[simianwords]

You are right but in a roundabout way. It’s true that most problems in US can be explained by this but it’s also true that the west and US particularly are successful because they can bypass the principal agent problem to an extent.

You just have to look at India or Africa a bit to understand the severity to which this problem permeates day to day in these countries.

[mellow_observer]

That's an interesting line of thought. How would you say the US/west are able to bypass this problem more effectively?

[simianwords]

No matter how poorly one thinks of westerners and their leaders, it is clear that in general they can look beyond themselves and their immediate surroundings when optimising their impact.

The same cannot be said about Indians and other poor people from poor countries. Their optimisation lies solely on themselves or immediate family. This has consequences at every level and even at the political level.

[devsda]

It is just the case that the west and its leaders have had the luxury of choice and have only seen relative poverty but not absolute poverty for various reasons.

When your are poor and basic necessities are difficult to meet, its natural to optimize for self and not care about the big picture.

[zarathustreal]

This may explain the phenomenon but it certainly doesn’t excuse it - just because something is natural doesn’t mean it’s smart or morally correct

[anal_reactor]

This is not correct. First, in crisis situations people tend to cooperate more, even though naive model predicts that people would act in self-interest. Second, there have been cases of countries that collectively decided not to be poor, and they stopped being poor once external pressure has been removed. Case in point is a huge part of Eastern Europe after the fall of communism.

[JumpCrisscross]

“America’s sophistication is reflected in the depth of its financial markets. It is unusually good at creating tradeable claims on the profits and revenues that its economy generates. In a more primitive system, these spoils would mostly accrue to the state or tycoons; in America, they back a vast range of financial assets.”

http://www.economist.com/news/finance-and-economics/21598651...