knowing what I know now.

Week 9 Blog Post

Hong Kong's next leader is Leung Chun-ying. Leung is the son of a policeman and a true man of the people. He is a self made millionaire and was voted by a group of 1,200 political and business aristocrats to be the new leader of Hong Kong. One of the main promises of his election is to help diversify Hong Kong's export dependent economy. An economy based in exports is heavily dependent on the well being of the global economy, which leaves it susceptible to hardship through no fault of its own. This is why Leung has decided that Hong Kong needs to focus on domestic consumption to help to continue their streak of large annual growth rates. He also seeks to strengthen the relationship with Mainland China.

I found this article to be particularly interesting because the research I found for my paper about the effects of the 2008 global financial crisis on Hong Kong were very dependent on these aspects that he is trying to change. A lot of the government action that was taken involved diversifying the economy and strengthening the bond with the PRC, which was incredibly effective. So, it would seem that Leung is on the right track to keeping Hong Kong as one of the economic leaders in the world.

http://online.wsj.com/article/SB10001424052702304840904577423843918689920.html

Beware of Greeks Bearing Bonds

The most interesting part of the passage in my opinion was, "The Greek people never learned to pay their taxes .... because no one is ever punished. It’s like a gentleman not opening a door for a lady”. I found this to be the most interesting because it is a very simple way of explaining a rather complicated situation and is also something that everyone can relate to. Not only can it be applied to this economic situation, but it is applied in the daily lives of practically every human being. If someone is not forced to own up to their mistakes then the problem will never cease to exist and progress cannot be made. It also can lead to the problem becoming larger and larger until it is out of control, which is apparent in the Greece situation.


The situation in Greece is a problem for the European Union because in order to become a part of the EEU Greece had to demonstrate that it was qualified to be there. These same standards demanded by the EEU also led investors to believe that Greece was a safe, and reliable area to invest in, but through backhanded accounting techniques Greece was able to manipulate these numbers into something that the EEU considered acceptable. So, through this crisis the EEU lost some of its credibility considering that the actions Greece took now have came to light, and this lack of credibility paired with a decrease in overall investment in the Euro (also attributable to this situation) have led to the ultimate decrease in the value of the Euro as a whole.


National Income is equivalent to GDP= G + I + C + NE. An increase in taxes would result in lower consumer spending also paired with a decrease in G overall leads to a decrease in national income which is where the opposition comes from. Not only does this decrease in GDP look bad to the public but the public is also very unreceptive to the idea of paying additional taxes. These two combine factors help to explain the opposition.

London seeks lead role as China's currency goes global

This article is a summary of China's Yuan becoming increasingly global. Nearly two years ago the first transaction to ever occur in the UK that was paid for with Yuan occurred. This transaction was by Neill Tools in the UK to make a cross-border payment, which was initially assisted by the HSBC. As a result of this transaction the UK now holds 35 billion Yuan which is typically used by companies like Neill Tools who choose to pay their suppliers in that currency, which was unheard of previously. The article also entails that China is making a push to spread their currency globally, which is currently being dominated by Hong Kong, but is now making much progress in the UK. Also according to the article, the reasoning behind the UK's sudden interest in trading the yuan is in hopes of increasing incentives for China to trade with the UK, and this would provide them with a new avenue.

I found this article to be particularly interesting because it relates very closely with what we talked about on Friday in terms of the markets for foreign currency. One of the many functions of money is to store value, and as no surprise their are certain types of currency that are better for storing money, and in some cases that actually cause the value of your money to increase. For example, if you have a large amount of money in a currency from a small, unstable country like one in central Africa, then it would be more beneficial to invest that money in a more substantial currency like the euro, dollar, or now (in reference to the article) the yuan in order to protect this money from losing its value. Or to invest it in a market for these currencies that is likely to increase due to exchange rates.

http://www.bbc.co.uk/news/business-18149651

How Walmart is Changing China

There were a couple of things that I found to be particularly interesting about this article. First, I thought that the relationship between rising interest in China and a decreasing interest in the United States was intriguing. Much of the distrust for Walmart in America is that a majority of their products come from China and local stores are not able to compete, but this same logic makes Walmart more appealing to the people of China. Not only are they getting more affordable prices, but they are also supporting their country at the same time. Additionally, I found the information that they are able to trust the food supply of Walmart much more than other places to also be interesting. That is a problem that Americans don't often have to worry about, so it was interesting to hear about it from someone else's perspective.

Multinational Firms have many impacts on a country's culture, but none more important than their impact on the quality of goods demanded in that country. For example, if higher quality products are demanded in one nation the firm participates in, then they must raise the quality of their product in that nation in order to compete. By the one nation demanding a higher quality good it corresponds with all of the other nations also receiving a higher quality product. This is apparent in China in how the population now prefers Walmart food over many of their local markets because of the quality and safety.

Two of the largest impacts of multinational firms reside in the fashion and food industries. Since multinational firms are forced to compete in many different areas this spreads the popular culture from these areas all over the world. This explains a lot of the restaurants we have in America that offer food from all over the world, as well as mega-malls that offer clothing styles that are popular here and also around the world.

Hong Kong's Economy Slows in January-March

According to Bloomberg, the economy in Hong Kong has slowed in comparison to previous years. In the first 3 months the year-to-year growth rate was only .4%, in comparison to a 5% growth rate from the previous year.  Additionally, according to a survey from Dow Jones this is 1% lower than their predicted 1.4% increase in total growth for the quarter. This is being attributed to the banking crisis in Europe which has resulted in a 5.7% decrease in total exports for the quarter. In another note this low growth rate has erupted in public outrage as housing prices in Hong Kong continue to rise making it the most expensive place to own a home in the world, further increasing the gap in the distribution of wealth.

This article is particularly interesting because it is a good reflection on how global the economy really is at this point in time. A banking crisis in Europe does not only negatively affect the people there, but also everywhere that is connected to them through the now global economy i.e. Hong Kong. Not only is there the direct connection between the negative impact of the the euro-crisis and the exports from Hong Kong, but the economists in Hong Kong are also worried that this crisis might negatively impact the recovery in the United States, and thus hurt Hong Kong's exports even more. This all goes to show that in today's economy one place's problem often turns out to be everyone else's problem, too.

http://www.bloomberg.com/news/2012-05-11/hong-kong-economy-set-for-slowest-growth-since-2009.html

EGT Consulting

When considering what products will be best suited for what market there are a variety of things to consider such as the nation’s GDP, the ease of access shipping-wise, the level of difficulty in starting a business, and the safety of the market as a whole. First and foremost, the economy in Hong Kong is currently ranked as the best in the world according to The Heritage Foundation in accordance with the Wall Street Journal. With a GDP of $45,736, a growth rate of 7% from last year, and being home to over 1,000 corporate headquarters it is evident that the economy is well suited for sedans as well as corporate limousines. Secondly, since Hong Kong is home to one of the largest ports in the world it is even clearer that it is suited for large automobiles. Third and finally, with one of the least expensive tax systems and easiest methods of entry for new business there is no doubt that Hong Kong is an excellent environment for success in the automobile market.

                                                                                           

Work Cited:

"http://www.heritage.org/index/country/hongkong." The Heritage Foundation. Wall Street Journal, 2012. Web. 6 May 2012. <http://www.heritage.org/index/country/hongkong>.

Hong Kong. Census and Statistics Department of Hong Kong. Statistics . Hong Kong: , 2011. Web. <http://www.censtatd.gov.hk/hong_kong_statistics/statistical_tables/index.jsp?subjectID=5&tableID=133>.

"Chapter 13." Hong Kong Yearbook 2007. (2007): n. page. Web. 6 May. 2012. <http://www.yearbook.gov.hk/2007/en/pdf/E13.pdf>.

"Shanghai container port world's No 2 in first quarter: report ." Channel News Asia. (2007): n. page. Web. 6 May. 2012. <http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/276744/1/.html>.

. "'Rise in turnaround time at ports a worr'y." Business Standard. N.p., 25 Feb 2011. Web. 6 May 2012. <http://www.business-standard.com/india/news/rise-in-turnaround-time-at-portsworry/126969/on>.

Wikipedia contributors. "List of Countries by Tax Rates."Wikipedia, The Free Encyclopedia. Wikipedia, The Free Encyclopedia, 04 May 2012. Web. 6 May 2012. <http://en.wikipedia.org/wiki/List_of_countries_by_tax_rates>.

                        

Reinventing the Bazaar: A Natural History Of Markets

Chapter 4 is a dissection of the effect that imperfect information has on the market for almost every good.

An interesting topic that McMillan presented was his belief that low quality goods drive down the price of higher goods due to a lack of information. This is because it is nearly impossible in this day and age to be an expert on everything in the market place, whether that is something simpler like milk or more complicated like a laptop. If information was free and perfect a customer could be reassured that they are not being "ripped off". Most consumers have no concept of what makes one laptop $500 and what makes another $2000. While this phenomenon may lead to some consumers purchasing the more expensive one versus the cheaper one due to what is often called "the snob effect", it more often leads to the consumer buying the less expensive option since it is easier for them to believe that they are getting their moneys worth so-to-say.

Transaction costs refer to costs associated with making a purchase or sale within a market. Not only does this refer to the actual currency and product exchange, but also to the information and search cost associated with actual attaining the product. This cost is something that is familiar to most people in the world today. For example when someone is at the mall, or the bazaar in this case, many people prefer to stick with the first option they come across rather than continue to search around the mall for other options. While on the other hand there are also people who value their money more than the inconvenience and will spend their time searching for the best available option.

Many effects arise from imperfect information but the largest effects are often higher prices and lower quality. Merchants can use this lack of information to raise their prices under the assumption that the consumer doesn't know any better. In this same sense they can also use it to decrease the quality of their product considering that the consumer does not have the expertise to know what the quality of the product should really be. Imperfect information is a huge positive for the merchant, while in the same sense an enormous disadvantage for the consumer.

Rivoli Part II

The fluctuation in the central location of the cotton industry illustrates how the global economy is ever changing. Considering that success in the cotton industry is highly dependent on a cheap and sustainable labor force, this fact is not surprising. A country is not able to compete unless it is willing to take advantage of desperate workers, i.e. Asia, or if the country is able to lower costs through unfair trade practices that are supported by the government, i.e. the United States.

My beliefs on the matter of industrialization are best outlined by pg. 119 of Rivoli's book, "The countries that have lost the race to the bottom are some of the most advanced economies in the world today, but they share a common heritage in the cotton mill and the sweatshop as the ignition switch for the urbanization, industrialization, and economic diversification that followed, as well as for the economic and social liberation of women from the farm." Industrialization is a necessary evil in the world today. Yes, it has its downsides such as pollution and the exploitation of workers in some countries, but through industrialization comes innovation and in turn a better world for the country as a whole. Additionally, through the implementation of a strong, central government (with these ideals in mind) it is possible to eliminate much of the pollution associated with industrialization, which is why the level of pollution is much higher in countries such as China than it is here in the United States. Although it is not reasonable to think that a country will always choose the more righteous path of being "greener", the sheer possibility furthers the case for industrializations benefits outweighing its costs.


The passage that was most interesting to me was when Rivoli raises this interesting point, "The argument that the economic development and income gains that result from trade will lead to better outcomes for labor and for the environment relies first on the assumption that higher incomes will lead citizens to demand these greater protections--a reasonable assumption that had empirical support. But it also relies on the assumption that someone is listening to the citizens’ demands. In brief, without some way of making their voices heard, that is, in the absence of democracy, it is more difficult for citizen demands, whether for cleaner water or minimum wage, to work their way into law”. This point that he raises directly connects to my belief that as long as their is a strong central role by a relatively uncorrupt government in the implication of these restrictions and guidelines, the potential gain from industrialization is far greater than the potential cost.

Transportation in Hong Kong

Water transportation:

• The Port of Hong Kong is one of the leading financial centers in the world. It is one of the largest capitalist areas in the region, since it was owned by Britain until 1997. It now has the 6th largest stock market in the world. Most of Hong Kong's imports are food and raw materials, while most of their exports go to mainland China.

Railroad transportation:

• Freight railroads: as of now there are no longer freight railroads in Hong Kong.
• Passenger railroads: the first tram opened in Hong Kong in 1904. Shortly after in 1910 the Kawloon-Canton British railway opened. Then in 1979 the first rapid transit system in Hong Kong opened, the MTR and it still exists today.
• Highway: the main highway in Hong Kong is Route 9. It was originally constructed to connect the new territories together.

Air transportation:

• International airports: the international airport in Hong Kong is Hong Kong International Airport and it is located in Chep Lak Kok.
• Other airports: their is also an airfield in Shek Kong which is known as the Shek Kong Airfield.

How the Shipping Container Made the World Smaller and the World Economy Bigger

Throughout the many interesting points that were raised by Marc Levinson in Chapter 1, the most interesting to me was how the ability to be able to support the transferring of the shipping containers furthered the emergence of some now very booming cities such as Seattle and Busan, while at the same time it took away much of the shipping traffic from cities such as New York City and Liverpool. Not only did the container revolution help cities grow due to this reason, it also helped other cities such as Hong Kong and Los Angeles rise into huge industrial cities because of the sudden and dramatic decrease in shipping expense, whether it was shipping raw materials in or shipping finished goods out. In addition to the this change lowering prices due to the shipping side of the equation, it also helped to lower the prices due to shipping firms being able to go from "armies" of workers to smaller, sleeker specialized groups who were able to ship through constantly expanding supply chains.

The connection between globalization and shipping containers is relatively obvious on some levels. It is very easy to understand that the ability of the world to be able to transport raw materials and finished goods far more efficiently around the world directly connects to the idea of making the world a "smaller place". By being able to do what would once take vastly more man power, as well as capital, with a much smaller and more productive system causes an obvious reduction in shipping costs and thus creates an environment that is much more world-trade friendly.

When considering the national income and employment of a country we must look at the equation for G.D.P. which equates to G.D.P.= Consumer spending + Investment spending + Government spending + Net Exports-Imports. In terms of the short run the container era led to a large increase in consumer spending, due mainly to the abundance of much cheaper goods now. In accord with the rise of consumer spending would also come to a large increase in investment spending due to the start up cost of purchasing the shipping containers. These two factors combined would lead to an overall rise in the total G.D.P. of the participating country. On the other hand in the long rung, it would be reasonable to assume that employment would decrease due to the new ability to do what once took a large number of people to do with a few specialized individuals. Additionally, the ease of world trade would lead to an increased number of exports, so if a nation was not able to keep up with the rest of the world in terms of trade this nation would also experience job loss due to the increase in goods coming from other countries, instead of from within.

The Travels of a T-Shirt in a Global Economy Part 1

In the typical idealized, pure market there are a large number of firms in the market all with homogenous goods, and thus all competing fairly and for a profit that is not off the charts. The market Rivoli discusses differs from this because with the help of the government the United States cotton farmers are able to compete in a market that they would otherwise not be able to. They are able to operate inefficiently (i.e. much higher labor and land prices in the United States in comparison to other agricultural nations) and still  not have to worry about the consequences due to these enormous subsidies. Thereby ensuring their place of dominance in the cotton industry.

An interesting example of how culture can sometimes interact, and at the same time interfere, is in the story of Eli Whitney and his revolutionary machine for the cotton industry. At this time in the United States, thanks to Mr. Whitney's machine, the United States was able to further itself from its cheaper competitors in India and China. But one would wonder why China and India didn't choose to accept the same technology and thus advance right along with the United States at the time. The answer is simple; India and China are two countries who are very rooted in their old ways, which eventually led to their choice to lose efficiency in the name of remaining loyal to their originality, and at the same time resistant to the ever changing new world, much like Schweder mentions in his prophecies as well.

What comes as the biggest surprise to me is even after international scrutiny of the unfair use of subsidies by the American government, there has been no falter. In fact, as mentioned in class, after being sued by Brazil over unfair trade practices due to these subsidies the United States did not stop or even slow down, rather they chose to issue more subsidies in the United States, and shockingly to Brazil too. A sort of large scale bribery one might say. It is shocking that in a country so adamantly supportive of the free market system that we would support something like this as much as we have. But I guess in the end, cash is king.

"HK Island Home Prices Hit Record"

This article describes the surge in the Hong Kong flat market, which they say can be attributed to the European Central Bank pumping 10.14 HK$ into the economy. Considering that Hong Kong is home to many middle to high class families it is no surprise that the effects are seen here. The article also details that these families in an attempt to get rid of the risk of holding on to something as sensitive as cash are investing it real estate around the area. This sudden interest has caused prices to go from HK$9,500 per square foot in the end of 2011 to HK$10,400 per square foot in this past March.

http://www.scmp.com/portal/site/SCMP/menuitem.2af62ecb329d3d7733492d9253a0a0a0/?vgnextoid=e18db6aa24386310VgnVCM100000360a0a0aRCRD&ss=Companies+%26+Finance&s=Business

This issue relates to the idea of government and investment spending having an effect on the total GDP of the area, and thus having an effect on the GDP per capita as well. By pumping a large amount of money into the economy the government has caused an increase in investment spending from the population of Hong Kong, and thus an overall better well being for some people not to mention a higher overall GDP per capita.

This issue is interesting because it is furthering the gap between the very wealthy and the less fortunate. Not everyone can be wealthy enough to accept these climbing housing prices, which results in a deeper segregation between the upper class in Hong Kong, and those who are not able to live there. This problem could be solved by taking steps to insure that this economic stimulus is finding its way to not only the upper end of the spectrum, but also to the people who may need it more. By doing so it would allow lower class citizens to live in Hong Kong, thereby increasing diversity, and eventually leading to a more prosperous and well balanced area.

The Social Responsibility of Business

Friedman's major themes connect to the idea that a business' ultimate goal is to increase profits and nothing more. He believes this so strongly in fact that he considers using any source of revenue for anything other than to pursue higher profits is "fraud". Not the fraud that we have grown so accustomed to in the business world, but even using this money in a charitable sense would also fall under this category of fraud. Friedman's new category of fraud refers to the central idea of his paper in which the executive of the company's ultimate goal is to increase profits and thus increase value to the stockholders, and any straying away from this path (whether for decent or immoral reasons) falls under the category of fraud. Friedman's cultural values are clearly on display here, which is already displaying one of his most flamboyant values which is: directness. Throughout the paper he does not smother his beliefs in kindness and sensitivity rather he goes add far as to refer to his colleagues as "schizophrenic". In fact the entire idea of his paper is one of the most easily debated topics I could imagine. Another value effortlessly on display is his belief in collectivism. Throughout the entire paper he makes countless references to the idea that it is the executive's responsibility to look out for the people in his corporation and not society as a whole. Higher profit margins equals happier stockholders, and that's the goal of his collectivist view and apparently of business as a whole, right? Personally I do in fact see a conflict between one's ultimate social responsibility and what is best for them in terms of the business world. If there wasn't such a conflict there would not be euphemisms such as "don't mix business with pleasure" and "don't do business with family" because inevitably every business person is faced with the choice of either doing what is best for the world or their social life, or what is best for their firm, and more often then not the choice is not one in the same. Higher profit margins will always come at a high price, and that is just the cost of living in the scarce world we live in. Adam Smith may be the father of modern economics, but the scarcity of Mother Nature will always reign supreme and due to that fact executives will be faced with the choice of helping the world, or helping their exclusive club for the unforseeable future.

Richard Schweder

In Richard Schweder's writing entitled, "Moral Maps, "First World" Conceits, and the New Evangelists", he lays out three prophecies forthcoming to the new world. The first being the prophecy labeled as:
"Prophecy 1: The West Is Best and Will Become Global (or at Least It Should Try to Take Over the World". This prophecy entails that by the ever growing process of globalization Western ideas and aspirations such as "a desire for liberal democracy, the decentralization of power, free enterprise, private property, individual rights, gender equality..."will begin to spread out all around the world, and eventually lead to economic growth in these now globalized nations.

The second prophecy that Schweder describes is titled "Others Will Have a "Piece of the Rock" and Hold On to Their Distinctive Culture Too". This section describes the idea that one does not have to give up their own spiritual values and cultural values if they choose to place value in the material world. This point on a broader scale refers to the belief that areas do not need to "Westernize" in order to be more productive, rather areas such as Africa can hold onto their own customs while at the same time integrating new technology. Thus implying the idea that globalization as well as economic growth would both be possible in this world without having to succumb to the cultural invasion of the Western world.

His third and final prophecy named "A Liberal Ottoman-Style Empire with Two "Castes" (Cosmopolitan Liberals and Local Non-Liberals)" describes a society operated on a "stance of neutrality" in the cultural world. A society he describes as similar to the Ottoman empire in which the world system is designed in such a way that it supports decentralized control in terms of cultural issues, which inevitably leads to promoting local culture expansion. This society will also be maintained by two groups of people whom he dubs as "castes". One group, similar to today's aristocrats, will be from a variety of world nationalities and will represent the world as the new global elites. Their role will be to run the global institutions and value cultural diversity as well as neutrality. The remaining caste in the world will play the role of separating their group from the world as a whole in order to further diversity at the same time. And last but not least,  a person would find themselves moving from one caste to the other, moving from one side of the spectrum (global liberalism) the the other (non-liberalism) several times in the course of their life.

Resources, Trade, and National Income

Natural resources:

• The natural resources of Hong Kong can be divided into three categories:

1. Metalliferous minerals and non-metalliferous minerals
2. Quarried rock
3. Sand deposits

Labor:

• Hong Kong has a population of roughly 7 million people, but despite this small population they came in ranking 15th in total exports in comparison to the rest of the world. The last statistics were in 2007 but at that time 3.46 million of the possible 3.65 people in the labor force were employed and of that only 117,800 were unemployed and only 75,500 were underemployed.

Capital:

• Not available

Exports:

• Hong Kong exported $362.1 billion of goods in 2008, and $92.3 billion in services

Imports:

• Hong Kong imported $387.9 billion of goods in 2008, and $45.8 billion in services

Exchange rate:

• One American dollar is worth seven Hong Kong dollars or HKD for short

Consumption:

• Not available

Investment:

• In 2010 the amount of investment on an inward flowing basis in Hong Kong was 8473.2 billion HKD

Government:

• Not available

Hong Kong

GDP: $350,400,000,000

GDP per capita: $49,300

Life expectancy: 82.12 years

Poverty rate: 17.7%

Literacy rate: 93.5%

Unemployment rate: 3.4%

Inflation: 5.3%

Why Did Human History Unfold Differently On Different Continents For The Last 13,000 Years?

Diamond's major themes in this piece are that these differences between the growth of these cultures can be attributed to a combination of: a lack of domesticated animals, a preference to east-west continents over north-south, population density, an unawareness to deadly disease, and an overall lack of arable and thus a lack of beneficial plant life. When combining all of these various factors one reaches his overall point in which he believes it is not a biological difference that determined which civilizations thrived and which did not, but rather it was due to the inevitable outcome after combining all of these factors, such as a lack of technology due to an inability to farm productively.

On another note, these determinants to society can be applied to today's global economy by through the course of time countries have been able to adapt to the majority free market economies there are today. By adapt I refer to Adam Smith's "Invisible Hand" theory, so at this point in time successful countries all over the world have been able to decide what is in fact most productive for them to do, and thus the best for their own self interest. By using the available technology and easy access to communication nations everywhere have been able to specialize and determine what is ultimately most efficient and most profitable for them to produce and distribute themselves, and additionally what they are reliant upon other countries for.