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[..] rich countries do not suffer from ethnic heterogeneity not because they do not have it but because they have succeeded in nation-building [...]
drawing on the fact that Rwanda is nearly as homogeneous in ethno-linguistic terms as Korea
[...] The Japanese and German cultures were transformed with economic development, as the demands of a highly organized industrial society made people behave in more disciplined, calculating and cooperative ways. In that sense is more of an outcome, rather than a cause, of economic development. It is wrong to blame Africa's (or any region's or any country's) underdevelopment on its culture.
apparently until the early 1900s, Japanese people were considered lazy; same for Germans until early 1800s
[...] the government picking winners may hurt some business interets but it may produce a better outcome from a social point of view.
the examples he gives: Korean govt telling LG to enter the electronics (and not the textile) industry, and Hyundai to enter the shipbuilding industry
The nineteenth-century liberals believed that abstinence was the key to wealth accumulation and thus economic development. Having acquired the fruits of their labour, people need to abstain from instant gratification and invest it, if they were to accumulate wealth. In this world view, the poor were poor because the did not have the character to exercise such abstinence. Therefore, if you gave the poor voting rights, they would want to maximize their current consumption, rather than investment, by imposing taxes on the rich and spending them. This might make the poor better off in the short run, but it would make them worse off in the long run by reducing investment and thus growth.
[...] Before the Golden Age, per capita income in the rich capitalist economies used to grow at 1-1.5 per cent per year. During the Golden Age, it grew at 2-3 per cent in the US and Britain, 4-5 per cent in Western Europe, and 8 per cent in Japan. Since then, these countries have never managed to grow faster than that.
1950-1973 in rich countries, coinciding with growth in progressive taxation and social welfare spending
[...] without subsidies from government or international donors, microfinance institutions have to charge, and have been charging, near-usurious rates. It has been revealed that the Grameen Bank could initially charge reasonable interest rates only because of the (hushed-up) subsidies it was getting from the Bangladeshi government and international donors. If they are not subsidized, microfinance institutions have to charge interest rates of typically 40-50 per cent for their loans, with rates as high as 80-100 per cent in countries such as Mexico. When, in the late 1990s, it came under pressure to give up the subsidies, the Grameen Bank had to relaunch itself (in 2001) and start charging interest rates of 40-50 per cent.
as a result of this, people are more likely to take out loans for consumption smoothing than to actually start businesses, since it seems so unlikely that they'll make enough profit to pay off the loans ... even when they do, the high interest rates mean that it's unlikely to help them get out of poverty
the other problem for businesses is that as a particular market segment gets crowded (e.g., renting phones), profits will of course fall ... and it's very difficult to simply switch to a different segment, due to limited skillsets, poor infrastructure, and limited access to capital (for example, you can't expect them to just start writing software for the phones)
he cites Milford Bateman's Why Doesn't Microfinance Work? for further reading
[...] what makes the poor countries poor is not the lack of raw individual entrepreneurial energy, which in fact they have in abundance. The point is that what really makes the rich countries rich is their ability to channel the individual entrepreneurial energy into collective entrepreneurship.
specifically, you need the right infrastructure in place: access to the initial knowledge and capital needed; a respected framework of company and intellectual property law; an educational system that produces capable employees. it's not that entrepreneurs in rich countries are better, it's that they're given an environment in which they can more easily flourish, whereas those in poor countries are in a much more hostile environment (at least when it comes to the same level of success)
[...] Even when it comes to higher education, which is supposed to matter more in the knowledge economy, there is no simple relationship between it and economic growth. What really matters in the determination of national prosperity is not the educational levels of individuals but the nation's ability to organize individuals into enterprises with high productivity.
in other words, systemic factors over individual (analogous to note 402)
at the same time, there are some questions which he doesn't really address, that I feel would be very relevant: how do you improve the nation's ability to organise these individuals? isn't a better educated workforce a necessary--though maybe not sufficient--step for that? what policies are needed to make that happen?
[...] evidence is emerging that, in defiance of the law, throughout the war GM secretly maintained its link with Opel, which built not only military cars but aircraft, landmines and torpedoes. So it seems that GM was arming both sides and profiting from it.
Opel being a German subsidiary acquired in 1929 that provided Nazi Germany with some of the technology needed for its war machine
[...] all these actions [...] have ultimately not been good even for GM itself--unless you equate GM with its managers and a constantly changing group of shareholders. These managers drew absurdly high salaries by delivering higher profits by not investing for productivity growth while squeezing other weaker 'stakeholders'--their workers, supplier firms and the employees of those firms. They bought the acquiescence of shareholders by offering them dividends and share buybacks to such an extent that the company's future was jeopardized. The shareholders did not mind, and indeed many of them encouraged such practices, because most of them were floating shareholders who were not really concerned with the long-term future of the company because they could leave at a moment's notice (see Thing 2).
makes u wonder why the stock exchange is still a thing when it's clearly SUCH A BAD IDEA