Welcome to Keith's night. Don't tread on anyone in the libertarian Institute. Here is an excerpt from why it's okay to want to be rich by. Dr. Jason Brennan in a section titled against the resource Theory. The great grandma's pie thought experiment makes it seem as though the reason some countries are rich and others are poor, is that rich countries have more and better natural resources than poor countries call this the resource Theory National borders are in some sense, Marley.
A arbitrary contingent somewhat random outcomes of historical circumstance, but the resource Theory holds through good historical luck. Some countries end up with good resources and others bad. Those with good resources become rich and those with bad resources, become poor, philosophers, historians And Delay. People often just assume the resource.
Theory is true, but economists have subjected the resource Theory to rigorous empirical Whitney and the theory doesn't hold up Economist David while summarizes the vast empirical literature in his widely used textbook economic growth. The effect of natural resources on income is weak at best. Indeed. Even the capacity to discover
natural resources. Depends upon institutions countries with market-oriented institutions are far better at discovering their natural resources than countries with Nan Market institutions. As for instance, China after the 1850s was and remains poorer in per capita income and other standard measures than Singapore or Hong Kong though. The latter have almost no natural resources to speak of the USSR, remain poorer than the United States. Throughout the 20th century though.
The USSR had far better, natural resources, North Korea remain poor. While South Korea became rich though the north started with more Industrial. Passivity and better mineral resources in Adam Smith's time. The Netherlands and England were richer than France though. France had far better natural resources while the Netherlands was largely composed of land. Reclaimed from below sea level. And so on indeed, while natural resources can sometimes induce growth. They far more frequently.
Inhibit growth economists, refer to this problem as the resource curse countries with a High concentration of easily extractable natural resources frequently suffer from economic stagnation. There are competing theories of just why the resource curse exists though, to be more precise. These theories are largely compatible with each other and might be identifying joint causes one Theory, holds that countries with abundant natural.
Resources. Do not develop the cultural attributes necessary for economic success. Another theory. Is that countries which enjoy resource booms tend to just consume the sudden influx in come in. An unsustainable way. They don't develop Capital, but eat away the extra income until it's gone. Another theory. The Dutch disease Theory holds that a sudden abundance of resources leads to contractions in manufacturing.
Finally, the most popular Theory today, or the theory thought to identify the most significant cause is that when a country enjoys abundant resources, this encourages government to act in destructive ways, government officials can just extract resources for their Own selfish ends and can afford to ignore or oppress their own people fighting over control of the resources, can lead to Civil War or more simply governments, might create unsustainable welfare programs programs.
They can only afford so long as resource commodity prices, stay high C, Venezuela for a recent example, regardless, while lay people often accept the resource Theory, economists largely rejected, the evidence goes the other way in a different section of the The book Brennan summarizes. What economists? Generally think in a section titled, the institutional theory?
He says rich countries are rich because they had institutions, which encourage growth poor countries are poor because they had institutions which inhibit growth. So which institutions promote growth, economists debate, the fine details of these questions. Nevertheless, the basic consensus is that countries need a a robust protection of private property, be open and free. See the rule of law.
Enforced and D stable and inclusive governments countries such as Switzerland Canada, Denmark, Singapore or Hong Kong which adopt these institutions, nearly always become rich, the countries that lack. These institutions nearly always remain poor further as countries. Move towards these institutions. They become richer when they move away from these institutions. They become poorer. Thank you for watching Keith Knight. Don't tread on anyone links to the Silent book. Why?
It's okay to want to be rich by Jason, Brennan will be in the description below.