[ekianjo]

Socio-cultural values. Japan has totally different values from the US. China, same.Apparently that does not prevent them from all being prettu successful economically speaking.

Religious beliefs. Huh ? Japan, China, same as previous point. Totally different from Europe or US. But otherwise pretty successful countries. Where's the correlation between economy and religion?

Natural resources. Japan has no access to natural resources on their land. Singapore has no resources. Luxemburg has no resources. Switzerland has no resources. Holland has no resources. Funny how all those countries have rather healthy economies.

Foreign policy Agree on that one. But policies which do not support free exchange of goods tend to do rather badly. Cuba, anyone?

Domestic policy Domestic policy in China and in the US are totally different - you will find very few common points there. That does not seem to impact significantly their economic success, at least on the short term.

Monetary systems You have a point there, but since all countries have abandoned the Gold standard for long, basically we are all on fiat currency currently, no matter in which part of the world you live in. Money is now paper everywhere, it's hardly a differentiator.

Infrastructure Infrastructure usually derived from an economic system. It's when you have a growing economy and growing needs that you worry about infrastructures. Building roads and airports when people are starving is useless.

So, not many of the things you mentioned matter at all, I'm afraid. But feel free to prove me wrong.

[lukifer]

You're implying direct causal links. I'm talking about synergies, all the components I mentioned (and many others I didn't) operating together as a system.

Religion affects how people vote. Voting affects foreign policy. Foreign policy affects international trade. And on and on.

For a more concrete example: American capitalism isn't composed just of our currency and the laws on the books regarding incorporation, property, etc. It includes our belief systems about capitalism: the American Dream, Horatio Algers, Ayn Rand, "greed is good", the invisible hand, build a better mousetrap, and on and on. It includes the moral values of consumers, who might make a purchasing decision based on whether it has a green label, or says "Made in the USA". It includes the expectations of workers regarding conditions: Chinese workers put up with the conditions at FoxConn, whereas most Americans would quit or strike (for now, anyway).

> But policies which do not support free exchange of goods tend to do rather badly.

I challenge you to give me an example of a society that engages in a completely free exchange of goods. Even proto-libertarian countries like Switzerland still outlaw trade of certain things (drugs, organs, humans), levy taxes of some kind, and socialize some economic activity (health care, public safety). The only countries that do not are those without a functioning government, in which case trade cannot be free, because there is nothing stopping someone from taking what they want by force.

That said, I agree with the notion that societies do better when they allow people to become rich. But I take umbrage with the idea that our flavor of capitalism is inherently the best one, and the only other alternative is to become Cuba.

[ekianjo]

If you phrase it this way, I can agree with some of your points. I think, more than "allowing people to become rich", I would state "respect and recognition of private property" a an important philosophical factor to enable economic growth. As of today, I have yet to hear about societies where "everything belongs to everyone" ending up being economically successful. So that might be one trait leading to success or improvement.

As for the free movement of goods, I know there is no country in the world following pure free market policies. Therefore it is also unfair to judge free market based on the numerous imperfect application of its principles. Note, however, that we do have examples of societies working well without central government, such as the early days of the "Wild West" societies in the US. Those societies were basically growing at an exponential rate at the time with an ongoing flow of immigrants, while managing to self-control and police themselves. The book "The Not so Wild Wild West" explains this point very well, if you are interested to read about this.

One last thing. Obviously not every country has to follow either free market or end up like Cuba, however there is a clear trend: when a society decides to indulge in welfare and collectivism, it almost never goes back and ends up going bankrupt and ruining everyone. I do not know how familiar you are with the current situation in Europe, but over the past 30 years you could see the trend of massive public debt (fueled by government intervention in all aspects of private life) growing and growing over time. And now you get Greece, Italy, Portugal, Spain, close to bankrupcy. Hardly a coincidence.

[lukifer]

> respect and recognition of private property

At some level, private property is an invention of the State. Without that, the property belongs to whoever can defend it, and whoever has the most guns wins.

This becomes even more significant with the advent of intellectual property, also an invention of the State. There are many digital examples of "everything belongs to everyone" that are going extremely well, and luckily with zero government tyranny required. Meanwhile, the patent system is a mixed bag at best: sometimes promoting/reward innovation, sometimes inhibiting/punishing it. I don't know how this balance should be struck between sharing and ownership, but I know that the way we're handling it now is deeply sub-optimal.

The concept of ownership and the ways in which we trade are social constructs, the economic "rules of the road". They are malleable, not inherent, and we can rewrite those rules however we wish to manage externalities such as worker safety or environmental damage. Obviously, if it is done poorly (or disingenuously), the results will not go well. But we take for granted the times when it does go well.

> The book "The Not so Wild Wild West"

I'll look into this. I'm definitely a proponent of the social contract occurring at a more local level, where people are actually people instead of numbers in a database. But I'm skeptical that it is enough sustain this thing we call civilization. Just because people can be rational and altruistic does not mean they will.

> when a society decides to indulge in welfare and collectivism, it almost never goes back and ends up going bankrupt and ruining everyone

There is an element of truth to this; many European entitlements go too far and cost too much (as has often happened with American unions as well). But I don't buy that social programs are inherently inefficient; there are many things that matter which don't show up on balance sheets. Stress, health, environment, social bonds, self-determination, respect: these things all matter to a society's quality of life and its bottom line, but are very hard to measure or draw profit from.

Also, we must look at the other side of the historical coin: turn-of-the-century America, where industry held all the bargaining power, and the whole family had to work 60+ hour weeks in dangerous factories with no human rights protections. Or, workers who lived in "company towns", in a life one step away from indentured servitude. I have a hard time not seeing strong similarities between Amalgamated Warehouse Whatever and the Dickensian hellscape of a century ago (or Foxconn, for that matter).

I suppose I just don't like dogma: MARKETS GOOD, GOVERNMENT BAD. The common thread between democracy and capitalism is to lessen the corrupting influence of power by distributing it: one person = one vote, and every person wielding their own power over buying and selling. But there is no system that is immune from manipulation and corruption; the incentive to game the system and maximize one's own power to the detriment of others will never go away. If we want to prevent tyranny, we have to constantly evolve ways to distribute power again, whether it takes the form of markets, governments, communities, or new organizational patterns we haven't thought of yet.

[Intermernet]

I have a feeling that the MARKETS GOOD, GOVERNMENT BAD is along the same lines as ELEPHANTS GOOD, ICEBERGS BAD in that the two are only correlated by public opinion.

I also feel that the difference between communism and democracy is that in one I'm given a dollar, and in the other I'm given a vote. Do I use the dollar to buy the vote or vice versa?

[ekianjo]

I disagree with your point that "private property is an invention of the State". There is no need for any state to claim property on something. As you said, as long as you can defend what you have, it "belongs" to you. I'm pretty sure prehistoric men had a concept of property. Even animals have a sense of property. A dog will defend the bone it likes to chew on. A bird will fight to defend its nest. Property is rather natural.

I however agree when you say that intellectual property is an invention of the State, because that is precisely where it originates: the granting of monopoly to an individual by the hand of the King. There is no natural root in intellectual property.

> workers who lived in "company towns", in a life one step away from indentured servitude

Again, please put this rhetoric in perspective, not in the eyes of a 21st century person from a developped society, but in the eyes of a person of that time, who had the choice between staying in an enpoverished countryside, potentially victim of starvation and malnourishment, and the perspective of having a stable, paid job in a factory. People were NOT stupid. They made the choice of "more gains", not less. They ended up richer and in better position than where they started. They progressed on the social ladder. The very same story is happening with all these workers in China, queuing outside of Foxconn to get a good and sustainable job, compared to the Nothing they had in the countryside.

> The common thread between democracy and capitalism is to lessen the corrupting influence of power by distributing it: one person = one vote

Totally agree with the decentralization of power, but democracy is a poor tool to reach that goal. You elect high ranking officials who are above the laws. Who are all RICH, without exception. Who have immense powers over other individuals. And who can use violence to force their laws on you, or make you go to war and lose your life if they decide to do so. Government is, by itself, a huge body of asymmetrical power against individuals. You do not "choose" it, when you are born you are already, automatically, subject to it.

When you buy some goods, however, every dollar you spend is a vote for a product, a company. Should that company screw up, you will not buy it again. Its reputation will worsen. It will lose customers. It may go bankrupt. It is, actually, at the mercy of the decentralized power of customers who AGREE to buy it everyday or on a regular basis.

Governments (almost) never go bankrupt. Instead, they will tax you to death, they will take your property and declare it theirs (like when they forbid possession of Gold). And they will use violence to punish you and put you away in prison if you do not comply. And you will have no way out, but to leave the country (if you can).

Governments CAN be useful, but I think in most developed countries they have gone way further than what their initial role was supposed to be. That's a vast subject, anyway.

[lukifer]

> As you said, as long as you can defend what you have, it "belongs" to you.

...in which case, there is no ownership of property. Someone else can just come along and take it.

Honestly, embracing this kind of "natural law" does make sense to me, as it's least internally consistent, but I don't see it as synonymous with calling the cops because someone takes something that a legal document says is "yours".

> Government is, by itself, a huge body of asymmetrical power against individuals. You do not "choose" it, when you are born you are already, automatically, subject to it.

> When you buy some goods, however, every dollar you spend is a vote for a product, a company. Should that company screw up, you will not buy it again.

I sense some cognitive dissonance here. So when it comes to politics, people are always stupid, picking tall wealthy men with good hair and no conscience; but when it comes to spending decisions, people are always smart, based on their rational self-interest.

Now, I'll concede that capitalism has a faster, tighter feedback loop: you generally don't have to wait 2-6 years to change your mind. (Why there has been no public advocacy for rethinking the concept of only voting periodically, I have no idea.)

That aside, I see the same phenomena in both arenas of human decision-making. People are mostly smart, left to their own devices, but they are sometimes irrational with both voting decisions and purchasing decisions. Moreover, there is a strong incentive in both arenas to manipulate those decisions, and the industries we have developed around this goal have become extremely efficient: electioneers, marketers, public relations, and all other sorts of "compliance professionals".

In my mind, the question is not whether democracy is good, but whether it is possible. I have yet to conceive of a social structure in which the smart and/or rich cannot play the game at the expense of the foolish and/or poor, whether it plays out at a political rally, or a corporate boardroom.

[batista]

Again, please put this rhetoric in perspective, not in the eyes of a 21st century person from a developped society, but in the eyes of a person of that time, who had the choice between staying in an enpoverished countryside, potentially victim of starvation and malnourishment, and the perspective of having a stable, paid job in a factory.

Let's not play the "they chose it" or "at least they were fed" argument for those situations. Having to choose between starvation and working as a wage-slave in horrible conditions, as they had, is not really a choice at all.

It's just employees of the time TAKING ADVANTAGE of people that had no other option than giving in to them, and the laws et al permitting them to do so. It is only slightly better than the "choice" slaves had, i.e that of working for their masters or getting killed.

People were NOT stupid. They made the choice of "more gains", not less. They ended up richer and in better position than where they started. They progressed on the social ladder.

Yes, working to your bone and getting paid peanuts is "more gains" over dying of starvation. Nothing to write home about, though.

I wouldn't call it exactly "progressing on the social ladder" either. Those people were dirt poor, they died dirt poor, and their children were dirt poor also, usually working on the same dead end conditions. With the occasional success story.

And those people knew the were getting a raw deal. That's how the labour movement was established, that's why people fought for the 8-hour day. And those people were also many times killed, by private guards and even the national guard, ever lending a hand to the rich men of their day, when they asked for fairer treatment.

One of my most vivid memories was visiting the Ludlow site in Ludlow, Colorado, and hearing of the story of the Ludlow Massacre, one of many. Here it is:

http://en.wikipedia.org/wiki/Ludlow_Massacre

[ekianjo]

> I wouldn't call it exactly "progressing on the social ladder" either. Those people were dirt poor, they died dirt poor, and their children were dirt poor also, usually working on the same dead end conditions. With the occasional success story.

I disagree. They did not die as poor as they started off. They were able to save a little, raise children and some of them did get education. This is the result of wealth creation. Life expectancy increased. They WERE better off.

By the way, facts and studies on the subject do not corroborate your theories:

"According to estimates by economist N. F. R. Crafts, British income per person (in 1970 U.S. dollars) rose from about $400 in 1760 to $430 in 1800, to $500 in 1830, and then jumped to $800 in 1860. (For many centuries before the industrial revolution, in contrast, periods of falling income offset periods of rising income.) Crafts’s estimates indicate slow growth lasting from 1760 to 1830 followed by higher growth beginning sometime between 1830 and 1860. For this doubling of real income per person between 1760 and 1860 not to have made the lowest-income people better off, the share of income going to the lowest 65 percent of the population would have had to fall by half for them to be worse off after all that growth. It did not. In 1760, the lowest 65 percent received about 29 percent of total income in Britain; in 1860, their share was down only four percentage points to 25 percent. So the lowest 65 percent were substantially better off, with an increase in average real income of more than 70 percent."

And this one too:

"Other evidence supports the conclusion of slow improvement in living standards during the years of the industrial revolution. Crafts and C. K. Harley have emphasized the limited spread of modernization in England throughout most of the century of the industrial revolution. Feinstein estimated consumption per person for each decade between the 1760s and 1850s, and found only a small rise in consumption between 1760 and 1820 and a rapid rise after 1820. On the other hand, according to historians E. A. Wrigley and Roger S. Schofield, between 1781 and 1851, life expectancy at birth rose from thirty-five years to forty years, a 15 percent increase. Although this increase was modest compared with what was to come, it was nevertheless substantial."

http://www.econlib.org/library/Enc/IndustrialRevolutionandth...

[batista]

Obviously not every country has to follow either free market or end up like Cuba

You forget that Cuba has had to work with a heinous embargo imposed upon them for decades. And that it does much much better, society wise, than the devastation, poverty, drug cartel rule, and foreign intervention that goes on in other Latin American countries, of not "socialist" persuasion.

when a society decides to indulge in welfare and collectivism, it almost never goes back and ends up going bankrupt and ruining everyone.

I'm not sure about that "clear trend". The US has a huge national debt, people living in the streets, 30 million people eating in public kitchens or with coupons, and 2 million people in jail? I've also been to Mississippi, Alabama and South Dakota among other states. There are places that are worse than third world areas. If it wasn't for the dollar imposed as a worldwide exchange metric from better times, the ability of the state to print inflated money, and the country's diplomatic might, anyone would call the country a failure.

I do not know how familiar you are with the current situation in Europe, but over the past 30 years you could see the trend of massive public debt (fueled by government intervention in all aspects of private life) growing and growing over time. And now you get Greece, Italy, Portugal, Spain, close to bankrupcy. Hardly a coincidence.

Hardly NOT a coincidence. Countries on the top echelons of the European and world economy have had (and still have) far more extended welfare than Greece, Italy, Portugal, Spain. Think Sweden, Denmark, Holland, etc. This has nothing to do with welfare, and a lot to do with corrupted government spending (a la Latin America), bribes to give overpaid state contracts to specific companies, bureaucracy etc. Plus, Germany controlling the Euro fiscal policy in a way benefiting the top-tier economies, to the detriment of smaller countries.

In fact, if you confuse welfare state with the near bankruptcy of those countries, how is the opposite working for, say, California?

[Intermernet]

Just to throw a spanner in the works, Australia has VERY similar socio-cultural values as the USA, lots of natural resources, racist foreign policy, US based financial infrastructure (free trade, anyone) and really, we're quite different from the USA in many ways.

Not sure how this fits with the geographic based theories on climate vs. behavior.

[batista]

Socio-cultural values. Japan has totally different values from the US. China, same. Apparently that does not prevent them from all being prettu successful economically speaking. Religious beliefs. Huh ? Japan, China, same as previous point. Totally different from Europe or US. But otherwise pretty successful countries. Where's the correlation between economy and religion?

Your argumentation continues in the same vain.

But he didn't said that Socio-cultural values have to be THE SAME for economic success.

He said that socio-cultural values are a FACTOR for economic success, which is a quite different thing.

For example, regarding cultural values: Japan has different values from the US, and China too. That doesn't mean that those kinds of values (Japan/China and US values) are not ALL suited for a successful economy, and a country with a different set of values (say, Mexico) wouldn't do as well.

So, the correlation of social values to economic success (which no economist/sociologist really argues against btw), is not that only ONE kind of value system can produce economic success, it's that different value systems do either well or bad on economy.

Same for religion, etc.

Natural resources. Japan has no access to natural resources on their land. Singapore has no resources. Luxemburg has no resources. Switzerland has no resources. Holland has no resources. Funny how all those countries have rather healthy economies.

Funny, how all those countries have different KINDS of economies. Natural resources is a huge factor for China or US like economic success. Not for Singapore (= a corporate hub), not for Kayman Islands (= a tax shelter), etc. That said, Japan without easy ACCESS to natural resources, on the other hand, would have been a complete failure.