Richest 2% own 'half the wealth'

[General Brock]

This is nothing new. What's more disturbing is the fact that so much of the population does not see it as a problem.

Well, I see it as a problem. I gotta get me inta that 2%...

[Lord Zentei]

Seeing as this is a world statistic, and that the world is not one market (and parts of it are very lawless indeed), these statements are a more than a little simplistic.

Maybe, but capitalist countries like America, Britain and others control most sections of the world economy as well.

I know. That was not my point. Dart Wong provided a better counterpoint.

Oh? Protectionism and corruption in third world countries plays no part?

Protectionism? Capital flight would've been impossible if there were strong barriers to that. It's the lack of specific "capital protectionism" I would say that is to blame, not the over-protection.

Free movement of capitals with it's notorious tendency to massive transnational, First-World centered concentration inevitably strikes at the least capable, the most weak and vulnerable...

Of course. It's not as if pro-trade policies have benefited south east asia while Africa, which is far more protectionist, has suffered.

[Lord Zentei]

Seeing as this is a world statistic, and that the world is not one market (and parts of it are very lawless indeed), these statements are a more than a little simplistic.

The underlying point is still valid if you consider only the United States, as most Americans are wont to do. The wealth gap in the United States has grown so much in the last 30 years that virtually all its economic growth has gone exclusively to the wealthy class.

A fair point; though this effect alone is not sufficient to explain the world statistic.

[K. A. Pital]

Lord Zentei
SEA is an extremely competitive importer of capital and source of extremely cheap additional labour - that, which inevitably attracts capitals (and incidentally, leaves other regions without them since capitals are a cap resource). In fact, Asia-Pacific draws more investment than any other developing region. _And_ it has very strong domestic investment. One of the articles I read about Chinese economy, is that they have all the foreign Chinese people send a lot of funds and invest mainly in China not somewhere else, that, a strong national allegiance.

If we're not treating investment as an unlimited and abundant resource which it is verily not, it's clear that those who can't compete for investment are fucked royally. They will have capital flight to more competitive countries even from their domestic capital holders - and there will be less investment in their own country. And thus, economies are ruined.

To absolve of this fundamental competition for investment between countries, and to absolve of the fact that only massive enough and long-term production investment cause real growth, not merely "trade", is dishonest. If nations are viewed as competitors on a market, which they _are_, on a really grand scale, it really becomes quite clear why the weaker nations _will_ be fucked.

Just like in the market, stronger companies can dictate their will and annihilate weaker ones or maintain their perpetual weakness and build barriers to their growth, so in the market of nations the same is present. But there's no oversight over the international market, and the superpowers have free reign in allocating FDI, determining the type of help - like monetary loans to the Third World? Pfffft... idiocy extreme. And other stuff as well.

As I said, if companies go bankrupt in a market, who gives a flying fuck, but if entire economies are vaped via the exactly same mechanisms of competition, this means immense human suffering. Humans are not mobile, so the argument "you shouldn't have put your country X in a place Y" or "you shouln't have had war and disease rampant in your countries" doesn't fly.

And if we understand that market forces will restrain investment to weak and unstable countries and either direct it to cheap additional labour centers or lock in the First-World centers circulation (which is pretty much how most of FDIs end)... being fully aware that unstability and unfavourable conditions cause capital flight on a grand scale and maintain _perpetual poverty_ - mind you, nothing of what I'm saying is any sort of news - why are we blind enough to allow this to continue?

As someone suggested, because the current incarnation of capitalism requires poverty to exist, and on a such massive scale, or at the very least allows. If it were not so, poverty would've been destroyed by the system.

[Lord Zentei]

SEA is an extremely competitive importer of capital and source of extremely cheap additional labour - that, which inevitably attracts capitals (and incidentally, leaves other regions without them since capitals are a cap resource). In fact, Asia-Pacific draws more investment than any other developing region. _And_ it has very strong domestic investment. One of the articles I read about Chinese economy, is that they have all the foreign Chinese people send a lot of funds and invest mainly in China not somewhere else, that, a strong national allegiance.

Cheap labour is indeed a powerful magnet for foreign investment: what is more, you need legal conditions in place to foster such investment.

If we're not treating investment as an unlimited and abundant resource which it is verily not, it's clear that those who can't compete for investment are fucked royally. They will have capital flight to more competitive countries even from their domestic capital holders - and there will be less investment in their own country. And thus, economies are ruined.

And to undermine the competitiveness of said economies by placing trade barriers that inevitably discourage the competitiveness of the economies in question with regards to foreign investment, the likelyhood to which they will be "fucked over", as you put it, is increased. The proper way forward for them, then, is to make their economies more competitive with regards to foreign investment - and to this end raising barriers is ass-backwards.

To absolve of this fundamental competition for investment between countries, and to absolve of the fact that only massive enough and long-term production investment cause real growth, not merely "trade", is dishonest. If nations are viewed as competitors on a market, which they _are_, on a really grand scale, it really becomes quite clear why the weaker nations _will_ be fucked.

Who the fuck is talking about trade without investments? It makes no sense to attempt the one without the other.

Just like in the market, stronger companies can dictate their will and annihilate weaker ones or maintain their perpetual weakness and build barriers to their growth, so in the market of nations the same is present. But there's no oversight over the international market, and the superpowers have free reign in allocating FDI, determining the type of help - like monetary loans to the Third World? Pfffft... idiocy extreme. And other stuff as well.

And just like in the market, for a country to attempt to do everything by itself leads to disaster. Case in point: North Korea.

As I said, if companies go bankrupt in a market, who gives a flying fuck, but if entire economies are vaped via the exactly same mechanisms of competition, this means immense human suffering. Humans are not mobile, so the argument "you shouldn't have put your country X in a place Y" or "you shouln't have had war and disease rampant in your countries" doesn't fly.

And companies also get vaped by not participating in the market by purchasing the goods and services produced by those in other sectors, rather than attempting to inefficiently producing all products they use by themselves.

And if we understand that market forces will restrain investment to weak and unstable countries and either direct it to cheap additional labour centers or lock in the First-World centers circulation (which is pretty much how most of FDIs end)... being fully aware that unstability and unfavourable conditions cause capital flight on a grand scale and maintain _perpetual poverty_ - mind you, nothing of what I'm saying is any sort of news - why are we blind enough to allow this to continue?

We might as well ask "why are we blind enough to reject the market system - which clearly can function given appropriate conditions - instead of fostering conditions that allow it to function". That the market system can work in any set of conditions is not a position that is being held by anyone except for fringe Anarchist nuts, and they don't count for shit. When free market policies are being put forward as a solution to the third world's problems, it is NOT being meant in the sense "let's allow companies to do whatever" it is "let's create conditions on the ground that makes these countries competitive". Protectionism, by contrast, offers nothing but stasis, as it certainly won't improve conditions to the point where investment will start flowing in. Neither will it accellerate development since a crucial element - investments - are lacking.

As someone suggested, because the current incarnation of capitalism requires poverty to exist, and on a such massive scale, or at the very least allows. If it were not so, poverty would've been destroyed by the system.

Capitalism does NOT require poverty to exist, given rule of law and welfare: case in point northern Europe.

[K. A. Pital]

Cheap labour is indeed a powerful magnet for foreign investment: what is more, you need legal conditions in place to foster such investment

In a given situation with roughly equal quality of law base a country with cheaper labour wins. Period. If this country has lots of labour (and that's a high probability to be the reason why the labour is cheap), this means it can also draw more capital, quantatively.

The proper way forward for them, then, is to make their economies more competitive with regards to foreign investment - and to this end raising barriers is ass-backwards.

You ignore point-defense domestic investment. Capital drain from the Third and Second world _outmasses_ foreign investment, sometimes by an order of a magnitude. So stopping this drain in key areas, or at least hindering it, is crucial. They have to decide between having low FDI due to unfavourable conditions _and_ capital drain, or low FDI due to barriers and _less_ capital drain. That's a no-brainer.

And just like in the market, for a country to attempt to do everything by itself leads to disaster. Case in point: North Korea.

Note that I never argued that full autharkia is a viable way of managing the problems. Yes, full autharkia is unviable, especially for those countries which do not have the resources to support own growth (NK is particulary poor in that regard, and it's misplaced bets on devalued natural resources back in the 70's don't help).

And companies also get vaped by not participating in the market by purchasing the goods and services produced by those in other sectors, rather than attempting to inefficiently producing all products they use by themselves.

Indeed. But take note that key functions that control the well-being of a given company are not given out for outsourcing. This is basic security. Diversification also helps, and I didn't say you shouldn't specialize or anything, there should be a balance between diversification and specialization however, and diversification is more crucial IMHO, for both small and yet more for larger economies.

That the market system can work in any set of conditions is not a position that is being held by anyone except for fringe Anarchist nuts, and they don't count for shit.

You seem to be marginalizing the right lobby as if it doesn't hold the belief that simply forcing agressive and violent interstate and intrastate competition among open borders will sort things out - despite the fact there have been experiments of that fashion conducted all over the world, and the US conservative administration incorporated quite a lot of this fringe views into it's policy decisions. "Introduce ultracapitalism no matter what and it will sort all out" may not be your position, but it seems this position is quite influential on the political stance of the First World. Even to the extent a question must be asked, "quo prodest"? Isn't it beneficial for the First World to have sweatshops, to ruin economies and have corporations prey on cheap human material that can be made to cheap workers and specialists?

Protectionism, by contrast, offers nothing but stasis, as it certainly won't improve conditions to the point where investment will start flowing in. Neither will it accellerate development since a crucial element - investments - are lacking.

Yet again - you said that the "sort all by itself" is a fringe position, but you think that I subscribe to 19th century version of protectionism, which is bullshit. No sane person save primitivist nuts would subscribe to that. You completely ignore a point-defense model, the models I proposed earlier (straight-to-material form of investment, to avoid the stage of it being present as monetary capital). You also say that key factor is lacking - investment, but completely ignore domestic investment. Case point: Russia has been losing dozens of billions yearly since 1991 and it essentially turned it, especially in province, into a close-to-Third World shithole. The FDI didn't even match it, they were orders of magnitude less, that's one, and the FDI were not directed at the diversity of sectors of economy, rather, concentrated in crude oil export (not even oil refining!!!).

So yes, by ingnoring the fact that stopping capital flight one could have domestic investment that greatly outmasses any foreign one, you could make your position hold, but that's unreal.

What is especially relevant, 3W is unstable and rarely receives large amounts of FDI, yet more rare are FDI which are diversified and crucial to economic rise, and will remain low due to unstability. However, it's capital flight it enormous. So it has almost nothing to lose if it introduces barriers to capital flight.

The domestic capital will no longer flee from the country - it will concentrate. And as it concentrates, the country will get stronger, could invest in key industries which then could possibly compete on international markets. That's a "point-defense" model.

But seeing a country in deep crisis and saying "let's make it open up it's capital markets, it will surely receive a lot of FDI" - is bullshit. It will NOT receive FDI, but it will lose huge masses of it's own capital.

Having an inner-country market-welfare system and a smart country leadership which keeps capital outflow under tight control would help rising from the depths of shittiness. It would curb inflow, but since inflow is anyway much less relevant than the huge mass of capital flight, it could be sacrificed until later.

[Lord Zentei]

Cheap labour is indeed a powerful magnet for foreign investment: what is more, you need legal conditions in place to foster such investment

In a given situation with roughly equal quality of law base a country with cheaper labour wins. Period. If this country has lots of labour (and that's a high probability to be the reason why the labour is cheap), this means it can also draw more capital, quantatively.

Not entirely, since there are numerous other production costs beyond labour costs. Nonetheless, that does not undermine the argument that conditions of law should be improved to foster investments and that barriers to trade are not going to be conductive to this end.

The proper way forward for them, then, is to make their economies more competitive with regards to foreign investment - and to this end raising barriers is ass-backwards.

You ignore point-defense domestic investment. Capital drain from the Third and Second world _outmasses_ foreign investment, sometimes by an order of a magnitude. So stopping this drain in key areas, or at least hindering it, is crucial. They have to decide between having low FDI due to unfavourable conditions _and_ capital drain, or low FDI due to barriers and _less_ capital drain. That's a no-brainer.

And how much could this capital drain be prevented if not for shitty conditions of law? Who would invest in their own country if conditions of law are not favourable? Even with trade barriers in place to prevent capital drain does not ensure domestic investments if conditions are shitty, even if domestic investments would be sufficient for any meaningful growth - which they are not.

And companies also get vaped by not participating in the market by purchasing the goods and services produced by those in other sectors, rather than attempting to inefficiently producing all products they use by themselves.

Indeed. But take note that key functions that control the well-being of a given company are not given out for outsourcing. This is basic security. Diversification also helps, and I didn't say you shouldn't specialize or anything, there should be a balance between diversification and specialization however, and diversification is more crucial IMHO, for both small and yet more for larger economies.

The analog for countries vis-a-vis functions that are not given out for outsourcing would be the functions that ensure rule-of-law. As for diversification, I have no problems with that - indeed I maintain that some diversification is neccesary; only that the third world would NOT be better off by over-protecting their inefficient industries. It is no accident that countries in SEA did better competitively than Africa, for instance; they were not afraid of the prospect of competition. That there were great growing pains there is without doubt, but the end result is that SEA got richer while Africa is got nowhere.

That the market system can work in any set of conditions is not a position that is being held by anyone except for fringe Anarchist nuts, and they don't count for shit.

You seem to be marginalizing the right lobby as if it doesn't hold the belief that simply forcing agressive and violent interstate and intrastate competition among open borders will sort things out - despite the fact there have been experiments of that fashion conducted all over the world, and the US conservative administration incorporated quite a lot of this fringe views into it's policy decisions. "Introduce ultracapitalism no matter what and it will sort all out" may not be your position, but it seems this position is quite influential on the political stance of the First World. Even to the extent a question must be asked, "quo prodest"? Isn't it beneficial for the First World to have sweatshops, to ruin economies and have corporations prey on cheap human material that can be made to cheap workers and specialists?

Fine, I'm marginalizing the right lobby, so sue me. I was thinking of academics, not lobbyists in any case. But truly competitive conditions that promote mutual growth are viable. That certain interest groups distort "market economy allows mutual benefit under the right conditions, hence it is good" into "what is good for our corporations is good for the market, hence it is good" should not fool us into equating the former with the latter, and thus rejecting policies that might actually be beneficial in favour of isolationism.

Protectionism, by contrast, offers nothing but stasis, as it certainly won't improve conditions to the point where investment will start flowing in. Neither will it accellerate development since a crucial element - investments - are lacking.

Yet again - you said that the "sort all by itself" is a fringe position, but you think that I subscribe to 19th century version of protectionism, which is bullshit. No sane person save primitivist nuts would subscribe to that.

That, at least is good to know.

You completely ignore a point-defense model, the models I proposed earlier (straight-to-material form of investment, to avoid the stage of it being present as monetary capital). You also say that key factor is lacking - investment, but completely ignore domestic investment. Case point: Russia has been losing dozens of billions yearly since 1991 and it essentially turned it, especially in province, into a close-to-Third World shithole. The FDI didn't even match it, they were orders of magnitude less, that's one, and the FDI were not directed at the diversity of sectors of economy, rather, concentrated in crude oil export (not even oil refining!!!).

Domestic investment is insufficient to bring about a turnaround in places like subsaharan Africa - they simply don't have the capital resources to catch up in a reasonable amount of time. Point defence models, sure they might be applied with some success, but absence of monetary capital and the goods and services this can purchase is going to be a burden.

So yes, by ingnoring the fact that stopping capital flight one could have domestic investment that greatly outmasses any foreign one, you could make your position hold, but that's unreal.

What is especially relevant, 3W is unstable and rarely receives large amounts of FDI, yet more rare are FDI which are diversified and crucial to economic rise, and will remain low due to unstability. However, it's capital flight it enormous. So it has almost nothing to lose if it introduces barriers to capital flight.

The crucial point of the 3W being unstable is one of particular import; that is a more significant a factor than most others. If you would focus on the promotion of legal, social and political factors in your considerations over protectionism for domestic investments, we would have more agreement.

Also, note how the fact that Russia suffered despite having invested hugely in its own infrastructure over 70 years prior to opening up. It promoted growth, but not in sectors conductive to international competitiveness.

The domestic capital will no longer flee from the country - it will concentrate. And as it concentrates, the country will get stronger, could invest in key industries which then could possibly compete on international markets. That's a "point-defense" model.

But seeing a country in deep crisis and saying "let's make it open up it's capital markets, it will surely receive a lot of FDI" - is bullshit. It will NOT receive FDI, but it will lose huge masses of it's own capital.

Then explain the SEA scenario. Anyway, how are you going to identify "key" industries? How are they defined? Is it industries that will prosper in an international market, or in a closed one - because with barriers you will benefit the latter, not the former.

Having an inner-country market-welfare system and a smart country leadership which keeps capital outflow under tight control would help rising from the depths of shittiness. It would curb inflow, but since inflow is anyway much less relevant than the huge mass of capital flight, it could be sacrificed until later.

"Until later" is a politically dangerous formula of course, particularly when such industries that gain an advantage locally but would stand to lose with internationalization gain in lobbying clout.

[K. A. Pital]

Not entirely, since there are numerous other production costs beyond labour costs. Nonetheless, that does not undermine the argument that conditions of law should be improved to foster investments and that barriers to trade are not going to be conductive to this end.

Improving law conditions depends on destroying corruption and the superwealthy class of the 3W countries. With the gross amount of wealth of this elite stored and invested elsewhere, while their own countries lie in shambles, creates a situation of people who don't really give a shit about improving conditions, because they're pretty good as they are.

And how much could this capital drain be prevented if not for shitty conditions of law?

And how much resources and will do the Third World elites have to impose a strong rule of law, as opposed to endemic corruption which is their job, their bread, their shield and sword and essentially their god damn life?
Also, how does this impact capitalist behaviour? Why would the capitalist keep his funds in his own struggling to create a law system country, when far better opportunities exist already and are open for inflow?

It is no accident that countries in SEA did better competitively than Africa, for instance; they were not afraid of the prospect of competition. That there were great growing pains there is without doubt

You're wrong here, clearly. "Growing pains"? Which of the SEA countries had capital drain for a dozen years that would outmass foreign investment by orders of magnitude? Their cheap labour attracted investment and they became net importers of capital, not losers of capital. Moreover, see what I said above about national allegiance. This is an irrational element which helps some and ruins other. A perfect "homo economicus" capitalist should have absolutely no qualms about removing all his capitals from his country and leaving people to starve, since he doesn't hold any national allegiances and only seeks maximally profitable and efficient opportunities.

That certain interest groups distort "market economy allows mutual benefit under the right conditions, hence it is good" into "what is good for our corporations is good for the market, hence it is good" should not fool us into equating the former with the latter

Indeed. So what if we're asked to "integrate", but the integration is run by corporations and it is pretty clear that it will contribute to their interests but not ours? Shouldn't we decline, or at least try to force them to our own terms? No colonial and postcolonial superpower achieved it's greatness by simply complying to "perfect international competition", I might add. They massively invested in their own industries (and rose to power not on FDIs, either), some looted colonies, etc. etc.

Domestic investment is insufficient to bring about a turnaround in places like subsaharan Africa - they simply don't have the capital resources to catch up in a reasonable amount of time.

Neither do they receive enough FDI to "catch up". But I agree, this is a point.

[Lord Zentei]

Not entirely, since there are numerous other production costs beyond labour costs. Nonetheless, that does not undermine the argument that conditions of law should be improved to foster investments and that barriers to trade are not going to be conductive to this end.

Improving law conditions depends on destroying corruption and the superwealthy class of the 3W countries. With the gross amount of wealth of this elite stored and invested elsewhere, while their own countries lie in shambles, creates a situation of people who don't really give a shit about improving conditions, because they're pretty good as they are.

Indeed. But changing that situation is not going to be acheived through protectionism.

And how much could this capital drain be prevented if not for shitty conditions of law?

And how much resources and will do the Third World elites have to impose a strong rule of law, as opposed to endemic corruption which is their job, their bread, their shield and sword and essentially their god damn life?
Also, how does this impact capitalist behaviour? Why would the capitalist keep his funds in his own struggling to create a law system country, when far better opportunities exist already and are open for inflow?

That the 3W elites are corrupt and that this prevents growth is true regardless of whether one adopts an open model or a protected one. Clearly, this is what needs to be adressed regardless of which model is applied. However, the open model has potentially more benefits to offer, given that social and political reform takes place - reform that needs to be implemented regardless.

It is no accident that countries in SEA did better competitively than Africa, for instance; they were not afraid of the prospect of competition. That there were great growing pains there is without doubt

You're wrong here, clearly. "Growing pains"? Which of the SEA countries had capital drain for a dozen years that would outmass foreign investment by orders of magnitude? Their cheap labour attracted investment and they became net importers of capital, not losers of capital.

I was actually referring to social conditions here, not capital flight.

Moreover, see what I said above about national allegiance. This is an irrational element which helps some and ruins other. A perfect "homo economicus" capitalist should have absolutely no qualms about removing all his capitals from his country and leaving people to starve, since he doesn't hold any national allegiances and only seeks maximally profitable and efficient opportunities.

This is a fair point, unfortunately. Tighter cross-border alleigances can be acheived by diplomacy, though, such as in Europe (though undeniably, they have the advantage of a tightly intergrated history and culture).

That certain interest groups distort "market economy allows mutual benefit under the right conditions, hence it is good" into "what is good for our corporations is good for the market, hence it is good" should not fool us into equating the former with the latter

Indeed. So what if we're asked to "integrate", but the integration is run by corporations and it is pretty clear that it will contribute to their interests but not ours? Shouldn't we decline, or at least try to force them to our own terms?

Of course they should not be able to run roughshod over the countries in which they invest, and certainly terms should be mutual. One can place certain conditions on the manner of the investment to prevent abuses. Despite this, as long as production costs remain lower than in the developed world, there can be gains for both paries. Peace and stability, the lack of corruption and organized crime are also powerful incentives in return (or rather, their absence is a powerful disincentive. This may be the main problem subsaharan Africa faces).

No colonial and postcolonial superpower achieved it's greatness by simply complying to "perfect international competition", I might add. They massively invested in their own industries (and rose to power not on FDIs, either), some looted colonies, etc. etc.

A fair point, though one has to point out the failure of mercentalism that advocated wealth=material reserves model, and the success of the Netherlands who supported the trade model. That free trade can be mutually beneficial also assumes that it is indeed free, as in, not coerced upon either party.

Domestic investment is insufficient to bring about a turnaround in places like subsaharan Africa - they simply don't have the capital resources to catch up in a reasonable amount of time.

Neither do they receive enough FDI to "catch up". But I agree, this is a point.

The problem then, is to create conditions that favour a posetive FDI while minimizing barriers. I maintain - somewhat optimistically, perhaps - that it is possible to acheive a better balance since these conditions are not automatically inversely correlated. This can be seen by the differing rates at which growth has taken place in various countries, and that growth also takes place in small, open economies - it is thus possible to promote investments without risking capital flight. Doubtless political and social conditions are also required for this.

[K. A. Pital]

But changing that situation is not going to be acheived through protectionism.

As long as those that hold keys to power employ it, weaker countries have little options left. In a "perfect" world protectionism may well be not a solution, but the world isn't perfect. And even this presumed perfect world would also be one of misery for those who have higher labour and capital construction costs all else equal. In short, more energy-intensive economies will be in a load of pain even in a theoretical libertopia (in fact, they will be in death, because total rationality will demand shifting all capital to where best avoiding any suboptimal solutions). Of course, one could argue that totally free mobility of labour could make all people migrate to wherever capital is concentrating without cost, but frankly, this is bullshit. All this theory lies upon zero transaction costs as well.

That the 3W elites are corrupt and that this prevents growth is true regardless of whether one adopts an open model or a protected one. Clearly, this is what needs to be adressed regardless of which model is applied.

I agree, however, I must stress again that having the 3W elite being able to remove capitals from their country is a greatly damaging factor. Yes, they're corrupt, but would it be so easy for them to become corrupt if the safety of your capital depended on the situation in your country, not on the keys from a Swiss bank? Having the ability to shift capitals anywhere means the elite can piss on the population and invest nothing.

I was actually referring to social conditions here

One must discern true reasons behind social conditions. Capital, the means of production, it creates workplaces and thus wages, thus people prosper. Capital flight destroys workplaces, creates poverty and joblessness. If their conditions worsened, it was not due to capital flight but due to something else. That is _if_ they worsened - from what I see, they became better for the most of SEA.

Tighter cross-border alleigances can be acheived by diplomacy, though, such as in Europe (though undeniably, they have the advantage of a tightly intergrated history and culture).

But diplomacy and politics undeniably have economic base. And who will be more worthy to speak from a position of power, than the already wealthy First World? What "allegiance" can, for example, Russia, seek from those who in countless criminal acts removed it's capitals? Concentrated oil ties? Even Russia's very own government, people don't trust it a bit, because all know that the stabilization fund is being stored in foreign banks, each official has accounts in Swiss and Kayman banks, and should anything happen to Russia, they're off to Baden fucking Baden. What sort of alleigance is there to expect from capitalists? The more rational they become, the less reasons they have to help their country in distress...

Peace and stability, the lack of corruption and organized crime are also powerful incentives in return (or rather, their absence is a powerful disincentive. This may be the main problem subsaharan Africa faces).

I agree. The problem is, we're looking at a natural vicious cycle (one of the many present in capitalism) here. Open border of weak country in crisis - capitalholders remove capital - capital flight - social crisis, economic crisis - corruption - capital flight... ad infinitum. And as far as I know, vicious cycles do not get solved "by themselves", rather, they tend to be self-replicating the problems into the future. In fact, vicious cycles can only be broken by strong influences beyond the nature of the cycle itself. Am I not correct here?

The problem then, is to create conditions that favour a posetive FDI while minimizing barriers. I maintain - somewhat optimistically, perhaps - that it is possible to acheive a better balance since these conditions are not automatically inversely correlated.

Hmm... I agree that there should be balance between FDI and barriers, and I also agree that perhaps they're not automatically inversely correlated, and it's possible to both have strong foreign investment and no capital flight, but we're talking about those who're weaker than the First World, fragile, corrupt, and possibly naturally disadvantaged (extreme natural conditions of cold/heat, biological disease (subsaharan Africa, India). It's very hard for them to fare well against those which are void of those problems and additionaly have amassed a lot of capital... against the big players. That's why for a century of capitalism, the inequality between top and bottom has grown, I believe.

If you would focus on the promotion of legal, social and political factors in your considerations over protectionism for domestic investments, we would have more agreement.

Well, as you see, I'm more of a determinist type of person. Legal, social and political conditions are of course important, but saying that they can be somehow present in a weak, third-world regime, without adressing the problems of it's weak, capital-depraved economy is strange. These things are correlated. I think that vicious cycles prevent such conditions from forming, and capital flight is the most deadly vicious cycle, because it can lead to sheer disaster for _all_ institututions - state, law, market, social conditions - all can go to hell if massive capital flight is present.

Also, note how the fact that Russia suffered despite having invested hugely in its own infrastructure over 70 years prior to opening up. It promoted growth, but not in sectors conductive to international competitiveness.

Russia has also created a second-world level, and rose from the shittiness of early XX century to a well-educated secular state (or should I say bloc). This all whilst maintaining a flawed, too-radical model of socialism (centralized command economy on the inner market). The problem here is in the way Russia opened - completely disregarding it's crisis situation - and the lied of "super problem solving FDI" (which were bullshit spoon-fed lies to the population). You're looking at Russia's XX century as a monolith period of self-investment, but in fact the problem is that in the 80's, the USSR entered an inner crisis, of the command economy. Opening up in a crisis automatically means no one would invest in you, but all your capital will flee. That's obvious. Look at what happens with countries that have economic crisis, or war, other instability - capital flies. Lebanon - a ravaged shithole always begging for aid, why? Capital flight. So what was wrong, was opening up in a time of crisis (as opposed to gradually opening up to mutual cooperation in the time of upheaval).

Also, I have already stressed that many of Russia's industries which were competitive enough for it's own economy and possibly with modernization could compete on the international markets were vaped simply because of the radical lifting of capital-movement restriction. Even if those industries had a great potential they were vaped because capitalists found better ways to use their money (Grand Kayman Banks and Chelsea Football Club, for once)...

Remember also that one of the keys to success is innovations. Brain drain and capital flight destroy potential for innovation _totally and utterly_. Innovative base, strong scientific establishment - nothing like this can exist in the conditions of crisis, capital flight.

Anyway, how are you going to identify "key" industries? How are they defined? Is it industries that will prosper in an international market, or in a closed one - because with barriers you will benefit the latter, not the former.

Obviously there are matters of security (food security, national security, resource security, energy security) - all which is talked too much about now. Following this, there are innovative sectors. They are key to success. There is the discipline of innovation management, that deals with how to manage innovations, how to predict key industries in the future (patent power measuring, analogue shifts, terminology changes). Telecommunications, for example. Airspace, automotive - keys to transport industry. If you want to be a leader, you need to have good grasp on capital-intensive goods and doing so without capital is impossible, that like slamming your head against a brick wall. Consider Finland, that has institutions like Commitee for the Future, and other that develop national innovation policy, and the fact that Finland became #1 innovation economy. They bet on innovations and science, and didn't lose.

Who loses? Those who bet on resources, especially finite ones like fossil fuels. Look at Nortk Korean catastrophy, they invested massively in mining and mineral industries, little did they know that in a few years these minerals, would mean jack shit.

Only innovation and scientific leadership are keys to success. The rest is merely ways to come by, like being a huge neocolony, a "banana republic" or a sweatshop industriopolis which continously "chase" and fail because they only use second-generation tech which is dropped from the First World that is moving to 1st generation, and never innovate anything

"Until later" is a politically dangerous formula of course, particularly when such industries that gain an advantage locally but would stand to lose with internationalization gain in lobbying clout.

If you don't like "until later", I'd say it like "gradually" and "on our own terms". For example, is it not obvious that a strong, comparable to the First World banking sector of a 3W shithole will never arise under capital flight? But if there are point-defense measures that ensure massive capital concentration in huge national megabanks which can wrestle internationally, you can do it. Same with many other industries.

Again the key here is removing corruption so that true innovation occurs, and money on innovation projects is not simply being laundered. Tighter observation of key innovation institutions, science, technological centers (technoparks) helps.

[Shroom Man 777]

I say rich people should be required by law to adopt a bunch of poor poverty stricken families. Not shower them with money so they'll be lazy bums, but to provide enough as to ensure they don't freeze to death in winter or starve in the summer.

[Beowulf]

My net worth is greater than $2k. That puts me into the richest 50% of the world's population. Yeah...

[Darth Wong]

My net worth is greater than $2k. That puts me into the richest 50% of the world's population. Yeah...

Ridiculing that fact won't make it go away. Most of the world is incredibly impoverished, yet we measure ourselves only against other people in our affluent society.

For that matter, having a net worth above zero actually puts you above a lot of people in your own country.

[Rawtooth]

For that matter, having a net worth above zero actually puts you above a lot of people in your own country.

Indeed, we covered in Soc class recently a study from 2003 concerning this as well as racial inequality. It showed the net wealth of African Americans shrinking due to debt.

[Lord Zentei]

I say rich people should be required by law to adopt a bunch of poor poverty stricken families. Not shower them with money so they'll be lazy bums, but to provide enough as to ensure they don't freeze to death in winter or starve in the summer.

I do beleive that such a system already exists. It's called "welfare".

[Lord Zentei]

But changing that situation is not going to be acheived through protectionism.

As long as those that hold keys to power employ it, weaker countries have little options left. In a "perfect" world protectionism may well be not a solution, but the world isn't perfect. And even this presumed perfect world would also be one of misery for those who have higher labour and capital construction costs all else equal. In short, more energy-intensive economies will be in a load of pain even in a theoretical libertopia (in fact, they will be in death, because total rationality will demand shifting all capital to where best avoiding any suboptimal solutions). Of course, one could argue that totally free mobility of labour could make all people migrate to wherever capital is concentrating without cost, but frankly, this is bullshit. All this theory lies upon zero transaction costs as well.

The point remains: protectionism is not going to change the social and economic weakness that makes these countries uncompetitive, neither will it cause corruption to disapear. Also, the point remains that small, open economies can prosper, even in remote locations. Mobility too does not really need to be perfect, for adjustments to be possible. The problem with this is not just that mobility of labour is not perfect, though, but that the big players are actively blocking mobility of people. More on this a few points down...

That the 3W elites are corrupt and that this prevents growth is true regardless of whether one adopts an open model or a protected one. Clearly, this is what needs to be adressed regardless of which model is applied.

I agree, however, I must stress again that having the 3W elite being able to remove capitals from their country is a greatly damaging factor. Yes, they're corrupt, but would it be so easy for them to become corrupt if the safety of your capital depended on the situation in your country, not on the keys from a Swiss bank? Having the ability to shift capitals anywhere means the elite can piss on the population and invest nothing.

Staged reforms such that each stage involves incentives that migitate the risk of capital flight and enhance the likelyhood of domestic investment might be possible to acheive, and more, with disincentives for stratification of the intermediate condition being made permanent. The ultimate objective of these stages a condition where the countries in question are indeed competitive in enough areas. More on this a couple of points below...

I was actually referring to social conditions here

One must discern true reasons behind social conditions. Capital, the means of production, it creates workplaces and thus wages, thus people prosper. Capital flight destroys workplaces, creates poverty and joblessness. If their conditions worsened, it was not due to capital flight but due to something else. That is _if_ they worsened - from what I see, they became better for the most of SEA.

Naturally; the point I was going for was that the SEA acheived rapid growth, though that was bought initially at the expense of equity. That suggests that social conditions neccesary for investment being present can be more complex than merely being a function of the workplace and the wages; though I won't contest for a second that better workplace conditions are more conductive to social health overall.

Tighter cross-border alleigances can be acheived by diplomacy, though, such as in Europe (though undeniably, they have the advantage of a tightly intergrated history and culture).

But diplomacy and politics undeniably have economic base. And who will be more worthy to speak from a position of power, than the already wealthy First World? What "allegiance" can, for example, Russia, seek from those who in countless criminal acts removed it's capitals? Concentrated oil ties? Even Russia's very own government, people don't trust it a bit, because all know that the stabilization fund is being stored in foreign banks, each official has accounts in Swiss and Kayman banks, and should anything happen to Russia, they're off to Baden fucking Baden. What sort of alleigance is there to expect from capitalists? The more rational they become, the less reasons they have to help their country in distress...

I would imagine that rational investors also look at long-term stability in conditions for economic growth being present. There is also a lot of mistrust from the old republics and the eastern European countries, since the breakup occoured only a short time ago. This building of diplomacy and economic ties takes time: one could look to France and Germany, who started out with their Coal and Steel Pact which grew into the EU - initially a trade agreement in specific areas that benefited both, later accompanied with growth by stages in both the economic and diplomatic arena.

Peace and stability, the lack of corruption and organized crime are also powerful incentives in return (or rather, their absence is a powerful disincentive. This may be the main problem subsaharan Africa faces).

I agree. The problem is, we're looking at a natural vicious cycle (one of the many present in capitalism) here. Open border of weak country in crisis - capitalholders remove capital - capital flight - social crisis, economic crisis - corruption - capital flight... ad infinitum. And as far as I know, vicious cycles do not get solved "by themselves", rather, they tend to be self-replicating the problems into the future. In fact, vicious cycles can only be broken by strong influences beyond the nature of the cycle itself. Am I not correct here?

Agreed. One can point with some hope that the cycle can be reversed with proper policies, though. I doubt that anyone in their right minds seriously thinks that is going to be easy, though.

The problem then, is to create conditions that favour a posetive FDI while minimizing barriers. I maintain - somewhat optimistically, perhaps - that it is possible to acheive a better balance since these conditions are not automatically inversely correlated.

Hmm... I agree that there should be balance between FDI and barriers, and I also agree that perhaps they're not automatically inversely correlated, and it's possible to both have strong foreign investment and no capital flight, but we're talking about those who're weaker than the First World, fragile, corrupt, and possibly naturally disadvantaged (extreme natural conditions of cold/heat, biological disease (subsaharan Africa, India). It's very hard for them to fare well against those which are void of those problems and additionaly have amassed a lot of capital... against the big players. That's why for a century of capitalism, the inequality between top and bottom has grown, I believe.

This is almost certainly true to an extent - the interests of the old colonial powers being protected still even now. Nonetheless, local corruption cannot be wholly ignored, neither can the self destructive policy of overprotectionism. If the current state of affairs benefits the big players as you say, it also benefits the corrupt elite of the 3W. Again, there is the contrast of SEA, which suggests that this is not inevitable even in the face of competition from the big players.

Moreover, there is one sign of hope: the West is (slowly) beginning to see the problem via the issue of illegal immigration. Ironically, the mechanism that ought to allow for correction of the problem - movement of labour - is precisely the one that is being prevented from taking place by the local (irrational and nationalistic - sometimes racist) interests. And yet, these pressures may offer some hope for help with the problem; albeit indirectly.

If you would focus on the promotion of legal, social and political factors in your considerations over protectionism for domestic investments, we would have more agreement.

Well, as you see, I'm more of a determinist type of person. Legal, social and political conditions are of course important, but saying that they can be somehow present in a weak, third-world regime, without adressing the problems of it's weak, capital-depraved economy is strange. These things are correlated. I think that vicious cycles prevent such conditions from forming, and capital flight is the most deadly vicious cycle, because it can lead to sheer disaster for _all_ institututions - state, law, market, social conditions - all can go to hell if massive capital flight is present.

There is a cyclic effect, as you said earlier. However: I must admit that the case of the SEA has largely convinced me that legal social and political conditions neccesary for investment can, in fact, be present to some degree in such countries (though perhaps that may require comparative advantage in the "right" things). Naturally, there comes a point where economic conditions of the workers must be adressed to avoid political and social turmoil. So, its a step by step process, one step with the "right" foot, one with the "left", etc.

Also, note how the fact that Russia suffered despite having invested hugely in its own infrastructure over 70 years prior to opening up. It promoted growth, but not in sectors conductive to international competitiveness.

Russia has also created a second-world level, and rose from the shittiness of early XX century to a well-educated secular state (or should I say bloc). This all whilst maintaining a flawed, too-radical model of socialism (centralized command economy on the inner market). The problem here is in the way Russia opened - completely disregarding it's crisis situation - and the lied of "super problem solving FDI" (which were bullshit spoon-fed lies to the population). You're looking at Russia's XX century as a monolith period of self-investment, but in fact the problem is that in the 80's, the USSR entered an inner crisis, of the command economy. Opening up in a crisis automatically means no one would invest in you, but all your capital will flee. That's obvious. Look at what happens with countries that have economic crisis, or war, other instability - capital flies. Lebanon - a ravaged shithole always begging for aid, why? Capital flight. So what was wrong, was opening up in a time of crisis (as opposed to gradually opening up to mutual cooperation in the time of upheaval).

Yes indeed, I cannot find fault with this analysis.

Also, I have already stressed that many of Russia's industries which were competitive enough for it's own economy and possibly with modernization could compete on the international markets were vaped simply because of the radical lifting of capital-movement restriction. Even if those industries had a great potential they were vaped because capitalists found better ways to use their money (Grand Kayman Banks and Chelsea Football Club, for once)...

Remember also that one of the keys to success is innovations. Brain drain and capital flight destroy potential for innovation _totally and utterly_. Innovative base, strong scientific establishment - nothing like this can exist in the conditions of crisis, capital flight.

So true. And more on this: there is a reason the EU places conditions on entry into their market, and they are not only selfish. However, the ultimate objective is always openness.

Anyway, how are you going to identify "key" industries? How are they defined? Is it industries that will prosper in an international market, or in a closed one - because with barriers you will benefit the latter, not the former.

Obviously there are matters of security (food security, national security, resource security, energy security) - all which is talked too much about now. Following this, there are innovative sectors. They are key to success. There is the discipline of innovation management, that deals with how to manage innovations, how to predict key industries in the future (patent power measuring, analogue shifts, terminology changes). Telecommunications, for example. Airspace, automotive - keys to transport industry. If you want to be a leader, you need to have good grasp on capital-intensive goods and doing so without capital is impossible, that like slamming your head against a brick wall. Consider Finland, that has institutions like Commitee for the Future, and other that develop national innovation policy, and the fact that Finland became #1 innovation economy. They bet on innovations and science, and didn't lose.

Who loses? Those who bet on resources, especially finite ones like fossil fuels. Look at Nortk Korean catastrophy, they invested massively in mining and mineral industries, little did they know that in a few years these minerals, would mean jack shit.

I would consider the North Korean catastrophy also being a case of a too top heavy planning economy. combined with a state of perpetual war, as well as an incomprehensible aversion to trade.

On your other points: seeking food security may be a burden if a nation has a comparative disadvantage in food production. Comparative advantage again (even if you claim that there are constraints, few 3W countries are at capacity in their production). Other than that, agreed - and to this end internal flexibility in production and investments is essential.

Only innovation and scientific leadership are keys to success. The rest is merely ways to come by, like being a huge neocolony, a "banana republic" or a sweatshop industriopolis which continously "chase" and fail because they only use second-generation tech which is dropped from the First World that is moving to 1st generation, and never innovate anything

Even advanced societies need products that are low tech. The advenced science was built progressively, not in a revolutionary manner. Of course such a condition is essential in terms of the ultimate goal, though you need a firm economic foundation first, and the easiest way to acheive this is through industries that are less demanding in advanced skills. Longer term, I agree.

Note: this is not to disparage those industries that do require advanced skills, and one may diffrentiate between Russia that found itself struggling to keep its corps of specialists versus 3W that does not have them (perhaps a point to mention here would be the way India is producing large numbers of engineers -more than it uses- such that they find employment abroad. Even if one could technically view that as a "brain drain" it is still a net posetive situation, since they send money, thus capital, home. In any case, India's GDP is growing apace).

"Until later" is a politically dangerous formula of course, particularly when such industries that gain an advantage locally but would stand to lose with internationalization gain in lobbying clout.

If you don't like "until later", I'd say it like "gradually" and "on our own terms". For example, is it not obvious that a strong, comparable to the First World banking sector of a 3W shithole will never arise under capital flight? But if there are point-defense measures that ensure massive capital concentration in huge national megabanks which can wrestle internationally, you can do it. Same with many other industries.

Well, as long as it does not become stratified in a particular step, and anyway, such flight is not neccesarily the inevitability. For instance: the microcredit model shows some promise. Capital flight may be inevitable if one bets on projects that require large amounts of capital, as opposed to what the greater number of smaller local investors might be able to manage.

Again the key here is removing corruption so that true innovation occurs, and money on innovation projects is not simply being laundered. Tighter observation of key innovation institutions, science, technological centers (technoparks) helps.

I may object to the imortance you place on advanced science as this is rather expensive industry, and the payoff is long-term. Again, Grameen Bank's microcredit may be a better model.

[K. A. Pital]

The problem with this is not just that mobility of labour is not perfect, though, but that the big players are actively blocking mobility of people.

Of course. This is what I thought much about. If all the world was void of national borders and visa regimes by "act of God" and people were absolutely free to move around, with transportation being close to zero-cost (okay, that's idealizing it, but still) a lot of the problems posed by capital movement would become simply obsolete.

Staged reforms such that each stage involves incentives that migitate the risk of capital flight and enhance the likelyhood of domestic investment might be possible to acheive

I would say even should instead of might. Too many people today excuse the mishandling of economy, and avoid taking any responsibility for such mishandling.

I was going for was that the SEA acheived rapid growth, though that was bought initially at the expense of equity.

Equity doesn't necessarily mean better conditions for people. Yes, conditions of investment aren't as simple as a linear wage function, but labour price and costs of capital construction undeniably is one of the main factors. Another very important one is stability, but of three equally unstable nations the one with cheaper labour will win.

I would imagine that rational investors also look at long-term stability in conditions for economic growth being present.

Indeed. This is why the Third World is seriously "handicapped" in it's race against the already existing, stable and reliable places of investment.

One can point with some hope that the cycle can be reversed with proper policies, though. I doubt that anyone in their right minds seriously thinks that is going to be easy, though.

Oh, certainly not. The more harmful is the illusion that it is simple and easy as ABC.

If the current state of affairs benefits the big players as you say, it also benefits the corrupt elite of the 3W.

I agree. It is most certain that 3W corrupt elites are playing well into the hands of the bigger players by ruining their own countries yet themselves enjoying immense wealth and power.

the West is (slowly) beginning to see the problem via the issue of illegal immigration. Ironically, the mechanism that ought to allow for correction of the problem - movement of labour - is precisely the one that is being prevented from taking place by the local (irrational and nationalistic - sometimes racist) interests.

Indeed. In a true internationalist world there would be no national barriers and thus people would be a lot more free. However, with current racist attitudes that are sadly all too prevalent illegal immigration is being touted as some sort of "evil act" by "brownie people" as opposed to the natural consequences of labour moving to where capital is... Sad. Also, I can't see a solution in the near future - allowing the labour of the Third World to move in and compete for capital in the First World would lead to massive reductions in First World overconsupmtion, because 3W labour is used to consuming a lot less yet producing at the same level if only given same capital to work on.

I must admit that the case of the SEA has largely convinced me that legal social and political conditions neccesary for investment can, in fact, be present to some degree in such countries (though perhaps that may require comparative advantage in the "right" things).

SEA, yeah... one of the largest untapped labour sources. Having a huge advantage in labour which is one of the main attractors of capital was perhaps as important as having legal conditions to allow it.

I would consider the North Korean catastrophy also being a case of a too top heavy planning economy. combined with a state of perpetual war, as well as an incomprehensible aversion to trade.

Of course. NK's debacle was only made permanent because of the central planning and total inability to cope with this reality, abscence of trade and no inner markets. A total war economy for dozens of years is just mind-boggingly fucked up I must say, being one of the economically, agriculturally, industrially (also totally void of oil...) and territorially weakest states in the world and yet run one of the biggest armies in the world... that's idiotic. Kim is not concerned with anything but perpetuating his self-glorification and that of his kin.

On your other points: seeking food security may be a burden if a nation has a comparative disadvantage in food production.

Indeed. NK a prime example. However, I was thinking more about larger and more diverse-landed countries. Food security need not be 100%, obviously, but it's a very crucial matter for larger states. Food insecurity means bad things for large nations (including low-quality food imports as a method of reducing import costs).

Even advanced societies need products that are low tech. The advenced science was built progressively, not in a revolutionary manner.

Hmm... advanced science can be built even through revolutionary drive. As for low-tech, I must note that one of the keys to the success of old colonialist powers was that they shifted their low-tech production to "sweatshops" in the Third World, whilst at the same time focusing at science-advanced products in their own countries. Shifting all the "shirpotreb" (cheap mass production) produced massive additional revenues due to cheapness of lowskill labour that was working on this low-tech production, while at the same time only highly capital- and skill-intensive production remained in those states proper. Also, the success of those 3W members who "made it" included necessarily the advancement from low-tech production to high-tech, through innovation (Japan), not being a perpetual sweatshop of unskilled workers. The point is, you can't become a leader through low-tech, only through high-tech.

3W that does not have them (perhaps a point to mention here would be the way India is producing large numbers of engineers -more than it uses- such that they find employment abroad. Even if one could technically view that as a "brain drain" it is still a net posetive situation, since they send money, thus capital, home. In any case, India's GDP is growing apace

As I said earlier, if there's strong national alliegance of skilled workers and they invest all their foreign revenue back into their home economy, that's a great booster. Also, I believe, indian specialists often return home after skill practice even if their country is a pretty bad one to live it. Russia doesn't enjoy it, neither does subsaharan Africa it seems... And one needs to differentiate between qualitative and quantative growth of GDP. Quantative growth is obviously worse than qualitative.

I may object to the imortance you place on advanced science as this is rather expensive industry, and the payoff is long-term.

Looking at only short-term gains will never get people anywhere. That's actually one of the vicious cycle mechanisms that rests upon inability of people to comprehend a more or less remote future and therefore behaving like dumb fucks in the long term but "rationally" in the short term. Hyperinflation, for example.
Same with ad-science. "Oh screw it because the payoff is long term" - none of the current economic powers would ever rise to greatness with such an attitude. Leadership and innovations are bound, one cannot go without the other (unless of course we're not talking of becoming a resource supermonopoly, but again, resources are a bad bet they run out and devalue... innovations do not).

[Lord Zentei]

Hmm. We seem to be mostly in agreement at this point, so snipping...

I was going for was that the SEA acheived rapid growth, though that was bought initially at the expense of equity.

Equity doesn't necessarily mean better conditions for people.

Quite so. Neither does it neccesarily allow progress. It was this realization that benefited SEA, amongst many others.

Yes, conditions of investment aren't as simple as a linear wage function, but labour price and costs of capital construction undeniably is one of the main factors. Another very important one is stability, but of three equally unstable nations the one with cheaper labour will win.

True enough, other things being equal cheap labour is preferred by investors (or more specifically, cheap productivity, since one wants to pay for the work done, not the hours worked. Workers at $8 per hour are preferable to workers at $1 per hour, if they are more than eight times as productive).

I would consider the North Korean catastrophy also being a case of a too top heavy planning economy. combined with a state of perpetual war, as well as an incomprehensible aversion to trade.

Of course. NK's debacle was only made permanent because of the central planning and total inability to cope with this reality, abscence of trade and no inner markets. A total war economy for dozens of years is just mind-boggingly fucked up I must say, being one of the economically, agriculturally, industrially (also totally void of oil...) and territorially weakest states in the world and yet run one of the biggest armies in the world... that's idiotic. Kim is not concerned with anything but perpetuating his self-glorification and that of his kin.

And that's about the only "success" he can boast about. Seriouly fucking over one's own country and yet to be seen as a demigod is admitedly an immense "success" against the odds.

On your other points: seeking food security may be a burden if a nation has a comparative disadvantage in food production.

Indeed. NK a prime example. However, I was thinking more about larger and more diverse-landed countries. Food security need not be 100%, obviously, but it's a very crucial matter for larger states. Food insecurity means bad things for large nations (including low-quality food imports as a method of reducing import costs).

Perhaps. Unless of course, there are trustworthy alliances/trading partners. Taking the long view, I maintain that it would be more efficient to foster such deals, though.

Even advanced societies need products that are low tech. The advenced science was built progressively, not in a revolutionary manner.

Hmm... advanced science can be built even through revolutionary drive. As for low-tech, I must note that one of the keys to the success of old colonialist powers was that they shifted their low-tech production to "sweatshops" in the Third World, whilst at the same time focusing at science-advanced products in their own countries. Shifting all the "shirpotreb" (cheap mass production) produced massive additional revenues due to cheapness of lowskill labour that was working on this low-tech production, while at the same time only highly capital- and skill-intensive production remained in those states proper. Also, the success of those 3W members who "made it" included necessarily the advancement from low-tech production to high-tech, through innovation (Japan), not being a perpetual sweatshop of unskilled workers. The point is, you can't become a leader through low-tech, only through high-tech.

The catch up effect does allow for rapid development, that is true enough; and point on Japan. However, note how they started their manufacturing with mass production of cheap tech-items, innovation was centered here, less on advanced science until they had carved out a niche in the tech market. Same with Taiwan. I guess perhaps our disagreement on this point is based on definition quibbles...

3W that does not have them (perhaps a point to mention here would be the way India is producing large numbers of engineers -more than it uses- such that they find employment abroad. Even if one could technically view that as a "brain drain" it is still a net posetive situation, since they send money, thus capital, home. In any case, India's GDP is growing apace

As I said earlier, if there's strong national alliegance of skilled workers and they invest all their foreign revenue back into their home economy, that's a great booster. Also, I believe, indian specialists often return home after skill practice even if their country is a pretty bad one to live it. Russia doesn't enjoy it, neither does subsaharan Africa it seems... And one needs to differentiate between qualitative and quantative growth of GDP. Quantative growth is obviously worse than qualitative.

India does benefit from their specialists returning with added experience, that is undeniable. It might be fortuitous to analyse that phenomenon in contrast to the Russian and African situation.

I may object to the imortance you place on advanced science as this is rather expensive industry, and the payoff is long-term.

Looking at only short-term gains will never get people anywhere. That's actually one of the vicious cycle mechanisms that rests upon inability of people to comprehend a more or less remote future and therefore behaving like dumb fucks in the long term but "rationally" in the short term. Hyperinflation, for example.
Same with ad-science. "Oh screw it because the payoff is long term" - none of the current economic powers would ever rise to greatness with such an attitude. Leadership and innovations are bound, one cannot go without the other (unless of course we're not talking of becoming a resource supermonopoly, but again, resources are a bad bet they run out and devalue... innovations do not).

Oh of course one should not dismiss it! Merely that one needs to build from the ground up - you need a useful basic education for the population at large before you can hope to be competitive in the scientific arena - many third world countries lack even that. Until then, you need projects that will help in the near-term.

[K. A. Pital]

Hmm... yes, we're mostly in agreement here. Speaking of the Third World education, what if the developed countries actually gave a shit about that and introduced and funded education systems in the Third World? ... Nah. Wishful thinking.

Untill all unskilled labour is mechanized, it's beneficial to have the unskilled to be exploited.

[Illuminatus Primus]

My net worth is greater than $2k. That puts me into the richest 50% of the world's population. Yeah...

Ridiculing that fact won't make it go away. Most of the world is incredibly impoverished, yet we measure ourselves only against other people in our affluent society.

For that matter, having a net worth above zero actually puts you above a lot of people in your own country.

There's another dynamic I think bares notice: its not like there's been a static number of people in the world, but instead the poorest sections of humanity reproduce at much higher rates. Its not a simple the rich steal from the poor, but we also must deal with the added variable of increasing population by the poorest, most disadvantaged members of society. Which of course isn't helped by fucking religions who adore rapidly multiplying groups of impoverished, desperate people.

[lance]

How much does a person have to have to be in the richest 2%?

[Major Maxillary]

While This is true, what I haven't seen yet is exactly how much money is in the world, total.

Sure, while 2% own 50%, how much is 2% of the population? how much os 50% of the wealth?

All I know for sure right now is that I make enough to live comfortably, and that right now I could throw all my crap into my jeep, haul ass out into the wilderness, and live out of the side of a hill for th rest of my life if I wasn't so addicted to civilization.

[ArmorPierce]

My net worth is greater than $2k. That puts me into the richest 50% of the world's population. Yeah...

Ridiculing that fact won't make it go away. Most of the world is incredibly impoverished, yet we measure ourselves only against other people in our affluent society.

For that matter, having a net worth above zero actually puts you above a lot of people in your own country.

Not just a lot, it puts you above the majority of people possess no wealth or negative so that puts you above the majority of people in your own country.

[Ma Deuce]

How much does a person have to have to be in the richest 2%?

Well, 2% of the world's population is 130 million people, and supposedly there are just under 8 million people on the plant worth $1 million USD or more. So suffice it to say, you probably wouldn't have to be anywhere close to a millionaire to be part of that 2%. I'd imagine most people in the upper-middle class are past the "richest 2%" threshold.

[K. A. Pital]

Having a net worth of a few hundred thousand, which is a lot more common than a million, adds up to the elite.

I'd imagine most people in the upper-middle class are past the "richest 2%" threshold.

So the world's "upper-middle class" is around 130 million total? That's preposterous, or this "middle" class is not really middle at all.

Also, 8 million millionaires? That's certainly untrue. ... (looking up...) Ah, I see. Excluding a good deal of their real estate (whatver the hell "primary residence" means, sometimes it's net worth alone exceeds a million dollars).

Besides, the statistics are twice misleading, because many millionaires give out costly assets for hold to relatives to avoid taxation, and the real number of millionaires is thus a lot greater than 8 million. According to some studies, there's ~8 million estate items with NW exceeding 1 million, just in the US alone, and excluding "primary residences".

I would say that if people would not wiggle around with all the millionaire property and take into account the "hidden funds" (those given out through family ties), suddnely there would be a lot more millionaires.