But what about the Middle Eastern countries who tried very similar policies in the 60s and 70s, and it didn't help them at all?
You can't just pick successful countries who all have X in common and write a Just-So story about how X is the cause. You have to look at all countries with X.
But what about the Middle Eastern countries who tried very similar policies in the 60s and 70s, and it didn't help them at all?
You can't just pick successful countries who all have X in common and write a Just-So story about how X is the cause. You have to look at all countries with X.
I found "Egypt on the Brink: From the Rise of Nasser to the Fall of Mubarak" useful as a source on Egypt specifically, though it's more political history than it is economic.
I feel like most Middle Eastern countries were not stable enough to keep the policies going. The most prominent example of socialist country trying to turn things around is probably Egypt. Egypt started with something similar in 1956 with Nasser, but by 1970s they were already deregulating their economy since they switch their side in Cold War.
Don't most of the Arab countries still have a hereditary nobility of large landowners? And haven't they stayed focused on bananas, rather than manufacturing? (Well, oil, but it's the same sort of thing as bananas. Some of the Emirates have tried to do something different, I suppose.)
Read Elinor Ostrom's book "Governing the Commons". There's lots of interesting stuff in here about how various traditional societies figured out non-state non-market ways of solving common pool goods problems, including water rights among small landholders in Spain, that involved a complicated system of ditch maintenance that made it easily verifiable by everyone that everyone was doing their part fairly.
And yet after the irrigation system was destroyed by the mongols, it was never rebuilt. Kinda hard to square that with some sort of cultural genius for hydrology.
?? The article describes the use of the irrigation system in the US. I'm unaware of any Mongol invasion of the US тАФ and the origin was Spain, and I don't believe the Mongols got that far. Could you clarify wrt to the article to which I linked?
I did not mention "true" Sha'riah. I suggest you simply read the article, look at it as a way of cooperatively managing a common resource, and not get distracted by labels.
You think the "co-operative water" is the interesting part.
I think the "labelling this as sharia, even though that claim is silly" (presumably because we live in a time where nothing euro-american can be considered good) is the interesting part.
From the article: "Jos├й explains the ancient practice of dividing the flow of water with acequias, the gravity-based ditch and communal water management systems that have irrigated farms in southern Colorado and northern New Mexico since the arrival of the conquistadores. To be historically precise, the conquistadoresтАУand the indian warriors and craftsmen accompanying them from MexicoтАУbrought this technology with them on their transatlantic journey from the semi-arid regions of 16th-century southern Spain to the New World. The Spaniards, in turn, learned it from their Arab and Berber conquerors, whose civilization dominated large of swaths of SpainтАЩs Iberian peninsula for more than seven centuries."
Islam shaped Spain substantially, and traces of the culture remain highly visible there (cf. Alhambra), and тАФ as the article notes тАФ some practices from that heritage were brought to North America by the conquistadores.
I can see that, you cannot, so I think we will just have to disagree.
I have to say that I don't understand some of your statements. You attributed to me things I did not say or think, and now you claim that "nothing euro-american can be considered good". I disagree with that, but I take it that's your view.
Your views and your misunderstandings of my statements show that there is no point in taking the discussion further.
IтАЩm no expert, but didnтАЩt Israel follow broadly similar policies to Korea, Taiwan etc and also succeed? My sense is that even (relatively) peaceful Turkey, Jordan etc have not been able to follow a similar path.
I wouldn't say that Israel followed a similar model: The early Kibbutzim were not privately owned, though being small and communal may have led to similar effects.
But Israel is something of a special case, having been built by immigrants. The earliest migrants were largely Eastern Europeans: Not quite American/British, but not Chinese either. There was also non-negligible immigration from Germany and either highly developed-European countries before WWII, and they would have brought substantial knowledge with them. That probably also explains at least part of the socioeconomic gap between European Jews and Middle Eastern and North African Jews and Arabs in Israel.
It's interesting that the most recent immigrant wave, of roughly one million often highly-educated immigrants from the USSR around 1990, actually had pretty low socioeconomic status, though it has since gone up. That may just reflect Israel's relatively high development by 1990 (to Soviet levels? IDK) plus some difficulty integrating.
There's an econ paper analyzing the labor market impacts of the Soviet Aliyah. Let me know if you can't find it in Google Scholar and I'll dig it up.
I wouldn't say the USSR jews were low socio economic status, they were only low economic status in Israel because of frictions entering the labor market (language, specializations). They were high socio status (education, culture) and indeed this shows in the catch up a generation later.
The counterexample I was thinking of was India, which implemented protective tariffs, manufactured their own crappy cars etc., and grew slower than Studwell's failure stories. At least in the Economist magazine version, the tech industry took off because the central planners didn't quite know what it was and left it alone, and India only achieved sustained fast growth post-liberalization.
Basically two, Ambassador and PAL, with the Suzuki-licensed Maruti introduced in the 80s. The argument would be that India did not enforce export discipline, and the тАЬlicense RajтАЭ bred complacency.
Automobiles have been liberalized since, and their first passenger car was only in 1988. Tata used to make trucks, but not cars. They started making the Nano, but it's not a big success AFAIK.
To what extent did their similar policies include real internal competition and export discipline, rather than the government subsidizing and/or owning designated champions of industry? My admittedly vague impression was that Nasser et al were Soviet-influenced socialists and much more friendly to SOEs than to entrepreneurs.
The Middle East experienced the highest increase in the UN Human Development index at the time. Sure, oil wealth helped (although it also causes Dutch disease).
Isn't the Dutch disease thing largely a myth? If you have 2 countries, one with $10bn of GDP and the other with $20bn, but $10bn is from commodities. Then if the non commodity part of the economy grows 7%, overall growth is only 3.5%. And for the country with no commodities, it would be 7%. Even though rate of development is the same.
The idea is that commodities represent easy money, which drives out every other kind of investment. At the same time, commodity prices can be rather volatile, to put it mildly, especially if you are not the margin producer.
I don't see why it would drive out other kind of investment. I think the risk is more that leaders can get rich from stealing those commodities, and use to resources to live large and opress the population. Whereas with no commodities they are forced to develop, opening Pandora's box (in a good way).
But for the most part, the non commodity economy often grows just as fast, it is just that the commodity part of the income distorts the growth %'s.
As I understand it, the reason commodity investment drives out other investment is because the risk-weightes return is so much higher.
The other problem is that the risk doesn't go away, and is in fact quite severe and hard to diversify or hedge away, at least on a national scale. In other words, you're always at the mercy of oil prices.
A different version might be Africa where a variety of countries (most recently supposedly Zimbabwe in, say, the late 90s by appropriation, and still, to now, supposedly South Africa by buy and split white farmer land) have claimed to do this.
IтАЩm unaware of any success stories. Did every one of these devolve into cronyism?
I read this in a French paper encyclopedia in the 90s, canтАЩt remember which one, probably the Universalis annual supplemental volume, and in any case it would have been discontinued years ago.
Not sure about the details but I remember an Iraqi writing that Saddam Hussein was actually a pretty competent administrator when he was Vice-President before he staged his coup and power went to his head. Iraq certainly had the human capital: engineers, doctors and so on, not being burdened by the dead weight of Wahhabi indoctrination in schools.
Iraq's lack of human capital is one reason why Greg Cochran was confident they wouldn't have any nukes. Other reasons were sanctions & that chunks of the country were too hostile to the regime to contribute.
Most of those factors would also apply to North Korea, yet they managed to get nukes. It's a 1940s technology, well within the reach of most nation-states. It's only active measures to deny enrichment like those under the NPT that have prevented more widespread adoption of nukes by every tinpot dictator out there.
I think the frameowork of exisiting within a Theocracy is enough to outweigh all of the other changes. I mean it looks like many of those Middle Eastern countries were indeed in somewhat of a renaissance before religious factions came in and reorganized the entire game around a very different incentive structure that had little to do with maximizing economic growth.
And I think the author would claim that the set of circumstances he describes are situationally dependant semi-necessary but not sufficient.
But what about the Middle Eastern countries who tried very similar policies in the 60s and 70s, and it didn't help them at all?
You can't just pick successful countries who all have X in common and write a Just-So story about how X is the cause. You have to look at all countries with X.
Where can I learn more about the Middle Eastern side of things?
I found "Egypt on the Brink: From the Rise of Nasser to the Fall of Mubarak" useful as a source on Egypt specifically, though it's more political history than it is economic.
I feel like most Middle Eastern countries were not stable enough to keep the policies going. The most prominent example of socialist country trying to turn things around is probably Egypt. Egypt started with something similar in 1956 with Nasser, but by 1970s they were already deregulating their economy since they switch their side in Cold War.
Don't most of the Arab countries still have a hereditary nobility of large landowners? And haven't they stayed focused on bananas, rather than manufacturing? (Well, oil, but it's the same sort of thing as bananas. Some of the Emirates have tried to do something different, I suppose.)
I'm wondering how the small landowner thing should work when water is scarce and requires large-scale irrigation.
Read Elinor Ostrom's book "Governing the Commons". There's lots of interesting stuff in here about how various traditional societies figured out non-state non-market ways of solving common pool goods problems, including water rights among small landholders in Spain, that involved a complicated system of ditch maintenance that made it easily verifiable by everyone that everyone was doing their part fairly.
This article describes the system as applied in the US: https://craftsmanship.net/the-hydraulic-genius-of-shariah-law/
And yet after the irrigation system was destroyed by the mongols, it was never rebuilt. Kinda hard to square that with some sort of cultural genius for hydrology.
?? The article describes the use of the irrigation system in the US. I'm unaware of any Mongol invasion of the US тАФ and the origin was Spain, and I don't believe the Mongols got that far. Could you clarify wrt to the article to which I linked?
So true Sharia is found in the Western US rather than the Middle East?
ThatтАЩs an *unorthodox* positionтАж
I am mocking the calling of this Shariah, and PC attitudes that felt that was a sensible characterization.
I did not mention "true" Sha'riah. I suggest you simply read the article, look at it as a way of cooperatively managing a common resource, and not get distracted by labels.
We all see what is interesting in an article.
You think the "co-operative water" is the interesting part.
I think the "labelling this as sharia, even though that claim is silly" (presumably because we live in a time where nothing euro-american can be considered good) is the interesting part.
From the article: "Jos├й explains the ancient practice of dividing the flow of water with acequias, the gravity-based ditch and communal water management systems that have irrigated farms in southern Colorado and northern New Mexico since the arrival of the conquistadores. To be historically precise, the conquistadoresтАУand the indian warriors and craftsmen accompanying them from MexicoтАУbrought this technology with them on their transatlantic journey from the semi-arid regions of 16th-century southern Spain to the New World. The Spaniards, in turn, learned it from their Arab and Berber conquerors, whose civilization dominated large of swaths of SpainтАЩs Iberian peninsula for more than seven centuries."
Islam shaped Spain substantially, and traces of the culture remain highly visible there (cf. Alhambra), and тАФ as the article notes тАФ some practices from that heritage were brought to North America by the conquistadores.
I can see that, you cannot, so I think we will just have to disagree.
I have to say that I don't understand some of your statements. You attributed to me things I did not say or think, and now you claim that "nothing euro-american can be considered good". I disagree with that, but I take it that's your view.
Your views and your misunderstandings of my statements show that there is no point in taking the discussion further.
Must steal that book....
IтАЩm no expert, but didnтАЩt Israel follow broadly similar policies to Korea, Taiwan etc and also succeed? My sense is that even (relatively) peaceful Turkey, Jordan etc have not been able to follow a similar path.
Israel has almost no privately owned farms though.
I wouldn't say that Israel followed a similar model: The early Kibbutzim were not privately owned, though being small and communal may have led to similar effects.
But Israel is something of a special case, having been built by immigrants. The earliest migrants were largely Eastern Europeans: Not quite American/British, but not Chinese either. There was also non-negligible immigration from Germany and either highly developed-European countries before WWII, and they would have brought substantial knowledge with them. That probably also explains at least part of the socioeconomic gap between European Jews and Middle Eastern and North African Jews and Arabs in Israel.
It's interesting that the most recent immigrant wave, of roughly one million often highly-educated immigrants from the USSR around 1990, actually had pretty low socioeconomic status, though it has since gone up. That may just reflect Israel's relatively high development by 1990 (to Soviet levels? IDK) plus some difficulty integrating.
I'd be interested in an analysis of the impact of each successive wave of immigration on Israel's economy and industrialization. https://en.wikipedia.org/wiki/Aliyah#Zionist_Aliyah_(1882_on)
There's an econ paper analyzing the labor market impacts of the Soviet Aliyah. Let me know if you can't find it in Google Scholar and I'll dig it up.
I wouldn't say the USSR jews were low socio economic status, they were only low economic status in Israel because of frictions entering the labor market (language, specializations). They were high socio status (education, culture) and indeed this shows in the catch up a generation later.
Could you dig it up? :)
I found two.
1) https://www.econstor.eu/bitstream/10419/102605/1/1996-28.pdf
2) https://www.econstor.eu/bitstream/10419/20581/1/dp1315.pdf
Thanks! (Somehow liking doesn't work.)
The counterexample I was thinking of was India, which implemented protective tariffs, manufactured their own crappy cars etc., and grew slower than Studwell's failure stories. At least in the Economist magazine version, the tech industry took off because the central planners didn't quite know what it was and left it alone, and India only achieved sustained fast growth post-liberalization.
How many car companies were competing in India?
Basically two, Ambassador and PAL, with the Suzuki-licensed Maruti introduced in the 80s. The argument would be that India did not enforce export discipline, and the тАЬlicense RajтАЭ bred complacency.
Not Tata?
Automobiles have been liberalized since, and their first passenger car was only in 1988. Tata used to make trucks, but not cars. They started making the Nano, but it's not a big success AFAIK.
To what extent did their similar policies include real internal competition and export discipline, rather than the government subsidizing and/or owning designated champions of industry? My admittedly vague impression was that Nasser et al were Soviet-influenced socialists and much more friendly to SOEs than to entrepreneurs.
The Middle East experienced the highest increase in the UN Human Development index at the time. Sure, oil wealth helped (although it also causes Dutch disease).
Isn't the Dutch disease thing largely a myth? If you have 2 countries, one with $10bn of GDP and the other with $20bn, but $10bn is from commodities. Then if the non commodity part of the economy grows 7%, overall growth is only 3.5%. And for the country with no commodities, it would be 7%. Even though rate of development is the same.
The idea is that commodities represent easy money, which drives out every other kind of investment. At the same time, commodity prices can be rather volatile, to put it mildly, especially if you are not the margin producer.
I don't see why it would drive out other kind of investment. I think the risk is more that leaders can get rich from stealing those commodities, and use to resources to live large and opress the population. Whereas with no commodities they are forced to develop, opening Pandora's box (in a good way).
But for the most part, the non commodity economy often grows just as fast, it is just that the commodity part of the income distorts the growth %'s.
As I understand it, the reason commodity investment drives out other investment is because the risk-weightes return is so much higher.
The other problem is that the risk doesn't go away, and is in fact quite severe and hard to diversify or hedge away, at least on a national scale. In other words, you're always at the mercy of oil prices.
Agreed. Dutch disease or not, it's better to be Iran than Pakistan.
A different version might be Africa where a variety of countries (most recently supposedly Zimbabwe in, say, the late 90s by appropriation, and still, to now, supposedly South Africa by buy and split white farmer land) have claimed to do this.
IтАЩm unaware of any success stories. Did every one of these devolve into cronyism?
Interested in your recommendation for the best first book to read that talks about the Middle Eastern 60s-70s development story!
I read this in a French paper encyclopedia in the 90s, canтАЩt remember which one, probably the Universalis annual supplemental volume, and in any case it would have been discontinued years ago.
Not sure about the details but I remember an Iraqi writing that Saddam Hussein was actually a pretty competent administrator when he was Vice-President before he staged his coup and power went to his head. Iraq certainly had the human capital: engineers, doctors and so on, not being burdened by the dead weight of Wahhabi indoctrination in schools.
Iraq's lack of human capital is one reason why Greg Cochran was confident they wouldn't have any nukes. Other reasons were sanctions & that chunks of the country were too hostile to the regime to contribute.
Most of those factors would also apply to North Korea, yet they managed to get nukes. It's a 1940s technology, well within the reach of most nation-states. It's only active measures to deny enrichment like those under the NPT that have prevented more widespread adoption of nukes by every tinpot dictator out there.
That's part of Greg's argument: NK had better human capital, so they could get nukes despite their awful economic system keeping them impoverished.
I think the frameowork of exisiting within a Theocracy is enough to outweigh all of the other changes. I mean it looks like many of those Middle Eastern countries were indeed in somewhat of a renaissance before religious factions came in and reorganized the entire game around a very different incentive structure that had little to do with maximizing economic growth.
And I think the author would claim that the set of circumstances he describes are situationally dependant semi-necessary but not sufficient.