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by Nokinside 3206 days ago
Many rich economies started poor.

Systematic investment to education and infrastructure have provided the tools to become a rich economy. Becoming rich country with low level taxation is possible only for countries with lots of natural resources, like oil.

2 comments

Governments in most rich countries today are vastly larger than a century ago. American in particular was basically an extreme libertarian system until relatively recent times. These countries were already rich, or well on their way to becoming so, when their governments bloated up. Rich societies cause big governments, not the other way around.

Additionally, things like education and infrastructure are a tiny fraction of government spending (although they tend to keep growing despite not getting any better.) Almost no one disagrees that the government should fund those things. That's not where the vast majority of your high taxes are going.

Systematic investment to education provides new enrollees for MIT and Stanford and, subsequently, workforce for Apple and Google. Brain drain is a real problem for developing countries.