Soccer for Americans

Three rule changes to turn American soccer into a big money maker.

The experience of watching a soccer game rarely lives up to the anticipation. You go in hoping for a 4-3 cliff-hanger (as with Argentina vs. France recently) but too often you end up with 1-0 or worse, a draw, or much worse, a draw that is resolved through a penalty shootout. This chronic letdown explains why Americans prefer watching other sports.

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Photo by Torsten Bolten.

Except for anxiety-ridden upper middle-class moms trying to steer their teenage sons away from (American) football practice, most Americans don’t really care about watching soccer. If this is changing, at about the pace of a glacier inching down an Alaskan ravine, it is mainly because the percentage of immigrants in the US population has been on the rise in recent decades. These immigrants or their parents often come from countries where soccer is the leading spectator sport. It follows then that with the current crackdown on immigration, the future of American soccer is looking as frail as ever. NFL bosses need not lose much sleep.
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Fertility and Literacy in India’s States

Higher female literacy is a reliable predictor of lower fertility and improved prosperity.

In a previous article, we highlighted a clear connection in sub-Saharan Africa between a country’s total fertility rate (TFR = average number of children per woman) and its young female literacy rate. The data showed that higher literacy may set off a chain reaction that results progressively in lower infant mortality, improved health for women, and lower fertility. While literacy rises to 90%, fertility falls gradually. Above 90%, it falls precipitously.

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End of the year exams in Mahatma Gandhi Seva Ashram, Jaura, India. © Yann Forget / Wikimedia Commons.

In turn, this lower fertility can, under the right conditions, open a window of opportunity for the economy to realize a demographic dividend. Read more

Future Hubs of Africa and Asia

On UN projections between 2015 and 2050, the world population will grow by nearly 2.38 billion people, from 7.35 billion to 9.73 billion. Although this 32% growth is a big increase, it marks a slowdown from the 66% growth rate recorded in the preceding 35 years (1980-2015). Total Fertility Rates (TFRs) have come down all over the world and are expected to continue falling.
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About half of the 2.38 billion increase will take place in sub-Saharan Africa and nearly 40% in Asia. India is the biggest contributor with a net addition of 394 million, followed by Nigeria (216m), Pakistan (120m), DR Congo (118m) and Ethiopia (89m). By 2050, all of these countries will feature in the top 10 populations by size, a list that will include the United States (expected to rank fourth) but not one European country. Outside of Africa and Asia ex-China, regional populations will be growing slowly (the Americas), stagnating (China, Europe), or receding (Japan, Eastern Europe). Read more

Cronyism and its Scapegoats

Cronyism destroys trust and assigns the blame to scapegoats of its own creation.

Only a fiercely committed left or right-winger would fail to recognize that there is today a social and political divide that does not easily fit within the traditional mold of left vs. right. If, loosely speaking, the left leans socialist and the right leans capitalist, there is a third branch, cronyism, that is characterized by the rising power and wealth of rent-seeking industries and individuals. In the past, this branch was dominant mainly in poorer countries with weaker institutions. But today it has also gained significant strength in a number of developed countries, including the United States.

In fact, if the Republican Party has been hijacked by Trumpism, as some allege, then we could say that capitalism has been similarly hijacked by cronyism. In our view, this parallel is nearly seamless, given that the GOP is traditionally pro-capitalism – in words if not always in deeds – and that the incumbent administration is largely populated with captains of rent-seeking industries. Read more

Immigration and Trust

Do we only really trust people who are like us? And if so, is that a mistake?

Distrust of the unfamiliar and the foreign is a natural survival mechanism for most species, including the human species. But, if empirical evidence is worth anything, a reflexive distrust of the foreigner cannot be said to be equally benign. Distrust sows fear. And fear plays in the hands of demagogues and can turn into a contagious pathology with numerous undesirable consequences.

One of these consequences is an excess of caution. Safety is important but an obsession with safety is counterproductive. Locking your door at night is prudent, but fear of ever leaving your house can lead to atrophy and other physical and mental degradations. As in most things, a fine calibration between the desire for safety and the need to accept minimal risks is likely to yield the best outcome. Read more

Cronyism Damaged Venezuela before Chavez

Venezuela is bankrupt, having just defaulted on three interest payments. And much of the world is pointing fingers at the socialist policies of Hugo Chavez and those of his successor, the incumbent Nicolás Maduro. This laying of the blame is not wrong but it is incomplete.

The kindest thing you could say about Mr. Chavez is that he was a talented demagogue who brilliantly identified his opportunity and judiciously seized his moment. But, as previously argued by Fred McMahon of the Fraser Institute, Chavez did not start Venezuela’s downward spiral. He was instead one of the final acts in the country’s decades-long devolution from laissez-faire capitalism to cronyism and finally to socialism. Cronies undermined Venezuela’s economy for decades and opened the door to Chavez’s socialism. Read more

Notes from the Wharton Africa Business Forum

The Wharton Africa Business Forum took place in Philadelphia on November 3-5, 2017. Present were the Finance Minister of Nigeria, the CEO of Ethiopian Airlines and other business leaders (notably from lead sponsors McKinsey & Company and the Boston Consulting Group) and educators. The event was attended by hundreds of participants including Wharton faculty, students and alumni, African investors and entrepreneurs, members of the African diaspora and many others who have an interest in Africa.

These are our notes from the event. They are not intended to be comprehensive.

First, there was a tremendous amount of energy and optimism surrounding Africa developments. There were a palpable sense that Africa’s moment is coming and an urgency that it should not be squandered. These sentiments are validated by our analysis of African demographics that show a coming decline in the dependency ratio and an accompanying increase in the odds of realizing some demographic dividend. However, fertility rates remain too elevated and are not falling fast enough to deliver the massive dividend that was seen in China, the US and Europe in recent decades. Read more

Africa: 800 Million Jobs Needed

African economies are in a race to get ahead of the demographic boom.

“Let us share without fear the journey of migrants and refugees.” Pope Francis (@Pontifex) tweet on 27 September 2017.

While some people in the United States are sweating the presence, against the backdrop of a demographically stagnant white population, of the 11 million undocumented immigrants or of the 30+ million other foreign-born residents, there are far bigger numbers brewing in other parts of the world, numbers that are so large that they could affect, decades from now, the life of an American citizen far more than would the rare determined Mexican or Guatemalan who manages henceforth to scale President Trump’s purportedly impenetrable border wall.

In the next decades as was so often the case in history, the future shape of the world could once again be decided in Europe and by Europe’s and the West’s handling of Africa’s incipient demographic boom.

In fact, if you are a generous-minded European who shares the Pope’s noble sentiment and who views the ongoing wave of migrants coming into your country as a benign and positive development; or, if you believe that borders are outdated constructs and that all refugees and other immigrants should be welcomed into the rich world; indeed, if it is your view that anyone who stands in the way of this openness is misguided by racist and nefarious motives, then it behooves you to test the strength of your belief by examining the larger demographic data coming out of Africa and Asia. Read more

A Different Kind of Border Wall

To slow mass migration, stop the illicit capital flight from poor to rich countries.

An asset manager called ____ Capital recently sent out this email seeking referrals:

The US Investor visa program allows one to invest $500,000 U.S. in a government licensed fund for a period of about five years and in around 18 months, a conditional green card is attained for the investor and their immediate family. The investor and their family can live, work and study anywhere in the United States and there are no educational, age or English language requirements.

Most experts report that on September 30th the investment amount will increase from $500k to $1.3m, a significant jump that will price out many potential investors.

There is still time to file before September 30th if you start your process with ____ Capital now.

Others can comment on the practice of selling green cards (and ultimately US citizenships) to wealthy foreigners while millions of other applicants, some of whom would be greater contributors to the United States, continue to wait in line for years. Our concern is one step removed and has to do with the legality of this money. Read more

Capitalism Did Not Win the Cold War

This article first appeared at Foreign Affairs.

Why cronyism was the real victor.

When the Soviet Union collapsed 26 years ago, it was generally agreed that the West had won the Cold War. This was affirmed by the prosperity and possibilities awaiting citizens of Western countries, as opposed to the political and economic stagnation experienced by those in Communist states. A natural conclusion, much repeated at the time, was that capitalism had finally defeated communism.

This sweeping statement was only partially true. If one took capitalism and communism as the only two protagonists in the post–World War II struggle, it was easy to see that the latter had suffered a mortal blow. But there was a third, stealthier protagonist situated between them. This was a system best identified today as cronyism. For if capitalism did win over the other two contenders in 1991, its victory was short-lived. And in the years that have followed, it is cronyism that has captured an ever-increasing share of economic activity. A survey of the distribution of power and money around the world makes it clear: cronyism, not capitalism, has ultimately prevailed. Continue reading at Foreign Affairs >>>