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Why Isn’t the Whole World Rich?

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Re: Why Isn’t the Whole World Rich?

#111

Post by fsloth »

karpierz wrote: post #102
FormerBandmate wrote: post #71

Earlier quoted context omitted.

South Korea and Ghana were at the exact same place 50 years ago. South Korea’s leadership were largely competent, so they’ve industrialized and used trade to become one of the wealthiest countries in the world. Ghana has not had nearly as good leadership and institutions, so they haven’t. Everyone constantly blames the West for all the problems of the world. If trade was really that deleterious to developing countrie…

South Korea had a propped up dictatorship that the United States strengthened and funded because they were scared of commies. Meanwhile Ghana had a dictator which was saddled with US loans who was overthrown. But the country still had to pay the loans back, despite them being will outside of their means.

This is extremely disrespectful of the economic savvy and work ethic of South Korean people.

Korean state had an extremely focused industrial policy to improve the added value created by the country's economic output.

The thing that needs critique here is that free trade would be somehow always beneficial. South Koreans state aggressively supported those industries it wanted to uplift.

Countries do rise up from third world countries to advanced industries. It just does not happen very often - sadly.

Another example of a country that rose from total poverty to industrialized advanced economy is my home country Finland which was in the 18th century dirt poor, started to industrialize, and only after second world war started to get some resemblance of wealth. However, the long history of poverty is still reflected to this day in lack of capital (are there other reasons for lack of capital I'm not sure).

Re: Why Isn’t the Whole World Rich?

#112

Post by majani »

awb wrote: post #9

> Yet even though extreme poverty has fallen, in 2018 about 80% of the world population still had material living standards less than one-third of that in the United States. That’s it right there. If wealth is relative then you can’t possibly create a system that will result in equality of outcome since we’re all born unique.

What would it take for the pareto principle to be considered a scientific law? Surely it can be seen everywhere you look

Re: Why Isn’t the Whole World Rich?

#113

Post by wazoox »

FormerBandmate wrote: post #71
phpnode wrote: post #27

Earlier quoted context omitted.

There's really no reason to blame this on the foreigners installing corrupt politicians, corruption is far more frequently organic and homegrown. Corrupt people work to further their own goals, if that happens to be using their power to take on e.g. debt on unfavourable terms then so be it, but that's not because they're beholden to foreigners, it's because that is their best route to enriching themselves - they can…

South Korea and Ghana were at the exact same place 50 years ago. South Korea’s leadership were largely competent, so they’ve industrialized and used trade to become one of the wealthiest countries in the world. Ghana has not had nearly as good leadership and institutions, so they haven’t. Everyone constantly blames the West for all the problems of the world. If trade was really that deleterious to developing countrie…

Ha-Joon Chang explains the case of South Korea in details in his book "Kicking away the ladder": Korea developed because it was extremely protectionist, while receiving substantial financial support from the US (because of North Korea, China and USSR).

While Ghana has been under the rule of the IMF the whole time.

IMF policies are arguably extremely toxic; they basically guarantee that countries can't develop by keeping them open to a flood of subsidized products from more powerful countries, killing their ability to develop their agriculture and industry.

China developed similarly by stringently protecting its interior markets. The US did the same in the 19th century. Basically, all countries that successfully developed were staunchly protectionist, then became "free traders" once they become powerful enough to defend themselves on open markets.

See https://www.allencheng.com/kicking-away-the-ladder-book-summ...

Re: Why Isn’t the Whole World Rich?

#114

Post by mdp2021 »

transfire wrote: post #99

Until smart robots are ubiquitous, it is not possible. To be rich is to have power over the poor, so they do and make things for you.

The article refers to "rich" as "beyond the unsatisfied need for food, water, sanitation, health, shelter, education and information", then as GDP (PPP, presumably).

The proposed idea would have the article state that South Korea etc. progressed as they did because they had others work for them. Were this the case, it would have to be defended through some good evidence - which Dietrich Vollrath will be happy to receive, by the way, since the article is about "How come we could not identify a recipe".

Re: Why Isn’t the Whole World Rich?

#115

Post by rippercushions »

What ties together their poster boys of South Korea, Taiwan and Singapore? They all had a baseline of education and decent government (for corporations, anyway), which they used to attract foreign investment (read: money flowing into the country) for industries that employed large amounts of people in roles where they could learn useful skills, kick-starting middle class wealth that could then propel the rest of the economy forward.

Most poor countries only have investment in extractive industries (oil, minerals, etc), which employ very few people, and the skills they learn are next to useless for anything else. The next rug up the ladder is places like Cambodia and Bangladesh, where investment goes into labour-intensive but low-tech industries like making clothes, but the government is too corrupt and the people too badly educated for much more. Although Bangladesh, in particular, has been a quiet success story lately, eclipsing India in GDP per capita.

Re: Why Isn’t the Whole World Rich?

#116

Post by incomingpain »

Imagine an agrarian low density country. There are no IT professionals in this country. Everyone more or less works for themselves on their homestead. The division of labour and the economies of scale basically dont exist.

As this country migrates to inudstrialization, what its really doing is implementing the economy of scale. It's difficult to get going though, if everyone is a poverty farmer, nobody is buying your widget. We have however measured and seen this entire process happen in about 50 years, several times now to huge success.

Despite this, people still believe the economy is zero-sum. These Malthusians in their politics believe that for the western world to be rich, requires them to rob the wealth from other countries. Which certainly has some truth to it.

This isn't how it works however, you can have a free trade agreement with palestine, but if nobody actually tries to trade goods, buy or sell goods. it doesnt matter. Each side in this trade of goods thinks they are getting a deal, otherwise they wouldnt do it. So we should in essence end up with excess on both sides. If someone selling their goods in palestine to germany has buyers. Then they can invest in producing more of those goods off the same labour hours.

BUT we have a problem: https://www.weforum.org/agenda/2018/08/were-living-in-the-ag...

The malthusians, aka world economic forum, believe we are in fact zero sum because there are so many metrics since 1971 showing we are zero-sum. They aren't wrong. So what happened?

https://seekingalpha.com/article/4356705-what-went-wrong-in-...

So basically what happened is the gold standard broke. In so doing, these fiat currency countries technically lose the ability to tax. Instead of tax, they should be printing the money they spend and NEVER take any debt. When they tax AND print money causing inflation. It's a double tax and removes, paying taxes on taxes on taxes.

Basically government is paying for itself, or rather failing to pay for itself by having circular taxation. This however breaks the economy and turns it to zero-sum.

This is why you also see everyone promising to lower taxes, if fiat currency without gold standard is going to stay, politicians basically have to reduce taxation to 0. The problem, they aren't doing it. They want to do little kickbacks to their supporters in specific tax deductions only.

Re: Why Isn’t the Whole World Rich?

#117

Post by majani »

postalrat wrote: post #96
zozbot234 wrote: post #42

The more interesting question is "Why isn't the whole world poor?" Poverty is the natural state of society, wealth is an exception.

Poverty is the natural state of which societies? All of them?

I think he meant to say "poverty is the default state." After all, you are born with nothing, and if you do nothing, you will get nothing.

Re: Why Isn’t the Whole World Rich?

#118

Post by robertlagrant »

jongjong wrote: post #74
realgeniushere wrote: post #23

Earlier quoted context omitted.

So I agree it has to do with bad governance. But you deflect all blame away from the people in those poorly governed country, instead blaming wealthy people in other countries. I’ll say though, the worst thing the West has done to the third world is insist on democracy. Peasants don’t know what they need government to do, and the political classes in those countries don’t have the maturity to steer them.

People in those poorly governed countries don't always have a choice. You could be living in such a country, see everything that's wrong with your political system and yet be punished for it nevertheless. There is a flawed assumption which infers that because the majority of people in a specific country are idiots, everyone who lives in that country should be punished... Imagine how hard life is for intelligent peopl…

> so they should not be punished on that basis

I keep seeing the word "punished" used as though there are some parents somwhere who are meteing out deliberate action against their children. It's not like that. It's just bad situations happening to adults and children alike.

The only antidote we know of is having democracy and free(ish) markets to allow as much agency as possible to accumulate to individuals, rather than to state officials.

Re: Why Isn’t the Whole World Rich?

#119

Post by commandlinefan »

Thiez wrote: post #63
1995moz wrote: post #47

You can make the whole world not poor (and quite a few people not as rich as they are). Solution is simple - allow free movement of goods, services AND people. Perhaps also follow-up with allowing anyone to buy any piece of land anywhere so that rich can also buy up cheaper land (fair deal?). A lot of reasons for conflict (and need to organize around nation states) will stop remaining so important. I guess, one can d…

There is a finite amount of (usable) land in the world. If it is all for sale, what is there to stop the rich from buying all of it, and then collecting rent for eternity, becoming ever richer in the process? How is a return to feudalism your dream?

> what is there to stop the rich from buying all of it

Isn't that already the case though? I'm not aware of any country that limits how much land a single person can legally own, just prohibitions on which people can own it (i.e. I can't buy land in England because I'm not an English citizen).

Re: Why Isn’t the Whole World Rich?

#120

Post by aflag »

throwaway294566 wrote: post #88
aflag wrote: post #66

Earlier quoted context omitted.

Quoted post unavailable.

A person's behavior and its abilities are determined by genetics ("nature") or family/society/circumstances ("nurture") or some ratio of mixture of both. Current political sensibilities prohibit talking about genetic aspects and demand that all, or at least as much as possible is ascribed to family/society/circumstances. Ascribing traits, especially negative ones, to genetics, is commonly called racism. However, for…

OP said that we can’t possibly create a system which will result in equality of outcome, while quoting that 80% of the world are poorer than the average American. In that context, equality of outcome means that the whole world shares the same average. Maybe I misunderstood that part, but if that’s what’s being said, then I’m not sure what is that uniqueness. Surely, the fact the US exist is evidence that such a system is actually possible. Then why is it not possible for the rest of the world? So you’re saying it’s culture? That seems like something that can be changed. So can politics, obviously. So, what is the unique trait that will make sure there’s no way to achieve a worldwide average earning as an average American family?
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