Paul Krugman has a good and interesting post on international development in his New York Times column today. Here’s his peroration:
The result is a world in which inequality among countries is declining if you look from the middle upward, but rising if you look from the middle down. Fundamentally, however, it’s a story of diminishing Western exceptionalism, as the club of countries that can take full advantage of modern technology expands.
There are some things I think he’s missing. That’s exactly what you’d each as rich countries abandon the habits, values, and cultural practices that made them rich in the first place and some countries adopt them or, at least, some of them, while others do not.
I don’t think that we should discount Europe having two world wars as a factor in our rise to wealth, but I agree with a lot of this. Not that we had paragons of virtue in the past, but I think that there was still a belief in basic values. Many of our business leaders were brought up in small communities and understood at some gut level the value of the community. Now our leaders are brought up in gate communities or are generally the children of the well to do. They don’t grow up with those connections. They are entitled to success and wealth. Is there any better example of this when the bankers who destroyed the US economy were back to giving themselves huge bonuses a year after the crash?
Makes me wonder if the Marx critique of the end state of capitalism is correct. (Let me quickly interject that his ideas about how to correct it have absolutely been proven wrong. That doesn’t mean his diagnosis was not correct.) He talked about capitalists keeping large reserves of labor to keep wages down. Immigration, H1Bs, etc fit that bill. He predicted the rise of the mega corporations. Didn’t you write recently about consolidation? Labor being replaced by machines? Large quantities of poverty in the midst of extremes of wealth?
Then if you read somewhat broadly, maybe starting with both of Adam Smith’s books, then carry it forward there has always been an undercurrent, or so I think, that values are important in our economic life. I think you can make a good case that those have changed in some cases disappeared. The only thing that matters is profit.
Steve
That’s a great example of my point. Our leaders also haven’t been military officers where serious codes of conduct are enforced (at least in theory) and honor is an important consideration.
And here in Illinois our political leaders not only have no notions of the value of community or of honor but even of basic decency. They’re machine politicians who understand what it takes to get and hold office and how to exploit office once you have it.
The advantage of the west in general and the US specifically is long-term political and social stability. You can’t grow or maintain an economy without it (See Venezuela).
It’s a marathon. And it remains to be seen whether we can continue trucking along. But it’s an open question whether others outside of the west can establish the political and social stability necessary for their own long-term growth. Because one wrong turn can destroy decades of progress.
“Our leaders also haven’t been military officers ”
I preferentially hire ex-miliary when I can. I just hired a young man yesterday who is ex-military, spent time deployed in Afghanistan. He noted that he met a lot of ex-military during his interview. I explained that I thought it likely that when I hired someone with military experience that I was hiring someone who had made a commitment to something greater than him(her)self. There is no guarantee of that, and I certainly remember some scummy people I saved with, but there was a high probability of that being true. That compares with most of the people who I hire, who are all bright, well trained good docs, but throughout their training and schooling they were always the stars of their class. Always catered to because of that, or thought that they were special because the achievement was all theirs. I guess in short they tend to be more self centered.
These are broad generalizations and understand are hard to apply to any given individual, but I think that is what I see and as long as I get to decide I am going to keep hiring that way.
Steve
“Now our (business) leaders are brought up in gate communities or are generally the children of the well to do.
There are only 500 Fortune 500 CEOs. I doubt there is a formal study, but general awareness would show that relatively few actually grew up in privileged gated communities. It’s makes for nice snark, but is silly. I’d wager that there is a higher proportion of doctors, investment bankers, Big Law or Big Consulting types with such backgrounds. There have been years when 80%+ of the MBAs from Harvard, Stanford, Wharton and Chicago went into investment banking or consulting.
More importantly, the number of mid and small businesses absolutely dwarfs 500. That’s where the action is. We, alone, probably come in contact with 250ish a year. And we see almost no gated community, entitled types. Almost none.