Guest essay by Roger E. Sowell, Esq.5
Recently on WUWT, a post1 by Willis Eschenbach was made advocating the almost doubling of energy consumption worldwide, by increasing energy use per capita in the poorest countries. This post addresses the issue of increased energy consumption and poses a few questions. I say at the outset that I agree that improving the quality of life is an important goal, and energy consumption per capita is probably a good indicator of quality of life.
First, what do the following countries all have in common? Nigeria, Indonesia, Algeria, Libya, Iran, Iraq, Venezuela, Mexico, Russia, Canada, and United Kingdom?
Each country is a major oil producer and exporter, but with Indonesia and UK experiencing decreased exports recently. The first seven countries all are, or were, a member of OPEC, the Organization of Petroleum Exporting Countries.2 Yet, all but the last two, Canada and United Kingdom, have below-average GDP per capita, gross domestic product, according to the World Bank statistics.3
Second, while it is true that a correlation can be made between energy consumption per capita and quality of life, there must be something else at work that prevents the oil-rich countries Nigeria, Indonesia, Iran, Iraq, and the others from enjoying that high quality of life. There are fundamental issues that prevent energy-poor countries from copying the success of another energy-poor country, Japan. Japan has essentially no natural energy resources, but found the means to import energy as oil, coal, and liquefied natural gas, LNG, to power its industry, commerce, and residences.4
Until some fundamental issues are resolved, simply increasing energy consumption in the poorer parts of the world will not improve the quality of life.
Among these fundamental issues are, in no particular order, economic system, a fair justice system, and the political or governing system. I don’t imply that I am an expert on any of these countries, or their economic systems, justice systems, or political systems. I have done a fair amount of study, and also have traveled to and worked extensively in five of the countries mentioned above: Indonesia, Mexico, Canada, Japan, and UK.
Perhaps the most important issue is the political system, for the justice system and economic system may depend on who is in power and the type of power exerted. It may be that a representative constitutional democracy is a favored political system. It may be that the degree of official corruption is a major factor. It may also be that civil discord is a major factor. Having a modest degree of government regulation to ensure fair treatment, but not an onerous burden, is surely important.
A fair justice system ensures that those with a legal grievance will be heard, and treated fairly according to laws that do not change on someone’s whim. Having a contract honored, or being allowed to bring a lawsuit for breach of a contract, are important issues. Having a means to collect on a judgment is also important, as it does little good to win a lawsuit, be awarded money as damages, and be unable to collect the money.
A brief anecdote to illustrate the importance of a justice system: during my time in law school, US Supreme Court Justice Anthony Kennedy spoke to an assembly of professors, staff, students, and guests. Justice Kennedy spoke on many things that night, but what I most remember is him telling us that he had met recently with members of Iraq’s judiciary. It was soon after the war to remove Hussein ended and Iraq was building up its new government and judicial system. According to Justice Kennedy, the Iraq delegation thanked him tearfully for bringing to the world the US Constitution and its many provisions for legal rights, especially the first ten Amendments known as the Bill of Rights. They intended to copy as much of those rights as they could into their new governing documents.
The economic system may be important, perhaps not as important as other issues. Economic systems in the oil exporting countries range from absolute monarchies to dictators to elected representative.
It is interesting to note that OPEC has existed for more than 50 years, having been founded in 1960, so ample time has passed to allow oil-rich countries to improve their standard of living. A few have, such as Saudi Arabia, but most have not. Clearly, other factors must be addressed besides access to basic energy, if the goal is to improve quality of life.
It is further interesting to note that even within a country with high energy consumption per capita, such as the United States, enormous differences exist between citizens and their energy consumption. It may be that energy per capita in the US is distributed according to a bell curve, with a few percent of the population consuming vast amounts of energy in their mansions, jet airplanes, and fast motorcars. Likewise, a few percent of the population are poor and have very low energy consumption. The majority of the population likely fall in the middle, with about average energy consumption. Clearly, again, other factors must be at work that prevent the poorest from achieving a better quality of life along with higher energy consumption even in an energy-rich nation like the US.
Citations
1 WUWT, article of August 21, 2013 “Double The Burn Rate, Scotty”
2 OPEC membership at www.OPEC.org
3 World Bank GDP per capita, 2012 data.worldbank.org/indicator/NY.GDP.PCAP.CD
4 EIA data for Japan www.eia.gov
5 The author is an attorney in California, practicing in engineering, science and technology law. He is a frequent speaker on climate change, energy, and engineering issues. He worked worldwide as a chemical engineer in the energy industry with oil refining, petrochemicals, basic chemicals, and power plants. He blogs at http://sowellslawblog.blogspot.com
There is a book out called ‘Why Nations Fail’ which emphasises the quality of a countries’ institutions, on how a country develops. It’s an interesting book that looks at basket cases which should do better like Argentina, Zimbabwe and others.
Another one is the head start given to some areas geographically in Jared Diamond’s book ‘Guns Germs and Steel’, which the book above contrasts.
Niall Ferguson’s book ‘The West and the Rest: Why the West Rules for Now’, emphasises the West’s more sophisticated political and social systems, the history of social reform, strong property rights, high level of competition, scientific development, and democracy.
A few points on things that improve a countries quality of life include:
-as you mention, level of corruption is a big one. A country must have a strong rule of law, and this requires strong institutions. Much of this seems to relate to a countrie’s long social history, and how previous and long standing social norms lend themselves to corruption and a lack of middle class representation and weak property rights (a good case being most of South America-Argentina for example has never been able to entirely free istelf from the strong regional land owning-caste power system, which it inherited from before the Spanish arrived).
-rural economies are generally much larger and poorer than urban ones, meaning a low GDP. Limiting family sizes in association with level of income is a step in the right direction.
-protectionism and trade barriers. Eg China has long shut itself off from the rest of the world for social and political reasons, which even Adam Smith noted in his own time (where only two ports were allowed to receive foreign vessels), which only limits mutual trade benefits.
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Roger Sowell says: August 23, 2013 at 6:36 pm
“@ur momisugly Blade, who is not impressed. I have stated before, and state here again, that if anyone can build a nuclear power plant that costs the same as, and is as safe as, a gas-fired combined cycle plant, then I’m for it. It is bordering on criminal behavior to allow such high-priced electricity production when there are far better alternatives. And yes, I’m all for having attorneys file lawsuits to force nuclear power plant owners to build the plants according to the existing laws. I think any rational person would also want that.”
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I suggest you look at why the Japanese have a first time ever in modern history, a foreign balance of trade deficit. It’s because they are buying natural gas to make electricity instead of using their shut-down nukes. The gas is costing them dearly. I once had a tour of the Brown’s Ferry nuke plant in Alabama. It was for members of the American Society for Mechanical Engineers, so there were about 20 of us with 5 guides. Really refreshing talking to someone actually knowledgeable. The guide said the plant was designed to be run by 200 people, but were 3000 employees at the time, in a separate administration building. Obviously, the 2800 employees mandated by law who didn’t even work in the same building added to operations cost. Instead of spending your time promoting the filing of lawsuits to force power plant owners to obey the laws, why don’t you do something to lower costs? For example, by forcing the Nuclear Regulatory Commission to justify the continuous stream of new laws requiring ever higher costs? I think any rational person would want that.
In that same plant tour we passed an employee loitering near a stairwell. The guide asked us “Remember the newspaper headlines a few weeks ago about a major safety violation?” Yes, we answered. “Well, it was because the inspector came through and that person was not standing there” How about lawsuits asking why such asinine laws are arbitrarily put on plant operators? I think any rational person would want that.
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Sowell: “But, perhaps you find it desirable to increase everyone’s power bill because a nuclear plant sounds cool, or chic, or some other smug reason. I don’t. I want the elderly, and poor, and those just barely getting by to have the cheapest, safest, and most reliable power that our technology can provide. Nuclear power as currently built in the US just does not make the cut.”
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Ah, yes, the qualifier about “as currently built in the US” A Westinghouse AP-1000 plant costs about twice as much to build in the US compared to China. It’s the same plant, so the argument about plant quality is moot. Personally, I do not want the elderly, and poor, and those just getting by to have the cheapest, safest, and most reliable power. No, I want everyone to have that cheap, safe, reliable power. If you look at actual historical statistics, modern nuke power is that. The NRC recently shut down two units in California. There was no technical or safety reason, just a government agency helping to fulfill Obama’s campaign promise of “Under my administration, electricity prices will necessarily skyrocket” The San Onofre units had some actual heat exchanger problems and shut down to evaluate the problems. The plant owner presented the proposed near term and long term fixes. What did the NRC do? They held public meetings for 8 months. What did they expect, somebody in the back of the room to stand up and offer advice on vortex shedding in a tube-and-shell heat exchanger? So now electricity rates in southern California go up. Why don’t you sue the NRC to force them to explain why they are acting against the public interest?
This thread started as a constructive discussion about the causes of poverty around the world. Now, it has become a bunch of personal attacks and derailings into unrelated issues.
Any chance of getting back on topic here?
johanna says: August 24, 2013 at 1:39 am
This thread started as a constructive discussion about the causes of poverty around the world. Now, it has become a bunch of personal attacks and derailings into unrelated issues.
Any chance of getting back on topic here?
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johanna: If you are referring to me, I argue that access to reliable low cost electricity is critical to creation of wealth and social stability. This is on topic. Good government is also critical to the creation of wealth. This is also on topic, and both of these points are thoughtfully argued above. The creator of the thread went off onto a well-meaning but wrong tangent regarding those two as seen in the US. As part of my rant, I pointed out details of how the US government is sliding from good to bad in its job of facilitating the creation of wealth. This is also on topic. I regret having to include details of a few specifics to show by example. (I have many more examples but brevity is a virtue) I expect hot and thoughtful disagreement, and this website is good at promoting that. No personal attacks were intended by me.
Gail Combs says:
Yes there were major problems. Blacks and women were second class citizens and the community
always looking over you shoulder. We had major pollution problems and safety problems in some factories too. But I am not so sure the ‘Cures’ put in place (red tape and bureaucracies) aren’t a heck of a lot worse than the problems.
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I think the soft bigotry of diminished expectations inherent in affirmative action and anti-discrimination legislation and the unintended consequences of “special” justice instead of equal justice have been a severe hindrance to the black community.
Anti-discrimination laws have added a legal liability obligation to employers that discourages them from hiring blacks– not because they’re racists, but because hiring blacks creates an unwanted and unnecessary risk that can be avoided by hiring someone else.
Race has become a political weapon and a source of envy and derision, which was never the intent of MLK.
To strengthen societies’ civility and charity, those virtues must be exercised on a personal level or they atrophy. When a society surrenders its civil obligation to the state, it robs the people of the satisfaction of its true humanity to man to its detriment.
Anyway, the current system is imploding. US’ $20 trillion in national/state debt and $100~200 trillion (depending on source) of unfunded liabilities due to massive entitlement spending and gigantic government bureaucracy have bankrupted the US. Bond rates are starting to spike, so it’s getting pretty close to the end game..
We’d better start setting the groundwork now for a restoration of our Republic or it’ll be replaced by something far, far more tyrannical than what we have now.
“There is no Utopian society. The limited form of government I described does increase individual freedom, but with that freedom comes increased individual risk and personal responsibility.”
But that is as close to a Utopia as we can get.
@Dan in California, re the nuclear plant at San Onofre.
Perhaps you are willing to tell Southern California Edison, operator and primary owner of the plant, why they should not have shut it down but keep running it with tubes that fail?
The simple fact is that SCE got caught breaking the laws, or regulatory requirements, if you prefer. The replacement steam generators were required, by law, to be “like for like” in design. This means the new ones had to be almost identical to the original equipment, with some room for very minor differences. They were not sufficiently similar, and SCE knew it.
The NRC requires a detailed analysis and review for materially (substantially) different replacement equipment. The review can take a year or more. SCE was fully aware of this review process.
SCE built the new steam generators with the differences that would trigger the review process, but told the NRC they were “like for like”. They got caught in the deception when the tubes vibrated and leaked.
Being caught in the lie, SCE chose to shut it down. They could have complied with the law, purchased new steam generators that truly are “like for like” but they clearly did not.
I’m glad you brought this up. It clearly shows yet another instance of nuclear power plant owners putting the public at risk of great harm from radioactivity release.
For what it’s worth, I was part of a tour of chemical engineers at the Perry nuclear plant on Lake Erie. Our guide was the plant engineering manager. The plant was 99 percent complete and was waiting for fuel delivery. It’s known as the Mistake on the Lake.
“””””…..jrwakefield says:
August 23, 2013 at 8:14 pm
“But if as you say, it IS produced by biological activity, then of course it is a renewable source; unless biology is planning to stop any time soon.”
But the rate of formation of organisms into oil is very slow, millions of years needed. Again, in Oil 101 the author looks at oil fields and explains when they were formed, and why. Generally periods of “global warming”, when the planet naturally cycled into warmer times. That meant much more biological activity. Hence a warmer climate is a better climate for the biota! Dont tell Gore!
As for abiotic, how come there are no oil fields in Precambrian rocks? Not one oil field came from rocks older than 450myo……..”””””””
Well jr , I guess I’ll take your word for it; your reasoning sounds plausible. From my limited understanding, there pretty much wasn’t any life on land before the Cambrian era, and I presume they mean no plants or animal life.
Presumably, both CO2 and H2O would be highly desirable raw feedstocks, for making hydrocarbon molecules, so I can see why such chemistry might take place in ancient oceans.
But if both were available I don’t see why biology would be necessary to perform the chemistry. I can see why CO2 and H2O might not be widely available together in rocks from deeper in the earth brought up by volcanism.
So OK maybe oil formation has only been going on for 500-600 million years in the oceans; but it still is a renewable resource.
Anyhow, thanks for the info on the source rocks; never had heard that before.
“””””””……..SasjaL says:
August 23, 2013 at 5:19 pm
george e. smith on August 23, 2013 at 11:21 am
Really? Currency inflation would have changed the rate, but not. Here, it has been relative stable for many years – 1 NOK : 1.12-1.17 SEK. As the Swedish currency have become stronger compared to many other strong currencies like EUR, GBP and USD, the same is valid for the Norwegian currency (during the last finance crise, both countries manage to stay out of the worst, in Sweden due to the right-wing economics, not sloppy/utopian left-wing ditto …).
Sorry to say, if traditional currency inflation “rules” really worked, the USD would have been of very low value today, due to the huge amount of both electronical money and genuine bills available world wide … (Have you seen the US million dollar bills with Obama’s mug …? 😉 )…..””””””
Well Sasjal maybe you missed the entire point. The inflation of the Elizabethan era, was caused by the gold riches plundered from the New World. The Meso-American cultures of the pre-Columbian era used gold, and other (now) valuable materials to make trinkets and artifacts.
Taking all that gold to Europe didn’t result in any great industrial revolutions or technology advances; it was simply used to compete for whatever limited products there were.
When “new money” invades existing economies, the price of everything simply increases to absorb it.
Roger Sowell says: August 24, 2013 at 6:42 am
@Dan in California, re the nuclear plant at San Onofre.
Perhaps you are willing to tell Southern California Edison, operator and primary owner of the plant, why they should not have shut it down but keep running it with tubes that fail?
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That’s an easy one. Engineers know the answer, plant operators know the answer, steam locomotive engineers know the answer, and even amateur “live steam” modelers who build their own scale trains know the answer. Boiler tubes fail. Happens all the time. The old, well tried solution is to hammer plugs into the bad tubes and go on with fewer tubes. The designs account for this common operational occurrence. SCE proposed this and the NRC stonewalled them. After 8 months of waiting, SCE retired the plants.
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The simple fact is that SCE got caught breaking the laws, or regulatory requirements, if you prefer. The replacement steam generators were required, by law, to be “like for like” in design. This means the new ones had to be almost identical to the original equipment, with some room for very minor differences. They were not sufficiently similar, and SCE knew it.
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Of course SCE knew it. The NRC knew it too, and allowed it. NRC reviews the design of every nut, bolt, and washer in a nuke plant. There are thousands of pages or review documents before a nuke plant is allowed to operate. In this case, they tried to do some product improvement, so that more power can be sold for less money. It’s the pursuit of low cost electricity that helps a nation prosper. But let’s assume SCE did return to operation. Remember, nukes are relatively expensive to build and cheap to operate. Fuel is about $.015 per KWHr. Operating at 70% power, as they proposed, would provide 700 Megawatts of low cost power to the grid. If more tubes failed, it would have exactly the same effect as the previous time they failed, that is, no external effect. Some leakage between the two water loops. They are then back to where the they were a year ago with a non problem. No effect on plant workers (except they would have jobs), and no effect on the uninvolved public, except their rates would be lower.
Now Mr Sowell, since turnabout is fair play, I think it should be you who explains to SCE’s customers why their rates are going up because SCE had to shut down a perfectly good, safe and reliable power plant. (And for all you non-technical folks out there, in this example heat exchanger = boiler = steam generator)
In the spirit of previous commenters, my vision of a step toward utopia is a Constitutional Amendment that requires employees of regulatory agencies to have at least 10 years experience working within the industry they regulate.
Way back on the topic of the Rule of Law being key for economic prosperity . . . it is not democracy that is key; more important are liberty, the rule of law, and individual responsibility and choices. I think it was Benjamin Franklin who said: “Democracy is two foxes and a hen voting on what to have for dinner. Liberty is the hen with a gun having the power to ignore that vote.”
AnInquirer, thank you for this. Mr Franklin is one of my favorite philosophers. Here’s a link to some of his best: http://jpetrie.myweb.uga.edu/poor_richard.html although he is at least somewhat paraphrased, as the word ‘lunch’ was not in frequent use until later.
The first three listed there are:
“Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote.
When the people find that they can vote themselves money, that will herald the end of the republic.
They that can give up essential liberty to obtain a little temporary safety deserve neither safety nor liberty.”
All three of these have special significance in the USA today, and to this thread in particular. Now permit me to tie this to anthropogenic global warming. The EPA/NOAA/NASA federal agencies have spent spend billions of taxpayer dollars to create a new ‘climate science’ and have paid scientists to show just how bad it is to burn carbonaceous fuels. Then they pay environmental organizations to sue the EPA to regulate the burning of carbonaceous fuels. The result is court findings referencing experts that burning carbonaceous fuels is bad. Then the EPA uses these legal precedents to crush the electric power industries and lower the standard of living for us all.
Where are the checks and balances on this? We have a few brave skeptics such as on this website pointing out that ‘climate science’ is neither science nor is it correct. The EPA is just plain hurting the population they are supposed to protect. Similarly, the Nuclear Regulatory Commission is just plain wrong in its continuous stream of raising the bar for power plant operators to abide by.
This has been a worthwhile discussion – a highly informal update, perhaps, of Adam Smith’s “The Wealth of Nations” (1776).
Background:
I have significant business and travel experience on six continents, specifically in regions such as the Western Europe, the Former Soviet Union, North Africa, Australia and North and South America. I have spent most of my career in the energy and mining industries including senior management. My strategic and fiscal (tax and royalty) initiatives were instrumental in revitalizing the Canadian oilsands industry in the 1980’s and 1990’s and Canada is now the 6th largest oil producer in the world and the most prosperous country in the G8.
My comments:
In travels it was at first difficult at first to understand why countries that were as rich in resources and older than Canada were so poor, and why wealth was so unevenly distributed. The common thread of wealthy nations soon became apparent and it was Rule of Law in all its forms. Rich nations allowed their people to build and retain most of the benefits derived from their honest efforts.
For most of my life the USA has been more materially prosperous than Canada. Contributing factors included the USA’s greater population, access to capital, entrepreneurship, and access to cheap energy and cheap labour. The USA also enjoyed less government regulation and more checks and balances to major government impropriety than Canada.
Since about 1970 the USA has been bleeding financially, due in part to ever-increasing oil imports. King Hubbert was correct (within his scope) when he stated in 1956 that USA oil production would peak circa 1970.
Energy production in the USA is now increasing rapidly due to the new technologies of the “shale revolution”. Cheap energy could fuel an economic recovery in the USA. The price of natural gas in the USA is about $3.50/MMBtu versus ~$110/Bbl for Brent crude oil. A barrel of oil has roughly 6 times the energy content of a MMBtu of natural gas, so US natural gas is about one-fifth the price of world oil on an energy-equivalent basis.
However, US governments have burdened themselves with excess government spending, resulting in huge deficits and a total debt that seems unsustainable. Many Western European governments are in the same difficult position.
The USA has been able to stave off the worst impacts of ever-increasing deficits due to the status of the US dollar as the global reserve currency. In recent years the USA and other major global currencies, (the Yen, Pound and Euro) have engaged in a Currency War, each printing huge amounts of their currency. The USA has ~tripled its monetary base since September 2008 and has used these funds to finance its growing deficits. This could end badly.
A closely-related threat to prosperity is excess government regulation. The necessary balance between public protection and excess government regulation has been overturned, and a pragmatic re-balancing is necessary in all Western democracies.
The intention of the Obama administration to bypass Congress and use the EPA to “fight climate change” is a current example of this imbalance, and this too will end badly.
We can say with increasing certainty that increased atmospheric CO2 is NOT a significant driver of global temperature. There has been no significant global warming for 10-20 years despite increased atmospheric CO2. By far the greatest threat to humanity is not global warming, but global cooling, which is a certainty within the next few millennia, and may have already begun.
There have been quite a number of comments on the importance of the “Rule of Law.” Rather than some degree of anarchy or corruption, having laws that are enforced is vitally important; but the fairness of the laws is equally or perhaps more important. I made this point in the essay, with the example of being able to collect on a judgment. Another example is the law in England before the Magna Carta. England had laws, and they were enforced, yet their very lack of fairness led to a revolt against the King and ultimately the signing of the Magna Carta. There are many details left out of those previous two sentences.
Another example, a favorite of mine, is the vital importance of Patent Laws. In the US, the founding fathers recognized that importance, so much so that forming a Patent Office with patent laws was included as an enumerated power in the body of the Constitution. Article I, Section 8, paragraph 8 states: “Congress shall have power . . .To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;” The founders placed such importance on Patents that they listed the justification in the Constitution: “To Promote the Progress of Science and Useful Arts.” This is remarkable, as it is the only such enumerated power to have a written justification.
It is widely recognized that one reason for the enormous success of the US has been its strong patent laws. As a counter-example, India until very recently had weak or non-existent patent laws. The bright inventors in that country had no incentive to innovate, tinker, and improve their ideas because anyone could copy it and use it for themselves. As an aside, the US patent laws were recently amended, to “harmonize” them with those of other nations. Briefly, an inventor now must rush to the patent office to file his or her application, because the first to file will receive the patent. Previously, the US had the “first to invent” doctrine, which was superior according to many patent scholars. I support the first to invent doctrine.
Yet another example, again briefly mentioned in the essay, is the importance of government regulation. Commenters above refer to the regulation of oil and other mineral rights. Regulations that limit destructive activities such as monopolies, business collusion or price-fixing, defrauding investors, and gross pollution, all are important. Yet, regulations that stifle commerce or cut employment are equally important and should be avoided.
Roger said: “First, I did address the issue of “time.” OPEC has existed for 50-plus years. It is not “time” that is the problem. ”
OPEC has existed for 50 plus years – so what? The Dow Jones Industrial average has existed for longer, but its components have shifted.
Nigeria also had a civil war – right before it joined OPEC.
Roger said: “Second, I did not disagree with Eschenbach. Please go back and read what I wrote. I stated explicitly that on this point, I agree with Eschenbach. I pointed out Japan as proof positive that having domestic energy resources is not a prerequisite.”
The problem is – Willis Eschenbach never said anything about a nation requiring intrinsic energy resources in order to increase GDP. The data points he put up were entirely in the realm of how much per capita energy is needed to achieve Spain/Italy levels of energy consumption. Thus Japan is irrelevant – and equally are tales of countries that have oil but aren’t Spain/Italy. Spain was the richest nation in the world 600 years ago. Italy has been a center of civilization for 2000 years. Both of these nations have literally centuries of infrastructure development not to mention time to mature into stable societies.
Many of the nations you refer to are artificial creations – legacy of de-colonialization after World War II. Nigeria’s civil war can be traced directly to this, as can the hodge podge nature of many of the North African and Middle Eastern countries.
@ur momisugly c1ue, re time required.
Your argument is that the poor nations need more time to develop infrastructure. Italy had an advantage due to being civilized for 2000 years.
Then, please explain the poverty in Egypt, which has been civilized for at least 7000 years. Then, explain Hong Kong’s prosperity. Then, explain how Canada and the USA went from wilderness to great prosperity in just over two centuries.
Australia, too was wilderness but has a high standard of living after colonization by England.
I repeat, time is not the issue.
Roger Sowell says: August 25, 2013 at 8:14 am
Yet another example, again briefly mentioned in the essay, is the importance of government regulation. Commenters above refer to the regulation of oil and other mineral rights. Regulations that limit destructive activities such as monopolies, business collusion or price-fixing, ……
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Absolutely, but what can citizens do when the biggest problem is the monopoly that is the government? Sure, we elect representatives, but the unelected staffers actually do most of the bill writing, and the staffers are frequently passed on from congressman to congressmen after elections. Another example: Truth in advertising is enforced with occasional prison terms for the offenders, yet nobody has the power to force politicians to make good on their campaign promises.
And as for “business collusion or price fixing” of course that’s bad. But again, how do you control price fixing on the part of government agencies? One example I give is the Interstate Commerce Commission telling the railroads what they must charge to transport goods. This almost killed the entire privately owned railroads in the country. It did kill the New York Central RR, Pennsylvania RR (which had merged by then), Erie Lackawanna RR, the Reading RR, and the New Haven, which were nationalized into ConRail. The Staggers Act deregulating rail operations came along just in time. I’m old enough to remember the cold war arguments that using trucks (Americans) is better than railroads (Soviets) because roads are more difficult to destroy in a war.
“Dan in California says:
August 25, 2013 at 1:14 pm
I’m old enough to remember the cold war arguments that using trucks (Americans) is better than railroads (Soviets) because roads are more difficult to destroy in a war.
Maybe then, but not now. Roads/rail are communication networks and there is the technology to render either useless from the air. I wonder how well Sowell would do in France where ~80% of electricity is sourced from nuclear? My guess the French would tell him to foutre le camp.