“Namely, what is the origin of this vast inequality in the wealth of nations? Why some countries are rich and others are poor, and why much of the inequality that we see across nations today is originated in the past 200 years.”
Geography and luck, mostly. Read Guns, Germs and Steel. This is well-trudged material.
I just ordered Oded’s book The Journey of Humanity and plan to read it shortly. I read Guns, Germs and Steel a while back and although my recollection of the book is currently a bit hazy, I do recall thinking that although the book was filled with interesting facts, I was a bit skeptical of its thesis that geography played a predominant role in determining the wealth of nations, i.e., the North-South orientation of Africa and the Americas and the subsequent range of geographical latitudes placed those regions at a significant developmental disadvantage relative to Eurasia.
I’m sure geography has played some role in the evolution of nations, but personally I feel like Diamond underemphasizes the importance of cultural and human capital and the necessity of good institutions. China during the Mao era was wretchedly poor, but diaspora Chinese were thriving. As noted by many, during those decades Chinese people seemed to be relatively well-off everywhere except in China. I would argue that China’s rapid advances over the past four decades are the result of institutional reform, not luck or geography.
Sowell and others have written about the disproportionate success of market dominant minorities and immigrant groups who seem to be successful no matter where they migrate. Someone like Richard Bicker will no doubt attribute this to differences in group genetics, but rather than rehash the entire nature versus nurture debate I’m happy to refer to the importance of accumulated cultural and human capital. Creating wealth is hard and it seems to me a bit lacking to suggest that its creation is mostly the result of arbitrary caprice, but I could be wrong about that.
You hit on a really key issue. There should be much broader discussion about why some cultures invariably prosper, and what the common denominators are in their success.
China’s geographical connectivity, which led to political centralization, was beneficial in the Middle Ages, providing the region with an economic and technological head start. But it ended up having an adverse effect on the eve of the Industrial Revolution, when competition and cultural fluidity were instrumental in taking advantage of this new technological paradigm.
Since China has now made the transition to modern growth, given the scale of the Chinese economy, its geographical connectivity, political centralization and social cohesiveness may bring China back to the global forefront of technology and prosperity, provided that the incentives to innovate are maintained. Nevertheless, the lack of sufficient diversity in China may limit this process. In this respect, it would be prudent for China to adopt an education curriculum that would foster critical thinking and thus diversity and cross-fertilization of ideas.
Historically, when the pace of technological progress was relatively low, high geographical and political unity, as existed in China, despite its adverse effect on competition and innovation, allows centralized regimes to govern enormous empires efficiently and foster economic growth by establishing the rule of law and investing in public goods. But when technological progress accelerated, geographical fragmentation as existed in Europe, despite their adverse effect on social cohesiveness, facilitated competition and innovations and contributed to the earlier take-off of Europe.
In fact, in contrast to the Diamond hypothesis, empirical evidence shows unambiguosly that differential timing of the onset of the agriculture across the globe has NO impact on the inequality across countries.
The reason for the failure of the Diamond hypothesis: "The first regions to experience the Neolithic (Agricultural) Revolution enjoyed two major benefits – higher agricultural productivity and a technological head start – placing these first-comers at the forefront of the world’s economic development. However, by the dawn of the sixteenth century, as innovative activities shifted from the rural to the urban environment, the economic importance of the agricultural sector – farming – began its gradual decline, while the human-capital-intensive and technologically-based urban sector began to flourish. An earlier onset of the Neolithic Revolution therefore started to generate conflicting effects."
Ultimately, then, the technological head start was counterbalanced by the relative disadvantage of agricultural specialization, and thus the timing of the Neolithic Revolution had a limited impact on economic development in the modern era. [The Journey of Humanity, p211-212]
Jared Diamond is full of shit. Wealth of nations is only tangentially an accident of geography—it's a result of enhanced IQ due to evolutionary pressures on those "up against it" in inhospitable regions and time periods.
There are plenty of non-cognitive cultural and institutional factors that affect national wealth. Genetically similar groups can vary significantly in terms of economic prosperity, i.e., North Korea versus South Korea today or modern-day China versus China during the Mao era.
At best national IQ is a necessary but far from sufficient criterion for economic prosperity.
“Namely, what is the origin of this vast inequality in the wealth of nations? Why some countries are rich and others are poor, and why much of the inequality that we see across nations today is originated in the past 200 years.”
Geography and luck, mostly. Read Guns, Germs and Steel. This is well-trudged material.
Michael Mohr
‘Sincere American Writing’
https://michaelmohr.substack.com/
I just ordered Oded’s book The Journey of Humanity and plan to read it shortly. I read Guns, Germs and Steel a while back and although my recollection of the book is currently a bit hazy, I do recall thinking that although the book was filled with interesting facts, I was a bit skeptical of its thesis that geography played a predominant role in determining the wealth of nations, i.e., the North-South orientation of Africa and the Americas and the subsequent range of geographical latitudes placed those regions at a significant developmental disadvantage relative to Eurasia.
I’m sure geography has played some role in the evolution of nations, but personally I feel like Diamond underemphasizes the importance of cultural and human capital and the necessity of good institutions. China during the Mao era was wretchedly poor, but diaspora Chinese were thriving. As noted by many, during those decades Chinese people seemed to be relatively well-off everywhere except in China. I would argue that China’s rapid advances over the past four decades are the result of institutional reform, not luck or geography.
Sowell and others have written about the disproportionate success of market dominant minorities and immigrant groups who seem to be successful no matter where they migrate. Someone like Richard Bicker will no doubt attribute this to differences in group genetics, but rather than rehash the entire nature versus nurture debate I’m happy to refer to the importance of accumulated cultural and human capital. Creating wealth is hard and it seems to me a bit lacking to suggest that its creation is mostly the result of arbitrary caprice, but I could be wrong about that.
You hit on a really key issue. There should be much broader discussion about why some cultures invariably prosper, and what the common denominators are in their success.
China’s geographical connectivity, which led to political centralization, was beneficial in the Middle Ages, providing the region with an economic and technological head start. But it ended up having an adverse effect on the eve of the Industrial Revolution, when competition and cultural fluidity were instrumental in taking advantage of this new technological paradigm.
Since China has now made the transition to modern growth, given the scale of the Chinese economy, its geographical connectivity, political centralization and social cohesiveness may bring China back to the global forefront of technology and prosperity, provided that the incentives to innovate are maintained. Nevertheless, the lack of sufficient diversity in China may limit this process. In this respect, it would be prudent for China to adopt an education curriculum that would foster critical thinking and thus diversity and cross-fertilization of ideas.
Historically, when the pace of technological progress was relatively low, high geographical and political unity, as existed in China, despite its adverse effect on competition and innovation, allows centralized regimes to govern enormous empires efficiently and foster economic growth by establishing the rule of law and investing in public goods. But when technological progress accelerated, geographical fragmentation as existed in Europe, despite their adverse effect on social cohesiveness, facilitated competition and innovations and contributed to the earlier take-off of Europe.
In fact, in contrast to the Diamond hypothesis, empirical evidence shows unambiguosly that differential timing of the onset of the agriculture across the globe has NO impact on the inequality across countries.
The reason for the failure of the Diamond hypothesis: "The first regions to experience the Neolithic (Agricultural) Revolution enjoyed two major benefits – higher agricultural productivity and a technological head start – placing these first-comers at the forefront of the world’s economic development. However, by the dawn of the sixteenth century, as innovative activities shifted from the rural to the urban environment, the economic importance of the agricultural sector – farming – began its gradual decline, while the human-capital-intensive and technologically-based urban sector began to flourish. An earlier onset of the Neolithic Revolution therefore started to generate conflicting effects."
Ultimately, then, the technological head start was counterbalanced by the relative disadvantage of agricultural specialization, and thus the timing of the Neolithic Revolution had a limited impact on economic development in the modern era. [The Journey of Humanity, p211-212]
Jared Diamond is full of shit. Wealth of nations is only tangentially an accident of geography—it's a result of enhanced IQ due to evolutionary pressures on those "up against it" in inhospitable regions and time periods.
There are plenty of non-cognitive cultural and institutional factors that affect national wealth. Genetically similar groups can vary significantly in terms of economic prosperity, i.e., North Korea versus South Korea today or modern-day China versus China during the Mao era.
At best national IQ is a necessary but far from sufficient criterion for economic prosperity.