Timmy elsewhereSeptember 21, 2014 Tim WorstallTimmy Elsewhere16 CommentsAt the ASI Logically it must be possible to escape poverty traps because some countries have done so. previousHow generous of the MiliboynextWhere’s Ronald Coase when you need him? 16 thoughts on “Timmy elsewhere” Luke September 21, 2014 at 11:30 am Logically it must be possible for me to run 100m in under 10 seconds because Usain Bolt has done so. Luke September 21, 2014 at 11:38 am Logically it must be possible for Albania to become a major oil exporting country because Saudi Arabia has become one. Luke September 21, 2014 at 11:45 am Logically it must be possible for everyone to become Prime Minister because David Cameron became Prime Minister. I’ll stop now. Pogo September 21, 2014 at 1:14 pm Just go and have a nice quiet sit-down and a cup of tea… Steve September 21, 2014 at 5:17 pm Luke – “Equally we can assert that, eg Somalia, has not escaped in 300 years, therefore Somalia never can.” You might be on to something there. Somalia’s average IQ isn’t listed in IQ and The Wealth of Nations, but it’s probably similar to Kenya and Sudan – both at 72. So, with relatively poor human capital it’s unlikely they’ll match Singapore (103) or Switzerland (101). However, it’s not all bad news. Kenya and Sudan are approximately 3-4 times richer than Somalia. Therefore, it should be possible for Somalia to get a lot wealthier than it is today, even if they will continue to lag behind the advanced economies. Luke September 21, 2014 at 8:08 pm Steve, Pogo, I completely agree with the conclusion – “lots of states have managed to escape poverty, so we should (a) be looking at how they have managed to do so, (b) look at why others haven’t, and (c) not lightly assume that states are condemned to poverty.” I just don’t think it is a matter of evidence free logic. The Meissen Bison September 22, 2014 at 12:41 am Poor Luke: Logically it must be possible to escape poverty traps because some countries have done so. This really doesn’t mean what you appear to think it means. I fear you’re more of a Somalia rather than a Singapore john77 September 22, 2014 at 7:58 am @ Luke i) You need to study elementary logic. You are not a subset of Usain Bolt. ii) It is, in fact, open to anyone except the Queen to become Prime Minister (unlike the USA where only those born in the country are eligible to be elected President). iii) Somalia did escape the poverty trap in the 1930s. PaulB September 22, 2014 at 12:39 pm Luke’s point is a good one. It’s possible for some countries to escape from a poverty trap, but it may not be possible for very many countries to do it at the same time. The route to growth in the third world is to make your country attractive as a source of relatively cheap offshore labour for the first world. To start with you need education, infrastructure, and the rule of law. Then you need the first world to start using your labour. That provides a flow of money which pays for more education and infrastructure and helps the populace appreciate the rule of law. So you get more attractive, and more money comes in. Then you’re on a spiral of increasing capabilities offset by increase wage costs, until eventually you’re a rich country. There’s a positive feedback effect which turns small or even invisible differences at the start of the process into huge difference at the end. Steve’s comment about IQ seems to be confusing cause and effect. As a country gets richer, its average IQ goes up – the Flynn Effect. Mr. Pants September 22, 2014 at 2:43 pm Has this guy ever heard of the two Korea’s? Interested September 22, 2014 at 8:47 pm Somalia will stay poor in our lifetimes because it’s a country completely unfitted for becoming rich in the 21st century. These things are cyclical, but it’s a very long cycle. Looked at another way, where are the Phonecians these days? The Meissen Bison September 22, 2014 at 10:18 pm where are the Phonecians these days? Didn’t EE buy up some of them? john77 September 22, 2014 at 10:53 pm @ PaulB To start with you need determination and the Rule of Law. Education follows. bloke (not) in spain September 23, 2014 at 8:41 am ” As a country gets richer, its average IQ goes up – the Flynn Effect.” ???? Sounds like one of those products of academia, mostly relates to academia. Over time, the subjects of IQ tests become closer intellectually to the setters of IQ tests. ie fuller of bullshit. Try relabeling IQ as “smarts”. Surviving in a country like Somalia requires a great deal of smarts because inadequate & inappropriate rationalisation gets you dead in a hurry. Contrast with the UK where inadequate & inappropriate rationalisation opens a gateway to a career in academia. Or politics. Luke September 23, 2014 at 3:33 pm John 77 “i) You need to study elementary logic. You are not a subset of Usain Bolt. ii) It is, in fact, open to anyone except the Queen to become Prime Minister (unlike the USA where only those born in the country are eligible to be elected President). iii) Somalia did escape the poverty trap in the 1930s.” i) Eh? We are both human beings. And is Eritrea a subset of Australia? In each pair, there are differing resources. ii) There are 60,000,000 UK citizens, but only one PM for 4-5 years. Unless we reduce the term to a few seconds, not everyone can be PM. As a matter of logic, it may be that there really is a “global race” and only a few countries can “win” and be rich. (I think that’s bollox, btw.) iii) If you say so. But my point is that just because A has done X, it does not mean *as a matter of logic* that B can also do X. It is encouraging evidence that B can do X. I’m being a pendant, not making economic argument. john77 September 23, 2014 at 11:26 pm @ Luke Anyone is not everyone. I assume that you are a human being. Therefore since all human beings breathe: you breathe. That is a logical deduction. Some human beings have red hair but not all so it is not a condition of being a human being that you have red hair. I cannot logically deduce from your humanity that you have red hair. All human beings have a nose: it follows that you have a nose [for Harry Potter fans – the reincarnated Lord Voldemort had ceased to be fully human]. Usain Bolt is not all human beings. There is a subset of human beings who can run 100m in 10 seconds – I do not belong to this. If you are a member of that subset you can run 100m in 10 seconds but if you, like myself, are part of the larger subset which cannot it does not follow that because Usain Bolt et al can run that fast we can do so. Tim stated that since some nations had escaped the poverty trap it logically was possible to escape the poverty trap – that does not mean that every nation WILL escape, just that is possible to do. The correct formulation of his statement is that since Germany has escaped the poverty trap, the claim that it is impossible to escape the poverty trap has been disproved. Hence an escape from the poverty trap is possible – that is NOT the same as saying that it is inevitable. Liberia has proved that it is not inevitable [not Zimbabwe because it was not in a poverty trap before Mugabe, nor Somalia which was showcase for Italian colonialism in the 1930s]. You just don’t do logic, do you? Ffrtunately that isn’t a crime since well over 90% of the population don’t do logic. As I said anyone is not everyone – some of us do not even want to try to be PM but if a poor Scots bastard like Ramsay MacDonald or a grocer’s daughter can become Prime Minister, then it is quite reasonable to say “anyone (except HM) can become Prime Minister”. Leave a Reply Cancel replyYour email address will not be published. Required fields are marked *Comment Name * Email * Website Save my name, email, and website in this browser for the next time I comment.