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4 comments
I think the proper first place to look is Hernando De Alto’s class Mystery of Capital… most entrepreneurs are small gray market businesses. They can’t grow because they lack access to capital because of the extra-legal nature of the business or people. Building easy access bridges to turn your gray market business into a white market business would unlock these entrepreneurs.
I'll admit I started skimming about half way but did the author actually make any real proposal on how to address poverty? As far as I can tell they just hand-waved away the poor by suggesting just start a business? I'm not sure if that's a fair assessment or not.
I was writing up a large comment with sources to rebut the claims, but I think I'll wait to finish it until I can save it as a blogpost and reply with it every time I see this type of argument being made.
Basically, the USA essentially disproves the idea that nationwide GDP is the most important factor in standards of living. US share of world GDP has been relatively constant, world GDP has increased dramatically, but American life has not improved dramatically (although it has improved more than what most people think).
Instead of singularly focusing on wealth, nation-building programs should focus on the broader idea of (re)building the social contract. In the Balkans that means building an environment where modern capitalism can effectively take place. In America that means rebuilding trust in institutions and building a better safety net for poor citizens. Often this involves what amounts to a direct wealth transfer from the rich to the poor, as this all has a cost and the rich are the only ones who are even capable of paying for it in the first place.
Basically, the USA essentially disproves the idea that nationwide GDP is the most important factor in standards of living. US share of world GDP has been relatively constant, world GDP has increased dramatically, but American life has not improved dramatically (although it has improved more than what most people think).
Instead of singularly focusing on wealth, nation-building programs should focus on the broader idea of (re)building the social contract. In the Balkans that means building an environment where modern capitalism can effectively take place. In America that means rebuilding trust in institutions and building a better safety net for poor citizens. Often this involves what amounts to a direct wealth transfer from the rich to the poor, as this all has a cost and the rich are the only ones who are even capable of paying for it in the first place.
I think Mitchell and Webb investigated this solution already: https://youtu.be/s_4J4uor3JE?si=EO37E-4t3uEWhaVE