Why some nations are wealthier than others

[Mijin]

@Measure_for_Measure

There is something known as the resource curse: countries endowed with large petroleum deposits for example typically don’t leverage them well. In fact, by appreciating the currency, oil exports can choke off other export sectors: this effect is known as the Dutch Disease, which may or may not afflicted the Netherlands when it developed its North Sea oil.

The textbook example of the resource curse is where an otherwise poor country has a single valuable natural resource. In such a situation the country must rely on exports of that material, which drive up the currency and make it harder for the rest of the economy to grow. Furthermore it puts lots of money in few hands and encourages corruption, while taking the pressure off the government to reform.

I don’t think the US was in much danger of the resource curse.
There was a huge influx of foreign investment and know-how, so it doesn’t really fit the mold of a poor country having to grow an economy from scratch.
And it had a multitude of natural resources, which just means it was largely self-sufficient for materials. It didn’t have to rely on exports of primary materials only; it could invest some of its resources into manufacturing. And when it did export goods, it put power and wealth into more hands than a single-resource scenario.

[newcomer]

@Measure_for_Measure

Careful. There is something known as the resource curse: countries endowed with large petroleum deposits for example typically don’t leverage them well. In fact, by appreciating the currency, oil exports can choke off other export sectors: this effect is known as the Dutch Disease, which may or may not afflicted the Netherlands when it developed its North Sea oil.

IIRC, Norway is an example of a country that’s allegedly been able to evade the resource curse. It’s not inevitable. But it’s a very real risk.
I know you took the example of 19th century US, which had a broad array of resources not incidentally timber. Again, I’m not claiming inevitability. I’m suggesting though that for insight into 19th century US growth, look to our protection of clearly delineated property rights and universal education.

Calling it a “curse” kind of suggests that there’s a bit of mystery to it but I’d argue - based on my earlier claim that it’s about property laws emanating from certain cultural elements and strength of “instability factors – it’s very obvious.

I’d love to see someone do a comparative study of the following countries rich in oil: Norway, Canada, Venezuela, Saudi Arabia and Nigeria.

I believe that study would show that there is no mystery at all – somewhat self-evident.

[BobLibDem]

@newcomer

it’s about property laws

People are just seeing what they want to see. Libertarians think of property laws as the Ace of Trumps, other conservatives think the universe revolves around tax rates.

[Human_Action]

@BobLibDem

People are just seeing what they want to see. Libertarians think of property laws as the Ace of Trumps, other conservatives think the universe revolves around tax rates.

Leftists see the white man raping the land of its resources and stealing wealth from the Native Americans.

[Paranoid_Randroid]

@BobLibDem

People are just seeing what they want to see. Libertarians think of property laws as the Ace of Trumps, other conservatives think the universe revolves around tax rates.

newcomer is a libertarian?

[Mijin]

@newcomer

I’d love to see someone do a comparative study of the following countries rich in oil: Norway, Canada, Venezuela, Saudi Arabia and Nigeria.

I believe that study would show that there is no mystery at all – somewhat self-evident.

I think the most important factor with that list will be how wealthy the countries were when they found significant oil reserves. When a nation already has a strong, diversified economy, striking oil is great; more fuel for the fire.
Not so for poor countries, as I alluded above, and there’s no mystery why that should be.

Now you could argue that economic freedom = strong, diversified economy = immune to resource curse. That may be the case. But the point is, the different relative successes of the countries you’ve listed doesn’t prove that as we’d expect wealthier countries to avoid the curse regardless of how/why they are wealthier.

[BobLibDem]

@Paranoid_Randroid

newcomer is a libertarian?

I don’t know for certain, I don’t really keep close tabs on others’ political affiliation. But use of the term “property rights” is a pretty reliable indicator of a libertarian.