It's time we asked WHY other countries are so poor

Discussion in 'Economics & Trade' started by kazenatsu, Feb 12, 2019 at 1:11 AM.

  1. kazenatsu

    kazenatsu Well-Known Member Donor

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    I think it's time we took a look around at other countries and asked WHY are they so poor?
    And how do we make sure that doesn't happen here?


    One of the problematic things is being able to differentiate between the contributing things that help make a country wealthy, and the trappings of luxury, things that only exist in wealthier countries because they can afford them.
    Education might be one example. We know that higher levels of education are correlated with wealthier countries, but is that because that education makes a country wealthier, or is it because that country can afford to spend more on education?


    I was just reading about huge numbers of old people living in poverty in South Korea. An interview with one old woman said she didn't blame the government, there was only so much they could do. She was still working hard as a seamstress in her 80s, through a special government program to create jobs for older people, though she was barely scraping by (the equivalent of 350 US dollars per month). This is South Korea, full of very educated and hard working people.
     
    Last edited: Feb 12, 2019 at 1:11 AM
  2. Kode

    Kode Well-Known Member

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    If we look at poor countries, we typically find a rich "upper crust" with a poor population. That is what we are becoming. And we need to get clear on why, --and soon.
     
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  3. kazenatsu

    kazenatsu Well-Known Member Donor

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    Is it possible that a big part of the reason for that upper crust is that profits are higher because wages are so low?
    And wages are low because there are so many people living in poverty, it's kind of like a self-perpetuating cycle.
     
    Last edited: Feb 12, 2019 at 5:32 PM
  4. Margot2

    Margot2 Banned

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    Exactly.. Our middle class is shrinking and the disparity in wealth is increasing.. America is all about MORE, BIGGER, BETTER.. That ultimately is NOT sustainable. Now we are hearing that we have to import immigrants because our population growth has slowed..

    Such foolishness.
     
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  5. Capt Nice

    Capt Nice Well-Known Member

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    Because of the corruption in their governments. If trump had enough time we would also become a third world country just like many other countries in our world.
     
    Last edited: Feb 12, 2019 at 5:44 PM
  6. Kode

    Kode Well-Known Member

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    There certainly is that interplay of conditions, but I think the underlying driver is that capitalism is in crisis. They are able to produce much more than they can sell; because they can't sell enough to maintain growth they are searching for other ways to boost profits; they kept the real median wage flat for 40 years while production soared along with the incomes and wealth of the rich; they're getting their captive government to cut support programs for the poor and needy so the money can be diverted to subsidies for corporations that are struggling to keep sales and profits growing at the necessary 3% per year.

    Beware. When these things run out, they will turn their focus on your bank account and mine. Brace yourself for negative interest rates.
     
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  7. Kode

    Kode Well-Known Member

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    Wages must be kept flat, --until they must be reduced.

    Capitalism has to grow and expand. It is struggling to maintain that rate, and now they have changed their focus from the impossible challenge to grow and expand, to the opportunity to artificially boost stock prices and cut costs by merging businesses, etc.

    We have had capitalism in the world since the 1600s. Try this little experiment.... create a spreadsheet that tracks the annual growth of a dollar at 3% compounded growth for 200 years and see what you get. You'll get a slope that starts low and gradual, gets steeper and steeper, and then ends by streaking unsustainably skyward in the final years.
     
  8. Margot2

    Margot2 Banned

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    Its very scary IMO... and what a lot of pressure.
     
  9. kazenatsu

    kazenatsu Well-Known Member Donor

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    I started a thread on that: Corruption & Poverty
     
    Last edited: Feb 12, 2019 at 8:13 PM
  10. bringiton

    bringiton Well-Known Member

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    Three factors make countries rich. People need the liberty to produce (low barriers to entry), the opportunity to produce (access to production factors and markets), and the incentive to produce (low property crime and production-based taxes).
    Education is part of the societal infrastructure that governments have to provide to give producers access to production factors and markets. Other required public infrastructure includes transport networks, water and sanitation systems, health care, etc. because the private market can't invest in them efficiently: their value is all taken by landowners rather than being recovered by those who provide them (see the Henry George Theorem).
     
  11. Daniel Light

    Daniel Light Well-Known Member

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    Look back at the histories of most poor countries and you'll find that wealthier, more powerful countries pillaged their natural resources for decades. Hard to get ahead when someone steals most of your valuables.
     
  12. kazenatsu

    kazenatsu Well-Known Member Donor

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    Yeah but you can only blame those other countries for so long.
    At some point you can't keep blaming past exploitation for all your country's failings.

    Germany and Japan were devastated by World War 2. But within less than 40 years they had built back up all their industries, expanded their exports and had become very prosperous.
     
    Last edited: Feb 13, 2019 at 7:13 PM
  13. Daniel Light

    Daniel Light Well-Known Member

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    Because they were busy exploiting the natural resources of other countries, and because their own resources were not being taken from them.
     
  14. kazenatsu

    kazenatsu Well-Known Member Donor

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    Germany and Japan do not have very many natural resources of their own.

    Yet plenty of natural resource rich countries where most of the population is dirt poor.
     
    Last edited: Feb 13, 2019 at 7:16 PM
  15. bringiton

    bringiton Well-Known Member

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    No, in most cases they were poor before contact with wealthier, more powerful countries, and in many cases were richer afterwards (depending on which powerful country "pillaged" them -- Spain's record was bad, Britain's quite good).
     
  16. LafayetteBis

    LafayetteBis Well-Known Member Past Donor

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    It isn't happening "here".

    The US, like the EU, is an economic dynamic that has its development basis firmly grounded in a well-developed and modern market-economy. For the moment, other nations can only emulate that process. In fact, the latest to "emulate the process" was China, which has done very well for itself.

    The world should have learned that if a market-economy depends specifically on government expenditure to sustain itself, it is going nowhere. In most such countries, an "educated elite" tend to own the process of development because there are insufficient private companies to assume that role.

    The result is that the country remains basically poor because private-enterprise is unable to sustain continued investment in redevelopment of products and markets ....
     
    Last edited: Feb 14, 2019 at 12:27 AM
  17. kazenatsu

    kazenatsu Well-Known Member Donor

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    Wasn't Argentina a well-developed modern market economy, before it went into chaos?
     
  18. LafayetteBis

    LafayetteBis Well-Known Member Past Donor

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    In a word, No! Durable economic countries go into chaos (as did the US in the Great Recession) - but come out of it. Great Recessions/Depressions don't happen every five years in a robust economy. Once every 30/40 years, OK.

    There is no such thing in either Central or South America that deserves (today) the title "durable economic economy". (Of course, this is a personal opinion.)

    Why? I can only attest to one bit of factual evidence - and it is just primary evidence. The fact that, in Europe, it is always the latin-language countries that get into an economic mess and take a long-time getting out of it, whilst the northern countries find a way out in far less time. That, I feel, is due to the nature of the people and a human characteristic called "
    mindset".
     
    Last edited: Feb 14, 2019 at 3:18 AM
  19. scarlet witch

    scarlet witch Well-Known Member Past Donor

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    South Africa did... truth is nothing is durable... we just think they are.
     
  20. cerberus

    cerberus Well-Known Member Donor

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    In the UK, the only groups which haven't suffered in the slightest way over 12 years of extreme austerity are the political and elitists classes. On the contrary they seem to have got richer than ever.
     
    Last edited: Feb 14, 2019 at 3:34 AM

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