I recently read one of the most influential economists in the world,
William Easterly's book Tyranny of Experts (2014) and share some important
lessons from it. Although a lot of common sense is established on that
date, such as benevolent autocrats rarely exist and historical conditions
of importance for economic development, there is still less obvious point
to absorb and learn.
The book essentially argues that the Austrian economist Friedrich
Hayek-British classical liberalism is preferred to the Swedish economist
Gunnar Myrdal's technocratic ideas. They both shared the Nobel Prize in
economics in 1974, but the debate between them has ever taken place in
public, and perhaps if she had, some misguided remedies for poor countries
could be avoided. Easterly was definitely on Hayek s side of the
political-economic spectrum, but with a nuanced understanding of this
complex issue. Both markets and governments count.
1. The economic and individual political rights are more important than
national policies
There are not only, but also cultural and social economic benefits of
nationalism. For example, as the economist Dani Rodrik also distinguished
(which refers to Easterly in other respects) stressed, domestic markets are
for various reasons generally that the proper functioning of international
markets.
However, national policies as such have limited effect. Essentially, the
wisest thing a government can do is to provide public infrastructure and
guarantee individual economic and political rights for its citizens. From
there people, especially as the most talented and industrious, will create
spontaneous solutions to local problems (a lesson that Adam Smith has often
been misunderstood as expensive as greed Scotsman) and create wealth and
prosperity for themselves and others.
An excellent example is the people of Fujian province in eastern China,
which dominated trade and investment in East Asia and affected the
development in mainland China in 1978.
examples as ancient history, there clearly:
Spain and Portugal had access to the Atlantic trade, but they had
institutions and absolutist values. Northern Italian cities and
institutions relatively free values, but they do not have access Atlantic
or free values. The winners were the United Kingdom and the Netherlands,
who had access Atlantic and had the institutions and values relatively
free by some time in the 1600s.
2. People as poor aspire to freedom
There was a tendency among technocrats economists and development experts &
# 8221; to assert that the poorest people do not care about freedom. While
it may be true in some cases, surveys and interviews indicate that it is
really not. Easterly summarized:
The general picture is that the poor (as rich) do not like to be told to be
quiet; they like to talk to protest against the abuse of goverment of them.
It seems that the almost universal model of individual rights (within the
nation's borders) and the market economy is the most appropriate model for
the actual development.
3. Economic growth measurement errors
GDP is a rough estimate for adequate national wealth, but the extent of it
tends to be very imperfect, to say the least. For example, the World Bank
Development Indicators (WDI) tend to have very different data that the Penn
World Tables (PWT), not only on the countries of sub-Saharan Africa and #
8211; which often fail to collect and present adequate data & # 8211; but
also the best performing states such as Singapore. The differences can
sometimes be high.
The reason this is relevant beyond the precision is because it is very
misguided either celebrate or accuse a government of incompetence if the
data are not correct and unambiguous.
4. The growth over time is more important than temporary miracles
The truth is that economists can rarely predict growth. When they look at
past experiences, they can pinpoint what actually works and what does not
work, but the future is still unfolded and is unpredictable in many
important respects. constraints: Easterly
The root cause of these results is simply that the annual growth rates are
extremely volatile. The average change in GDP per capita growth rates (in
both directions) from one year to another is more than 4 percentage points,
which generally reflects the look and disapperance temporary factors such
as a boom of Contents first.
That's why we often wait and see and not be excited by the sudden growth of
miracles, which rarely last more than two years (or less). There are
exceptions, such as Hong Kong, South Korea, Singapore and Taiwan, which has
managed to have a growth that lasted for several decades, but the growth
rates have finally slowed in these countries. Easterly predicted even
regarding China.
Conclusion
Easterly's book provides relevant data and perspectives on economic
development, successes and failures due to erroneous beliefs that knowledge
and inadequate government agency cure the ills of the world.
It is interesting to read about historical examples of places as diverse
and distant & # 8211; in time and in space & # 8211; like Genoa, New York
City, Colombia, Benin, Syria, South Korea and China. It does not address
all relevant issues, such as human capital, cultural differences and the
effects of women competing with men in the labor market, but one rarely
work covers all important aspects. Many academics also tend to avoid
controversial issues, or assume that the industrious Jews, women and
Chinese should be praised in the modern West.
Some of these ideas are questioning indeed the benefits of nationalism, but
as far as I see it has never been the autocratic nationalism that male and
female treasure, but rather a more libertarian such. On the economic front,
the government should allow its people have the opportunity to thrive and
stay away as much as possible. Internationally, a delicate balance between
nationalism and internationalism restricted seems the best prescription.
More: 5 important ideas Red pilled British economist Peter Bauer
No comments:
Post a Comment