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Why Are Some Countries Rich and Others Poor?

research.stlouisfed.org

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Re: Why Are Some Countries Rich and Others Poor?

#61

Post by te_chris »

anovikov wrote: post #24
mc32 wrote: post #19

Wasn't there a significant divergence in fortunes as economies transformed from resource based to value added economies? Around the turn of the XX century, many struggling economies today were on par with middling countries in Europe. Think Czech, Finland, Hungary, Polen, Japan. Brazil, Mexico, etc., were competitive with them back then, but now, the latter are seen as basket cases of mismanagement. And empire and co…

Brazil became a basket case of mismanagement only since a few years ago, that isn't something they are doomed to forever. They are already well on the way to fix that.

By deposing a democratically elected president? Not Brazilian, but I'm not sure how this is 'fixing it'.

The key strength of the West, IMO, is, as others have said, the things you don't see. Trustworthy institutions that mean you're not always second-guessing whether or not something is as it seems.

That's why it's so important for us Westerners to be vigilant to attacks on the integrity of our institutions and systems.

Re: Why Are Some Countries Rich and Others Poor?

#62

Post by aninhumer »

imperfect_cat wrote: post #53
wheresvic1 wrote: post #16

I'll save you all a click: The article answers the question with the following two points: - lack of strong institutions - trade barriers It provides an example of North vs south Korea in defense of the theory. It's a ridiculously simplistic synthesis in my opinion.

This criticism is always so weird. What should the article - not thesis note, ARTICLE - have been: 10 times longer? It is almost like people expect comprehensive, bulletproof writing in under 1000 words.

The criticism is not that the article should be more comprehensive, but that the title implies that it is.

Re: Why Are Some Countries Rich and Others Poor?

#63

Post by sgift »

andriesm wrote: post #55
wallace_f wrote: post #35

Economists can sometimes be the equivalent to the priests of the past--basically making justifications for the ruling class. I was once passionate about economics and public policy... If we are to be honest about it, at some point you just realize that the world is much less nice than I imagined, and it's that way because of people's greed. That's not to say there aren't a fair good number of decent people out there,…

The beauty about free market economics is, it doesn't depend on people's niceness to maximize productivity, capital utilization and consequently the aggregate standard of living of a country. Supply and demand, and pursueing self interest will achieve all of this in the aggregate despite any localized exceptions.

That's the believe. The proof in the real world is quite lacking.

Re: Why Are Some Countries Rich and Others Poor?

#64

Post by Synaesthesia »

sddfd wrote: post #52
hasenj wrote: post #36

Earlier quoted context omitted.

Japan and Germany were completely devastated after WWII, on a scale we have never witnessed in our lifetimes, yet they rose out of the Ashes. So no, it's not colonialism. It has to be something less visible. Something that a country like Afghanistan for example severely lacks. You might point to dictatorships, but I would point to South and North Koreas. South Korea was ruled by a brutal dictatorship for decades , in…

After WWII, the US invested /massively/ in Germany. Also, many people were trained in some profession, so even though everthing was destroyed, they knew how to rebuild it.

Same with South Korea, which actually made a lot of money during the Vietnam war, as did Japan. Japan trade with Zeus boomed at that time, and Korea supplied 300 000 mercenaries. Before that North Korea was faring better economically than the south.

Re: Why Are Some Countries Rich and Others Poor?

#65

Post by tpeo »

wallace_f wrote: post #35

Economists can sometimes be the equivalent to the priests of the past--basically making justifications for the ruling class. I was once passionate about economics and public policy... If we are to be honest about it, at some point you just realize that the world is much less nice than I imagined, and it's that way because of people's greed. That's not to say there aren't a fair good number of decent people out there,…

I think you give too much credit to economists as propagandists. Pretty much any other kind of social scientist receives way more space in the media than economists do. And an educated layman seems way more likely to be acquainted with the Milgram experiments or with the Sapir-Whorf hypothesis than he is to be acquainted with comparative advantage. Specially today. Back in the 1970s you could have seen Milton Friedman and John Kenneth Galbraith exchange passive aggressions through their own TV series (respectively "Free to Choose" and "Age of Uncertainty"). I don't know of a contemporary equivalent.

Unless you literally mean that they're making justifications for the ruling class and have them as their captive audience. Which, I'm ... rather tempted to agree. Unfortunately, people have a self-serving bias, and like paying people to say what they want to hear.

Re: Why Are Some Countries Rich and Others Poor?

#66

Post by mvc »

andriesm wrote: post #55
wallace_f wrote: post #35

Economists can sometimes be the equivalent to the priests of the past--basically making justifications for the ruling class. I was once passionate about economics and public policy... If we are to be honest about it, at some point you just realize that the world is much less nice than I imagined, and it's that way because of people's greed. That's not to say there aren't a fair good number of decent people out there,…

The beauty about free market economics is, it doesn't depend on people's niceness to maximize productivity, capital utilization and consequently the aggregate standard of living of a country. Supply and demand, and pursueing self interest will achieve all of this in the aggregate despite any localized exceptions.

All those good things like maximizing productivity, capital utilization etc are theory based on markets with perfect competition. How many "free markets" satisfy all the assumptions made about perfect competition?

https://en.wikipedia.org/wiki/Perfect_competition

Re: Why Are Some Countries Rich and Others Poor?

#67

Post by yipopov »

sumedh wrote: post #7

As someone who migrated from a developing country(India) to a developed country(Australia) and observing the difference in quality of life of average citizens among the two countries, I always wonder why politicians/dictators from developing countries who can also observe these differences ever wonder that the average people in a developed country are living a good life so why not just copy what the developed country…

>I always wonder why politicians/dictators from developing countries who can also observe these differences ever wonder that the average people in a developed country are living a good life so why not just copy what the developed country is doing and apply the similar policies back home to improve the lives of their own citizens.

They very much do, but they almost always do it in a cargo-cult fashion, imitating the appearance of western progress while remaining ignorant of or uninterested in the underlying mechanics. Take for instance Julius Nyerere, well-intentioned as he was, driving his country into the ditch not once but twice by uncritically accepting foreign ideologies of communist collectivisation first and then unchecked capitalism second, apparently thinking either was some kind of white magic incantation that would bring about prosperity, completely ignoring the systemic factors at work with ordinary Tanzanians.

Re: Why Are Some Countries Rich and Others Poor?

#68

Post by Supernaut »

bolololo1 wrote: post #47

Most rich countries are rich because they build their wealth on free labor (slavery), and this countries include USA, UK, France, Germany, Belgium, etc. Some are really poor because they've been exploited by the countries mentioned above (Africa and former German, British, Belgian, French colonies). Some are poorer because they've been destroyed by war multiple times (Poland).

This is an absurd generalisation. The only nation in your list that benefitted greatly from slave labour is the USA, and even that period is over a hundred and fifty years ago. Furthermore, the civil war that was waged to end slavery ultimately brought economic ruin to the southern States that had relied on slave labour.

In the post-WWII era, the countries that have prospered have done so because they have enjoyed stable government and long periods of peaceful relations with their neighbours. This allows for an educated populace, fruitful use of their natural resources and human ingenuity, and remunerative trade with other nations.

Re: Why Are Some Countries Rich and Others Poor?

#69

Post by bluetomcat »

andriesm wrote: post #55
wallace_f wrote: post #35

Economists can sometimes be the equivalent to the priests of the past--basically making justifications for the ruling class. I was once passionate about economics and public policy... If we are to be honest about it, at some point you just realize that the world is much less nice than I imagined, and it's that way because of people's greed. That's not to say there aren't a fair good number of decent people out there,…

The beauty about free market economics is, it doesn't depend on people's niceness to maximize productivity, capital utilization and consequently the aggregate standard of living of a country. Supply and demand, and pursueing self interest will achieve all of this in the aggregate despite any localized exceptions.

The inconvenient truth is, gaining capital means gaining power. That power is exercised by taking specific decisions from the relatively small management board of a company and these decisions can have far-reaching effects not only on the company itself, but on society as a whole.

We believe voting is essential to run a democracy, yet the management of companies is far from being democratic.

Re: Why Are Some Countries Rich and Others Poor?

#70

Post by wallace_f »

sgift wrote: post #63
andriesm wrote: post #55

Earlier quoted context omitted.

The beauty about free market economics is, it doesn't depend on people's niceness to maximize productivity, capital utilization and consequently the aggregate standard of living of a country. Supply and demand, and pursueing self interest will achieve all of this in the aggregate despite any localized exceptions.

That's the believe. The proof in the real world is quite lacking.

There is a lot of proof markets do work very well when you get close to perfect (and I'd add, fair) competition. Outside of that, things begin to break down quickly.
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