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Why Nations Fail (Read 36295 times)
Yadda
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Re: Why Nations Fail
Reply #150 - Apr 4th, 2014 at 12:50am
 
Yadda wrote on Apr 4th, 2014 at 12:25am:

Covenants.  -  Why do we need to understand the importance of the concept of a 'covenant' ?

[Q.
On a personal level, how do you understand, or how do you define the 'meaning' of the word 'covenant' ? ]




For example, a marriage, is a solemn covenant, between a man and a woman.    [....well, it used to be regarded, as.]

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"....And he said unto him, If they hear not Moses and the prophets, neither will they be persuaded, though one rose from the dead."
Luke 16:31
 
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Soren
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Re: Why Nations Fail
Reply #151 - Apr 4th, 2014 at 6:20am
 
True Colours wrote on Apr 2nd, 2014 at 8:01pm:
The culture argument is absurd. The Islamic Middle East was far wealthier than Christian Europe for about a thousand years - 500 years ago the busiest trading port in the world was in Islamic Malacca.






So, what happened? What led to the closing of the Islamic mind?
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Lord Herbert
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Re: Why Nations Fail
Reply #152 - Apr 4th, 2014 at 6:34am
 
True Colours wrote on Apr 2nd, 2014 at 8:01pm:
The culture argument is absurd. The Islamic Middle East was far wealthier than Christian Europe for about a thousand years - 500 years ago the busiest trading port in the world was in Islamic Malacca.


'Malacca' is right. Any Greek speakers here?

True Colours wrote on Apr 2nd, 2014 at 8:01pm:
2 of the 3 top economies in the world today are neither Christian nor European.


Meaningless in terms of how this affects the average citizen.

Let's make a list of which countries' citizens enjoy the best living-standards.

China, India, and the Middle East would kick in around about the '50s' mark ~ and that's giving them the benefit of the doubt.

Let's get real, True Blue.

No more of those deceitful statistics, please.  Tongue
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freediver
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Re: Why Nations Fail
Reply #153 - Apr 6th, 2014 at 1:38pm
 
Quote:
Meaningless in terms of how this affects the average citizen.


Quite the opposite, as it prompts you to consider what really matters in making a country "successful". These distant concepts greatly affect every "average citizen" in the world.

Quote:
China, India, and the Middle East would kick in around about the '50s' mark ~ and that's giving them the benefit of the doubt.


Good start. Now tell us why. Then, tell us how this will look in 100 years time.

Quote:
So, what happened? What led to the closing of the Islamic mind?


The closure of the gates of ijtihad - a few centuries after Muhammed. However I think that is more of a symptom than a cause. They did achieve some wealth, but it was relative and not part of sustained growth. They achieved some economic advances by facilitating long distance trade, but they also put many brakes on it. In Arabia achieving a centralised state was itself a big step and yielded signifant economic gains compared to what existed previously. Unfortunately this was the first step of many that occured elsewhere, mainly in western Europe, and the actions of Muhammed resulted in the Arabs taking that first step and then not moving forward for 1400 years. Instead, they not only stagnated their own societies, but they exported this stagnating political and economic system to about half of what counted as the rich world at the time.

During the "golden age" many of the great scientists were more practical engineering types, and were at the mercy of the decrees of religious leaders. Many suffered greatly as a result.

Ultimately the problem was political, with all power vested in the Caliph and the religious leaders who propped him up. Regular people had no say in how things were run. Indeed, their only 'legitimate' criticism of the state could be that it failed to uphold Shariah law properly. Islamic banking, taxes, and other Islamic economic institutions are a significant barrier to economic growth.

The Ottoman empire is one of the classic 'modern history' examples of the elite deliberately deciding to block industrialisation in order to maintain their grip on power. They banned the printing press for example, and they were still copying books by hand a century or more after books were common in Europe. The government introduced one once, and set up a religious committee to approve any book and make sure they were done right. Eventually it fell into disuse. The political and social institutions of this empire were typical of extractive regimes of the time. These institutions survived through all the changes of recent history and are still a barrier to growth. In Egypt for example, the British took advantage of them and reinforced them. Despite being a democracy, Egyptian society is still built on extractive political and economic institutions. Don't expect them to change overnight. There is no reason to expect their revolutions will be any more successful than the basket case South American "democracies". But it is still a good start.
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Re: Why Nations Fail
Reply #154 - Apr 6th, 2014 at 2:07pm
 
freediver wrote on Mar 15th, 2014 at 7:23am:
Why Nations Fail (by Acemoglu and Robinson) is a book I am currently reading that attempts to explain the enormous variations in wealth seen in the world today. It attributes these differences to economic institutions, which are largely dictated by political institutions. Institutions is intended in the broad meaning - eg property rights, democracy etc. It highlights how both the patterns in wealth and the patterns in these institutions have been very (though not entirely) stable over the last 150 years, and argues an institutional inertia (my term) that goes beyond the influence of the powerful individuals involved. It suggests why it is so hard to break the mold, and how to break it (not up to that part yet).

It also rejects some of the conventional arguments - eg:

* Culture - that Protestant, Judea-Christian, European or Roman culture is what makes the west so rich, while attempting to disentangle the various meanings of culture. Culture is part of the economic and political institutions that make countries rich or poor. He even argues that the middle east is not poor because of Islam, though I suspect he has never met anyone like Abu.

* Geography - that people in hot countries are lazy, or the soil is less fertile, and various more complicated version of this theory. It addresses the "Guns, Germs and Steel" hypothesis of Jared Diamond and puts it in it's place as an explanation for why the west was able to dominate the world, while highlighting the inability of this theory to explain vast differences in wealth seen in those countries colonised or settled by Europeans.

* Ignorance - that leaders or people in poor countries do not understand how to get rich. This is the explanation favoured by many modern economists. It highlights that even when they do understand, the people in power usually don't want to. Even when they are forced to or try to make the change, it is fraught with danger, because the problems are institutionalised within the economy and the politics. The idiotic economic policies of various tinpot dictators are not determined out of ignorance of economics, but by the economic and political institutions that for the tinpot dictators are an unchangeable reality they must work within.

The causes of wealth and poverty are economic and political freedoms and rights that are closely linked or interact. For example - secure property rights, including patents, economic freedom, democracy and a broad distribution (separation) of political power.

In historical terms, it largely attributes these differences to "accidents of history".


Does the book have a chapter on house flipping as a means to wealth for a nation. That's how Singapore works. Prices are so high every time they build a new apartment tower the GDP goes up a few percent.
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Re: Why Nations Fail
Reply #155 - Apr 6th, 2014 at 2:26pm
 
Quote:
Meaningless in terms of how this affects the average citizen.


freediver wrote on Apr 6th, 2014 at 1:04pm:
Quite the opposite, as it prompts you to consider what really matters in making a country "successful". These distant concepts greatly affect every "average citizen" in the world.


I repeat ~ If the average citizen doesn't benefit from the national wealth, then it's purely academic that a country is 'successful' in terms of wealth generated.

Quote:
China, India, and the Middle East would kick in around about the '50s' mark ~ and that's giving them the benefit of the doubt.


freediver wrote on Apr 6th, 2014 at 1:04pm:
Good start. Now tell us why.


Why, is because the average citizen is walking barefoot and in rags on their homeland ground that covers godzillian-dollars of oil wealth.

I rest my case.

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Re: Why Nations Fail
Reply #156 - Apr 6th, 2014 at 2:37pm
 
Quote:
I repeat ~ If the average citizen doesn't benefit from the national wealth, then it's purely academic that a country is 'successful' in terms of wealth generated.


The central message of the book is that countries who share the wealth, or more precisely, share access to the wealth, as well as access to political decision making processes, also end up wealthier on the whole.

Quote:
Why, is because the average citizen is walking barefoot and in rags on their homeland ground that covers godzillian-dollars of oil wealth.


Ah, so they are poor because they are poor?
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Re: Why Nations Fail
Reply #157 - Apr 6th, 2014 at 2:48pm
 
freediver wrote on Apr 6th, 2014 at 2:37pm:
Quote:
I repeat ~ If the average citizen doesn't benefit from the national wealth, then it's purely academic that a country is 'successful' in terms of wealth generated.


The central message of the book is that countries who share the wealth, or more precisely, share access to the wealth, as well as access to political decision making processes, also end up wealthier on the whole.


That's what I inferred.

Quote:
Why, is because the average citizen is walking barefoot and in rags on their homeland ground that covers godzillian-dollars of oil wealth.


freediver wrote on Apr 6th, 2014 at 2:37pm:
Ah, so they are poor because they are poor?


They are poor because their rich invest in other countries instead of their own.

Hence ~ no industry to employ the citizens.
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Re: Why Nations Fail
Reply #158 - Apr 6th, 2014 at 3:00pm
 
So we are so poor because we set up factories in countries like China to make all our cheap plastic goods?
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Re: Why Nations Fail
Reply #159 - Apr 6th, 2014 at 3:06pm
 
freediver wrote on Apr 6th, 2014 at 3:00pm:
So we are so poor because we set up factories in countries like China to make all our cheap plastic goods?


We're not poor. We're one of the richest countries in the world.

Not even the US has 4 weeks holiday a year for its workers (5 weeks for shift workers) ... free doctors and hospital treatment ... an unemployment benefit that has no cut-off period of 6 months ... DSP for dodgy BS like 'depression' and 'Mediterranean back-ache' ... rental assistence ... concession tickets ... family benefits ... child benefits ... Single Parent benefits ... etc etc.

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Re: Why Nations Fail
Reply #160 - Apr 6th, 2014 at 3:09pm
 
So they are poor because they invest in other countries, but we invest in other countries because we are rich?
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Re: Why Nations Fail
Reply #161 - Apr 6th, 2014 at 3:18pm
 
freediver wrote on Apr 6th, 2014 at 3:09pm:
So they are poor because they invest in other countries, but we invest in other countries because we are rich?


Wrong.

They: as in the monolith of the nation state.

And They: as in the citizens of dictatorships, and the citizens of 'democracies' (sic) such as India and Indonesia where voting is a farce and a fraud that all parties ignore as nothing more than a pro forma nicety to give the semblance of civilisation.
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Re: Why Nations Fail
Reply #162 - Apr 6th, 2014 at 3:32pm
 
What are you trying to say Herbert?
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Re: Why Nations Fail
Reply #163 - Apr 6th, 2014 at 3:55pm
 
freediver wrote on Apr 6th, 2014 at 3:32pm:
What are you trying to say Herbert?


What I said right at the beginning: The wealth of a nation is reflected in the standard of living of the average person.

It matters nothing if the ruling elite of China, India, Saudi Arabia or the US have access to all the wealth while the great bulk of the population is on Struggle Street.

Statistical Almanacs that are published each year are irrelevant if they don't state the standard of living of the average person.



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Re: Why Nations Fail
Reply #164 - Apr 6th, 2014 at 4:10pm
 
Standard of living is a relative term. GDP has long been disdained as a measure of National wealth and entities are now evaluating other measures.

Bhutan uses GNH, Gross National Happiness. Hideous Herbert would be a negative contribution to that measure.

http://www.theguardian.com/commentisfree/2012/oct/22/gdp-only-measure-wealth

Under current GDP measures, countries that cut down forests for timber exports, dynamite their reefs for fish, pollute and degrade their soil for intensive agriculture and allow farms and factories to contaminate their waterways get rich.

GDP has been similarly challenged and deconstructed in Europe. In 2009, the then French president Nicolas Sarkozy recruited a team of economists "to tear the GDP apart as they saw fit". They too found that GDP should be replaced and that other indicators should be introduced to monitor social and environmental, as well as economic, change.

The UN is working to value ecosystem services – or natural capital – and this year adopted a new international standard to give natural capital equal status to GDP. Speaking at the UN's conference Rio+20, Nick Clegg said the UK was committed to including natural capital in its national accounts by 2020.

One notable exception to the reign of GDP across the globe is Bhutan, which for the last four decades has used "gross national happiness" as the important measure, instead of GDP. With its long experience of alternative measures, Bhutan is now instrumental in current debates about national wealth and wellbeing.
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