<Americans take our extraordinary standard of living for granted because it's been extraordinary for over three hundred years. What we wonder, perpetually, is why others don't catch up to us?>
CB, just as dumb ideas cause busts, dumb ideas, held for centuries, maintain busts. And just as mobs of people following dumb ideas cause busts, mobs of people following good ideas, [as they have in the USA with the ideas of freedom, free enterprise, capitalism, protection of private property and enforcement of contract, rule of law], do very well. But not everyone understands those ideas and they are commonly under pressure - see compulsory military service in defence of freedom for example. See Governor Gray doing Kremlin-style pricing of power. See taxation levels increase over the last 100 years. See 1000s of laws created to circumscribe life so that citizens are more like pet poodles than free humans.
Until reality in some way causes people to be separated from their foolish position, they can maintain that position and even think they are doing very well. India has maintained the socialist idea for decades and thought they were doing okay because they got rid of the Poms [but foolishly kept the bad Pommy ideas, such as socialism and bureaucracy, but are now ditching the good stuff, such as the lingua franca].
The American extraordinary standard of living is not really very good in absolute terms. It's only good relatively. It's not actually better in many ways, which is why, contrary to what many Americans think, it's not the greatest country on earth and everyone on earth is trying to get there. Many Americans, for example, leave to live in countries which give them a much better quality of life [which is perhaps not the same thing as a standard of living].
I don't think it's been the highest material standard of living for 300 years, though it certainly improved the lives of those who went there [which is why they went there]. Leaving nutty religious, repressive Ireland for the USA was no doubt quite an improvement [and perhaps why the idea of keeping church and state separate got a good airing in the USA]. Similarly, leaving Germany must have been a good move in the 18th and 19th centuries. England and France were top dogs then and I suppose had the standard of living to go with it.
The British still think they are top dog even though the empire ended decades ago and their position on the OECD leader board has dropped substantially.
Actually, Japan, Luxembourg and a few other places have a higher per capita income than the USA and a very nice quality of life to go with it.
<Ask Jay Chen whether people in Hong Kong are living on borrowed effort? >
Actually, you missed my point there. When the USA prints a bunch of new $$ and uses that to pay for goods and services, that is borrowed effort. The $ is accepted with the expectation that later on, it will be used to buy something. Because that $ is accepted by third parties and the US$ has been so well managed, the demand for them has increased hugely, so without inflation, more and more can be printed.
That can continue as long as the demand increases and the world increasingly uses US$ as a store of value and means of exchange. Since there is vast economic underdevelopment, it might be that the process has just begun. But I think a competing production-based currency will win because the US$ has inherent defects [the dilution for a start].
Thanks to having established such a powerful currency, Americans are living very well on borrowed effort. They print $$ and don't have to work to receive goods and services. But that effort is borrowed and one day, repayment will be expected [the rest of humanity don't think they owe the USA a living in exchange for $$]. Yes, yes, I know the USA also produces a huge amount of other stuff; I just mean living on borrowed effort in the case of the dollar printing.
Hong Kong doesn't export dollars. So we can't say they are living on borrowed effort. But they might be living on borrowed time [Shanghai and other cities in China will ogle the wealth and seek to compete for that income - if they create the property rights etc which enable that wealth, then they'll certainly compete, and win on price].
Mqurice |
