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Wednesday, September 26, 2012

 

Two Conditions Facilitating Prosperity


Two Conditions Facilitating Prosperity
The United States is one of the most prosperous countries in the world.  Why is it that we prosper and others don’t?  It may be the market we live in, but I don’t think so because everyone has a market.  The government (force) and their ability to use their power may be a better indicator as to why we are able to prosper and others cannot.  Government may be the ultimate dictator in our ability to prosper but “To know why some countries prosper while others fall behind, then, we need to know which industries in which countries are more productive and why.”  In the political economy we live in, it can be very misleading to only look at traded goods; we tend to see international business’s facing a bunch of competition.  “Domestic industries, by contrast, are often protected from competition.”  Remember, government is force, and they can force to protect and implement policies in order to keep us safeguarded.  “Poorer countries are hampered mostly by government policies, especially high taxes that drive businesses underground, rather than by the inherent problems of poverty, Mr. Lewis argues. If they could solve their policy problems, they would attract foreign investment. Businesses could train workers on the job, achieving competitive productivity.”  We see the opposite government effect in the United States. 
Economist look at the whole world through a paradigm of exchange, exchange is voluntary.  So to understand power and prosperity we must not only look at exchange (voluntary social interaction), but also the logic of force-used by the government.  It is human nature to truck, barter and exchange; lie, steal and go to war; nasty, brutish and short.  We cannot think of government and economics separately, and as the point of the class we see people prosper in good governments and people suffer in bad governments.  For example, in human history we see prior to 1800 people living in subsistence around three dollars a day!!  Yet in 1800 we see a huge spike in per capita income, people going from three dollars a day to 137 dollars a day and increasing from one horse to two horses to 4 horses and eventually cars.  What we are seeing is the difference between good and bad government and the switch around the 1800’s.  In the 1800’s we had the “Great Divergence/Great Fact” and it was the masses of people that were prospering.  Many people don’t prosper like us and live in poverty for two main reasons:  (1) we have protected property rights and, (2) lack of predation.  To prosper we must all touch the force and get it to back our actions in order to have a prosperous/productive economy.





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