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Why Isn’t the Whole World Rich?

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Re: Why Isn’t the Whole World Rich?

#161

Post by brutusborn »

wizeman wrote: post #104
brutusborn wrote: post #29

Earlier quoted context omitted.

I think the logical fallacy is thinking about the economy as a steady state system. At any given time there are finite resources, so it is "zero sum" in that the pie is finite and slices can only be shared once.

That's not zero sum. The pie can be 100% finite and yet, while everything else remains equal, two people can both benefit and be happier at the same time by simply (and voluntarily) exchanging a good or service between them, because they value those things differently at that point in time. If I have 10 chickens and you have 10 goats, we can exchange between us and each of us would simultaneously benefit more from ha…

I agree :)

Re: Why Isn’t the Whole World Rich?

#162

Post by bergenty »

awb wrote: post #11
api wrote: post #5

Make the question smaller. Why isn’t all of America equally rich? Why aren’t all neighborhoods in your city equally rich? The answers are similar: historical path dependence, founder effects, compounding network effects, and fortunate or unfortunate accidents.

+ Nature

I don’t know if I can fully agree. India and China made up 60% of the world GDP for over 2000 years of history. Does their decline into poverty mean there was a genetic change? Both those countries are now growing at very fast rate, has there been a change again?

Re: Why Isn’t the Whole World Rich?

#163

Post by brutusborn »

hoseja wrote: post #131
brutusborn wrote: post #37

Earlier quoted context omitted.

I used to have the same utopic dream, but I have started to question whether a "small number" is actually desireable. If everyone on earth is working on great things, having more people might be better. Maybe even Elons vision of people spilling out into the stars.

This is impossible with baseline humans, no matter how good you make education (without slipping into much heavier indoctrination).

Why is that?

Re: Why Isn’t the Whole World Rich?

#164

Post by LoganDark »

> living standards in the poorest countries in the world will eventually catch up to the United States

What part of the US? Because we're paying most of our income for a tiny two bedroom apartment and barely have enough money to afford groceries because the government took our SNAP EBT. We're paying almost $200/mo for 25Mbps internet and don't have any other options because the ISP here is a monopoly.

Sure we're lucky to have medical insurance, but it only covers everything except dentistry which is ironically what we've needed the most recently. Oh, and medical insurance is a thing you need here.

Grass is always greener.

Re: Why Isn’t the Whole World Rich?

#165

Post by amanaplanacanal »

zozbot234 wrote: post #125
wazoox wrote: post #113

Earlier quoted context omitted.

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 keep…

> IMF policies are arguably extremely toxic Correlation, not causation. The whole point of IMF intervention is to rescue countries that are already in the toilet, and need to consolidate foreign debt.

I wonder if a lot of those countries would do better to declare bankruptcy and not pay those debts.

Re: Why Isn’t the Whole World Rich?

#166

Post by Tade0 »

bergenty wrote: post #160
Tade0 wrote: post #136

My country's(Poland) GDP per capita grew 8-9x over the past 30 years. My personal take is that it's not just the political system during this time, but the transition from communism to a market economy that made it happen. The centrally-planned economy back then had interesting features, among them generally full employment and frankly ridiculous expectations regarding the amount of work(at least in terms of hours).…

This doesn’t seem accurate. Are you saying Poland had GDP growth rate of more than 30% a year?

Exponential growth over 30 years to 9x the original value is 7.6%/yr.

Real growth was closer to 7x, so 6.7%/yr and indeed similar growth was sustained over a large part of those three decades.

Re: Why Isn’t the Whole World Rich?

#167

Post by yucky »

aflag wrote: post #140
yucky wrote: post #135

Earlier quoted context omitted.

Do you think culture plays any role at all in the relative success one nation or group of people has vs another?

Sure, but I also think that's part of the system.

"the system"

There are countless systems, the world over. At some point one must accept the data.

Re: Why Isn’t the Whole World Rich?

#168

Post by welshwelsh »

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…

>Prices would rise and rise until they matched the new million-fold buying power

Prices would rise, yes. But they would not rise proportionally to the increase in purchasing power.

At the extreme case, imagine a person with $0. If they are given $1 million, they are now ∞% wealthier. If the cost of food rises 1,000,000%, they can still afford more food then before.

But prices won't rise that much. Your 50¢ pretzel might cost $1,000 now. But that won't last: if you can get an extra $1 million by selling 1,000 pretzels, people will do that. In the medium term, the supply of pretzels will increase and maybe the price will drop to $100.

I am not implying that wealth distribution solves scarcity. But it does redistribute power and resources, so that everyone's desires and needs are more equally catered to.

Re: Why Isn’t the Whole World Rich?

#169

Post by Leary »

rippercushions wrote: post #115

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…

They were all part of the Sinosphere?

Re: Why Isn’t the Whole World Rich?

#170

Post by phkahler »

zozbot234 wrote: post #122
phkahler wrote: post #106

Earlier quoted context omitted.

Yeah, balancing both budget and trade imbalance (better yet, a trade surplus) should take a country out of poverty over time. South Korea turned from agrarian to massive tech exporter over the time talked about. I'm writing this comment on a Samsung phone BTW. Not every country can have a trade surplus though, that part is a zero sum game. Having your own currency is probably important with a trade deficit, so exchan…

A trade deficit is an investment surplus, and vice versa. It's not like one is always good or the other always bad, you can't reason like that from a single number.

Money leaving the country directly translates to lower levels of wealth. An exception would be capital expenditures, in which case it might be good. I was mostly referring to consumption though.
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