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.