Reddit mentions of Why Nations Fail: The Origins of Power, Prosperity, and Poverty

This is a pretty huge question. I believe it was Robert Lucas who said: "Once you start thinking about why some countries are rich, and others poor, it's hard to think about anything else." Or something alone those lines. I'll do my best to give a few exemplars from which you may be able to induce larger issues, but this issue is too big for a Reddit comment of any size, I think.

Before I start, when dealing with big questions of society and economics, you are naturally going to get competing theories and competing ideas about history. Howard Zinn, for example, had a very different view on why the United States has been prosperous (through vicious extermination of indigenous peoples, oppression of lower-classes and immigrants, vampire-like exploitation of natural resources, benefiting from the results of wars, etc.) than someone like Victor Davis Hanson does (commitment to republicanism, enforcement of private property rights, Protestant work-ethic/tradition, citizen-soldier ethic, etc.). The same, of course, is true of historians of Canada.

One thing we can do as historians is examine the different circumstances that countries and societies had leading up to their current state, and see where the divergences occurred.

For me, a most interesting and illustrative comparison is that between the U.S. and Argentina. Leading up to and during the 1920s and 1930s, Argentina's economy and society were, in many ways, similarly successful to that of the U.S. Even up until the 1950s, Argentina was one of the 15 richest economies in the world.

However, at some point, things changed in Argentina, and the two countries went radically different ways in terms of prosperity. This continues to this day. That's a broad issue that I don't want to gloss over, and probably suited to its own thread, but some things we can see for sure:

• Argentina's formerly stable government went down to a coup d'etat in 1930 that ousted the elected President and set the country down a path of instability in government, heavy-handed caudillismo, and increasing reduction of the middle class. The United States, although in the midst of the depression, the Dust Bowl, and other terrible events, suffered from no such coup d'etat. Although President Roosevelt attempted a variety of theretofore unheard of government expansion schemes (including his infamous "court packing scheme"), the government maintained its influence and respect, and indeed, Roosevelt was beloved for his ability to instill confidence in government and continuity thereof in the people, despite harsh times.
  
  
• Militarism and stratocracy slowly replaced Argentina's former electoral system, most famously beginning with the election of Juan Peron and his successors. The United States, though warned about its growing "military-industrial complex" by President Dwight Eisenhower, saw its republican form of government remain strong
  
  
• Argentina's government shifted from a focus on economic liberalism (what we would today call free-market capitalism) toward nationalization of industries and social-welfare programs under Peron. Peron strove for and nearly achieved so-called "full employment," but this was mostly by creating government jobs, which, along with his other programs, put a massive strain on the treasury and created a huge debt. The U.S. at this time was recovering from World War II, and going into a period, in the early 1950's, of unprecedented economic prosperity, spurred on by a commitment to free-market ideals and a staunch opposition to nationalization of business in the U.S. (and in places where the U.S. had a lot of business interests, like Cuba).
  
  
• Following Peron's exile to Spain, Argentina suffered from increasingly unstable government, a series of coups d'etat, and a huge amount of oppression of the people at the hands of the military. The U.S. maintained a largely stable government, and although civil rights unrest and the Vietnam War rocked the public consciousness, the government and its institutions maintained their basic function and character throughout this period.
  
  
• Violence between the right-wing parties and left-wing underground in Argentina continued to worsen, making it relatively difficult to start and maintain a business, or to keep the fruits of one's labors without being extorted by one side or the other. The right-wing government became increasingly isolationist and paranoid, and increasingly looked-down upon by foreign countries, making international trade relatively harder, and concentrating power and wealth in an increasingly small group of political elites. In the U.S., it remained relatively easy to start a business and trade within and outside of the country (especially with Canada) was easy, helping expand U.S. products and services into foreign markets.
  
  I won't keep going, but these are a few key examples. There are many more, and each country or area has its own. It's very difficult to compare all of Latin America with the U.S./Canada in a quick way. I might recommend a couple of books:
  
  
• The Mystery of Capital by a South American historian and economist with the unlikely name of Hernando de Soto is interesting, although by no means exhaustive.
  
  
• Why the West Has Won by Victor Davis Hanson gives Hanson's view on why Western countries have succeeded so often in warfare, and by extension, why these economic and political policies have been so instrumental in keeping the West successful.
  
  
• Why Nations Fail by Acemoglu and Robinson is an interesting, if somewhat monomaniacal, look at theories on why certain political institutions are critical to national success, and uses examples of the U.S. and Canada quite a bit.
  
  
• Finally, Modern Times by Paul Johnson, is, in my view, one of the very best histories of the twentieth century, and while not necessarily addressing your question in specific, it does tackle a lot of the historical issues that led up the current situation, and it's a great read.

I should note that the effects of automation on inequality are very concerning - even though I'm dismissive of the claims you made regarding jobs, specifically.

In making this next video, I strongly recommend incorporating the "Skills Biased Technological Change" literature. Goldin and Katz's The Race Between Education and Inequality, Autor's Skills Inequality and the 99% and Acemoglu's Technology and Inequality are good places to start.

I'd also recommend looking a bit into how inequality corrodes our political institutions. Acemoglu and Johnson's Why Nations Fail is the heavy hitter here.

>Can you offer a critique of the Scandinavian model?

Read this carefully

https://scholar.harvard.edu/files/jrobinson/files/varieties_of_capitalism_april_9_2013.pdf

Acemoglu and Robinson are some of the best in the business when it comes to this topic (authors of the widely memed Why Nations Fail)

There's a lot of good discussion in the field of international development economics about why the Marshall Plan worked and why modern aid efforts aren't as effective. From what I've been able to take away the problem is actually on the political side, not the financial side: the Middle East actually has rather underdeveloped political institutions, which tend towards kleptocracy and tyranny rather than open economies and responsive democratic structures. I recommend Acemoglu and Robinsons' Why Nations Fail on the matter.

> It is cumbersome to setup an interac or paypal when you want to help.

Those are your words. The words that I am replying to. Paypal is not irrelevant, which you very well know, because it is the competition to changetip.

> Says you.

No, says the entire field of economic history, not to mention lean startup methodology and user experience design.

Innovation (defined as the wide-scale adoption of new technologies) is not an easy or simple process. The "if you build it, they will come" mantra almost always works out poorly for the builders.

Invention is, by comparison, rather easy. Large businesses project manage invention all the time. We know about when and how well new inventions will be established if we just crank away at them.

Driving user adoption, on the other hand, is a very difficult process. You have to not just build an invention that solves problems for individuals and opens up new avenues of economic efficiency for society, but you also have to convince individuals en masse to change their behavior.

This takes marketing, politics, sales, and more. It takes understanding the human factors that go into technological adoption. At the end of the day, no technology succeeds without humans. These are creative fields which see some degree of process but which are ever-changing. Solutions have to fit the specific technology, consumer market, legal framework, etc..

A good example of innovation vs. invention is Edison vs. Tesla. We all know the popular geek narrative, that Tesla was a lone genius whose work was suppressed by the evil, profit-hungry Edison. But really, the difference was one of innovation. Both men were greatly inventive, but only one of them cared to focus on marketing, user adoption, working with governments, and building a business. It's telling that the one major "success" that Tesla did have was the one where he engaged with Edison on his own turf, taking the AC/DC battle to local governments and the courts.

But at the end of the day, Tesla the inventors legacy is a yet-to-be-built museum crowdfunded by a webcomic author, while Edison's legacy is one of the oldest, largest, and most inventive consumer companies in the US.

If you'd like to learn more, I'd highly recommend The Lever of Riches by Joel Mokyr. He uses historical examples from Europe, the Americas, and China to develop a historical narrative and theory of technological and economic progress (aka, innovation) that helps explain why certain technologies see adoption, as well as why certain societies see more technological innovation than others. And if you're interested in the latter question, Why Nations Fail by Acemoglu and Robinson is a very enjoyable read.

One was made already.

>This seems right, and also seems to track pretty well in terms of correlation

Yeah, there is actually a fantastic book about it. They address china as well, claiming that while growth is possible under bad (extractive) institutions it is short lived as it would allow the political class to be ousted by the new elite, which is why the political elite will stop it before it reaches that point, killing growth in the process. A similar thing happened in the Soviet Union.

Why Nations Fail: The Origins of Power, Prosperity, and Poverty

Interesting (although from a really neolib perspective) look at prosperity and political power and how systems evolve, that mostly avoids any sort of left viewpoint. I think that criticising and re-imagining some of their ideas with analysis from a left perspective would significantly improve the book. it's also available "online" if you don't want to shell out any money

For political science, I liked "Why Nations Fail". For political theory, the 1-2 punch of "A Theory of Justice" and "Anarchy, State, and Utopia" is obligatory. If you ever just want to cry, there's "A Problem from Hell."

The political problem I'm most interested in is how to conduct votes. www.equal.vote has some really good information about how different voting systems work and how the voting systems used in all developed democracies are not optimal. Best of luck.

Does anyone actually think Wakanda is real? I mean, no shit. It's a fake country from a superhero film. News Flash: Stark Industries and Asgard aren't real, either.

The conclusion it has to do with race is historically ignorant too. Most of Africa never took to the ideas of Western civilization, and like most places in the world that have not done so, they've suffered for it. Much of the Middle East, China, and Russia are all suffering for the same reason, and last I checked Russians were as white as anyone else.

Ideas matter. Wakanda is a fantasy because there's no reason the country would have adopted Western values, which it clearly did, simply because of a magic metal (nor does the metal explain the advanced science). Maybe those ideas were taken back from spies, I don't know.

But concluding this has something to do with the fact that the people are African is simply not backed up by evidence. The problem with Africa is that the institutions are African, and some institutions are simply better than others.

I recommend reading Why Nations Fail, as it goes into the evidence for this in significant detail.

I am really starting to think about switching to recommending this endlessly.

Acemoglu's Why Nations Fail [wiki] is a pretty good run-down of the institutional problems that hold them (and many others) back.

yea like this one

Take note that your arguments are dubious because you are applying Jared Diamond's theory of geography and natural resources in the economic development of today's nations.

Jared Diamond has been criticized by a lot of scholars and academics that his arguments are irrelevant and do really nothing to explain the economy of nations.

Daren Acemoglu and James Robinson have butchered Diamond's theories in their book Why Nations Fail? They argue that geography and natural resources have little to do with today's development and that it is more the result of political and economic institutions influencing the economy. - https://www.amazon.com/Why-Nations-Fail-Origins-Prosperity-ebook/dp/B0058Z4NR8. They even spend some time refuting Diamond's theories in a chapter in their book.

The croplands map you provided actually debunks your own theory. For example, Korea and Japan are one of the most prosperous countries yet contains very little cropland and fertile land. India, for example contains lots of fertile land but still remains a poor country mired in poverty and wealth inequality.

Why Nations Fail by Daron Acemoglu and James Robinson is seen as a sequel of sorts to Diamond's book. Why do some nations thrive while other fails? What breeds success?

The Great Divergence by Kenneth Pomeranz tries to answer the question Diamond wasn't able to fully answer in GGS: why Europe and not China?

There's a fascinating book on the subject called Why Nations Fail

if you want support for your pet theory I highly recommend this book. Daron Acemoglu is a pretty respected economist.

> Podés creer lo que quieras. Yo no dije "falso". En lo que a mi concierne, Cristina puede haber hecho exactamente todas las cosas que Nisman denunciaba y aún así no hay delito constituído. Si leyeras la denuncia, se desprende una sola conclusión posible. Queda muy claro que ni la miraste.

Pero el pacto se firmó. No es que lo pensaron nada más y no hicieron nada al respecto. Es un poco más complejo que tu ejemplo sobre matarme. Obviamente que planear algo y no actuar no es delito, si fuera por cada pensamiento oscuro yo estaría preso hace años. El tema es que acá se actuó.

Y la verdad es que no soy abogado ni se tanto de derehco, y la denuncia como decís es floja, y muchos lo dicen. pero eso no quiere decir que, como decía, no sea verosimil. Escucharlo a D'elia (un tipo que se trajo 1 millon de dolares en cash de Cuba para armar la contracumbre contra Bush en Mardel, y lo reconoció!!!) conspirando con Rabbani, me parece que es algo que al menos da para sospechar, más allá del trabajo de Nisman.

> Claro, y es totalmente imposible que alguien de una facción cualquiera opuesta al gobierno haga esto para generar exactamente esa impresión.

Sería la primera vez en la historia del mundo que se hace algo así para desestabilizae a un gobierno que se termina en seis meses y que ya está muy débil por los miles de quilombos que creó por todos lados. No es que estamos hablando de Néstor en el 2006.

> Nnnnnnnnnnnnnnnope. Lee la denuncia. No tiene nada de "Verosimil". Los hechos que Nisman dice que indicaban culpabilidad no sucedieron. Eso es la definición de inverosimilitud.

Andá más allá del documento de la denuncia, y decime si no tiene aunque sea una pizca de verosimilitud.

Además yo no estoy habalndo con el diario del día después. Si el gobierno si hizo ese pacto, incluso si no lo llevó a cabo (a pesar de haber hecho su parte y aprobarlo en el Congreso), ellos no podían saber que la denuncia era una garcha juridicamente. Por lo que tiene sentido que hayan querido prevenir que hablara o que la presentara. O por lo menos tener una excusa para salir a embarrar la cancha.

Ahora, si no hicieron el pacto no tiene sentido nada de eso, obviamente. Pero que lo hayan aprobado en el congreso me da una cierta pauta de que no era una mentira de nisman. Insisto, a pesar de lo choto que pueda ser su escrito.

> Lol yo le doy muy poco crédito, vos estás diciendo que se auto-generó una crisis política a propósito.

Es lo que viene haciendo desde hace 8 años. Te doy solo dos ejemplos.

1. La crisis del campo. Ella la podría haber desarticulado cualquier día, pero presionó, insistió, jodió, hizo marchas, provocó a los ruralistas, creó la guerra con Clarin. Por qué? Porque políticamente se benefició con eso, le permitió crear y darle forma al relato.
   
2. La crisis con los holdouts. Podría haber pagado cualquier día. La cláusula Ruffo no era tan seria. Pero incluso si te la querías tomar en serio, van 3 meses del 2015 y podía pagar el 1 de enero. Por qué no lo hizo? Porque los Buitres son el enemigo perfecto, y la crisis política alrededor de eso le reditua, porque puede culpar a los yankis - un enemigo muy querido en argentina - y crecer políticamente.
   
   Y así hay mil más.
   
   > A ver ¿Qué bibliografía me recomendás?
   
   Te recomiendo varios de mi biblioteca personal:
   
   

• El autoritarismo competitivo, de Steven Levitsky. Analiza muy bien las nuevas "democracias" autoritarias, sobre todo en las exrepúblicas soviéticas, y en algunas zonas de América Latina.
  
• Nothing to Envy: Real Lives in North Korea. Este libro es excelente. Una corresponsal yanki en Korea del Sur cuenta la historia de 6 o 7 desertores norcoreanos – muchos igual muy nostálgicos de su vida en aquel país –que cuentan el régimen desde adentro. Te pone la piel de gallina, y también te hace ver otro lado del regimen.
  
• Finding the Dragon Lady Este cuenta la historia de Madame Nhu, la primera dama de Vietnam del Sur antes de la guerra. Una hija de puta impulsiva y caprichosa que generó tantos conflictos que casi casi que aceleró la guerra. No es un libro muy profundo, pero es muy divertido y si te gustan las historias de dictadores o democracias altamente imperfectas está bueno.
  
• The Dictators Handbook Este está escrito en tono muy gracioso por dos politólogos de NYU, pero básicamente hace un trazado y exhibe elementos comunes en varias dictaduras alrededor del mundo. No es un libro académico ni mucho menos, es para leer en el baño casi, pero la verdad que está bueno y tiene su valor.
  
• Why Nations Fail Este creo que es un libro fundamental. Habla sobre el origen de las naciones, sobre la maldición de los recursos naturales, y sobre como el mismo sistema político lleva a que muchos países no se desarrollen. Es un libro super conocido, y vale la pena.
  
  Tengo algunos más, pero tengo el Kindle sin batería y no me acuerdo del nombre de todos. Pero los dictadores son uno de mis temas favoritos.
  
  No con eso quiero decir que Cristina sea Kim Jong Un, ni Madame Nhu, o Saddam Hussein. Nomás digo que toma elementos de ese tipo de regímenes y que su aplicación de algunas estrategias parece de manual. Nada más.
  
  > Es meramente estar medianamente informado. Lee la denuncia. Es descabellada, mal escrita, vergonzosa.
  
  Como dije antes, vos te remitís nomás al documento.
  
  Edit: corregí lo que dije sobre los buitres, había puesto cualquiera.

no surprises here, China is currently playing catch-up. They will stabilise at a much lower level of GDP-per-capita than the US (in the next 10-20years, with growth trend slowing throughout the period). The only way they will get close to US productivity is by radical overhaul to their political and economic system, eg mass privatisation of state industries, freely floating currency, greater transparency of governance etc. These are all reforms that would erode power from the elites that currently enjoy it, so these changes are unlikely.

http://www.amazon.com/Bird-Cage-Legal-Reform-China/dp/0804743789
http://www.amazon.com/Why-Nations-Fail-Prosperity-ebook/dp/B0058Z4NR8

hmm... this is tough are you more interested in theory or application? Political Economy can get very abstract/philosophical which I personally like but it turns some people off.


why nations fail: great overview of Institutional/development economics by two phenomenal economists, Acemoglu and Robinson.

violence and social orders Another great book, it was written as introduction to North's theories for non-economists. Very interesting work.

capital in the 21st century: I don't think this book needs an introduction. But just in case, Picketty examines the interplay between economic prosperity and income inequality. The book was written with non-economists in mind. The math will greatly help your understanding but it's not necessary to understand his general arguments

Capitalism a general introduction to socioeconomics that is concise and a variety of topics on capitalism that have puzzled (and sometimes outraged) sociologists since the 19th century.

Development as Freedom: Sen argues that open dialogue, civil freedoms and political liberties are prerequisites for sustainable development.

The Worldly Philosophers: The Lives, Times And Ideas Of The Great Economic Thinkers: A history of economic thought/theory that really elucidates the intersection of politics,economics and philosophy.

Why Nations Fail addresses your issue (i.e. North v. South American colonialism): http://www.amazon.com/Why-Nations-Fail-Prosperity-ebook/dp/B0058Z4NR8

>Yeah, no it's you who did not read the articles, and I'm beginning to wonder if you can even read at all.

If the stereotype bias theory was correct we would likely see the same effect in women as we do in minorities, and we don't as you can see here https://www.ncbi.nlm.nih.gov/pubmed/19025250

So let me get this straight: Your way to debunk stereotype threat affecting performance in tests among minorities....was to link to a meta-analysis confirming that proposition? What the hell.

>Au contraire, the test results had to be corrected for the Flynn effect, would you like to guess how large the gap was? Here's a chart http://i.imgur.com/yKhXVhu.png

You just said the Flynn Effect was debunked, but now tests have to correct for it? What the hell.

>The whole damn point is that there is no social environment you can insert blacks into in which they will begin to perform as well as whites on tests of general cognitive ability. It's just that simple.

Correct, it's a fundamentally unsolvable question. I'm glad you finally admit that.

>Wait, why does it matter if he's qualified in high-level cognition studies? He's not claiming anything new, he's making use of existing research. Just as you and I are right now. Should I just disregard everything you say?

This is the part where you go "Sheeeeiiitt"

thinking_emoji:

>Edit: also I failed to point out how you apparently didn't have time for a 16 minute video but you wanted me to watch a ~90 minute lecture

I personally haven't watched that video (I'm actually literate), I read their literature.. You like youtube videos so I linked that.

Noruega es la excepción que confirma la regla casualmente. Muchos autores lo atribuyen a que Noruega ya había desarrollado instituciones democráticas sólidas mucho antes de encontrar petróleo. Nosotros no tenemos esa solidez institucional (como bien lo demostró la última década).

Pero si mirás el resto de los países con estados que alimentan sus arcas de la extracción más que del cobro de impuestos, vas a ver que en general se trata de dictaduras, o por lo menos de autoritarismos. Ejemplo: Gran parte de los países de medio oriente, Venezuela, Rusia... Recomeindo el libro "Why Nations Fail" (que habla bastante del caso noruego - y de Argentina) y que en mi opinión presenta la teoría mejor lograda sobre la relación entre democratización y libertad, y recursos naturales.

Paging Why Nations Fail

There are many things but there is one that is most importend. It does not explain why it happend around 1990 or many other things but it is the reason behind all of it.

Innovation

The USSR had some growth in between 1930 and 1960 but after that it didn't grow any more. There is tones of economic theory to explain this, I will link some resources.

First I hope that it is clear that the USSR was a extractive regim, a lot of people worked few profited. Economic theory predicts that if you have a extractiv regim you will not grow in most cases.

The USSR did grow for a time but then growth stoped and no attemped to change that by any of the leaders changed this. The USSR had growth because of forced industrialisation, this process is however not substanable.

Substanable growth only happens threw innovation and the USSR just did not have the insentiv structure to do that.

Without growth the massiv amount of resource extraction for the few and the millitary could no longer be substaned and eventully the system collapst. The process how happend is just a symptem of the underlying problem not the cause.

It could have happend 10 years earlyer or 50 latter but without changing the social and economic structure the USSR could not be substained.


This book provides a good overview why nations fail or succed, http://www.amazon.com/Why-Nations-Fail-Prosperity-ebook/dp/B0058Z4NR8

The theory is rather 'thin' in that it does not say you need to do X or Y. It is a more general observation of how extractiv or inclusive a regim is. The support there theory with tons of historical examples, including USSR.

Edit: To be a little clearer in how USSR was extractive, the USSR worked diffrent then most people think. I think some of the essays in the book linked below would help to make the point clear. I would suggest, chapter 8 to 11 specially 8.

Calculation and Coordination (http://library.mises.org/books/Peter%20J%20Boettke/Calculation%20and%20Coordination%20Essays%20on%20Socialism%20and%20Transitional%20Political%20Economy.pdf)



Edit 2:

To go a bit into the points you mentiond.


1. Lenin in 1918 to 1921 failed too. Its not like its all stalin. Most of the growth (look at the data) was acctually in the time of stalin. It is true that implmented a bad structure but the reason he did that is to make his planes work. You can not have forced industrialization where everybody can do what he wants. The reason the USSR grew was forced industrialization and this does not work without controll. So what I conclude is that if stalin did do what he did he would never have been able to stay in power or put threw his planes.

2. All the leaders after statlin had the same problems. They all tried to do revisions because if the worked it would secure there power. If the USSR economy would have worked leaders would not have to do all these chances and could have just said that they are the reason everything worked. This infighting was harmful to the USSR and let do the collaps, but the intressting question is why this happend in the first place. Here is where rent seeking in a extractiv regim comes in. Do you guys really belive that if not for Khrushchev, the USSR would have been happly ever after?

3. This arugment fail in many ways. Many people pointed out that you can not have a plan economy (specially not the war communism time economy) and have it work in a democratic way. If you look at chapter 8 of the book above you will see that it has infact a lot in common with state capitalism or mercantilism, to make money people did not help others, they went to the state and asked for favers (rent seeking and lobbying).

Many socialist still think it is possible to have a state controlled economy with a peaceful democracy. I would argue that this is not possible, look at public choice economics or read Road to Serfdom by Hayek (specially the chapter on democracy and planning).

4. Here I would just say that a system that does only work if you allready have a well working system is avoid the problem and it is idiotic. If I have a system that brings growth I would just stay with that system. If socialism really works and is a good alternativ to capitalism I want to see a poor society to become rich with socialim.

I know what marx said but I think its idiotic. Sure if the US became socialist tomorrow you would have a relativly rich socialist society but that does not really say much about the ability of socialism to creat or substain wealth.

If you can creat weath with socialism (special central planning) has been douted in many fundamental ways and many of the crtics still wait for a solution.

5. This is vage. I would just say that if you want a world where no more scarcity exists I would agree that central planning socialism will never ever lead you there. I think you can have a society like the on in the USSR where people live under a form of socialism for hunderts of year but I think it will never become a rich society.

Well, arguing that you “should” have a moral compunction to do anything is a virtually impossible task, because morals are internal motivation. I can try to appeal to those morals through guilt (which you don’t like), though calculating marginal utility and appealing to your sense of community (the EA approach, which you don’t like), or by demonstrating that you did benefit from other people (which I will continue to try). But if you truly believe that you are entitled to everything you have and not only owe nothing to people to whom you profited from (because that’s the way the world works) and do not wish to address disparities even though the cost to you is much less than the benefit to someone else (because it’s yours and you worked for it), then you are free of moral compunction and I can’t change your mind. That’s why this is usually the provenance of religion, which promises a punishment from a higher being to encourage what many societies have defined as “the right thing to do.”

First, I would like to agree with you about capitalism as a force for good. The expansion of globalized trade and capitalist economies has made the people on this planet healthier and wealthier than at any other time in human history. Those gains have been distributed, but they have not been equally distributed, and as a result, there is massive global inequality both between and within nations. And actually, the OECD suggests economic strategies by which lessened inequality promotes more growth, growing the pie for everyone (so the pursuit of maximizing only profits at the expense of other developments is not necessarily the greatest global good).

That being said, I will address your three points.

The most important is #2. The idea of “business-friendly values” is a very popular one, but values alone cannot make an economy thrive (or a government or a society) without institutions that protect and promote those values. It is not at all clear that implementing “western values” create prosperity in any kind of automatic way, and certainly not without protective institutions. In addition, it is rare for people in positions of power to voluntarily give up that power, and so disenfranchised people tend to remain disenfranchised. I would say that in your example of immigrants that come to the “Western world” and prosper can do so not because of their values, but because of the institutions that allow that to happen. I suggest Acemoglu and Robinson's Why Nations Fail and Paul Collier's The Bottom Billion as further reading.

It’s also part of the reason that innovation tends to come from a subset of economies. Countries that innovate, have good institutions, and invest in education tend to have more innovators, find a balance between protection of profit and distribution, and make more innovators. There is also an incentive to oppress innovation on discoveries outside of the original innovation centers, which is why we have overzealous patent protection and unequal business agreements that use proprietary tech (Point #1).

Which brings me to the idea that international business can perpetuate disenfranchisement. Many companies use economic power to subvert the power of the people in order to protect their profits, whether through appropriating the use of force or through lobbying elected officials. BP lobbied the US and the UK to overthrow the democratically-elected government of Iran to prevent oil fields from being nationalized (and resource profits sent overseas) in 1953. The United Fruit Company convinced the Eisenhower administration to overthrow the government of Guatemala in 1954 to avoid agrarian reform policies. In 2007, Chiquita banana admitted to funding a terrorist organization in Colombia to protect their interests. Domino Sugar today refuses to comply with labor protections in the CAFTA agreements, using disenfranchised Haitian-Dominicans to harvest sugarcane (part 1) (part 2). Conflict minerals in the DRC and Zimbabwe are still used in a large proportion of electronics. Nestle still uses child labor to harvest cacao in the Ivory Coast.

Rich countries are not immune. Fossil fuel lobbying in the US is a real and problematic thing that is bad for the earth and bad for the green energy industry.

So though it’s true that you did not personally oppress any Tanzanians or Iranians or Koreans (or Guatemalans or Colombians or Haitian-Americans or Congolese or Zimbabweans or Cote-d’Ivorians) (Point #1), if you made money as a shareholder of those companies (or consumed their products), then you profited from the unethical behavior of those companies. As a direct result of those business decisions, people in other countries received less money and you received more. Period. I don’t think that this necessarily makes you a perpetrator, but I think that it does make you complicit.

If you consider this kind of capitalistic profiteering ethical (or “the way the world works”), I can agree that you do not have a moral compunction to support disenfranchised people and reject these company behaviors. However, if you think that any of these actions are morally wrong, then you should feel guilty from profiting off of them. (And I am speaking explicitly about investment income here).

Even if you do not profit from stocks in those companies, you may profit as a consumer – when you buy cheap gas or bananas. Taxes that the companies paid may have supported your elementary school. Benefits from medical protections may have been reinvested in new therapies that cured your grandmother’s cancer. The global economy is complex. But generally, the people who are already rich are those who reap a larger share of the benefits.

If you believe that this is morally acceptable (or “the way the world works”), then you do not have a moral compunction to donate to charity.

However, if you do have a problem with these behaviors and you feel morally uncomfortable with the results, you have two routes to address the issues, and both routes should be followed at the same time: to ameliorate the effects through global giving AND to pursue system reform to make it stop happening.

Since you seem quite interested in the topic, I will not be able to write out all the compelling arguments and data on this forum. If, however, you are still curious, the book The Industrial Revolution, 1760-1830 by T.S. Ashton outlines quite well the conditions of the Industrial Revolution.

As for the correlation between the GDP per capita and the standard of living, I do not mean this as an ad hominem attack, but if anyone truly believed that, then they are free to give away their income to pre-Industrial Revolution levels. More income means greater ability to buy better food, medicine, and education.

This statement is also curious:
> Also in the creation of industrial capitalism people had their access to land removed as exited in the medieval ages and so weren't able to produce their own food.

The medieval ages had feudalism and serfdom.

I do not understand why colonialism was brought up, as I did not bring it up and do not defend it, but in fact, abhor it; nor was it mentioned in the original post. There has been great work done by economists Acemoglu and Robinson detailing the deleterious effects of colonialism to the colonizers and the colonies and the ensuing effects it has on current institutions (see Why Nations Fail). In addition to being morally wrong, slavery did not make America rich (see Gallman and Easterlin). You brought up American cotton and textiles, which presumably alludes to the belief that cotton produced through slavery was the foundation of the American economic, especially for the South. Again, the myth of King Cotton was proven by Olmstead and Rhode.

Now, it is true that technology has good and bad aspects, my previous statements do not deny that. It is, however, difficult to deny the benefits of the modern fertilizer, the MRI machine, vaccines and antibiotics, and the artificial heart--just to name a few.

This comment becomes significant for you if you have read http://www.amazon.com/Why-Nations-Fail-Origins-Prosperity-ebook/dp/B0058Z4NR8

> "Why Nations Fail"

https://www.amazon.com/Why-Nations-Fail-Origins-Prosperity-ebook/dp/B0058Z4NR8

Would highly recommend reading Why Nations Fail for more on this. According to the economists who wrote this book, the Black Death could arguably be the single most important reason why western Europe is the birthplace of democracy.