April 13, 2015

Why is Northeast Asia poorer than the USA?

The statistics make it clear as crystal that IQ is a major determinant of national wealth.  Poor countries tend to be dumber, much dumber in some cases.  So it is interesting that a massive and statistically very strong article by Anatoly Karlin has just come out that asks why the USA is such an outlier. American exceptionalism really does exist in the wealth statistics.  According to their national average IQs, Japan, South Korea, Hong Kong and Taiwan should be richer than the USA -- but they are in fact significantly poorer.  That's a puzzle.

The easy answer to the puzzle is to say that special factors are at work in each case but that is a bit of a cop-out -- though it may be true.  Karlin considers a wide range of factors that might help America and it is clear that some of them are indeed involved.  Relative size of market, more Jews in the USA etc.

Something that deepens the puzzle is that Northeast Asia is also less socialist.  Socialism, depending on its extent, clearly has a dampening effect on wealth creation.  Britain's millions of NEETs sponging off welfare are an example of how socialism can take a significant slice of the population out of the workforce.  Now that the Tory government has done a modest crackdown on "dole bludging", there has been a big increase in the size of the active workforce.  So semi-socialist USA should be poorer than the NE Asians, not richer.

And natural resources are not the answer.  Karlin has some statistics on that but there are plenty of examples of resource-poor countries doing well.

I think inherited traditions and RACE are major factors, though not perhaps in the way that one might think. As it is less incendiary, I will mention traditions first.

Yankees tend to be, to be blunt about it, self-righteous, know-it-all bastards. And they are still a substantial fraction of the US population -- and are certainly an influential fraction of the US population.  Their ancestors left Europe and Britain in rickety wooden boats absolutely convinced that they would create in the new world a religious utopia -- as soon as they threw off the silly customs and conventions of the old world.  A third of them had to die of starvation before they decided that their communism was a crock and that the silly ways of the old world were not so silly after all.  And their descendants today are not much different, still convinced of their own righteousness and wisdom  -- which is why New England is the great redoubt of the American Left.  Being a Republican in Massachusetts requires some fortitude.

And we see something similar in Australia.  The first white settlers there made a much longer journey in rickety wooden ships of the Royal Navy.  Most of them were convicts.  Two of them were my ancestors. And they HAD to become settlers.  Returning to England would get you hanged at Tyburn.  But convicts were not keen workers.  Their attitude to their jobs tended to be relaxed. And that still exists in Australia.  Australia is the laid-back country. Nobody really expects to get any job done right the first time.  Even if it takes three times to get something done that is fine, normal, even.  But such relaxed attitudes are inefficient economically.  Having three goes to get something done is wasteful.  It does however make Australia a cheerful, friendly place, which the world could surely do with much more of.  It takes Muslims to make Australians riot.

So what we see is the surprising influence of the founders of a society.  Traditions once set up are amazingly persistent.  So it is to American traditions that we should to look for at least a part-explanation of American exceptionalism.  And whatever else they were, the Pilgrim Fathers were exceptionally enterprising and brave. They took on a big challenge with scarcely a second thought.  They knew the risks and were prepared to face them.  And that is very characteristic of American business to this day.  American wealth is created by American business.  And as we recently saw, what is bad for General Motors is bad for America.  American entrepreneurs are a large part of America's success.

Now we get on to what I believe is another powerful factor:  RACE.  But I am NOT going to say  that Americans are particularly superior racially.  Not at all.  We can see that by considering the cases of Australia and New Zealand.  Both those countries are very similar to America racially  -- and in other ways too.  You don't even have to press "1" for English there.  Yet Australia and New Zealand are clustered with the NE Asian countries in terms of wealth per capita.  Despite the great similarities between the USA and the ANZAC countries, America is clearly richer.  So it is not the racial composition of the majority population that makes the difference.  It is the minority population that is the key.

OK.  Let me now say something that just about every American knows but which it is social poison to utter these days:  Blacks are a HUGE problem for the white population.  They run fast and sing well but those are just about the only good things you can say about them.  So American whites are in general pretty frantic to minimize their contact with blacks.  Living among them is just too frightening for most whites.

But how can whites minimize their contact with blacks in the present climate of political correctness?  There is really only one way: White flight.  You have to move to places where blacks don't want to go if you are to find safety for your family.  And, since their income is generally as low as their IQ, blacks are mostly poor. So it is in the more expensive suburbs and exurbs were you are safest from them. So being able to spend big money  is the only way to safeguard yourself and your family. So American whites have to struggle frantically to make as much money as possible.  And they do.  To an outsider it looks like money is their God. But in a capitalist economy the best way to make a lot of money is to deliver a lot in goods and services. And white Americans do.  Their spurred-on efforts produce America's wealth.

Japan and Korea, by contrast, are among the world's most racially homogeneous societies.  Unaccompanied women walk through the streets of Tokyo at night without fear -- somewhat different from NYC, one might say.  There is a story here about Japan that sometimes makes me sob.  I remember that it was once like that in the small Australian town where I grew up long ago.  Not all Japan's strengths are monetary.

So I think that the high money-motivation produced by America's racial tensions is the main driver behind America' unusual wealth.  I am glad I am not American. I give most of my modest income away. Radix malorum cupiditas est

UPDATE:  A reader has commented that there are many places in the USA where blacks are largely absent so there is no pressure to avoid them. I think however that overlooks the importance of the big cities -- e.g. NYC and L.A.  The big cities are a large part of America's economic dynamism and there ARE lots of blacks in most of them.  So the people there ARE driven towards affording a refuge.





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