Formula for economic development

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Website owner:  James Miller

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We live in a world in which there are a few wealthy nations and a whole lot of very poor nations. Today the vast majority of mankind is poor even though there is great wealth in a few countries. The United States, Canada, the countries of northern Europe, Australia, New Zealand and Japan enjoy a high standard of living. The most of the people in most of the rest of the countries of the world are poor. What has made the rich countries wealthy and why are the poor countries poor? Well, behind the wealth of the wealthy countries is a great long, gradual development process involving the industrial revolution, the long arduous advance of science, invention and technology in combination with ever and ever larger aggregations of capital being put to use in production and long hours of hard work of hundreds of millions of industrious, hardworking people over a great many years. All this, employed in the utilization of a country's natural resources, has slowly built all the many great infrastructures of the wealthy countries of the world that provide all the conveniences that their peoples enjoy. A vast, complex, interdependent system has gradually developed in these countries that provides the peoples with their high standard of living. A journey of a thousand miles is made a step at a time and the development of the wealthy countries of the world has occurred a step at a time. It has been a plant of slow growth, one generation building on the work of previous generations, man building on the structures of his forefathers. What has actually happened has been that a few countries have grown increasingly wealthy while the people in the most of the countries of the world have simply continued living in the way that mankind has lived for thousands of years. Thus the people in these poor countries are poor only by comparison with the people in the wealthy countries of the world. "Poor" depends on what you are comparing with. They are not poor in comparison with the way mankind has lived for thousands of years. The poor countries of the world have simply been left behind, have not developed very fast in comparison with the wealthy countries of the world. The poorer countries have just not been able to get the formula right. They just haven't been able to duplicate that complicated mix of ingredients that has produced the wealth of the wealthy countries. The plant just doesn't seem to want to grow. The soil isn't right, the temperature isn't right, or something. And with modern satellite television, etc. the poorer people of the world learn how the people in the wealthy countries of the world live and they become envious and dissatisfied with their own lot. They become restive and want change. And they become attracted to people and political movements offering quick and easy solutions --- like the communists. Many like the ideas of the Communists --- take from the rich and give to the poor. They would love to have the wealth of the rich.

The countries of Latin America. The countries of Africa. What is the problem? First, recreating what the wealthy countries have done isn't a quick, easy, simple process. It takes time. Second, I think there is something else that plays an important role in economic development besides just natural resources, capital and technical knowhow. I think the character of a people, their mentality, their culture, plays a critically important role. Different peoples have different mentalities, different ways of thinking. In my mind I compare German mentality and character with Latin mentality and character. Germans have a reputation for being energetic, punctual, methodical, organized, efficient and industrious. They have that reputation and they are, as a group, indeed so. Latins, as a group, are, on the other hand, (to say it bluntly) unpunctual, unmethodical, disorganized, inefficient and often not particularly energetic or industrious --- a fact that can be testified to by anyone who has traveled in Latin countries (these are generalizations and there are, of course, always lots of exceptions). Most of the wealthy nations of the world are made up mostly of peoples of northern European origin, people known for being energetic, industrious, efficient and hardworking. Work has a lot to do with wealth. Certain character traits have a lot to do with wealth. Belief in education, an emphasis on education, has a lot to do with wealth. The wealth of a nation is the collective wealth of its inhabitants. Hundreds of millions of energetic, intelligent, educated, industrious, efficient, organized people working together create wealth, for themselves and for their descendants. Hundreds of millions of unenergetic, disorganized, uneducated people not working together don't create much wealth.

It has become popular in America to speak disparagingly of White Anglo-Saxon Protestants, referring to them as WASP's. Well, the WASP's have had a lot to do with what has made America wealthy and powerful.

There are yet other things which explain why some nations are poor. I note that most of the poor nations of the world lie in the tropical and subtropical latitudes. Most of the countries of Central and South America, most of the countries of Africa, most of the countries of southeast Asia, for example. Is there a reason why tropical climates might have something to do with poverty? I think there is. People living in tropical climates don’t have to worry about staying warm in the winter time. They don’t have to worry about freezing temperatures presenting a threat that needs to be dealt with. They only really need shelter from rain when it rains. They can get by with shelter that is far more rudimentary and primitive than that required in colder latitudes. Back in the 1970s my wife and I were visiting a region in the lowlands of western Ecuador (town of Babahoyo) and we came upon a elderly lady sitting outside a building. Behind her, on the wall of the building was a lot of kitchenware hanging from hooks. My wife started talking to her and the lady told her that was her home. She lived outside. When it rained she had to find shelter. If you look at the dwellings of primitive Indians living out in the jungle you will note that they often have only roofs and no walls. They need protection from the rain but not from the cold. Houses in small villages or the countryside are often very primitive with mud wattle or bamboo walls. I have seen YouTube videos of homes in the slums of Manila consisting only of a sheet of plastic stretched over a framework of poles. People in the tropics can get away with far less in the way of shelter than can people in colder latitudes. People living in cities in tropical climates probably rent but they can get by with much more primitive accommodations.

In colder latitudes the cost of housing is usually the biggest component of the cost of living. People in tropical climates can live on less. They don’t need warm air-tight housing. They don’t need all the warm clothes that people in cold climates need.

Another reason why people in tropical climates may be poorer than those in colder climates: Heat saps energy. Cold temperatures invigorate. (I walk five miles a day. On cold days in the wintertime I walk briskly with lots of energy. On hot days in the summertime I walk much more slowly — with little energy.) Temperatures affect energy levels.

People in northern climates may just by habit put more into life. Habit is very important in life. Different climates may induce different types of habits. Northerners may, by habit, just work harder.

Feb 2001