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Why nations fail

economist.com

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Re: Why nations fail

#51

Post by dingfeng_quek »

zipdog wrote: post #10

The author's key argument is that extractive institutions lead to state failure. Like most theories of state failure, there's some good examples but enough weak or counter examples to discredit it as 'the' answer. At best, I'd argue that extractive institutions are a block to success: countries with them have one fewer barrier to overcome. I recently researched the thorny issue of what consititutes art, and the leadi…

Hi zipdog, when such an article is published, it should (if you're doing real work/research in this area) be interpreted as X is one of hypothesized significant causes of Y. X is often a new finding, or an old hypothesis with new support, or with new relevance. There's little reason to think the author meant it literally, given the extensive literature (just search any journal) on how and why states fail, and it is both sensible and charitable to assume the authors at The Economist are well-educated and do their background research (:

In fact, you'll find that this is a popular style in economics and business articles.

Re: Why nations fail

#52

Post by nhebb »

moldbug wrote: post #3

Once again Occam's butterknife is spotted in the wild. Richard Lynn, call your office: http://en.wikipedia.org/wiki/IQ_and_the_Wealth_of_Nations

The graph on the Wikipedia page looks like it would correlate well with climate. (I've always had a pet theory about climate and the history of academic and economic development.)

Re: Why nations fail

#53

Post by ktizo »

moldbug wrote: post #48
ktizo wrote: post #45

Earlier quoted context omitted.

The best answer to this question I have ever found is in the book Guns, Germs and Steel by Jared Diamond. It takes a look at the question of why one group of people ended up with the tech first and largely comes to the conclusion that it is part of a complex interaction involving the environmental availability of species and geography neccessary for the development of sedentry existence and then also a maximally hete…

Complexity is one invariant in Occam's butterknife. From the butterknife's point of view, the razor is always too simple to be true...

Well done. Now here's a biscuit.

And do please stop waving around the razor and the butterknife, you'll only do yourself another mischief.

Re: Why nations fail

#54

Post by dredmorbius »

ktizo wrote: post #45
tatsuke95 wrote: post #21

Earlier quoted context omitted.

The situation is bad enough that I'm a little sensitive to agreeing with what you've said here. According to a few posts up, that makes me a racist, I guess. The problem is, I never really understood why it's a stretch to believe that in all of the messy soup of chromosomes and culture (variables of a magnitude beyond what we could ever possibly research) that there are tangible differences between human beings. And…

The best answer to this question I have ever found is in the book Guns, Germs and Steel by Jared Diamond. It takes a look at the question of why one group of people ended up with the tech first and largely comes to the conclusion that it is part of a complex interaction involving the environmental availability of species and geography neccessary for the development of sedentry existence and then also a maximally hete…

An even better answer specific to the "Why Nations Fail" question is in Jared Diamond's Collapse. Which specifically explores the manifold reasons nations and cultures fail.

Highly recommended.

Re: Why nations fail

#55

Post by nirvana »

There is fundamentally sound economics behind the authors theory, but there's also really easy to understand logic: IF you have a strong state that controls the economy, then everything that is done must be authorized by the state. This is necessary if the purpose of the state is to extract the nations wealth to profit an elite few. If you have a weak state, then experiments can be tried, and while many experiments will be failures (such as most companies can fail) the ones that are successful really have a lasting and long term positive impact across the whole society. DEC, Apollo and many others failed, but IBM, Apple and Microsoft succeeded.

The other reason this works is that businesses have to accommodate the needs and desires of their customers, their shareholders and their employees. Businesses need all three in order to thrive. Governments don't need to accommodate anyone's desires or needs, short of that which would cause a revolution that overthrows the government... government imposes its edicts using violence while businesses can only attempt to pursuade or entice people.

Naturally this means that government is less interested in accepting economic reality, while businesses have to react very quickly... and if they don't, the entire economy of businesses overall will react quickly (e.g.: your business will get supplanted by one that accommodates the new reality.)

The lesson here for those who wish to enslave a populace and extract wealth from them is rather than have an overarching government with extreme control, allow a great deal of liberty and then impose a %10 tax on it. %10 is better than %50 when its %10 of an economy 1,000 times bigger.

Unfortunately, all states I'm aware of historically, no matter how rooted in liberty, eventually become parasitical and over the years start to extract more and more of the wealth to profit politicians and more and more controlling to make protect that extractive policy.

Re: Why nations fail

#56

Post by nirvana »

entangld wrote: post #34
cynicalkane wrote: post #22

Earlier quoted context omitted.

No it isn't. The author's main point is that corrupt governments siphon wealth into privileged hands at the expense of the public good. This isn't same as "allowing" wealth inequality. You can try to elide these things into being the same, but now you're misrepresenting things to make a politically charged point.

Geez. I'm not on a soapbox here. Don't accuse me. If you're going to say I'm wrong, at least point out how I'm wrong. There isn't a big difference between what I said and: >> corrupt governments siphon wealth into privileged hands at the expense of the public good. The effect is the same. Too much money in too few hands. Countries don't only need the rule of law to protect us from violence. We also need it to protect…

The difference, near as I can tell (since I'm talking about what two other people are saying and thus quite likely could be misreading either or both of you) is the method by which this wealth concentration occurs.

To use extreme examples, in one case, the concentration comes from enslaving a populace, while in the other case the concentration could come from a pure free market where only contracts are enforced (and thus some people become extraordinarily wealthy by benefiting large numbers of people, as Steve Jobs & Bill Gates have.)

Re: Why nations fail

#57

Post by [deleted] »

fragsworth wrote: post #6

I can't get past how needlessly wordy this article is. It's as if someone is trying to flaunt their language skills and it distracts me from the actual content; I must admit that I read the whole thing and did not catch wind of the author's point. Sentences like these just read as nonsense to me: "The intuition behind the theory is nonetheless compelling, which makes the scarcity of policy prescriptions frustrating."

[deleted]

Re: Why nations fail

#58

Post by dingfeng_quek »

hristov wrote: post #15
moldbug wrote: post #11

Earlier quoted context omitted.

The implicit comment is that the article's substance is of no conceivable relevance, because it fails to mention the most obvious possible cause - human genetic diversity - for the pattern it purports to analyze. It's one thing to refute or qualify the null hypothesis. It's another to ignore it. Why shouldn't it be the null hypothesis that genetic diversity is the cause of global inequality? Human beings have been th…

This is the most obvious cause only if you are a racist. Genetic differences between races are very minor as compared to the genetic differences between individuals within a race. Furthermore, it is very doubtful that you can find any statistically significant genetic differences between some of the countries mentioned in the article (e.g., England and Spain).

However, genetic differences between certain groups of people can be quite significant. Sometimes, they are clustered geographically, like immunity against malaria. Other times, they are clustered based on a shared history and selection pressure, like the Jews. Or math professors.

Afterall, humans came from the same small genetic stock, and races generally reflect adaptation/mutation to particular geographies - not to the very recent economic developments.

Not to mention that diversity and specialization is generally good for trade.

Re: Why nations fail

#59

Post by JonnieCache »

ender7 wrote: post #9
fragsworth wrote: post #6

I can't get past how needlessly wordy this article is. It's as if someone is trying to flaunt their language skills and it distracts me from the actual content; I must admit that I read the whole thing and did not catch wind of the author's point. Sentences like these just read as nonsense to me: "The intuition behind the theory is nonetheless compelling, which makes the scarcity of policy prescriptions frustrating."

"The authors do a convincing job of explaining why things are they way they are, but fail to explain how we might go about changing them."

That doesn't express the same thoughts at all though.

I guess what it comes down to is that some people perhaps see it as pompous to place the precise expression of one's thoughts above the simple and efficient conveyance of information.

To these people, I say: read more poetry.

To find true opacity-for-its-own-sake one must look to the french postmodern "philosophers" of the 1960s:

We can clearly see that there is no bi-univocal correspondence between linear signifying links or archi-writing, depending on the author, and this multireferential, multi-dimensional machinic catalysis. The symmetry of scale, the transversality, the pathic non-discursive character of their expansion: all these dimensions remove us from the logic of the excluded middle and reinforce us in our dismissal of the ontological binarism we criticised previously.

Utterly unforgivable.

Re: Why nations fail

#60

Post by nkurz »

barrkel wrote: post #42
tatsuke95 wrote: post #21

Earlier quoted context omitted.

The situation is bad enough that I'm a little sensitive to agreeing with what you've said here. According to a few posts up, that makes me a racist, I guess. The problem is, I never really understood why it's a stretch to believe that in all of the messy soup of chromosomes and culture (variables of a magnitude beyond what we could ever possibly research) that there are tangible differences between human beings. And…

Keeping the conversation off the table removes oxygen in which racists with less noble goals thrive. Human nature being what it is, they make judgements based on first appearances. When people are highly invested in having opinions on people based on things that come from first appearances, they are very likely to mistreat people on an individual basis - i.e. prejudge them, literally, and unfairly , because individua…

Thanks for your explanation. I disagree with your conclusion, but now better understand your reasoning. I'm more of the theory that rather than avoiding this conversation, we should confront it head-on: so long as it's accurate, prejudice can be beneficial, but should never trump individual reality. Instead of arguing against all bias because bias is bad, we should argue against false bias because it's false and misleading.

If you're in the mood for an excellent book on these topics, with what I think is good representation of both arguments, you should check out http://www.amazon.com/Defenders-Truth-The-Sociobiology-Debat.... It's one of the best books I've ever read.

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