Factors in economic development of second and third world

[energiewende]

They don't always teach that during economics courses in UNIVERSITY, much less high school

A lot of time during my degree was spent on listening to various lecturers demonizing intervention and glorifying the Austrian school.

"So you see, farm subsidies distort the market and mean agricultural production becomes inefficient..."

"But what if without intervention your state's agricultural sector loses in competition to your neighbor's, and you then become dependent on his food supply? In case of war you'd starve."

"War? Why should you be concerned about war?"

That's an actual quote

Bottom line being, the quality of economics education is abysmal and hopelessly ideological in many places. The US has some excellent economics faculties, yes, but a lot of propagandistic diploma mills as well

Where did you go to university? Austrian School isn't taken seriously by almost anyone in professional economcis (excepting like 4 Austrians who managed to get permanent jobs at low ranked universities). The problem for the anti-market case is taht even left-wing New Keynesians accept almost all the arguments in favour of markets (even more than you would expect by reading their op eds as layman).

[Simon_Jester]

That really, really depends on what you mean by "arguments in favor of markets." Do you mean arguments of the form "yes, there should be a market," or do you mean "yes, there should be a market that should tick over without monitoring and supervision, because [insert handwaving about invisible hand here]?"

I accept that nuclear reactors are good things to have. I do NOT accept that they should be run without control rods, monitoring, and occasional SCRAM-shutdowns if things get out of control.

[energiewende]

It's more like the difference between preferring a passively safe nuclear reactor and preferring one that has Obama and Bush in the control room fighting over which button to press next.

But sure New Keynesians aren't US libertarians. US libertarians are a very extreme outlier. A state controlled by the most left wing mainstream economists would be to the considerably to the right of Latin America however.

[Dr. Trainwreck]

A state controlled by the most left wing mainstream economists would be to the considerably to the right of Latin America however.

That would be because America is seriously right wing no matter how you cut it, not because Latin America is full of communists.

[Simon_Jester]

It's more like the difference between preferring a passively safe nuclear reactor and preferring one that has Obama and Bush in the control room fighting over which button to press next.

Market fundamentalism is not passively safe; I don't know what is but I'm damn sure it'd have a regulatory structure.

[energiewende]

Best evidence is that market fundamentalism would be passively safe in the short-medium term (3-5 years). Third way systems we have in the West (what Latin Americans mean by market fundamentalism) may not be; some interventions cause non-correctable damage, or rather, damage only correctable by removing the intervention or intervening somewhere else. There is also some possibility that the passively safe system would nonetheless produce a sub-optimal distribution of wealth. But again this is a debate for the West. Most of the developing world can realise huge improvements in living standards just by adopting policies that are uncontroversial everywhere in the West.

[Dr. Trainwreck]

Best evidence is that market fundamentalism would be passively safe in the short-medium term (3-5 years).

A term shorter than the lifespan of a cat. Or better yet, a term between one election and the next.

Most of the developing world can realise huge improvements in living standards just by adopting policies that are uncontroversial everywhere in the West.

You mean like not being colonized, driven into wars fueled by Western money, or getting their leaders overthrown in favor of pro-west dictators? Or the freedom to adopt such policies on their own and adapt them to their culture, instead of getting them down their throat by a fleet of warships? Because yes, this whole non-interference thing has been working quite well for the developing world.

[energiewende]

Germany, Japan, Italy?

[energiewende]

addendum: apologies, I misunderstood

A term shorter than the lifespan of a cat. Or better yet, a term between one election and the next.

I meant that any imbalance would be corrected within 3-5 years with mild recession in the meantime, not that the system would be stable for 3-5 years and no longer.

[ray245]

Germany, Japan, Italy?

How much of their success can be attributed to western policies(whatever that is) alone?

[K. A. Pital]

I meant that any imbalance would be corrected within 3-5 years with mild recession in the meantime

Argentina's short-lived ultra-radical market experiment ended with a severe recession that threw their economy on the knees and caused child malnutrition across the nation, a wave of kidnappings and some territories turned into violent free-for-all zones. To an extent where Argentina was a poster boy for survivalists on "how to survive an economic apocalypse".

Surely you joke.

[Dr. Trainwreck]

Germany, Japan, Italy?

If one-liners is what we're reduced to, Africa, China, India? And can you tell me exactly what policies Germany imported from "the West"? Except for MURRICA, it doesn't get more Western than Germany and its neighbors.

[energiewende]

All those countries have been under foreign military rule in living memory, unlike China. The problem for your argument is that to defeat evil-westerners/military-occupation conspiracy theory of failure to develop I only need to cite major counter examples. A lot of countries were conquered, even mass firebombed to the point of unrecognisability, yet today are top 5 economies because they adopt the right policies. India and China meanwhile were officially socialist states for that period and failed to develop, reforming now and enjoying massive growth. Africa meanwhile still fails to develop. Or compare East and West Germany; the destruction wasn't particularly greater in one than the other but one adopted market liberalism while the other adopted Marxism-Leninism. This indicates that military actions and occupations don't matter much except in the short term and after that policies are what matter.

[Lord Revan]

hmm wouldn't Finland count as a counter example for the argument "you must adopt US style ecomy to prosper", I mean Finland in the late 1940s and 1950s as devestated by 3 fairly major wars and Finland was very much on the left side of things until about the 1980s or so and even after we're mostly centre or left by european standards (which are left of US standards already) and still one can't argue that Finland is under developted (with alot of IT developments in recent years coming from here). Oh and one more thing Finland hasn't been under military occupation since 1917 (aka for entire existance of the Republic of Finland).

[PeZook]

All those countries have been under foreign military rule in living memory, unlike China. The problem for your argument is that to defeat evil-westerners/military-occupation conspiracy theory of failure to develop I only need to cite major counter examples. A lot of countries were conquered, even mass firebombed to the point of unrecognisability, yet today are top 5 economies because they adopt the right policies. India and China meanwhile were officially socialist states for that period and failed to develop, reforming now and enjoying massive growth. Africa meanwhile still fails to develop. Or compare East and West Germany; the destruction wasn't particularly greater in one than the other but one adopted market liberalism while the other adopted Marxism-Leninism. This indicates that military actions and occupations don't matter much except in the short term and after that policies are what matter.

Yes, I'm sure the 1.5 billion dollars in direct recovery aid and low to no interest loans had NOTHING TO DO with West Germany recovering faster than East Germany. Neither did the 2.44 billion spent on reconstructing Japanese industries, or the fact that Germany was occupied for a grand total of 4 years, while Japan for 7, after which they were free to set up whatever government they wanted and went stable and undisturbed by military intervention for the next six decades - rather than being saddled with corrupt and abusive governments installed by force just because they were friendly to a particular superpower.

Italy got 1.2 billion in aid, France 2.2...see where this is going?

[energiewende]

If you think development aid makes countries grow why don't all these countries receiving up to 75% of their GDP per year in aid(!) grow faster than China? By comparison Marshal Plan aid was more like 5% of GDP - as proportion of their economy 48 countries are receiving more aid than West Germany did right now! The comparison is ridiculous anyway; this money just paid part - no where near all - of cleanup cost of military damage allies inflicted on Germany. There were no thousand-bomber raids on Delhi! Now the major country in Europe to be bombed the least, receive most Marshal aid, and grow slowest was UK.

If Japan had failed to grow after 1945, would you say it's because "independent" Japanese government that is not allowed to have a military or make alliances without US permission had chosen bad economic policies, or would you blame evil racist-imperialist MacArthur and his western military junta?

[loomer]

You do know that China's GDP is heavily fixed on a real-estate bubble, right?

[PeZook]

Split from here, hence the remark about the Pope and his Marxism.

[Dr. Trainwreck]

All those countries have been under foreign military rule in living memory, unlike China. The problem for your argument is that to defeat evil-westerners/military-occupation conspiracy theory of failure to develop I only need to cite major counter examples. A lot of countries were conquered, even mass firebombed to the point of unrecognisability, yet today are top 5 economies because they adopt the right policies. India and China meanwhile were officially socialist states for that period and failed to develop, reforming now and enjoying massive growth. Africa meanwhile still fails to develop. Or compare East and West Germany; the destruction wasn't particularly greater in one than the other but one adopted market liberalism while the other adopted Marxism-Leninism. This indicates that military actions and occupations don't matter much except in the short term and after that policies are what matter.

Oh man, where to start? Your "major" counter examples are... erm... three countries, already industrialised in one degree or another, occupied for a very short amount of time, and then left alone with their independent political process. India was never "officially socialist" and China had begun industrializing before Deng Xiaoping's reforms. African countries are also developing, their GDP increasing (it's just that the media don't trump that as often).

My point, which you say is a conspiracy theory, is this: all these countries are so varied culturally, geographically, politically and historically, that their only common attribute is that they were being bullied around by Europeans until the last few decades.

[Dr. Trainwreck]

You do know that China's GDP is heavily fixed on a real-estate bubble, right?

And I was wondering why the Western media have been so obsessed with their economic system; they are effectively reporting on their own countries.

[energiewende]

India is still officially socialist, declared so by the 42nd ammendment of its constitution:

"2. Amendment of the Preamble.- In the Preamble to the Constitution,-

(a) for the words "SOVEREIGN DEMOCRATIC REPUBLIC" the words "SOVEREIGN
SOCIALIST SECULAR DEMOCRATIC REPUBLIC" shall be substituted"

The fact is every country except perhaps Switzerland can claim some kind of Western (or, why limit to that? really just US/UK) conspiracy against them. I call it a conspiracy theory because the way it is formulated it is somehow unfalsifiable. No country exist in a bubble and the ones that are most successful and wealthy naturally are the ones that get to win their wars and impose their wills on others: so we say that countries win wars because they are successful, and are successful because they win wars! Now I am using here the scientific method: we have some hypothesis, say that one's country being bombed or occupied, or foreign government form being imposed, results in failure to develop. There are cases where "unsuccessful" "losers" who get conquered then become very wealthy, even if they're some other race than their oppressors or vast destruction, unparalleled in prior or subsequent history, in inflcited upon them. So even though it's formulated in a somewhat dishonest way, we can still say this hypothesis fails to stand. Your attempt to dismiss these examples because they are only - only - the 3rd and 5th wealthiest countries in the world, I think does not warrant rebuttal.

[K. A. Pital]

What a moron we have here. India was never practically socialist, although under Indira it was more interventionist. You just stuck to pathetic excuses "well they officially say so". Well, idiot, DPRK stands for Democratic and Republic, and the DPRK is neither.

There are cases where "unsuccessful" "losers" who get conquered then become very wealthy, even if they're some other race than their oppressors or vast destruction, unparalleled in prior or subsequent history, in inflcited upon them.

The white swan fallacy. Now go fuck your own brain until it comprehends the problem with "some swans are white = all swans are white".

Now I am using here the scientific method

You have shitted all over the scientific method with your moronic statements.

we have some hypothesis, say that one's country being bombed or occupied, or foreign government form being imposed, results in failure to develop

We do not have a hypothesis that this always, in any historical period, is causative, idiot. Imagine if two nations are industrializing. One bombs the other into stone age. Now, at some point in the future, two other industrial nations go to war and deal some damage that is afterwards restored. Obviously in the first case the damage is much greater. But you lump all those cases together to form a strawman, then knock it down.

That's what they call science?

[energiewende]

One might think parties strong enough to amend the constitution to declare the country socialist may be quite socialist and quite influential in charting policy. We are re-entering conspiracy theory territory here; there is no serious historical argument than post-independence India went down socialist route of [non-]development for many decades.

White swan "fallacy" means it's unsafe to infer from that many countries taken over by the west failed to develop that therefore all of them did. Actually white swan isn't even about causation at all, so I don't think it really applies to either argument. You don't know what you are talking about.

Japan was industrialising in 1941. Its GDP per capita was something lie 1/6 that of the United States, about the same as China today. This skewed upwards because labour-intensive farming wasn't quite worthless then as it is now. But you are back to this problem of reverse causation: the West beats up countries that were undeveloped before it arrived, and weren't developing anyway, therefore West causes failure to develop?! This definition more or less excludes any possible counter-example. The question is why some countries develop and others don't and it seems that war damage and lack of political independence are not very important in themselves. What's important is what policies are implemented afterwards and that is precisely what I am saying.

[K. A. Pital]

One might think parties strong enough to amend the constitution to declare the country socialist may be quite socialist and quite influential in charting policy. We are re-entering conspiracy theory territory here; there is no serious historical argument than post-independence India went down socialist route of [non-]development for many decades.

This is simply wrong and you are once again an idiot. Do you also think North Korean democratic forces are strong enough to declare the country Democratic with a capital D? Socialism means running a planned economy. India did not run a planned economy. Moreover, if we were to arbitrarily declare all mixed economies socialist, we would simply render the term useless. Not to mention thefact that for over a century India was operated as a colony by laissez faire extremists, the British masters. They were so fanatically dedicated to laissez faire that they allowed dozens of millions of Indians starve to death in the name of not interfering in the Indian market. In the end a whole century of misrule by these market fanatics brought India nothing but maldevelopment and complete destruction of any nascent industry building attempts, as well as an actual pauperization. At the same time, after India became independent, it stopped having deadly famines and had to only face malnourishment. Cruel as this sounds, for India that was a step forward.

On the other hand, European nations that operated pure planned economies turned out a lot richer than India and many other poor mixed economies. You have no explanation for this.

Your pathetic attempt to weasel out on the subject of war consequences is remarkably stupid and not even worth a second of my precious time, you walking education failure.

[Dr. Trainwreck]

India is still officially socialist, declared so by the 42nd ammendment of its constitution:

"2. Amendment of the Preamble.- In the Preamble to the Constitution,-

(a) for the words "SOVEREIGN DEMOCRATIC REPUBLIC" the words "SOVEREIGN
SOCIALIST SECULAR DEMOCRATIC REPUBLIC" shall be substituted"

The fact is every country except perhaps Switzerland can claim some kind of Western (or, why limit to that? really just US/UK) conspiracy against them. I call it a conspiracy theory because the way it is formulated it is somehow unfalsifiable. No country exist in a bubble and the ones that are most successful and wealthy naturally are the ones that get to win their wars and impose their wills on others: so we say that countries win wars because they are successful, and are successful because they win wars! Now I am using here the scientific method: we have some hypothesis, say that one's country being bombed or occupied, or foreign government form being imposed, results in failure to develop. There are cases where "unsuccessful" "losers" who get conquered then become very wealthy, even if they're some other race than their oppressors or vast destruction, unparalleled in prior or subsequent history, in inflcited upon them. So even though it's formulated in a somewhat dishonest way, we can still say this hypothesis fails to stand. Your attempt to dismiss these examples because they are only - only - the 3rd and 5th wealthiest countries in the world, I think does not warrant rebuttal.

The only dishonesty I see here is yours. North Korea and Turkmenistan are also democratic in name, and Turkmenistan's constitution constantly references democracy and popular will; they are hardly "free", and one is in fact a byword for totalitarianism.

Then we have the ridiculous strawman. Apparently, I was saying "the eeeeeeevil Brits shot a few people, therefore lack of development". Hey asshole, do you understand the difference between industrialised and non-industrialised countries? Do you understand the difference between brief occupation and centuries-long colonial rule? Do you understand the difference between billions of dollars in aid and famines because the colonialists across the sea couldn't bother themselves?

To give you an example: post-WWII, one of the discussed plans for Germany was to dismantle its industry and revert them in an economy reliant on agriculture and dairy products. If this actually went through, and was then backed up by force of arms for five decades, would we be correct to blame the US and Soviets for their lack of development or not?