The Wealth of the Nations

The Wealth of the Nations
Why nations are rich and other poor?

Alfredo Ascanio (askain)

This subject was analyzed for the first time in the classic book of the economist Scotsman Adam Smith (1723-1790), The Wealth of the Nations. The questions of that book still must be analyzed. It is a complex question because its answer is
interdisciplinary.

There are many theories to explain why exist some prosperous nations and others poor.Nations is a complex system and then are many points of view for the analysis. The factors that was discussed in the interdisciplinary doctorate, with the professor Klaus Jaffe, are the following ones and what follows is only a summary of which it will be a book of almost 200 pages.

History

The Hellenic historian Herodotus de Halicarnaso (485-452 aC) said that the nations are poor or rich by the action’s individual but in relation to the context. History and geography mold the nations. For many authors from Epicurus to the English historian Michael Cook (A Brief History of the Human Race. 2003).

J. Branford DeLonge (2002) said that exists a high correlation between growth of the population and the growth of the real gross national product (G.N.P) to prices of the dollar of 1990. The accumulation of the human wealth for million years as far as today has been growing when growing the world population. But this relation does not inform on the wealth’s distribution and the well being into the humanity.

The value of the production per capita for a million years as far as today was not important with the grew of the agriculture and the hunting and the fishing, but with the industrial revolution it begins a major distribution of the wealth and to today with the new economy of the information and the technology is increased still more.

For example, countries that went those that gave origin to the agricultural revolution like Egypt, Iraq, Iran and Syria have still not managed to consolidate the industrial revolution since have made it England, Germany and France.

The advances of the civilization occur, according to the point of view of the historian Arnold Toynbee (To Study of History-1934-1961) in the geographic peripheries whenever it exists a good climate context and a great biodiversity assured the biologist Jared Diamond in its book: Guns Germs & Steel-1999.

A modern State cannot be improvised because they are required of many years to be developed.

The Institutions

In the primitive government the main and the only institution was the solidarity of the clan. Soon it arose the communal house and the small cities and centralized governments with social norms. It appears the division of the work and the specializations. Hibbs y Olsson (2004). They compare the wealth of 112 nations with his industrial development and the relation is amazing. The institutional organization affects the future.

Geography

The climate and geography have impact in people and her culture. The vision of the satellites of the Earth indicates that the areas near Ecuador with high density of population they have less intensity of electrical light that in the subtropical or tempered zones with greater industrial development.

Countries located to a greater distance of Ecuador are more prosperous and rich. Exists correlation between the climate, the latitude and the wealth of the nations. The countries with different annual climates motivate the saving and him better planning for the use of the resources. The entropy is smaller in these geographic spaces and the capitals last more because they require less maintenance. In the geographic spaces with a better climate animals and plants are better domesticated and the endemic diseases are smaller. Tropical countries like Brazil, Hong Kong, Malaysia, Singapore, Taiwan knowing their climatic limitations have invested capital in health programs, familiar planning and industrial development to obtain a better economic growth.

No climatic factors

The commerce is an important factor for the development, but countries that do not have exit to the sea like Bolivia, Afghanistan, Chad, Zambia, Mali, Mongolia and Laos have less commercial possibilities and are poor countries. Some countries that break these correlations like Luxembourg and Switzerland that are isolated countries of the sea but with excellent development. Fertile and flat land of alluvium and volcanic origin are better geographic spaces for agriculturist development. All this is related to the ecological economy.

The Genes and the DNA

The evolutionary mechanisms, the mutation at random, the inheritance, sex and the natural selection are the main elements that collect data in the DNA. Evolutionary Biology aid to understand the human behavior. The genetic origins of many abilities affect the social structures and modulate the living organisms. The genetic and racial differences can be used as a political weapon and this is tragic, like the cases of the deaths of Armenian, Jews, Gypsies, Turkish Muslims and the racial tragedy in Rwanda.

The Economy

The economy explains the dynamics of the wealth of the society. The neoclassic explained that economy the wealth of a nation is related to the capital and the work. Then the poverty can be explained by absence of capital and the productivity of the work. Other economic theories like developed by Leon Walras and John M. Keynes is to look for some balance or the multiplying effects of the expense. Also the theory liberal that it privileges the greater use of the forces of the market (supply, demand prices and competition). The theory of Mark an Engel’s who is related to the intervention of the State and the centralized Planning.

The economy modern or economy on the basis of the etiologic tries to understand the human behavior.

The relation between the per-capita wealth and the index of human development of United Nations is not a linear correlation. That is to say, in the less developed countries with a smaller increase of the wealth the effects are greater than in the developed countries. The modern industrial society does not eliminate the poverty but the poverty is smaller.

The economic inequality is an important problem. A country can have a high economic growth but a deficient distribution of the wealth. The economic is analyzed with the GINI index.

For example Japan, The USA and Nicaragua: 25,41,60. In Nicaragua 10% of the richer population consume the 50% of the wealth of the country. Educative inequality, high number of children and deficient public expense. But in some developed countries 10% of the prosperous population consume as soon as 18% of the total wealth. But in the developed countries also exists the inequality in the distribution of the rent, although more tolerable. Despite the poor men of China and India increase its income faster than the average of the citizens of the rich countries. But the countries of Africa became more poor people between 1980 and 2000.

The economic development is different from the economic growth. The economic development must incorporate the potential of existing resources in a country. But a country can have economic growth, economic development but very little progress, because it does not distribute the rent or because an institutional deficiency exists. These differences were indicated by the Argentine economist Julio H.G. Olivera of the University of Buenos Aires in 1959.

The Natural Resources

Countries with great natural resources exist and are poor (Bolivia, Nigeria and Congo). Countries with very few natural resources also exist and are prosperous and rich countries (Japan, Taiwan, Switzerland, Iceland).

The Size of the State

Exists a perverse relation between the size of the State and the little quality of its functions with the productivity of the economy. Its relation is inversely proportional.

The Bureaucracy and the Corruption

The Peruvian economist Hernando De Soto has studied the influence of these factors in the generation or not of the poverty. The potential of growth and development of a country is affected by the multitude of steps that is necessary to give to obtain the approval of projects and initiatives. Greater bureaucratic filters greater the corruption and inefficiency.

The Education

The Education is the most influential factor in the values and the culture of a country. To greater education and greater generation of wealth. And it is very important the years of schooling. In the rich countries 90% of the population have more than 12 years of schooling and in the poor countries 8 years of schooling. Also the education must be of quality and that helps to elevate the productivity and to the wealth creation. Also science and the technology contribute to elevate the wealth of a country.

The Social Capital

It is the collective value of the networks of personal relations with attitudes, traditions and customs of a country. Francis Fukuyama in the book Trust says that the interpersonal confidence contributes to create wealth because it makes the investments more efficient. The legal security is fundamental.

Growth and Development Sustainable

The calls economic miracles are related to growth and long-term development (in the time).

The Armed Conflicts and the Wars

The wars disintegrate the social institutions and promote the misery and the poverty.

Imperialism and international Capitalism

It is certain that a strong country takes advantage of the weaknesses of other societies. But the freedom and the wealth are not obtained by the good or bad will of the neighbors but by the own effort of each country with its democracy and its State of Right. To project the problems in external factors is a psychological aberration that is necessary to fight. Each country and each region must obtain high synergy.

2007/01/16 오전 6:31