Excerpts from recent economics Nobelist Edmund Phelps
As is increasingly admitted, the economic performance in nearly every Continental country is generally poor compared to the U.S. and a few other countries that share the U.S.'s characteristics. Productivity in the Continental Big Three--Germany, France and Italy--stopped gaining ground on the U.S. in the early 1990s, then lost ground as a result of recent slowdowns and the U.S. speed-up. Unemployment rates are generally far higher than those in the U.S., U.K., Canada and Ireland. And labor force participation rates have been lower for decades. Relatedly, the employee engagement and job satisfaction reported in surveys are mostly lower, too....
In my thesis, the Continental economies' root problem is a dearth of economic dynamism--loosely, the rate of commercially successful innovation. A country's dynamism, being slow to change, is not measured by the growth rate over any short- or medium-length span. The level of dynamism is a matter of how fertile the country is in coming up with innovative ideas having prospects of profitability, how adept it is at identifying and nourishing the ideas with the best prospects, and how prepared it is in evaluating and trying out the new products and methods that are launched onto the market.....
There are two dimensions to a country's economic model. One part consists of its economic institutions. These institutions on the Continent do not look to be good for dynamism. They typically exhibit a Balkanized/segmented financial sector favoring insiders, myriad impediments and penalties placed before outsider entrepreneurs, a consumer sector not venturesome about new products or short of the needed education, union voting (not just advice) in management decisions, and state interventionism. Some studies of mine on what attributes determine which of the advanced economies are the least vibrant--or the least responsive to the stimulus of a technological revolution--pointed to the strength in the less vibrant economies of inhibiting institutions such as employment protection legislation and red tape, and to the weakness of enabling institutions, such as a well-functioning stock market and ample liberal-arts education.
The other part of the economic model consists of various elements of the country's economic culture. Some cultural attributes in a country may have direct effects on performance--on top of their indirect effects through the institutions they foster. Values and attitudes are analogous to institutions--some impede, others enable. They are as much a part of the "economy," and possibly as important for how well it functions, as the institutions are. Clearly, any study of the sources of poor performance on the Continent that omits that part of the system can yield results only of unknown reliability....
The values that might impact dynamism are of special interest here. Relatively few in the Big Three report that they want jobs offering opportunities for achievement (42% in France and 54% in Italy, versus an average of 73% in Canada and the U.S.); chances for initiative in the job (38% in France and 47% in Italy, as against an average of 53% in Canada and the U.S.), and even interesting work (59% in France and Italy, versus an average of 71.5% in Canada and the U.K). Relatively few are keen on taking responsibility, or freedom (57% in Germany and 58% in France as against 61% in the U.S. and 65% in Canada), and relatively few are happy about taking orders (Italy 1.03, of a possible 3.0, and Germany 1.13, as against 1.34 in Canada and 1.47 in the U.S.)....
The weakness of these values on the Continent is not the only impediment to a revival of dynamism there. There is the solidarist aim of protecting the "social partners"--communities and regions, business owners, organized labor and the professions--from disruptive market forces. There is also the consensualist aim of blocking business initiatives that lack the consent of the "stakeholders"--those, such as employees, customers and rival companies, thought to have a stake besides the owners. There is an intellectual current elevating community and society over individual engagement and personal growth, which springs from antimaterialist and egalitarian strains in Western culture. There is also the "scientism" that holds that state-directed research is the key to higher productivity. Equally, there is the tradition of hierarchical organization in Continental countries. Lastly, there a strain of anti-commercialism. "A German would rather say he had inherited his fortune than say he made it himself," the economist Hans-Werner Sinn once remarked to me....
It may be that the Continentals finding, over the 19th and early 20th century, that there was little opportunity or reward to exercise freedom and responsibility, learned not to care much about those values. Similarly, it may be that Americans, having assimilated large doses of freedom and initiative for generations, take those things for granted. That appears to be what Tocqueville thought: "The greater involvement of Americans in governing themselves, their relatively broad education and their wider equality of opportunity all encourage the emergence of the 'man of action' with the 'skill' to 'grasp the chance of the moment.'"
The most basic point to carry away is that the empirical results related here lend support to the Enlightenment theme that a nation's culture ultimately makes a difference for the nation's economic performance in all its aspects--productivity, prosperity and personal growth.
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PRESIDENT PEANUT
A former Carter loyalist finally sees behind the mask. Excerpts:
Recent disclosures of Carter's extensive financial connections to Arab oil money, particularly from Saudi Arabia, had deeply shaken my belief in his integrity. When I was first told that he received a monetary reward in the name of Shiekh Zayed bin Sultan Al Nahayan, and kept the money, even after Harvard returned money from the same source because of its anti-Semitic history, I simply did not believe it. How could a man of such apparent integrity enrich himself with dirty money from so dirty a source?
And let there be no mistake about how dirty the Zayed Foundation is. I know because I was involved, in a small way, in helping to persuade Harvard University to return more than $2 million that the financially strapped Divinity School received from this source. Initially I was reluctant to put pressure on Harvard to turn back money for the Divinity School, but then a student at the Divinity School -- Rachael Lea Fish -- showed me the facts They were staggering. I was amazed that in the 21st century there were still foundations that espoused these views. The Zayed Centre for Coordination and Follow-up - a think-tank funded by the Shiekh and run by his son - hosted speakers who called Jews "the enemies of all nations," attributed the assassination of John Kennedy to Israel and the Mossad and the 9/11 attacks to the United States' own military, and stated that the Holocaust was a "fable." (They also hosted a speech by Jimmy Carter.) To its credit, Harvard turned the money back. To his discredit, Carter did not.....
In reading Carter's statements, I was reminded of the bad old Harvard of the 1930s, which continued to honor Nazi academics after the anti-Semitic policies of Hitler's government became clear. Harvard of the 1930s was complicit in evil. I sadly concluded that Jimmy Carter of the 21st century has become complicit in evil....
It's worth noting that, despite the influx of Saudi money funding the Carter Center, and despite the Saudi Arabian government's myriad human rights abuses, the Carter Center's Human Rights program has no activity whatever in Saudi Arabia. The Saudis have apparently bought his silence for a steep price. The bought quality of the Center's activities becomes even more clear, however, when reviewing the Center's human rights activities in other countries: essentially no human rights activities in China or in North Korea, or in Iran, Iraq, the Sudan, or Syria, but activity regarding Israel and its alleged abuses, according to the Center's website
The Carter Center's mission statement claims that "The Center is nonpartisan and acts as a neutral party in dispute resolution activities." How can that be, given that its coffers are full of Arab money, and that its focus is away from significant Arab abuses and on Israel's far less serious ones? ....
It is Carter, not me, who has argued that distinguished reporters cannot honestly report on the Middle East because they are being paid by Jewish money. So, by Carter's own standards, it would be almost economically "suicidal" for Carter "to espouse a balanced position between Israel and Palestine." By Carter's own standards, therefore, his views on the Middle East must be discounted. It is certainly possible that he now believes them. Money, particularly large amounts of money, has a way of persuading people to a particular position. It would not surprise me if Carter, having received so much Arab money, is now honestly committed to their cause. But his failure to disclose the extent of his financial dependence on Arab money, and the absence of any self reflection on whether the receipt of this money has unduly influenced his views, is a form of deception bordering on corruption....
If money determines political and public views-as Carter insists "Jewish money" does-then Carter's views on the Middle East must be deemed to have been influenced by the vast sums of Arab money he has received. If he who pays the piper calls the tune, then Carter's off-key tunes have been called by his Saudi Arabian paymasters. It pains me to say this, but I now believe that there is no person in American public life today who has a lower ratio of real to apparent integrity than Jimmy Carter. The public perception of his integrity is extraordinarily high. His real integrity, it now turns out, is extraordinarily low. He is no better than so many former American politicians who, after leaving public life, sell themselves to the highest bidder and become lobbyists for despicable causes. That is now Jimmy Carter's sad legacy.
More here
For more postings, see TONGUE-TIED, EDUCATION WATCH, GREENIE WATCH, POLITICAL CORRECTNESS WATCH, GUN WATCH, SOCIALIZED MEDICINE, FOOD & HEALTH SKEPTIC, AUSTRALIAN POLITICS and EYE ON BRITAIN. (Mirror sites here, here, here, here, here, here, here and here).
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"All the worth which the human being possesses, all spiritual reality, he possesses only through the State." -- 19th century German philosopher Georg Wilhelm Friedrich Hegel. Hegel is the most influential philosopher of the Left -- inspiring Karl Marx, the American "Progressives" of the early 20th century and university socialists to this day.
The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialistisch) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party".
R.I.P. Augusto Pinochet. Pinochet deposed a law-defying Marxist President at the express and desperate invitation of the Chilean parliament. He pioneered the free-market reforms which Reagan and Thatcher later unleashed to world-changing effect. That he used far-Leftist methods to suppress far-Leftist violence is reasonable if not ideal. The Leftist view that they should have a monopoly of violence and that others should follow the law is a total absurdity which shows only that their hate overcomes their reason -- Details here and here
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