LET'S FIGHT BACK

LET'S FIGHT BACK
GOD BLESS AMERICA

Tuesday, September 25, 2018

Why isn’t the Whole World Economically Developed?

he AZEL

PERSPECTIVE

Commentary on Cuba's Future, U.S. Foreign Policy & Individual Freedoms - Issue 145
 

Why isn’t the Whole World Economically Developed?

Share
Tweet
Forward
Are some cultures more conducive to economic growth than others? This is the uncomfortable, and politically incorrect question raised by economist Gregory Clark in his new book “A Farewell to Alms”, subtitled “A Brief Economic History of the World.”  Why, do we have a world where some countries enjoy unprecedented wealth while others languish far behind?
When I studied international economics in the 1960s, the explanations offered for development focused on geography, climate, soil fertility, resource endowments, religion, work ethic, ignorance of economic principles, and more. Professor Clark provocatively argues that culture is the main determinant of the wealth or poverty of nations.  He asks:  Why hasn’t industrialization made the whole world richer? After all, the key technological, organizational and political innovations propelled by the Industrial Revolution are well known to all societies, and all societies can employ them. So, why isn’t the whole world economically developed?

In Dr. Clark’s thesis, one reason for this intellectual puzzle is that some societies “cannot instantly adopt the institutions and technologies of the more advanced economies, because they have not yet culturally adapted to the demands of productive capitalism.” The modern production technologies employed by the rich countries require labor forces that are disciplined and engaged, and this discipline and engagement are often lacking in the labor forces of the poorest countries.

To phrase it differently, whereas production technologies themselves can be replicated, it is not so easy to replicate the social environment that supports productive cooperation and innovation. For many poor countries their social environment constitutes a culture trap of inefficiency.  They are able to replicate production technologies, but not the social environment required to use those technologies efficiently.

Trade, commerce, and business stimulate, and are in turn stimulated by innovations. Yet, the application of innovations can be impeded by a reluctant social culture.  For example, in medieval Europe, the demands of commerce propelled the replacement of cumbersome Roman numerals with Arabic numerals. But in that same Europe, the state and religious organizations, shielded from market demands, were very slow to adopt this mathematical innovation.  Arabic numerals were widely used in business from the thirteenth century onward, but the English Treasury was still keeping its accounts in Roman numerals in the sixteen century.  The reader may be able to provide examples of small businessmen today still bookkeeping in paper ledgers.

In economic terms, poor countries are principally characterized by inefficiency in production as well as deficiency in innovation.   But the problem has not been one of access to technologies; rather, the problem has been one of using the new technologies ineffectively. It turns out, that when poor countries use the same production technology as rich countries they end up using much more labor per unit of output.  Research shows that poor countries add so much labor to the production process that they end up losing their inherent lower labor cost advantage.

However, the problem may not be all due to a lack of discipline and engagement in the labor force. The poorest countries also have the least effective management. In these societies, a sort of socially induced lethargy appears to be widespread with reference to work.  It is not clear what foments the cultural characteristics that enable economic growth.  As Dr. Clark’s points out, there is no satisfactory theory to explain the underlying causes of the differences in labor productivity among societies.

That said, the social interactions that govern the attitudes of people towards work and cooperation are magnified by the economic system in place. This is evident in productivity differences between efficient free market societies and inefficient government controlled economies, and between free thinking peoples and those where authorities seek to enforce fallacious dogmas about economic development.

Just as importantly, this cultural thesis challenges the idea that poor societies can be economically developed through outside intervention.  Thus, it is incumbent on each nation to promote, not just the application of modern technologies, but the capitalist culture of a free, accomplished, disciplined, and engaged population. Only then can we aspire to an economically developed world.

Please let us know if you Like Issue 145 - Why isn’t the Whole World Economically Developed? on Facebook this article.
We welcome your feedback.
Abrazos,
 
Lily & José
 
(click on the name to email Lily or Jose)
This article was originally published in English in the Miami Herald and in Spanish in El Nuevo Herald.
 
José Azel, Ph.D.
José Azel left Cuba in 1961 as a 13 year-old political exile in what has been dubbed Operation Pedro Pan - the largest unaccompanied child refugee movement in the history of the Western Hemisphere.

He is currently dedicated to the in-depth analyses of Cuba's economic, social and political state, with a keen interest in post-Castro-Cuba strategies. Formerly, a Senior Scholar at the Institute for Cuban and Cuban-American Studies (ICCAS) at the University of Miami, Jose Azel has published extensively on Cuba related topics.

In 2012 and 2015, Dr. Azel testified in the U.S. Congress on U.S.-Cuba Policy, and U.S. National Security.  He is a frequent speaker and commentator on these and related topics on local, national and international media.  He holds undergraduate and masters degrees in business administration and a Ph.D. in International Affairs from the University of Miami.

José along with his wife Lily are avid skiers and adventure travelers.  In recent years they have climbed Grand Teton in Wyoming, trekked Mt. Kilimanjaro in Tanzania and Machu Pichu in Peru.  They have also hiked in Tibet and in the Himalayas to Mt. Everest Base Camp.

They cycled St. James Way (
El Camino de Santiago de Compostela) and cycled alongside the Danube from Germany to Hungary. They have scuba dived in the Bay Islands off the Honduran coast.

Their adventurers are normally dedicated to raise funds for causes that are dear to them. 
Watch Joe & Lily summit Kilimanjaro.

Books by Dr. José Azel
In Reflections on FreedomJosé Azel brings together a collection of his columns published in prestigious newspapers.  Each article reveals his heartfelt and personal awareness of the importance of freedom in our lives.  They are his reflections after nearly sixty years of living and learning as a Cuban outside Cuba. In what has become his stylistic trademark, Professor Azel brilliantly introduces complex topics in brief journalistic articles.
Buy Now
En Reflexiones sobre la libertad José Azel reúne una colección de sus columnas publicadas en prestigiosos periódicos. Cada artículo revela su percepción sincera y personal de la importancia de la libertad en nuestras vidas. Son sus reflexiones después de casi sesenta años viviendo y aprendiendo como cubano fuera de Cuba.  En lo que ha resultado ser característica distintiva de sus artículos, el Profesor Azel introduce con brillantez complejos temas en  breves artículos de carácter periodístico.
Compre Aqui
Mañana in Cuba is a comprehensive analysis of contemporary Cuba with an incisive perspective of the Cuban frame of mind and its relevancy for Cuba's future.
Buy now

 
Pedazos y Vacíos is a collection of poems written in by Dr. Azel in his youth. Poems are in Spanish.
Buy now
To friend, follow or email author click on the icons below:
Copyright © 2018 Azel & Associates, All rights reserved.
If you are receiving this email it is because we met you at some point on an adventure.

Our mailing address is:
Azel & Associates
440 Sawgrass Parkway, Suite 106
Sunrise, FL 33325

No comments:

Post a Comment