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The Politically Incorrect Guide to Ending Poverty

The_Penguin

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Halfway through the 12th century, and a long time before economists began pondering how to turn poor places into rich ones, the Germanic prince Henry the Lion set out to create a merchant’s mecca on the lawless Baltic coast. It was an ambitious project, a bit like trying to build a new Chicago in modern Congo or Iraq. Northern Germany was plagued by what today’s development gurus might delicately call a “bad-governance equilibrium,” its townships frequently sacked by Slavic marauders such as the formidable pirate Niclot the Obotrite. But Henry was not a mouse. He seized control of a fledgling town called Lübeck, had Niclot beheaded on the battlefield, and arranged for Lübeck to become the seat of a diocese. A grand rectangular market was laid out at the center of the town; all that was missing was the merchants.

To attract that missing ingredient to his city, Henry hit on an idea that has enjoyed a sort of comeback lately. He devised a charter for Lübeck, a set of “most honorable civic rights,” calculating that a city with light regulation and fair laws would attract investment easily. The stultifying feudal hierarchy was cast aside; an autonomous council of local burgesses would govern Lübeck. Onerous taxes and trade restrictions were ruled out; merchants who settled in Lübeck would be exempt from duties and customs throughout Henry the Lion’s lands, which stretched south as far as Bavaria. The residents of Lübeck were promised fair treatment before the law and an independent mint that would shelter them from confiscatory inflation. With this bill of rights in place, Henry dispatched messengers to Russia, Denmark, Norway, and Sweden. Merchants who liked the sound of his charter were invited to migrate to Lübeck.

-snip-
The Politically Incorrect Guide to Ending Poverty - Magazine - The Atlantic

Fascinating read. The author doesn't hold back. He looks at the past and how certain areas (Hong Kong, for example) develop so well and how this could be replicated elsewhere.
 

Aunt Spiker

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I'm on page two - a storms coming in so I'm likely going to lose my connection adn thought I'd throw in a post before that happens.

I like his ideas. He's not judgmental or offensive, but quite blunt and factual.
 

Jerry

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The Politically Incorrect Guide to Ending Poverty - Magazine - The Atlantic

Fascinating read. The author doesn't hold back. He looks at the past and how certain areas (Hong Kong, for example) develop so well and how this could be replicated elsewhere.
Well, if we handle poverty the way the left handles gun crime, then all we need to do is register everyone who's homeless, require a permit to be homeless, and limit how often you can be homeless to once per month. In some states, in order to get your homeless permit you will have to demonstrate a need to be homeless.
 

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I'm on page two - a storms coming in so I'm likely going to lose my connection adn thought I'd throw in a post before that happens.

I like his ideas. He's not judgmental or offensive, but quite blunt and factual.
Bugger. Hopefully it blows over quickly.
 

The_Penguin

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Well, if we handle poverty the way the left handles gun crime, then all we need to do is register everyone who's homeless, require a permit to be homeless, and limit how often you can be homeless to once per month. In some states, in order to get your homeless permit you will have to demonstrate a need to be homeless.
:)

Read the ****ing article ;) .
 

Jerry

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:)

Read the ****ing article ;) .
Or if we handle homelessness the way the left handles abortion, then anyone who ever finds a homeless person merely inconvenient can take them to a "clinic" and have a "medical procedure" performed to "terminate" them.
 

Aunt Spiker

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Or if we handle homelessness the way the left handles abortion, then anyone who ever finds a homeless person merely inconvenient can take them to a "clinic" and have a "medical procedure" performed to "terminate" them.
What does being homeless have to do with abortions? Aren't there enough abortion debates to sink your teeth into?
Since you're on a note of synicism I could just say "why don't we all deport the illegals and put the homeless to work!" :shrug:

But that's not the point. I'm still reading the article and will comment in depth when I'm finished.
 

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What does being homeless have to do with abortions? Aren't there enough abortion debates to sink your teeth into?
Since you're on a note of synicism I could just say "why don't we all deport the illegals and put the homeless to work!" :shrug:

But that's not the point. I'm still reading the article and will comment in depth when I'm finished.
:prof It has to do with how the left never has the correct answer for anything.
 

Aunt Spiker

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Ok - I've read it.

I'm impressed - it's defintely not a *new* idea (Charter cities) and the problems with it aren't new, either.
Everyone wants *their country* to be untouched by *other countries*
Everyone wants equality - no one likes the idea that "they, over there, have more freedom than I do, over here"

But in the incidences in history in which it *did* occur - it was unbelievably positive: Lubeck and Hong Kong. There's no denying that Hong Kong kickstarted that entire regions wealth and prosperity much to their happiness. And it wasn't even intentional, unlike Lubeck. It was quite accidental - handing over control of that land to Britain was the best thing they could have hoped for. So Romer is just trying to make that happen on purpose.

And of course, it's funny, the people - the citizens - are the reason why things didn't go too well in Madagascar, et al. Too much "my country!" and little desire ot hear and see the possibility of a brighter and promising future. By being against it - they stunt their own growth.

Jerry - by being against it you stunt your own growth.

Great article - very insightful.
 

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The idea that Hong Kong is responsible for the growth and development of China today is idiotic.

China has a long history of being trader's, inventors, and merchants among other capitalistic area's. Up untill the industrial revolution it had the worlds largest economy, producing more material goods then the rest of the world by a long shot. It had a legal system prior to communism that allowed for capitalism to exist and thrive.

What caused China's growth was not Hong Kong, but CHINESE leadership in China deciding finally in the 80's that communism does not work. That realization caused the Chinese leadership to open up China's economy to capitalism again. Chinese leadership then allowed outside business's to set up shop in China using SEZ. Hong Kong may have been a facilitator, in the redevelopment of China but it was not the cause..

Lubeck is different story as much of Europe at the time was underpopulated, and the region was open for development without much in the way of concern for local populations (their wasnt much after the various plagues. So setting up a new city that was open and friendly to trade, in an underpopulated region was bound to have strong growth provided outside invaders were contained
 

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The idea that Hong Kong is responsible for the growth and development of China today is idiotic. *snip for brevity*
His focus isn't what made China great to begin with - it's what made Hong Kong even *better* than everyone else in the region. His point is that *rules* are what keep a people down and keep development from happening.

From page 5: said:
When you listen carefully, you realize that much of what Romer is saying should not be controversial. A few development economists argue that geography is destiny, but most share Romer’s conviction that decent rules are paramount. After all, Asia accounted for fully 56 percent of world income in 1820, only 16 percent in 1950, and a substantial 39 percent in 2008; what changed over this period was rules, not geography.
From pages 2 and 3: said:
When Romer explains charter cities, he likes to invoke Hong Kong. For much of the 20th century, Hong Kong’s economy left mainland China’s in the dust, proving that enlightened rules can make a world of difference. By an accident of history, Hong Kong essentially had its own charter—a set of laws and institutions imposed by its British colonial overseers—and the charter served as a magnet for go-getters. At a time when much of East Asia was ruled by nationalist or Communist strongmen, Hong Kong’s colonial authorities put in place low taxes, minimal regulation, and legal protections for property rights and contracts; between 1913 and 1980, the city’s inflation-adjusted output per person jumped more than eightfold, making the average Hong Kong resident 10 times as rich as the average mainland Chinese, and about four-fifths as rich as the average Briton. Then, beginning around 1980, Hong Kong’s example inspired the mainland’s rulers to create copycat enclaves. Starting in Shenzhen City, adjacent to Hong Kong, and then curling west and north around the Pacific shore, China created a series of special economic zones that followed Hong Kong’s model. Pretty soon, one of history’s greatest export booms was under way, and between 1987 and 1998, an estimated 100 million Chinese rose above the $1-a-day income that defines abject poverty. The success of the special economic zones eventually drove China’s rulers to embrace the export-driven, pro-business model for the whole country. “In a sense, Britain inadvertently, through its actions in Hong Kong, did more to reduce world poverty than all the aid programs that we’ve undertaken in the last century,” Romer observes drily.
 
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Aunt Spiker

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:prof It has to do with how the left never has the correct answer for anything.
This guy, here, though. - fully embraces the free market. His whole theory is that economic growth can happen any time you lessen the rules and regulations and accomodate business growth. He refers to Hong Kong and states that "Hong Kong's colonial authorities put in place low taces, minimal regulation, and legal protections for property rights and contracts"

He's all for freeing up the system and lessening regulations - he's for *changing* the rules that don't work and replacing them with ones that are proven *to* work. In this sense he's being quite the Conservative.
 

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Juxtaposed with chinas new growth... and the probability that HONG KONG would be economically massive no matter who owned it, I don't completely agree. Not a bad article though.
 

Lord Tammerlain

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His focus isn't what made China great to begin with - it's what made Hong Kong even *better* than everyone else in the region. His point is that *rules* are what keep a people down and keep development from happening.
Yes good governance will typically lead to good economic performance. But it was not that Hong Kong was the inspiration for China's good governance or that China had to copy what Hong Kong had, China had it before, lost it for a while and regained it.
 

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The idea that Hong Kong is responsible for the growth and development of China today is idiotic.
I'm curious, have actually read the article?
China has a long history of being trader's, inventors, and merchants among other capitalistic area's.
Yes. And while it was all dandy up until Europeans started using steam power in order to run machines, it didn't do much when it came time to confront the world outside.
Up untill the industrial revolution it had the worlds largest economy, producing more material goods then the rest of the world by a long shot.
Yes... and the focus of the article (China specifically) is the last 50 years.
It had a legal system prior to communism that allowed for capitalism to exist and thrive.
Kind of. The problem with China was a lack of keeping contact with the rest of the world by deciding to close its borders to outsiders, having emperors that would at times become quite jealous of businesses that developed too quickly for his taste (draws away peasentry that could otherwise toil on the lands of nobility) and a general lack of the same types of property laws brought by the British.
What caused China's growth was not Hong Kong, but CHINESE leadership in China deciding finally in the 80's that communism does not work.
Coincidentally this is also the time that Hong Kong began to really take off. And we're not just talking here shoe factories. This is when you saw high-rise buildings in the Hong Kong sky-line. It was a pretty clear sign to the mainland that they were doing it wrong.
That realization caused the Chinese leadership to open up China's economy to capitalism again.
Yup. Seeing Hong Kong bloom and their centrally planned economy stagnate was a clear enough sign to hand over the reigns of development to the masses.
Chinese leadership then allowed outside business's to set up shop in China using SEZ. Hong Kong may have been a facilitator, in the redevelopment of China but it was not the cause..
Hong Kong, as the author says, was an example. It showed the region what can happen when you have a government that has strong property laws and hands over the task of development to the people. Hong Kong did a very good job of convincing Beijing that their current approach was a failure.
 

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Juxtaposed with chinas new growth... and the probability that HONG KONG would be economically massive no matter who owned it, I don't completely agree. Not a bad article though.
i
It was a small trading enclave in a region where trade was restrictive between major countries. The same open trade aspect of Hong Kong were/are shared with Singapore. Being open to trade, without having a large country/population that requires support is generally going to allow that city/state quite well.

Imagine if New York was an independant city state that was able to control immigration into it. Use the cheap surrounding labour for manufactuing and New York would be seen in the same light. It would not have had to spend money on the military, rural infrustructure would not be a concern
 

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This guy, here, though. - fully embraces the free market. His whole theory is that economic growth can happen any time you lessen the rules and regulations and accomodate business growth. He refers to Hong Kong and states that "Hong Kong's colonial authorities put in place low taces, minimal regulation, and legal protections for property rights and contracts"

He's all for freeing up the system and lessening regulations - he's for *changing* the rules that don't work and replacing them with ones that are proven *to* work. In this sense he's being quite the Conservative.
Free market? He's an imperialist :) . Personally, I look to people like him that given the right form of external administration it could work wonders for impoverished nations.
 

Lord Tammerlain

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I'm curious, have actually read the article?

Yes. And while it was all dandy up until Europeans started using steam power in order to run machines, it didn't do much when it came time to confront the world outside.

Yes... and the focus of the article (China specifically) is the last 50 years.

Kind of. The problem with China was a lack of keeping contact with the rest of the world by deciding to close its borders to outsiders, having emperors that would at times become quite jealous of businesses that developed too quickly for his taste (draws away peasentry that could otherwise toil on the lands of nobility) and a general lack of the same types of property laws brought by the British.

Coincidentally this is also the time that Hong Kong began to really take off. And we're not just talking here shoe factories. This is when you saw high-rise buildings in the Hong Kong sky-line. It was a pretty clear sign to the mainland that they were doing it wrong.

Yup. Seeing Hong Kong bloom and their centrally planned economy stagnate was a clear enough sign to hand over the reigns of development to the masses.

Hong Kong, as the author says, was an example. It showed the region what can happen when you have a government that has strong property laws and hands over the task of development to the people. Hong Kong did a very good job of convincing Beijing that their current approach was a failure.
Chinese leadership had plenty of examples other then Hong Kong It had the US, Germany, Japan and South Korea

The countries that it probably focused more on would have been South Korea and Japan. More so then Hong Kong. What is effectively a city state has different economic sociological concerns then a large country with a massive population.

Overall in my opinion it would have been the death of Mao, which would have caused the opening up of the Chinese economy
http://en.wikipedia.org/wiki/Economy_of_the_People's_Republic_of_China#1978.E2.80.931990
See also: Economic reform in the People's Republic of China
Since 1978, China began to make major reforms to its economy. The Chinese leadership adopted a pragmatic perspective on many political and socioeconomic problems, and sharply reduced the role of ideology in economic policy. Political and social stability, economic productivity, and public and consumer welfare were considered paramount and indivisible. In these years, the government emphasized raising personal income and consumption and introducing new management systems to help increase productivity. The government also had focused on foreign trade as a major vehicle for economic growth. In the 1980s, China tried to combine central planning with market-oriented reforms to increase productivity, living standards, and technological quality without exacerbating inflation, unemployment, and budget deficits. Reforms began in the agricultural, industrial, fiscal, financial, banking, price setting, and labor systems.[24]

A decision was made in 1978 to permit foreign direct investment in several small "special economic zones" along the coast.[25] The country lacked the legal infrastructure and knowledge of international practices to make this prospect attractive for many foreign businesses, however.[25] In the early 1980s steps were taken to expand the number of areas that could accept foreign investment with a minimum of red tape, and related efforts were made to develop the legal and other infrastructures necessary to make this work well.[26] This additional effort resulted in making 14 coastal cities and three coastal regions "open areas" for foreign investment. All of these places provide favored tax treatment and other advantages for foreign investment. Laws on contracts, patents, and other matters of concern to foreign businesses were also passed in an effort to attract international capital to spur China's development.[27] The largely bureaucratic nature of China's economy, however, posed a number of inherent problems for foreign firms that wanted to operate in the Chinese environment, and China gradually had to add more incentives to attract foreign capital.[
1978 is when China started the reforms, two years after the death of Mao.

The SEZ which were heavily invested in by Hong Kong investors also corresponds with as you Hong Kong's bloom. Hmm.
 
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Aunt Spiker

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Yes good governance will typically lead to good economic performance. But it was not that Hong Kong was the inspiration for China's good governance or that China had to copy what Hong Kong had, China had it before, lost it for a while and regained it.
Yes, he's just explaining a part of the reason why they regained it and still have it - rules changed. . .and those rules changed to be more in tune to Hong Kong because H.K. grew separately from China and surpased China. . .China had to play catch up.

Just recently, though, it's been looking like things are slipping away from them - chinese workers have been going on strike, demanding higher pay. Certain businesses have already left in hopes to find alternative sources of labor without certain regulations. Some of these businesses have come home.

All in all - I don't think the world's ready for Romer's idea. It's very 'Star Trek' and not there, yet. It's gaining traction with people who see the benefits - but those people have to convince everyone else.

In response to this Romer's changing his ideology to accomodate modern-day social hangups about the idea, which is good. I think that would be more successful - the idea of another country coming in an governing your land and people, to many, is so taboo.
 

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Yes, he's just explaining a part of the reason why they regained it and still have it - rules changed. . .and those rules changed to be more in tune to Hong Kong because H.K. grew separately from China and surpased China. . .China had to play catch up.
Yes the rules changed, I am not doubting that. That the rules change has lead to China's economic development I am not doubting that either
Just recently, though, it's been looking like things are slipping away from them - chinese workers have been going on strike, demanding higher pay. Certain businesses have already left in hopes to find alternative sources of labor without certain regulations. Some of these businesses have come home.
They are moving into Western China which is still quite cheap FoxCon is building a factory complex in Chengdu (I think that is the city) that will employee 600 000 people. The strikes are actually a good sign. Higher wages for the Chinese workers will further the development of China's economy. The strikes at Honda were not organized by a union but the employee's themselves
All in all - I don't think the world's ready for Romer's idea. It's very 'Star Trek' and not there, yet. It's gaining traction with people who see the benefits - but those people have to convince everyone else.

In response to this Romer's changing his ideology to accomodate modern-day social hangups about the idea, which is good. I think that would be more successful - the idea of another country coming in an governing your land and people, to many, is so taboo.
Romer's idea's on good governance is true in my opinion. Without it a country will not expand economically the idea that foreigners are needed to spur it is idiotic. You have had most African dictators over the last 50 year with western educations, most latin American dictators had American advisors. You had colonial rule in which the end result was horrible for the people being colonized. ( Either population marginalization as in the North America and Australia where the preexisting population is marginalized into being a very small minority, or just left on the margin economically as in Latin America.

All that is needed is good leadership that is focused on the development of the country, not personal power, or serving external masters. It does not need, and generally has not come from outside that country
 

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I agree - the only way this type of idea in today's world won't be abused and twisted is if everyone involved agrees and believes in the same values.

I see it being successful (on a smaller scale) as part of a business rooting itself in an area - with the intention of enriching and supporting the area - without letting their corporate politics get in the way.
 

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I agree - the only way this type of idea in today's world won't be abused and twisted is if everyone involved agrees and believes in the same values.

I see it being successful (on a smaller scale) as part of a business rooting itself in an area - with the intention of enriching and supporting the area - without letting their corporate politics get in the way.
My suggestion would be for a country like Canada to focus foreign aid on a small region in a country like say Malawi. Such aid would be used to as build up a community but not rule it. The aid would be used to build schools, fund the operation of it, medical clinics, and if needed small electrical generation facilities. Other then the building and operation of those types of things, with the approval of the local government no other decisions would be made regarding the aid. Aid would only be removed if was being stolen by the people in power
 

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bump

I'm taking this article into my social-problems class as part of an assigning concerning wealth and poverty this week.
Thanks, again, for posting it
 
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