The Next Convergence

Discussion in 'Economy' started by Wiseacre, Jul 14, 2011.

  1. Wiseacre

    Wiseacre Retired USAF Chief Supporting Member

    Apr 8, 2011
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    San Antonio, TX
    My dear wife got me this book "The Next Convergence", by Michael Spence, which I've started to read. It's basically talking about how the developed countries diverged from the so-called 3rd world countries at the end of the 18th century when the industrial revolution occurred. And now in the past 20-30 years the undeveloped countries are catching up while the already developed ones are kinda spinning their wheels.

    I haven't got very far yet in the book, but one thing got me thinking early on. Some of those 3rd worlders have prospered greatly while others are no better off. It's not a question of resources, some places like Korea, Japan, and Singapore have little or no natural resources to speak of yet are very prosperous. Look at North and South Korea, 50 years ago both had about the same GDP per capita, approx $350-$400/year. Today, South Korea's per capita is close to $20,000 but the north has not progressed much at all. Same deal with Singapore and Cuba, both island nations that took different paths; today Singapore is up among the world leaders in GDP per capita while Cuba languishes.

    Why? Free enterprise and good governance among other things. China didn't do squat until they allowed at least some free market principles to take hold and flourish. Government has to get out of the way and make it as easy and quick and inexpensive to start and run a business. Places like North Korea and Cuba have been bogged down with too much central planning by the gov't, and have paid a heavy price. We in the USA have to avoid that pitfall, or wind up paying a similar heavy price in the future.

    I'll have more to say from this book in the future, it's a good read.

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