To Wim
>From Roger
WIM:
In your 29/10 13:23 -0500 posting you don't seem to get the main
point I tried to make in my 21/10 11:50 +0100 posting:
"Because of the growing division of labor, mainly intranational,
but international as well, no nation, defining
itself as a 'society', can tell less privileged 'societies': <we
are wealthy because of our 'free and competitive environment' and
you are not because you are 'centrally commanded, non fragmented,
non competitive'>. Globalization has made them both part of the
same society and the different 'environments' in different parts
of that society have come into being simultaneously and because
of mutual influence."
No wonder that you write a couple of times later in your posting
that you can't follow me any more.
ROG:
Coming into being simultaneously and exerting mutual influece doesn't
undermine analysis of which factors lead to improved wealth/social quality.
My inquiries are practical and pragmatic in that they attempt to find
workable solutions that countries can apply and errors to avoid. I am not
trying to legitimize success, I am trying to provide a bit of a roadmap.
Your mutually influencing model of countries is certainly correct, but your
dismissal of my point doesn't necessarily follow from the premise. It would
be like dismissing a study comparing/contrasting successful/unsuccessful
corporations in the same industry. They are of course mutually influential
and the development of each affects the others. But, adjusting for average
trends in the industry, THE RELATIVE PERFORMANCE AND THE ATTRIBUTES
DISTINGUISHING SUCCESS FROM FAILURE is a reasonable way to evaluate
corporations. What makes a company succeed? What should other companies
avoid?
I am really sorry Wim, but your dismissal seems unwarranted. In MOQ terms,
studying past/current static patterns of quality can lead to value. And as
is true on the evolutionary model, future dynamic breakthroughs are likely to
be found as variants around current successes.
As for my misunderstanding of your "nobles exploitation of the peasants"
story, I don't think I misunderstood you, I intended to offer another
hypothesis:
"My
thesis is that this is part of the reason that success shifted
across the English Channel. Exploitation holds cultures back.
The greater the exploitation, the less progressive the society
(to oversimplify)."
WIM:
Your "point is that the exploitation of peasants wasn't the cause
of social progress as much as it was a limiting factor." and "The
strong benefit themselves short term at the expense of the weak
and at the expense of the synergy within the society that
inevitably leads to value creation."
I don't agree. Exploitation, siphoning off part of the wealth
created by others, (both intranational and international) is in
my view essential for creation of wealth above a certain level.
ROG:
BOOM! This seems to really separate us. I believe wealth is created through
a cooperative and synergistic process. You seem to believe theft is
essential "for creation of wealth above a certain level." I find this view
both repulsive and logically unlikely (my guess is that you view it as "both
repulsive and logically LIKELY")
Now, to be fair, I do agree that exploited wealth can indeed be used
creatively. However, over the long term, exploitation and theft lead away
from cooperation and productivity and creativity. If people are freely
stealing for their wealth, eventually there will be little incentive to
create or produce anything of value -- it will just be stolen. You are
better off stealing yourself. But if everyone is a thief and nobody a
producer...there is nothing to steal.
I believe exploitation leads away from wealth creation and social quality.
WIM:
Without the concentration of wealth in the hands of Amsterdam
merchants, they could not have invested so heavily in the
development of better ships and in the dykes, polders, canals
etc. that still underpin my wealth. Without the concentration of
wealth in the hands of English manufacturers and of those English
nobles that connected their interests with those of the
manufacturers, they could not have started the Industrial
Revolution.
ROG:
Again, I agree that exploitation could lead to the concentration of wealth,
but I do not believe it is necessary for the development of necessary
infrastructure. Successful countries are not those that exploit others , but
those that invest in property rights, effective regulations, infrastructure,
work ethic, business morals, competitive business climate, effective capital
and financial markets, freedom from excessive regulation and taxation, sound
monetary policy, education, etc.
For a similar view, see
http://www.heritage.org/index/2002/#Contents
The above links you to studies correlating freedom to economic wealth. I
doubt I agree with everything this site suggests, but I do agree broadly with
the correlation between freedom and wealth.
WIM:
And ... most exploitation is fully legal: "you
basically have to offer your self to the service of others. You
have to make something or do
something that others value and will pay you for. Free enterprise
requires people voluntarily cooperating with each other in ways
that benefit both parties." as you wrote 29/9 19:00 -0400. It's
just that both parties usually don't benefit to the same extent
(because they are not equally dependent on the deal) and that
they don't pass on the benefits to their own suppliers, workers
(serfs) and customers if they have enough monopoly (or oligopoly)
power.
ROG:
I too believe I have said many times that the degree of benefit can vary
widely in a voluntary win/win relationship. But true exploitation involves a
win/lose outcome. We should probably avoid these gray ares though until we
see eye to eye on the black and white issues. Rest assured that I believe
best outcomes occur with smaller disparities in power.
WIM:
The most successful parties are usually supported by a
strong state granting monopolies and hampering competitors with
all kinds of (fully legal) devices ranging from tariffs to
piracy. (The Dutch and English heroes of the 16th and 17th
centuries were pirates hijacking Spanish ships.)
ROG:
Exactly. This is why excessive state power is so frightening. It creates
massive power imbalances that allow destructive exploitation that suppresses
social quality.
WIM:
Because of the importance of international division of labor (and
the implied international exploitation) since around 1500 for
wealth creation, countries are simply not the relevant entities
for comparing relative success and failure. The relevant entities
are world systems containing (since around 1500) several
countries as well as colonies, failed nations and other
politically or economically dependent territories. A peripheral
region can only successfully apply recipes from core states
(nowadays often given out by IMF and Worldbank) and become
semiperipheral by outcompeting other semiperipheral regions,
that become peripheral in the process. The success of 'free
enterprise global economics' (not the system of ideas, but the
practice) is not measured by the wealth of the USA or the
Netherlands, but by the wealth of almost the whole world.
ROG:
Don't be silly. You seem to be explaining away successful vs unsuccessful
cultures. There are huge and endemic discrepancies between different nations
that make a profound difference in the wealth and quality of life of that
countries inhabitants. The IMF and Worlbank are the new global teats that
foster dependency and stifle self sufficiency.
WIM:
Before we get this point (countries are not the relevant
entities) straight, I don't think discussing the other details in
your posting is very fruitful.
ROG:
They are not isolated, absolute Newtonian entities. But they are an
extremely practical way to evaluate cultures. As a comprmise, may I suggest
looking both at the freedom between countries and within countries?
Open as always,
Roger
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