November 22, 2011
THIS is not a good time to be foreign. Anti-immigrant parties are gaining ground in Europe. Britain has been fretting this week over lapses in its border controls (see article). In America Barack Obama has failed to deliver the immigration reform he promised (see article), and Republican presidential candidates would rather electrify the border fence with Mexico than educate the children of illegal aliens. America educates foreign scientists in its universities and then expels them, a policy the mayor of New York calls “national suicide”.
This illiberal turn in attitudes to migration is no surprise. It is the result of cyclical economic gloom combined with a secular rise in pressure on rich countries’ borders. But governments now weighing up whether or not to try to slam the door should consider another factor: the growing economic importance of diasporas, and the contribution they can make to a country’s economic growth.
Old networks, new communications
Diaspora networks—of Huguenots, Scots, Jews and many others—have always been a potent economic force, but the cheapness and ease of modern travel has made them larger and more numerous than ever before. There are now 215m first-generation migrants around the world: that’s 3% of the world’s population. If they were a nation, it would be a little larger than Brazil. There are more Chinese people living outside China than there are French people in France. Some 22m Indians are scattered all over the globe. Small concentrations of ethnic and linguistic groups have always been found in surprising places—Lebanese in west Africa, Japanese in Brazil and Welsh in Patagonia, for instance—but they have been joined by newer ones, such as west Africans in southern China.
These networks of kinship and language make it easier to do business across borders (see article). They speed the flow of information: a Chinese trader in Indonesia who spots a gap in the market for cheap umbrellas will alert his cousin in Shenzhen who knows someone who runs an umbrella factory. Kinship ties foster trust, so they can seal the deal and get the umbrellas to Jakarta before the rainy season ends. Trust matters, especially in emerging markets where the rule of law is weak. So does a knowledge of the local culture. That is why so much foreign direct investment in China still passes through the Chinese diaspora. And modern communications make these networks an even more powerful tool of business.
Diasporas also help spread ideas. Many of the emerging world’s brightest minds are educated at Western universities. An increasing number go home, taking with them both knowledge and contacts. Indian computer scientists in Bangalore bounce ideas constantly off their Indian friends in Silicon Valley. China’s technology industry is dominated by “sea turtles” (Chinese who have lived abroad and returned).
Diasporas spread money, too. Migrants into rich countries not only send cash to their families; they also help companies in their host country operate in their home country. A Harvard Business School study shows that American companies that employ lots of ethnic Chinese people find it much easier to set up in China without a joint venture with a local firm.
Such arguments are unlikely to make much headway against hostility towards immigrants in rich countries. Fury against foreigners is usually based on two (mutually incompatible) notions: that because so many migrants claim welfare they are a drain on the public purse; and that because they are prepared to work harder for less pay they will depress the wages of those at the bottom of the pile.
The first is usually not true (in Britain, for instance, immigrants claim benefits less than indigenous people do), and the second is hard to establish either way. Some studies do indeed suggest that competition from unskilled immigrants depresses the wages of unskilled locals. But others find this effect to be small or non-existent.
Nor is it possible to establish the impact of migration on overall growth. The sums are simply too difficult. Yet there are good reasons for believing that it is likely to be positive. Migrants tend to be hard-working and innovative. That spurs productivity and company formation. A recent study carried out by Duke University showed that, while immigrants make up an eighth of America’s population, they founded a quarter of the country’s technology and engineering firms. And, by linking the West with emerging markets, diasporas help rich countries to plug into fast-growing economies…
November 22, 2011
Amwell Township is a 44-square-mile plot of steep ravines and grassy pasturelands planted with alfalfa, trefoil and timothy in the southwestern corner of Pennsylvania. It’s home to some 4,000 people, most of whom live in villages named Amity, Lone Pine and Prosperity.
From some views, this diamond-shaped cut of land looks like the hardscrabble farmland it has been since the 18th century, when English and Scottish settlers successfully drove away the members of a Native American village called Annawanna, or “the path of the water.” Arrowheads still line the streambeds. Hickory trees march out along its high, dry ridges. Box elders ring the lower, wetter gullies. The air smells of sweet grass. Cows moo. Horses whinny.
From other vantages, it looks like an American natural-gas field, home to 10 gas wells, a compressor station — which feeds fresh gas into pipelines leading to homes hundreds of miles away — and what was, until late this summer, an open five-acre water-impoundment chemical pond. Trucks rev engines over fresh earth. Backhoes grind stubborn stones. Pipeline snakes beneath clear-cut hillsides.
The township sits atop the Marcellus Shale Deposit, one of the largest fields of natural gas in the world, a formation that stretches beneath 575 miles of West Virginia, Pennsylvania, Ohio and New York. Shale gas, even its fiercest critics concede, presents an opportunity for the United States to be less dependent on foreign oil. According to Wood Mackenzie, an energy-consulting firm, the Marcellus formation will supply 6 percent of America’s gas this year, a figure expected to more than double by 2020.
About five years ago, leases began to appear in the mailboxes of residents of Amwell Township from Range Resources, a Texas-based oil company seeking to harvest gas through hydraulic fracturing. “Fracking,” as it is known, is a process of natural-gas drilling that involves pumping vast quantities of water, sand and chemicals thousands of feet into the earth to crack the deep shale deposits and free bubbles of gas from the ancient, porous rock. Harvesting this gas promises either to provide Americans with a clean domestic energy source or to despoil rural areas and poison our air and drinking water, depending on whom you ask.
On Nov. 21, the Delaware River Basin Commission, which involves four states — Pennsylvania, New Jersey, New York and Delaware — will vote on rules governing fracking in the river’s watershed, which supplies some 15 million people with drinking water. The states most affected will be New York and Pennsylvania, which sit on the Marcellus Shale, where the gas is closest to the surface.
This summer, Gov. Andrew Cuomo of New York moved to lift the state’s yearlong moratorium on fracking against vocal opposition from environmentalists and many local residents. Following a series of hearings this month, New York will decide whether to allow fracking early next year. In the meantime, New Yorkers are looking to Pennsylvania, the first neighbor to welcome fracking, as a model.
There are more than 4,000 Marcellus wells in Pennsylvania, with projections ranging from 2,500 new wells a year to a total of more than 100,000 over the next few decades; 458 of those wells are in Washington County and 60 are in Amwell Township, to which fracking has given an injection of new income and business; it has also spurred one of the first E.P.A. investigations into fracking’s effects on rivers, streams, drinking water and human health.
Just before Christmas in 2008, a handful of neighbors granted Range Resources the right to drill thousands of feet below their homes and up to two miles in any direction. Signing leases here is nothing new. For the past 200 years, one industry after another has extracted minerals from the land. In the 1800s, it was coal; in the 1900s it was glass, coke and steel and industrial mining. “Sooner or later, somebody wants to go around, under or through you,” one farmer and gun-shop proprietor told me. “You make your best deal and you talk to a lawyer. At least these companies pay something up front.”
What these companies paid was more than many people in Amwell Township, where the per capita income in the 2000 census was $18,285, were accustomed to seeing in their lifetimes, even if the windfall wasn’t the same for everyone. Next-door neighbors made, upon signing, between $1,500 and more than $500,000 for the same amount of land. Curiously enough, the huge gap in payments didn’t cause much trouble among neighbors, at least at first. Most, if they express a political viewpoint at all, are old-school libertarians who believe each man has the right to live by his will and abilities.
The conflict instead is between “country folk and city people,” Bill Hartley, 63, a barber and a cattle farmer told me. “The country folk want the drilling and have mineral rights. The city folk don’t want the drilling and have no rights to sell…”
November 22, 2011
Andy Warhol is an art-world colossus whose work accounts for one-sixth of contemporary-art sales. How did that happen, and is he really worth it?
Sara Friedlander, the 27-year-old head of First Open Sale at Christie’s in New York, has a startling view of American art history. “Nothing good was made in the 19th century, nothing really good was made in the 18th century and American art in the 20th century for the first three, four or five decades was very elitist.”
There was, in this view, no American Titian or Picasso, Raphael or Matisse. And then, suddenly, on July 9th 1962, there was. That was the date of the first solo show by Andy Warhol, the 33-year-old son of Slovakian immigrants. It was at the Ferus Gallery in Los Angeles and it consisted of a series of 32 paintings of Campbell’s Soup Cans, one for each flavour—beef, clam chowder, cheddar cheese, etc. The response was underwhelming. Five sold for $100 each, but the gallery owner bought them back to keep the series intact.
Nevertheless, by the end of that year, Warhol had conquered New York, the capital of the art world, and America had the artist for which she had been waiting. “He reached a public”, says Friedlander, “that no artist was able to do before him. Because he was able to accomplish what nobody else had done and in the way he was able to influence what came after him, I think that makes him, I would guess, the greatest artist of the 20th century.”
There is nothing unorthodox about this claim. Almost unanimously, today’s young art fans adore Andy as earlier generations adored Pablo Picasso or Jackson Pollock. “To the under-45s”, says Georgina Adam of the Art Newspaper, “Warhol is what Picasso used to be to an older generation…and, like Picasso, he has become a man for all seasons.”
This vast fan base has been reinforced by the shrewd licensing arrangements negotiated by the Andy Warhol Foundation for the Visual Arts, established under the terms of the artist’s will. There have been Warhol skateboards, Warhol editions of Dom Pérignon champagne and countless Warhol fashion lines, including Pepe jeans and Diane von Furstenberg dresses. But, in a wider sense, Warhol’s colours and styles—especially his use of pop style—pervade the culture. Any city street shows evidence of the astonishing power and durability of his imagery.
The market backs the enthusiasm of the young. Those original soup cans are not for sale: bought by the Los Angeles dealer for $1,000, they were sold to the Museum of Modern Art in New York in 1996 for $15m, a deal that promoted Warhol to art’s first division. In 2008 a 12-foot-wide Warhol painting entitled “Eight Elvises”, made in 1963, broke the $100m barrier, putting him in the same lofty bracket as Picasso, Pollock, Willem de Kooning and Gustav Klimt. The highest auction price, meanwhile, is $71.7m for “Green Car Crash” (1963). To put these dizzying prices in perspective, Titian recently achieved his highest ever auction price—$16.9m for “A Sacra Conversazione” from about 1560. This is an important picture by an artist many regard as the greatest painter that ever lived. But the market says that Warhol is more than five times better.
Warhol is now the god of contemporary art. He is indeed, it is said, the “American Picasso” or, if you prefer, the art market’s one-man Dow Jones. In 2010 his work sold for a total of $313m and accounted for 17% of all contemporary auction sales. This was a 229% increase on the previous year—nothing bounced out of recession quite like a Warhol. But perhaps the most significant figure is the rise in his average auction prices between 1985 and the end of 2010: 3,400%. The contemporary-art market as a whole rose by about half that, the Dow by about a fifth. “Warhol is the backbone of any auction of post-war contemporary art,” says Christopher Gaillard, president of the art consultants Gurr Johns. “He is the great moneymaker.”
Some glee in the market is understandable—and not just because of the money. Warhol believed in fame and wealth: they were intrinsic to his aesthetic. The auctioneers are co-creators, carrying on Warhol’s work post mortem, and the salerooms are extensions of the galleries. “How he would love it all!” says Sara Friedlander of the current frenzy. “I can see him at an auction, seated at front and centre with his Polaroid camera and his fright wig…I think of him in every sale we do.”
Before Warhol, the believers argue, there was sterility; after Warhol there is a ravishing, visual cornucopia. Without him, they say, there would be no Jeff Koons, no Richard Prince, no Banksy, no Takashi Murakami, no Damien Hirst. Many of the fashionable artists in the world emerged from beneath Andy’s fright wig.
There would also be no fun without Andy. The starting point for any assessment of his legacy is his instant accessibility: nobody need ever be puzzled by a Warhol—his lavish colours, his epic simplicity, above all his subject matter. “Andy always painted famous things,” says the artist Michael Craig-Martin, “whether it was Liz Taylor or a Coke can.”
“Even children love him,” says Gul Coskun, a specialist Warhol dealer in London. “They stop their parents outside my shop. His pictures are big, colourful, they are not taxing academically. But they are taxing financially now…”