Don't Overpay for Security Theater

Bloomberg: China's $5 Trillion Opportunity
Most metal detectors in China share a curious trait: The alarm goes off no matter what. You can have emptied your pocket of every last coin, and the thing still sounds. Then there are usually two young women waiting to screen you with hand-held detectors that do seem to work.

After several experiences with this procedure, I developed a theory that the useless metal detectors were part of a vast job-preservation scheme, an indication of the Chinese government’s unwillingness to countenance job losses in the service of efficiency.

Then I caught a flight at the Beijing airport’s newish Terminal 3. I emptied my pockets as instructed before walking through the detector, and the alarm didn’t go off. There was only one young woman waiting on the other side with a hand-held detector, and she briskly waved me through.

So perhaps there isn’t a vast job-preservation scheme. Maybe it’s just that they used to make really bad metal detectors here, and now they’ve gotten better.

I’ll take that as a sign that China might be able to take advantage of what the McKinsey Global Institute is calling its “$5 Trillion Productivity Opportunity.” China’s labor productivity -- output per hour worked -- is at 15 percent to 30 percent of the average for countries in the Organization for Economic Cooperation and Development (aka the club of rich nations).
Using fake machines and low wage unskilled workers to create security theater is a way of increasing the productivity of the society. It's cheaper to do away with security, or combat it with targeted efforts. The U.S. is the worst example, subjecting everyone to extensive security checks.

As for the larger productivity story, China has room to grow by removing government influence, but that effort has been very slow going.

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