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Why Isn’t the Whole World Rich?

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Re: Why Isn’t the Whole World Rich?

#141

Post by serverholic »

1234letshaveatw wrote: post #70
jdthedisciple wrote: post #14

My personal (purposely incomplete!) answer is because the whole world doesn't deserve to be rich. Imagine this scenario to help understand why: Let's say the top richest people gave away so much money that every person on earth was a millionare. What would happen? People wouldn't change their spending and other habits, in fact they would buy more useless stuff. Prices would thus rise and rise until they matched the n…

As mentioned in other comments, you can't escape scarcity. If everyone became a millionaire overnight, would there be enough mansions for everyone to buy the next morning? How about PS5s? How about steaks? It's wishful thinking and politicization to pretend otherwise.

Scarcity will always exist. However, the system we are in doesn’t exactly make the best use of resources.

Some things are artificially scarce, like diamonds. Other things are made to be cheap and disposable like clothing so you’ll buy more in the future. And other things are made proprietary so that you’ll have to buy multiple of the same thing.

A simple example of the last point is modern consoles. PS5s and XBoxes are basically PCs at this point. Yet they are made to be incompatible and minimally upgradeable.

Re: Why Isn’t the Whole World Rich?

#142

Post by wizeman »

pizza234 wrote: post #101
docdeek wrote: post #18

Earlier quoted context omitted.

FTA: In 2019 there were about 648 million people living in extreme poverty, subsisting on the equivalent of $2.15 per day or less. Those 648 million people made up 8.4% of world population — representing an improvement over 1990, when 35.9% of people lived on that little. This seems to be the inverse of a zero-sum game: the West might have got a lot richer, but hundreds of millions of people were lifeted out of extre…

> This seems to be the inverse of a zero-sum game: the West might have got a lot richer, but hundreds of millions of people were lifeted out of extreme poverty at the same time. Parent's thesis is that it's not a typical zero-sum game, but "a zero sum game with an ever increasing pie". It's an interesting idea; I don't know if there are formalizations of it.

Except it's not really a "zero sum game with an ever increasing pie".

Even if the pie remains exactly the same, it's not a zero sum game: simultaneous value for two people can be created out of nothing simply by the voluntary exchange of goods and services between them while everything else remains the same, see my other comment here for examples:

https://news.ycombinator.com/item?id=33719823

As another example more relevant for this context, poor people can exchange their time for money, which can then be used by them to acquire other things they value more than their time (food, housing, etc).

So yes, poor people can get themselves out of poverty even if the pie doesn't change. There are many examples of this happening (i.e. poor people lifting themselves out of property much more than the pie grows).

But of course, they can do that even better if the pie increases, i.e. if we get better at producing food and housing even more efficiently.

But even if the pie remains the same, value can be created out of nothing by the simple voluntary exchange of goods and services and poor people can also greatly take advantage of that.

It doesn't mean that some people have to lose something when poor people gain something. Both poor and rich people can simultaneously benefit from exchanging goods and services between them, while everything else remains the same.

If nothing else, because rich and poor people value things differently (and even among each group, at any point in time each person also values things differently to a great degree).

Re: Why Isn’t the Whole World Rich?

#143

Post by mdp2021 »

FollowingTheDao wrote: post #133
mdp2021 wrote: post #128

Earlier quoted context omitted.

> Did people know there was such a think called "poverty" before Diogenes the Cinic 2400 years ago reportedly lamented hunger (and the absence of shortcuts to curb it, NSFW). That is the poverty contextual to the article.

Hunger is not poverty, hunger is hunger. Even wealthy people can be hungry.

And even the frugal can be hungry: that is the meaning of poverty in the article, and the analysis is about a solution against it - because whether you embrace the idea of "[GDP-based] growth" or that of "frugality", hunger is a bad state to live in. The point of the article is about "how to have growth", and it is a transposition on different assumptions of "how to have food even though you are frugal". Diogenes was frugal and, reportedly, occasionally sadly aware of his factual poverty.

Re: Why Isn’t the Whole World Rich?

#144

Post by aidenn0 »

emanuer wrote: post #109

For anyone interested in this topic, I can wholeheartedly recommend the book: "The WEIRDest People in the World" by Joseph Henrich. The book provieds a beautifully constructed framework to understand culture and its effect on psychological development, as well as economic development. 1. In the book, the author argues that innovation rates of countries correlate positively with the psychological dimension of "individ…

> My personal opinion is: gaining wealth is not a zero-sum-game, but a — the more participants the bigger the pie gets — kind of game. I truly believe, if cultures and institutions change, everyone in the world can be wealthy. With "wealthy" I refer to the living-standard North-American or Europeans enjoy.

I'm less convinced. A lot of the improvement to living standards in the west for the past 50 years or so have been a result of shifting labor to countries with lower standards of living. That being said living standards in post-war US is not a bad target and I don't see a physics problem with attaining that.

Re: Why Isn’t the Whole World Rich?

#145

Post by aidenn0 »

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?

Agrarian societies are historically composed of nearly all subsistence farmers. The industrial revolution changed that, but (unless you agree with Marx) it still doesn't seem like a foregone conclusion that "society" receives the wealth rather than it being concentrated in a few places.

Re: Why Isn’t the Whole World Rich?

#146

Post by karpierz »

fsloth wrote: post #139
karpierz wrote: post #127

Earlier quoted context omitted.

Your implication is that Ghana failed where South Korea succeeded because they didn't work hard enough. Of course people in South Korea worked hard to get where they are. So did people in Ghana. But in South Korea, the US protected them and funded them. Meanwhile in Ghana, the US stripped them of their wealth. How well off do you think South Korea would be if the US didn't intervene in the Korean War?

US military intervention and economic uplifting are partly two different things. I would limit this discussion to "how can a once poor country become an industrialized economy". Since not all countries do this, the question is incredibly interesting. Perhaps I were too harsh but "US helped them" is not a satisfactory answer. The fact that north korea is poor and south korea is not, is an interesting part of this puzz…

"Why Nations Fail" comes from the Jared Diamond school of "My Model Fits My Data So It's Causal". It's a series of just-so stories, which discounts outliers (ex: Singapore, India, China). They take the scientific method (find examples to disprove your hypothesis) and invert it (find examples that match your hypothesis), which does nothing except provide people with the feeling of confidence that they've finally come across the Truth.

Re: Why Isn’t the Whole World Rich?

#147

Post by nickpp »

mdp2021 wrote: post #130
nickpp wrote: post #108

Free Markets - the biggest wealth creation engine known to man. The most impressive and amazing reversal of fortune I've personally lived through was the switch from planned economy to free markets which took place in Eastern Europe after the fall of communism. You could even predict the degree of improvement or the trajectory of a country by the percent of the free market reforms vs protectionism left in place. Of c…

> to being left behind by the IT/computer revolution And you suppose it happened because of internal market pollution?

Labor market in Western Europe became so corrupted by leftist policies after the mid-20th century that it became basically anti-business. This affected startups the most, since businesses are most vulnerable in their startup phase. And the IT industry (unlike other old industries) was built almost exclusively by startups... Current idiotic policies (GDPR, USB-C charging) are just nails in the coffin on the inexistent European IT industry.

The second necessary component was capital. Financial markets in Europe were heavily regulated and taxed, with investing and especially angel investing actively discouraged.

The third component: universities were available in Europe as well. But without the first two parts the best and brightest europeans went to Silicon Valley to help build the US IT industry.

Because the immigration policy (the final component) was significantly more open in the USA as well...

Re: Why Isn’t the Whole World Rich?

#148

Post by karpierz »

fsloth wrote: post #139
karpierz wrote: post #127

Earlier quoted context omitted.

Your implication is that Ghana failed where South Korea succeeded because they didn't work hard enough. Of course people in South Korea worked hard to get where they are. So did people in Ghana. But in South Korea, the US protected them and funded them. Meanwhile in Ghana, the US stripped them of their wealth. How well off do you think South Korea would be if the US didn't intervene in the Korean War?

US military intervention and economic uplifting are partly two different things. I would limit this discussion to "how can a once poor country become an industrialized economy". Since not all countries do this, the question is incredibly interesting. Perhaps I were too harsh but "US helped them" is not a satisfactory answer. The fact that north korea is poor and south korea is not, is an interesting part of this puzz…

As for South Korea, did you look into the impact of US economic aid as well as industrial advisors, and compare it to the economic drag that the US induced via the collection of loan payments on Ghana?

https://www.kdevelopedia.org/Development-Overview/official-a...

Re: Why Isn’t the Whole World Rich?

#149

Post by awb »

aflag wrote: post #120
throwaway294566 wrote: post #88

Earlier quoted context omitted.

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 syste…

> 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?

Geography for one. Countries have unique shapes, sizes and access to natural resources.

History for another. Chess is considered one of the most even games invented, but moving first has a small but distinct advantage. Countries that are more developed today have an advantage over those that are less developed. It’s possible to catch up, but it requires some advantage over other countries.

The thought that every countries advantages and disadvantages could be equal is vanishingly small.

Now if you’re born in a country with fewer advantages, you’re at a disadvantage even if you’re a clone of someone in a more advanced country.

Then throw in that we’re not clones of each other and that mental and physical disabilities are huge barriers to success through no fault of the individual.

Re: Why Isn’t the Whole World Rich?

#150

Post by dirtyid »

fsloth wrote: post #139
karpierz wrote: post #127

Earlier quoted context omitted.

Your implication is that Ghana failed where South Korea succeeded because they didn't work hard enough. Of course people in South Korea worked hard to get where they are. So did people in Ghana. But in South Korea, the US protected them and funded them. Meanwhile in Ghana, the US stripped them of their wealth. How well off do you think South Korea would be if the US didn't intervene in the Korean War?

US military intervention and economic uplifting are partly two different things. I would limit this discussion to "how can a once poor country become an industrialized economy". Since not all countries do this, the question is incredibly interesting. Perhaps I were too harsh but "US helped them" is not a satisfactory answer. The fact that north korea is poor and south korea is not, is an interesting part of this puzz…

>US helped them

IMO more accurate to insinuate whether countries succeed or fail to develop is ultimately at the discretion of the (wealthy) hegemon. Especially more so in recent history with the viability of export led growth models and US / western bloc constituting huge % of global GDP, who can choose who to "uplift" via absorbing exports. Which is zero sum process, since demand is still finite, ergo Hegemon + co's policies / cooperation / coercion / indifference picks winners and losers, frequently explicitly via trade agreements / sanctions.

Also The moat and wall around modern tech is so high that industrializing / modernizing / moving up value chain can only be expediently done with active facilitation from other advanced economies. Even primary resource states that on paper should be able to extractive their way to wealth (not equality) still depends on increasingly advanced tech (and now increasingly export restricted) to even get goods to market in first place.

SK / NKR good example. NKR initially more developed than SKR via USSR until US with more resources and consumption seriously invested in SKR while absorbing their industrial policies' surplus. Meanwhile US kept NKR down via sanctions. Even post Korean war, NKR had fairly competent residual industrial prowess. Once country has the industrial institutional memory, it's able to quickly rebuild base to technically flourish but they still need permission to grow unhindered. Most of destroyed european powers postwar got back on feet with push from Marshall plan. Except NKR got pushed down.

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