doug: you tout the advantages of our banking/funding/competitiion system as major catalysts for the success of our system. agree, but i think the answer is more basic than that altho not necessarily simple.
frederich hayek, a nobel laureate in econ, said that what we and other successful countries had was the working of what he called "spontaneous order," which is easier to describe with an example. thus, no one knows how to make a #2 pencil, i.e., mining the graphite, harvesting and shaping lumber, making the rubber for the eraser, not to mention putting it all together. yet we have 3-cent pencils b/e thousands of people in a million acts and transactions exercising their judgment in their own areas of expertise combine to yield the correct result.
a country based on spontaneous order can only exist if the cultural underpinnings are there, principally the rule of law, which is relatively fragile. ask the downtrodden in many countries in south america, africa, and asia. clinton showed in his china speeches that he didn't understand this when he said that the strength of the u.s. was in its democratic freedom of the press, religion, assembly, petition, etc. ask yourself how far freedom of the press goes when the government won't sell you paper. or what happens to freedom of religion when the govt can say - i don't care whether the rationale is diversity, equal time or what - you must turn over/lease (for free?) your facilities to another religion. none of our freedoms we take for granted can survive the destruction of property rights, which of course can happen from oppressive taxation as well as outright confiscation.
you cite our earlier reliance on resources as an explanation for our success. true we were blessed, but many countries (u.s.s.r.) had the resources and didn't prosper while those that didn't (hong kong) did. the trick was the cultural underpinnings that many/most who are benefiting from living in the freest country in the world aren't even aware of.
consider our constitution (not the bill of rights). the word "right" appears just once. the rest is all process, e.g., must be 25 to run for congress; senate must approve treaties; congress has the power to do x, y, or z, but is not required to do anything, etc. but our founders, who counted their wealth in slaves, wheat fields, and specie, approved Article I, Seciton 8, which says (roughly) that "congress shall, for a limited period of time, protect the rights of authors and inventors to their respective writings and discoveries...."
Think about it: over 200 years ago the property of the mind was recognized as worth protecting even though, today, many asian cultures have trouble saying that ideas aren't collective property.
and since ip is really the engine that is behind the current increases in our wealth/income, i think that the disparities will grow between those countries that recognize/protect ip and those that don't.
the issues you raise, doug, are well worth discussing in detail; it's just hard to be thoughtful when you have to type. but, as one who mostly lurks, i just wanted to thank you and others on this and other threads who have contributed so many insights that i have found valuable.
good investing. best regards, peter |
