Is Democracy Doomed?

Democracies are much richer than non-democracies and their wealth has made them the envy of the world. The close correlation between democracy, high GDP per capita, and economic, military, and cultural power has made modernity appear to be a package deal. When people look at rich, powerful countries they typically see a democracy and they think, “I want that.”

At the same time, however, the academic literature on the causal effect of democracy on growth has shown at best weak results. Here is the all-star team of Acemoglu, Naidu, Restrepo, and Robinson (ungated) in the JPE summarizing:

With the spectacular economic growth under nondemocracy in China, the eclipse of the Arab Spring, and the recent rise of populist politics in Europe and the United States, the view that democratic institutions are at best irrelevant and at worst a hindrance for economic growth has become increasingly popular in both academia and policy discourse. For example, the prominent New York Times columnist Tom Friedman (2009) argues that “one-party non democracy certainly has its drawbacks. But when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages. That one party can just impose the politically difficult but critically important policies needed to move a society forward in the 21st century. ”Robert Barro (1997, 1) states this view even more boldly: “More political rights do not have an effect on growth.”

Although some recent contributions estimate a positive effect of democracy on growth, the pessimistic view of the economic implications of democracy is still widely shared. From their review of the academic literature until the mid-2000s, Gerring et al. (2005, 323) conclude that “the net effect of democracy on growth performance cross-nationally over the last five decades is negative or null.”

Acemoglu et al. continue, “In this paper, we challenge this view.” Indeed, using a multitude of sophisticated econometric strategies, Acemoglu et al. conclude “Democracy Does Cause Growth.” In their sample of 175 countries from 1960 to 2010, Acemoglu et al. find that democracies have a GDP per-capita about four times higher than nondemocracies ($2074 v. $8149). (This is uncorrected for time or other factors.) But how much of this difference is explained by democracy? Hardly any. Acemoglu et al. write:

Our estimates imply that a country that transitions from nondemocracy to democracy achieves about 20 percent higher GDP per capita in the next 25 years than a country that remains a nondemocracy.

In other words, if the average nondemocracy in their sample had transitioned to a democracy its GDP per capita would have increased from $2074 to $2489 in 25 years (i.e. this is the causal effect of democracy, ignoring other factors changing over time). Twenty percent is better than nothing and better than dictatorship but it’s weak tea. GDP per capita in the United States is about 20% higher than in Sweden, Denmark or Germany and 40% higher than in France but I don’t see a big demand in those countries to adopt US practices. Indeed, quite the opposite! If we want countries to adopt democracy, twenty percent higher GDP in 25 years is not a big carrot.

As someone who favors democracy as a limit on government abuse, I find this worrying. One optimistic response is that the nondemocracies that adopt the policies necessary to make a nation rich, such as support for property rights, open markets and the free exchange of ideas, may not be such bad places. These beasts, however, appear to be rare. But if they are truly rare there must be more to the democracy-GDP per capita correlation than Acemoglu et al. estimate. So what are they missing? I am uncertain.

If democracies don’t substantially increase growth, why are they rich? Acemoglu et al. don’t spend time on this question but the answer appears to be reverse causality (from wealth to democracy) and the fact that today’s rich democracies adopted capitalism early. But don’t expect the wealth to democracy link to be everywhere and always true, it’s culturally and historically bound. And catch-up is eliminating the benefits of the head start.

If much of the allure of democracy has been higher GDP per capita then the allure has been a mistake of confusing correlation for causation. A fortunate mistake but a mistake. The literature on democracy and growth implies that there is no reason to reject an alternative history in which the world’s leading industrial economy was a nondemocracy. Nor why we could not see some very rich nondemocracies in the future–nondemocracies that would be as on par with the United States as say Sweden, Denmark and Germany are today. If that happens, the case for democracy will look very much weaker than it does now as the correlation between democracy and wealth will be broken and the causal effect more evident even to those without sophisticated econometrics.

Hat tip: Garett Jones for discussion.

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Tom Friedman is a nincompoop.

+1 we reckon you gotta good point!

Yes democracy is doomed. But not without a war. THAT is what you should worry about. The globalists who are controlling these invasions know at some point there will be war. At some point the citizens will resent all their assets being taken/stolen to support the replacement citizens. There will be war.

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+1 It sure seems like it.

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Yes, as soon as I saw Friedman's take, I knew the opposite was true.

Only a complete idiot could see the present Chinese leadership as "enlightened" with political prisoners & concentration camps (real ones). There are Andalusian donkeys with better sense.

To be fair to Friedman, he wrote that in 2009 a decade before the present brouhaha.

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Friedman is correct, by definition: "when led by a reasonably enlightened group of people." The problem is when power corrupts, as it inevitably does. Democracy and capitalism are alike in that they often result in poor decisions, but they are unparalleled as error correction mechanisms.

>When people look at rich, powerful countries they typically see a democracy and they think...

"Let's turn it socialist so we can steal all that money. You know, for a good cause."

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There are no democracies. Sure, there are countries that have election campaigns and votes for officeholders and vote winners that get to impose their ideas on the population but those aren't democracies per se. Geez, even the hated Putin stands for election and wins. In fact, the most tyrannical warlord can't retain power without a significant amount of the population going along with the deal, at least over the long haul. The tyrants eventually die, just as the heroes like FDR do.

Thank you for your amazing contributions into the vast literature on regime type. I can certainly assure you that no political scientist, sociologist, or economist has ever considered the cutting insight that elections do not make a democracy. Perhaps you should consider developing your ideas, and coin a term like electoral democracy, competitive authoritarianism, or maybe even hybrid regime?

Robert Dahl has a good conceptualization of democracy in his book Pluralism which came out over 50 years ago. Political scientists, in fact, have competing yet reliable definitions of democracy that include dozens of variables.

From below, RIPM: "if European democracies aren't motivated to transition to an American style democracy". So, there are "styles" of democracies, like there are "styles" of clothing or furniture. There's the US, "I'm With Stupid" T-shirt and multiple tattoos "style" compared to the British waterproof trench coat and trilby.

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The USA once was a representative republic. It could not keep it.

Now, it's an irredeemably corrupt system of organized brigandage headed by idiots (an insult to ordinary idiots) in Congress and unelected judicial oligarchs chirping pronunciations based on feelings nothing more than feelings; Dr. Seuss; and the progressive nightmare narrative.

Yup, Trump puts America on the path to pedophilia and fascism.

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The idea that countries choose democracy for the economic gains sounds like a straw man. Just look at the wealthy democracies of Asia - Japan, South Korea and Taiwan. They all developed their economies before democratizing. Does anyone really dispute this?

It also seems strange that there is supposed to be this affinity between democracies, such that we Americans "stand by" fellow democracies like the Philippines. To me personally, the Philippines is an awful place that is in no way redeemed by its democratic facade, and I identify more with non-democratic Hong Kong and Singapore because they are wealthy countries/cities with vibrant civil societies, and that's what actually matters.

"with vibrant civil societies, and that's what actually matters."

I guess slavery is great if the rich get richer. Some people, though, don't intend to exchange freedom for a mess of trinkets under Chinese totalitarianism!!

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The thing about non-democracies is that they can be quite pleasant, until the day they are not. Until the next cabal or murderous son takes over.

To say such places are nice "at the moment" seems a half completed thought.

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In order to develop, grow, prosper economies require physical security, property rights, an independent judiciary, political stability, the rule of law, and a functioning civil society. Theoretically, a non-"democracy" could provide those elements.

In reality, men are not angels. Hitler brought to Germany prosperity. His methods were unusual. Then, the Allies rained down on Germany death and destruction.

Hitler brought to Germany prosperity. His methods were unusual.

Actually, not. Much of the German prosperity was based on simple looting of conquered people.

Theft is not unusual.

So why is it that the US government steals from its own citizens when it has the military capacity to extort whatever it wants from anybody, anywhere?

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You are ignoring the well-known fact that most of Germany's economic recovery took place in the first five years of Nazi rule, 1933-1938. There were no "conquered people" to loot then, except--maybe--the tiny handful of Czechs in the Sudetenland who were handed over as part of the Munich agreement...in late 1938.

The Nazis used much the same approaches that were used in, e.g., the United States: large-scale construction projects (and in Germany, expansion of the Army) which soaked up much of the unemployed and underemployed labor pool.

And while there was considerable looting and wealth confiscation from Jews and other "undesirables," the actual amounts involved were not any greater than what was acquired by FDR's government under the tax system.

Though of course the methods involved were both more brutal and more direct.

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NIMBY concerns are restrained. The Chinese were well aware of the environmental dangers, but chose to ignore them.
Whrn I first went to China 15 years ago, my wife of Chinese descent was fearful of counterfeit products we take for granted here in the USA. Fresh food or trusted brands allayed her fears.
When people started to complain about fraud, land grabs, or lack of freedom, the government restricted freedoms and ramped up xenophobia.

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The argument that democracy is good for catchup growth is indeed not amazingly strong. Catchup growth is "copying" or "learning" and does not really deal with social exploration and innovation, and democracies have never been standout *more* successful at that.

Of course, I don't think it's bad for it, or that as some (hat-tip Zaua) would argue that countries can be "too poor" for democracy (or if so it must be is at a very low level, far beneath "middle income").

What democracy does, giving citizens a voice in their government, has value because it shapes government policy, on the whole in a more effective way at the frontier of growth, and it generally increases willingness to investment in government.

Non-democratic regimes must keep their citizens happy by delivering high growth rates or very low taxes, which is hard to sustain with functional government when you're not like China, with lots of easy catchup growth potential. (Or by offering national pride and the like, which matters, but can often become bread and circuses and cause jingoistic missteps).

The democratic peace and democratic stability (from civil war) argument is also a strong argument for democracy.

I think it's clear that democracies are actually *worse* at catch-up growth, since catch-up growth benefits from from swift, decisive actions at large scales. A dictatorship's ability to instantly direct resources and crush internal dissent are important tools for this.

All the Asian "miracles" followed this model.

(Incidentally, how many times does the same thing have to happen before people stop calling it a "miracle"?)

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It does in a sense that the US and its allies won't trade with you unless they see democratic reforms. Cuba could be Latin America's richest nation if they could trade with the US.

Cuba can trade with 95% of the world's population. There's no excuse.

95% of the 95% is poorer than America. A good fraction of that is even poorer than Cuba. I mean Venezuela is Cuba's major trading partner for crying out loud.

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Exactly. Red China is the problem. It is a shame that some peoples are ready to exchange their freedom for a mess of pottage and trinkets. I think America should support leaders, such as Brazil's President Captain Bolsonaro, who stand for democracy and civilization against Chinese barbarism.

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Reminds me of Goldstein's book in "1984," explaining that political thought in the years preceding the establishment of Oceania "had turned increasingly authoritarian."

My thoughts exactly.

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I don't know where those numbers come from but GDP per capita in Sweden is higher than in the USA. And in France it is only 15% lower.

But what about the GDP of the United Arab Emirates?

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Undoubtedly those numbers comes the same sources that the Mercatus Center uses for its various proclamations of economic freedom.

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World bank, PPP corrected of course. https://en.m.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

Just an FYI, those wikipedia list of GDP, list of employment data etc, get vandalized all the time and arent well patrolled. If you dont believe me just create a wikipedia account and put those pages on your watchlist. Random bullshit changes all the time and few editors reverting them.

If you want World Bank PP corrected numbers you should go to the World Bank's website.

for example, the page you cite lists Sweden at 50,070 @2017 (citing the world bank)

World bank says Sweden is 51,404:

https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?end=2017&locations=SE&start=2017&view=bar

Note that this may depend on when the data was accessed. If there are any revisions to the data (which there almost always are), data that is accessed at different times may differ because of those adjustments and not some nefarious plot to "vandalize" wikipedia. The World Bank numbers show Sweden lagging by 16 percent instead of the 19 percent on Wikipedia. Not a material difference.

Except that i actually watch those pages and can confirm that it is just vandalism.

As a rule, when someone who has never edited Wikipedia makes an unexplained change to an obscure fact like Per capita GDP, its most likely not a good faith effort to keep Wikipedia up to date. Again, if you dont believe me, put the page on your watchlist and see for yourself. Vandalism is super common on Wikipedia, it doesnt require a "plot" nefarious or otherwise, just the all too common internet jackasses.

I have no doubt that some pages are "vandalized", I just don't think anyone is lurking on the List of Countries by GDP (PPP) to change Sweden's per capita number by $1000. And when I clicked the edit button, the message "This page is protected to prevent vandalism" pops up. And who just watches these pages on Wikipedia? Did you see $51,404 next Sweden one day and then $50,070 the next? Probably not. As further proof that it is most likely revision, this Pew report (https://www.pewglobal.org/wp-content/uploads/sites/2/2018/09/Pew-Research-Center_Global-Views-of-Economy-Report_2018.09.18_Updated-2019.04.30.pdf) published September 2018 also list Sweden's PPP GDP per capita in 2017 as $50,070 (found it on the first page of results using this Google search: sweden per capita ppp "50070"). Could they have used the "vandalized" figures from Wikipedia and just said they sourced it directly from the World Bank? The probability is non-zero. The most likely explanation (as I mentioned above) is that the numbers are revised and the Wikipedia just has the original figure.

I authored a long post showing that the last half dozen or so edits are suspect, with at least 3 definitively being vandalism but it got eaten by my browser, so you will have to make due with this:

https://en.wikipedia.org/w/index.php?title=List_of_countries_by_GDP_(PPP)_per_capita&diff=prev&oldid=899569588

https://en.wikipedia.org/w/index.php?title=List_of_countries_by_GDP_(PPP)_per_capita&diff=prev&oldid=898831342

https://en.wikipedia.org/w/index.php?title=List_of_countries_by_GDP_(PPP)_per_capita&diff=next&oldid=891836965

Thats just in the last couple of edits.

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By the way, world bank says the US per capita GDP in 2017 is 59,927 so your point is still correct, at least as far as that fact is concerned.

Wikipedia lists US per captia GDP PPP @ 59,532 @2017

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+1

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Switzerland is higher, not Sweden. This site has France down by 28%, which sounds about right. http://worldpopulationreview.com/countries/countries-by-gdp/#countries

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Tyler writes "I don’t see a big demand in those countries to adopt US practices. Indeed, quite the opposite! If we want countries to adopt democracy"

Doesn't this imply that Tyler thinks France and Sweden are non-democracies? Poor phrasing or is Tyler a retard?

It’s an Alex post. And yes Alex IS a retard.

I suppose he means adopting US economic policies (low taxes, etc) not democracy, but it’s not clear that specific policies account for the difference.

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"Doesn't this imply that Tyler thinks France and Sweden are non-democracies? "

He's implying that if European democracies aren't motivated to transition to an American style democracy over a 20% difference, then why would an authoritarian state make a much larger transition to democracy over a 20% difference.

What about Luxembourg and Ireland? Are they models for the USA?

No, that's the point. A 20% differential clearly isn't enough to motivate that kind of change.

In any case Ireland has a lower GDP per capita than several larger US states. And Luxembourg isn't big enough to make a good sized city in the US. It's like asking if Nashville should model itself after Germany.

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Ireland maybe (Switzerland should be) but Luxembourg is money laundering state, too hard to scale up to 330 million.
All this tells me that USA, French people, Swedes etc. get very little for their taxes. Welfare systems could be much more efficient than they are. Maybe Singapore should be the model.

+1

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For those countries moving to an American style democracy would mean become less democratic.

As an American, I have to both laugh and agree with you.

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It's the inequality, stupid (to paraphrase Clinton's political advisor)! Tabarrok refers to GDP per capita, which is like the GDP per person in a bar occupied by me and Bill Gates. Of course, blaming inequality is like blaming air at this blog. But the day of reckoning is coming. What? The market cure for excessive inequality is harsh but history proves it works. I'd prefer the soft landing approach, but don't count on it. The Austrians will have their day. Count on it. Will democracy survive the day of reckoning? The last time it almost didn't.

I wonder if the authors did a "gini coefficient" regression, and not just a gdp/per person analysis.

Regardless, even if democracy came as a cost, it is worth it.

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If you're standing in a bar with Bill Gates, you're doing fine. Quit whining.

If rayward is standing in a bar with Bill Gates, then he's the assistant to the guy mixing Bill Gates' drinks.

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There are very different kinds of inequality not measured by Gini.

The US and China have roughly the same Gini coefficients. In the US, it is because the upper class produces monstrous levels of value that they mostly get to keep. This not only doesnt deprive anyone else of income, but it is remarkable that this value gets shared at all.

By contrast, China is more like colonial South Carolina where a relative few privileged people own most of the productive resources, and vast swaths of the economy live in squalor.

The US is inequality at its best, China at its worst.

Agree on USA, but 50 years ago, China was mind-blowingly poor. They now boast a middle class about as big as the US population.

Growth from a low base and a population more than four times larger. If I recall, they still have a 40% poverty rate.

I also imagine that there is substantial economic growth beyond the control of the government that they would suppress if they could. As I understand, they have a dysfunctional system of deeds and recording. There is huge concentration of property ownership and most transactions are unregulated. These grey market activities are part and parcel of excessive regulation.

Power is rapidly slipping through Beijing's fingers. The economy grows despite them, not because of them. Corruption eats up a lot of gains.

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I'm not sure if China is quantitatively more unequal than the US, but it's stunning to visit remote factories and see the owners' fully loaded Porsches parked next to the post-apocalyptic dormitories where the workers live. The lower bound is unfathomably higher in the US, as is the proportion of the "doing okay" population that has a car and a reasonable place to live.

Even 300 million Chinese in the middle class mean a billion plus are still really poor, without any welfare safety net. They still have a long way to go.

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What an odd assertion.

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“Will democracy survive the day of reckoning? The last time it almost didn't.”

When? When was this last time?

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Universal democracy is inherently unsustainable because it rests on the notion of equality.

We've taken the original intent of this concept (that laws should apply to everyone equally) and bastardized it to mean that everyone is of equal ability and shares universal values. It should be pretty clear by now that is not the case.

Most people can't distinguish their self-interest from that of their [arbitrary economic zone] when voting, many can't be trusted to manage their own affairs, and some just need more structure in their lives. It's insanity to look at the average person and say with confidence that they are qualified to make the sort of decisions needed for a government to function. Anyone who claims otherwise is just perpetuating that big lie.

Do we infer the founding fathers were insane?

The Founding Fathers limited the franchise to a very specific group of people, for a nation that was also composed of a very specific group of people. One wonders what they would think about the current state of the Republic.

They would be tickled pink that the United States was still here, with 330 million people and a standard of living 10-20x what it was in their lifetimes.

They would be surprised at the racial and ethnic diversity and probably not too pleased with the machinery of government.

They would shake their head and grimace over women's suffrage.

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You don't see the contradiction in their being happy with the state of the populace but displeased with the government? One would think a group of people who fought for self-rule would be all too aware that the people make the government, not the other way around. Or maybe you mean it's time for another revolution.

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The Founders did not "limit the franchise". There's nothing in the Constitution that mentions the franchise at all. That was a state level thing, and in some cases was based on laws that had obtained since before the Revolution. However the push for universal white male franchise began almost as soon as the ink was dry on the Constitution. Vermont enacted this when it entered the Union in 1794.
Moreover it's not like the elite are generally wise and competent. History is in part a record of the follies and foibles of various ruling classes. Broadening the franchise in principle prevents any one group from foisting its idiocy on the whole.

Right, much better that we let the idiocy of the whole bring everyone down to the lowest common denominator.

The history of aristocratic government is not exactly a record of glorious successes.

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It is a bigger lie to believe that a dictator will know everybody else's interest better than the people themselves. Democracy is the best of the worst.

Right, the old "worst except for all the others" refrain. Hardly a glowing recommendation.

To the contrary, a dictator, and in particular an intelligent and sensible one, would in fact be a better judge of many people's interests. It's pretty clear that the sophistication of our modern society has leapfrogged the capacity of the masses to navigate it. They've outkicked their coverage, in other words. People are built for hunting and gathering, at most subsistence farming, and they could use a life coach.

In any case the notion that one must choose between democracy and a dictatorship is a false dilemma (one that doesn't speak well of your ability to navigate the former successfully, I might add). How about a nice quaint monarchy? The Queen of England, for example, as the nominal owner of the entire nation has a vested interest in keeping good stewardship over it (and her subjects, by extension). Certainly she has more skin in the game with respect to the future of England than the recent "Asian" immigrant who's only there to live off the dole and perhaps stab or run over some infidels before moving on to the next host once the well runs dry. But by all means, let's make sure both have an equal voice in government.

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Well, Switzerland supposedly has the most unstable form of democracy, a direct one. Yet they've been stable through even a couple world wars fought in their own backyard.

The Swiss also have a homogenous population with the highest average intelligence outside of Asia and a strong national tradition. Hardly a melting pot, or egg salad or whatever we are supposed to be now.

There's also nothing to unite a populace and get people's priorities in order like a war in one's backyard. One might even say it would do America good to have a nice, old-fashioned war at home (as opposed to the expeditionary petrodollar enforcement actions we have now). Don't worry, it's coming one way or the other.

The Swiss are not homogenous. They are a diverse, multi-cultural society consisting of Germans, French, and Italians!

/s

I always use the Swiss to undermine any argument in favor of diversity.

They're all white though that's the point.

Why does that matter? In Europe nationality and religion have always been the principle flash points of conflict. And the Swiss straddle boundaries on both fronts.

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'Is Democracy Doomed?'

Of course it ix, like everything created by humans. For that matter, everyone is going to die too.

'GDP per capita in the United States is about 20% higher than in Sweden, Denmark or Germany and 40% higher than in France'

All that amazing value created by Facebook and Google and Apple and Amazon et al really stands out, doesn't it?

And this aside is the sort of thing that calls for the HTML blink tag, to effectively highlight it in true mindless glory - ' (This is uncorrected for time or other factors.)'

The gulf has certainly widened over the past twenty years as a result of the social democracies' inability to foster a real tech-focused entrepreneurial class, absolutely. Good insight.

'as a result of the social democracies' inability to foster a real tech-focused entrepreneurial class'

Yeah, who needs industrial robots, something that U.S. 'tech' industry has no interest in at all. 'What happens when we stop the flow of knowledge up the stack? I think that the weakness of the US industrial robotics sector is instructive. The US has little position in making high-end precision manufacturing equipment. When it comes to factory automation systems, machine tools, robot arms, and other types of production machinery, the most advanced suppliers are in Japan, Germany, and Switzerland. I think the reason that the US has little position can be tied directly to the departure of firms from so many segments of manufacturing. How do engineers work on the design of automation systems if they don’t have exposure to industrial processes?'

You can read the whole text, which was linked from this post - https://marginalrevolution.com/marginalrevolution/2018/08/dan-wang-technology-grows-2.html

Where the basic argument is that the U.S. failed to foster a real technology (forget the stupid marketing term used for something like Facebook) competent class, which is a good insight.

Japan and Switzerland certainly aren't social democracies.

Germany isn't one either, by the classic analytic criteria of "The Three World of Welfare Capitalism" (https://en.wikipedia.org/wiki/The_Three_Worlds_of_Welfare_Capitalism).

Social democracy != "European", or even less "Democratic not-American". Admittedly this is as much the conflation of "Anonymous2" that you have continued with of course.

Arguing against the US developing industrial robots (one facet of high technology) is not really arguing for the "social democracies" capability to do so.

"reduce the division introduced by market-based access to welfare services, as well as preemptively socializing the costs of caring for children, the aged, and the helpless"

That's what your link says about social democracy. Japan has universal healthcare and the world's most generous parental leave laws. Germany has free university education and universal healthcare. They sound like social democracies to me, even though Japan does not ideologically think like one.

The work specifically says Japan and Germany are not. Universal healthcare coverage != "social democracy".

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We are not a proportional democracy, we are a republic.

https://reason.com/2018/01/17/the-united-states-is-both-a-republic-and/

https://thebaffler.com/latest/were-a-republic-not-a-democracy-burmila

https://thehill.com/homenews/senate/452315-high-anxiety-hits-senate-over-raising-debt-ceiling

High anxiety hits Senate over raising debt ceiling

Senators are growing anxious that they might have to vote to raise the nation’s debt ceiling in a matter of weeks given new estimates that the government could hit its borrowing limit earlier than expected.
The debt limit was exceeded earlier this year, and the Treasury Department is now taking steps known as “extraordinary measures” to prevent the government from going over its borrowing limit.
Lawmakers had hoped they would be able to avoid the politically painful vote to raise the debt ceiling until the fall — and that it could be packaged with other legislation to fund the government and set budget caps on spending.
But that could be much more difficult if Treasury’s ability to prevent the government from going over its borrowing limit ends in mid-September — just days after lawmakers would be set to return from their summer recess.

--------------
This is a republic action on limits to budgets.

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Democracy and capitalism clearly aren't the same thing.

Would 10,000 corporate lobbyists be democracy, capitalism or something else?

Copulatism

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Almost 50 comments to mention the magic word that clearly escaped Prof. Tabarrok - capitalism.

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Democracy exists largely to create the illusion of consent of the governed. It should now be clear just how bogus it is. People vote against wars in the Middle East, continued immigration, etc. yet they get more and more of the same. My faith in democracy was temporarily renewed with the election of Trump as it was an example of the public electing a candidate the establishment manifestly did not want, and it was heartening that they were unable to prevent this act of defiance (without letting the mask entirely). But a couple of years later Trump’s failure is apparent as he has been actively subverted at every step.

The current system is to let the public pick from a menu of “approved” candidates. The voting itself is not rigged, but only because they don’t need to rig it since it doesn’t much matter who wins. Occasionally an unauthorized candidate gets through (look for them to “fix” this problem soon) but this is only a minor inconvenience for the establishment interests. Periodically both the Democratic side and the Republican side will take up popular issues (i.e., something actually in the broad public interest) and the candidates are permitted to pay lip service to these ideas during their campaigns. But none of it ever happens.

Another major problem with Western democracy is its propaganda is too effective and it provokes insufficient skepticism in the public. In the Soviet bloc, people knew the government and the press were lying and just pushing a party line. Here with a “free press” and “democracy” a lot of people actually think they are getting the truth and that the government is working in their interests! Ha!

Trump: Ran on 1) immigration restriction, 2) reduced offshoring, 3) anti-war. We got: corporate tax cuts.

Obama: Ran on 1) anti-war, 2) universal health care. We got: wars and weird corporate-friendly health care scheme.

Don't know why people put so much faith on what presidents "run on". The laws in this country are written by legislatures, not executives, whose veto power is not enough to compel the legislature to create laws out of whole cloth. Trump cannot snap his fingers and restrict immigration or reduce offshoring if the laws basically do not allow it. With respect to matters of war, the President does have more leeway since not only is he constitutionally the commander-in-chief of the army and navy, but importantly since in recent decades Congress has ceded much of its powers in that area to the President.

Same thing in the legislature. Immigration restriction is immensely popular with Republican voters. That is why Trump cruised through the primaries. Republican congressmen (and presidential candidates during the primaries) pretend to support immigration restriction (and a few of them actually do) but then don't do anything about it. This is because their corporate interests don't want immigration restriction. And they do not care about screwing over their voters since they know those voters have no meaningful alternative.

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You probably need a government/state strong enough to enforce laws before a country can get wealthy. I don’t know what value an analysis adds that doesn’t use state capacity in its typology will tell you.

A government that cannot build roads, sewers, power plants, or put murderers in jail isn’t going to be a wealthy country. But is such a country better off with a democracy or authoritarian government? I am not sure that either clearly leads to a competent, modern, bureaucratic nation state.

However, take a competent government. I am pretty sure you want that country to be a liberal democracy if you are a citizen of that country, so you don’t end up in a gulag or a re-education camp.

Yes, liberal in the traditional sense, which is increasingly rare. Case in point, last week a Democratic congresswoman saying that people making fun of her should go to jail.

"people making fun of her should go to jail"

They should! It's illegal to make fun of Literals because they won't get it!

Mad Magazine c1952-2019
RIP

erratum
we reckon it was supposed to be
Mad Magazine c1952-2019
RIP!!

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There was a time when Liberals and Literals were different groups.

But after hearing NPR announce breathlessly that Trump claimed "Obama founded ISIS," and generally missing out on the meaning of almost every colorful Trump phrasing since, it's clear that Liberals and Literals are now one in the same.

(note to Literals: in this context the word "colorful" doesn't actually refer to the color of the words. It's a general term for similes, allegories, allusions and other forms of comparison that render an abstract concept (Obama's actions created the conditions under which ISIS could form) in a concrete way (Obama "founded" ISIS).

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Elections and political rights might work for some cultures, but not for others. Try interacting variables indicating broad cultural group membership of countries with indicators of democracy.

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Most countries now claim to have some sort of democracy - even China - but the democracy we are accustomed to requires a vibrant civil society that supports discussion and dissension and alternate policy ideas. One of the best articles on this is the Robert Kaplan Was Democracy Just a Moment? in the Atlantic in 1997 (available online). Kaplan was talking about 3rd world democracies, but Levitsky and Ziblatt describe our own authoritarian tendencies in their new book How Democracies Die. On the other side, authoritarian single party states can be rather flexible, to promote development and remain in power. That is China. As long as there are sufficient property rights and incentives, development doesn't need voting at all. And, in fact, capitalism is pretty happen to not have to deal with the uncertainty and messiness of democratic procedure. I have written quite a bit on this at chinareflections.com One example is http://chinareflections.com/index.php/105-comments-on-policies-and-programs/394-whither-china-post-7-question-5-whither-china-s-economic-development-with-no-democracy

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Populism isn't democracy? To the ancients (echoed by Machiavelli), democracy led to demagoguery. The US Founders were quite worried about this phenomenon.

Is this what everybody believes now? Of course not. In modern parlance, "democracy" doesn't mean "democracy", it means something vaguely related to the post-WWII Western order.

Our populist leader took Tucker Carlson to North Korea as part of his entourage. On that trip, Tucker made this announcement from within the American populist movement:

“you've got to be honest about what it means to lead a country. It means killing people"

Now that was set in some context, which could generously be called an attempt at realpolitik, but yeah, I think it is a real departure from that post-WWII Western order. It was not exactly a sweeping vision of a better world. (see also)

I'm an optimist. I think Trumpism is about done, and anti-intellectual populism will be thrown under the bus with him.

Still, it is sad that constitutional democracy and rule of law had to be tested to this degree. We found that the checks and balances aren't such hard railings, and that it does take our vigilance.

Read the Mueller Report.

Thank you for misunderstanding my comment and using it to take a twirl on your hobby horse.

I'm generally a fan of the post-WWII Western order, but I feel like something is elided by sweeping this thing under the banner of "democracy", I'm just not sure what.

To think that populism is anything other than a manifestation of real democracy is to misunderstand millenia of thought on the subject.

Seriously, Brian?

"Russian intelligence officers who were part of the Russian military launched a concerted attack on our political system,” Mueller reminded us at the outset. “They used sophisticated cyber techniques to hack into computers and networks used by the Clinton campaign.” Then he closed by “reiterating the central allegation of our indictments — that there were multiple, systematic efforts to interfere in our election."

In what functioning democracy could that be dismissed as a random citizen's hobby horse? I say none, functioning.

David Corn's assessment is harsh, but maybe people who genuinely care about that post-WWII world order should take it seriously as well:

Putin attacked the 2016 election. @realDonaldTrump aided and abetted the attack—and benefitted from it. For two and a half years, he and his cult have been trying to distract from these basic points. That’s the story.

If you are a fan of something better, stand up for it.

A kindred spirit!

I agree!

Same here.

Strange group. We've got trolls actively opposing a functional, constitutional, democracy and rule of law .. because in their simple minds that has become "partisan?"

And then we've got cool kids, including perhaps the hosts on most days, who don't think they should talk about it. Perhaps a nagging partisanship again? Or perhaps a disabling cynicism.

Whatever point you’re attempting to make, it’s orthogonal at best as a response to Brian’s comment.

This entire response thread is a non-sequitor.

That too is a weird response. Alex opens a discussion about the future of democracy. Brian muses on populism, democracy, and the post WWII world order.

I tie that to the concrete.

"Oh no, this must remain abstract!"

Funny.

No, you misunderstood what Brian meant and went on an unrelated tangent because you're even dumberer than I am.

Dude says an attack on our democracy is unrelated to the future of democracy.

If you were smarter, you would understand.

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At some point, it's just gonna be you and Rachel Maddow.

Revealing. For you it is left of center to accept the conclusions of Republican Robert Mueller?

You need Mueller to tell you 1. Russia tries to influence our election, as they have been doing since WWII, b. Clinton was behind the fake Trump conspiracy theory, which we've know since the beginning, c. The Russians were helping Clinton, which we've known since they bought her at the time of the Uranium One deal?

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Would your U.S. post-WWII order support a 90% oligarch income tax rate or a bone spur tax cut.

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"you've got to be honest about what it means to lead a country. It means killing people"

Refreshingly honest. Which postwar US president of the US hasn't killed people?

There was a nice interlude when the CIA was precluded, and we were in no wars.

https://www.nytimes.com/1998/08/30/weekinreview/the-world-rethinking-the-ban-on-political-assassinations.html

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"Populism isn't democracy? "

Modern Populism in both the US and Europe have clearly been Democratic. Trump was fairly elected. Only the partisan nut cases think he's a result of Putin hacking the election.

Only partisan nut cases think they know for sure.

But there is a lot to be concerned about. This is wild. Three days after Seth Rich was killed, Russian intelligence drafted a fake memo implicating Rich in the DNC email hack.

It showed up here:

https://marginalrevolution.com/marginalrevolution/2017/01/thursday-assorted-links-90.html#blog-comment-159572947

More than once

https://marginalrevolution.com/marginalrevolution/2017/01/thursday-assorted-links-90.html#blog-comment-159572947

Don't think it never reached you, or your literal or virtual neighbors.

Trump must have had him killed!

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Ah, the second copy didn't take.

https://marginalrevolution.com/marginalrevolution/2019/03/the-winners-and-losers-of-the-mueller-revelations.html#blog-comment-159923074

I glanced at the link, because occasionally you make cogent rebuttals. This was not one of those times.

"Among intellectuals, Glenn Greenwald has been insisting throughout that the Russia collusion story was phony. Whether or not his extreme skepticism was entirely correct, he is due to rise in status. Ross Douthat of The New York Times also had been suggesting that the Russia collusion angle may not pan out and some of his columns now seem pretty wise. "

Your own link helps to prove my point.

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I sometimes go round and round about this in my head, because it is hard to question the American system without sounding, and feeling, ungrateful. Like a lunatic, even.

Trump: the important thing is that he's seen as illegitimate. If there'd been no Russian troll farm, there would be greater focus on the Electoral College. If there were no Electoral College, there would be a spat over the definition of citizenship - still in their back pocket, of course - and a surge of interest in voting rights/schemes. It's not enough that he should just be *bad, but we'll survive* - politics isn't everything, or even most of it - and we'll vote him out next time. This is how you know "democracy" has become a religion. Maybe one day we'll have an anti-pope, I mean an anti-president. I'm not imaginative enough to think of a better system of governance, and in any case it would not occur to me to make the question narrowly hinge on GDP - I'd instead be inclined to turn it on environmental metrics, species conservation, open space, etc. - but that's just my dark pro-life values, I guess. Still, if "democracy" however loosely defined - and I agree with Brian if he's saying it's tedious to get too semantic about it - has become something we must worship, while rooting out heresies like the Deplorables; and increasingly untethered from the realistic, pragmatic, arguably-humble spirit - "How small, of all that human hearts endure, that part which laws or kings can cause or cure," &etc. - that I associate with its development in Britain, particularly, then paradoxically it seems a diminished thing, in terms of commanding one's faith.

And no - not least because I've had problems with authority all my life (not proud of it) - I'm pretty sure I'm not a fascist.

Personally I think of it as keeping up the house. You can have high ideals, but if no one is vacuuming the carpet and washing the dishes, things go to hell.

Maintaining democracy is vacuuming the carpet and washing the dishes.

I dunno. Until the recent wokeness and identity politics and hating-on-Boomers stuff, the 1960s was seen, during my life, as the high water mark in American history. The dream decade when American youth told off the man, told off the military establishment. We had a president who, though in his personal habits and as inheritor of his predecessors' war, was reviled, yet on the other side of the ledger oversaw the Great Society expansion of government, and is favorably associated with civil rights legislation. People who visit his presidential library do so in a very respectful manner. His decision not to seek re-election is there presented as a very poignant sign of his grief over the war. Beyond a few nutjobs in Texas, and despite the bizarre events of his ascension, he was indubitably "our president" - none of this "he's not MY president" that has become a regular refrain in American life (I always want to say, who IS your president, who's your daddy?). Nothing that has happened since has ever made anyone seriously re-evaluate the 60s as the golden time (and even the ratcheting-up of the outré by the left is not really a comet suddenly appearing in the sky). How many of those of you who are younger, grew up with a painful sense of having missed the 80s, the 90s?

And yet, and yet ... there is no question that the political rise of LBJ involved no dishes, and no vacuuming, and sure as hell better not look under the couch cushions, because you'll find more than a stray Frito.

And I don't think people care about that very much at all.

Absurdly, provincial that I am, I feel a local-boy-made-good defensiveness about the man, and should add that I appreciate his environmental legacy, the Wilderness and Land and Water Conservation Acts especially, which Nixon then built on. (And others have retreated from ...)

Visit any national park or forest. So much park infrastructure dates from that decade. I suppose it will always be my golden time, even though I eventually became the sort of conservative who writes in the Queen of England on the ballot, or would if they hadn't made doing so a huge hassle!

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Of course, absent EC, Hillary is president, so that doesn't make sense, sorry! But even if we eliminated it, I doubt we'd see the end of the "science of democracy" aiming to achieve the immaculate election with the foreordained outcome.

"Hillary is president"

should read: *probably* president

I don't understand Trump, but I've got to assume he has unusual skills even if it's hard to say what they consist in.

We were trying to throw out names of somebody similar the Democrats might field. My husband came up with Cher.

Best possible president, politics aside, would be magician David Copperfield. It would be priceless to see him pull coins from Putin's nose, turn Kim Jung Un into a donkey or make an aircraft carrier disappear.

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"Reasonably enlightened group of people"

Wow. Just wow. Goes to show that Orwell was right about leftists admiring totalitarianism.

The "miracle" of China's economic growth and power is not that they have reasonably enlightened dictators, but that the country had been strangled at low development by communism for so long that strong growth was the only possibility. China has a massive country filled with cheap labor and resources. The question isnt why they grew, but why they couldnt grow for 5000 years. The answers are totalitarianism and mysticism.

The reasonably enlightened oligarchy are stealing all of the riches of growth. Simple people are simply now receiving some of the excess benefits afforded by capitalism.

Let us be blunt: they are savages. They invaded Tibet, they invaded the Soviet Union, they invaded Korea, they invaded Vietnam, they invaded India, they supported genocide in Cambodia. They are waging subversive war against the West. They aim for world conquest.

Unfortunately for the Dalai Lama, no country in the world has recognized Tibet as an independent nation, either then or now. They had a limited border dispute with the Soviet Union that occasionally erupted into armed clashes, over a few islands in a river. They were invited in by the North Koreans, when the latter were about to lose the Korean War. They invaded Vietnam as retaliation for Vietnam invading Cambodia, it didn't end well. The conflict with India was a limited border dispute over uninhabited frozen upland; they are not really seriously pressing their claim to Arunachal Pradesh.

In Cambodia the Khmer Rouge was deposed from power in 1979 but continued to be led by Pol Pot, and they dominated the so-called anti-Vietnamese coalition which remained internationally recognized as the legitimate government by the UN, the US and many other countries until about 1993. So the US was equally happy to "support" a genocidal regime in the name of Realpolitik, against the Soviet Union and its ally Vietnam.

Your shtick is getting tiresome.

I see, that Red China invaded their neighbors and plotted genocide in Cambidia is a series of unfortunate events, coincidences, actually. Why not? Hitler said the Poles attacked Germany, and Stalin said the Finns attacked the Soviet Union. I wonder how far and how deep the Red Chinese fifth column in the West runs.

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International recognition is not a necessary condition to be a victim of oppression.

World history has indeed been marked by invasions, but we can certainly rank them from least to most just, least and most bloody, least and most oppressive.

As George Orwell described in Notes on Nationalism, the UK and USA are always singled out by pacifists for their incursions, but those same pacifists are silent about incursions by communists. The outrage is selective.

US and UK imperial aspirations have abated. China believes it can conquer it's way into a new empire.

Exactly.

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"the country had been strangled at low development by communism for so long that strong growth was the only possibility"

This is the correct answer. It's not hard to go from dirt poor to somewhat middle class when your authoritarian rulers ease up on the oppression peddle even just a little bit. It also doesn't hurt when all you need is a few years to copy and steal technology that took centuries to develop in the West.

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Peter Bauer would have "I told you so!" For long he had been arguing that democracy is not a prerequisite for prosperity. As in the case of most of his other arguments about development, this one too appears to be vindicated

Dictators make the trains run on time, but over the long term, extreme centralization of power leads to cronyism, nepotism and corruption among the leadership, and cynicism and apathy among the population. This ultimately nullifies all the efficiency gains and then some.

At least that's the way it worked in the twentieth century. Modern technological developments (the internet, big data, surveillance, machine learning) may be tilting the balance in new ways, not necessarily in democracy's favor.

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Democracies are rich because they are white, and people want to go to democracies because they are white. The endogenous effects are also more important -- what kind of a people wants to be led by strongmen and thugs? Not the kind that is otherwise inventive or enterprising.

Democracies also work particularly well in places where it's hard to imagine anything substantively different. That's not the case for, say, India where the method and structure of a monarchial or autocratic alternative is quite evident in the observed inequality -- of type, power, and attitude, not just material wealth -- between the various classes in contrast with America in the eighteenth century.

Changing "white" to "Anglo" in all that I said would make all this more apparent. I don't know how you can perform all these regressions ("econometrics") and exclude a key variable that is almost to a tee a necessary and sufficient condition to be a prosperous, attractive, and decent country in the recent era.

And to the extent it seems increasingly false that the Anglo world is so much better than the rest, it's also increasingly true that the Anglo world is less Anglo... Far be it for me to put 2 and 2 together, though.

Yeah sure, let's call the Japanese "white" too, to balance those books.

By the way, a good modern read on this:

"Because of the historical misuse of the term ‘race’, this is an important distinction to make. In 19th century Britain, for example, two groups who would now be simply lumped together as ‘White’ were regarded as separate biological races — namely, and complete with the ‘picturesque’ descriptors of the time, the “careless, squalid, unaspiring” Irish and the “frugal, foreseeing, self-respecting” Scots. (Full disclosure: my own genetic ancestry is of the careless, squalid and uninspiring variety.) A more modern perspective, however, does not deny the existence of genetically distinct ‘indigenous’ British populations — such groupings do indeed exist — rather, it avoids describing them in meaningless racial terms"

https://geneticliteracyproject.org/2019/02/13/genetics-and-race-how-do-we-have-this-awkward-conversation/

Of course, since you know exactly what I meant and mean by "white", I think my point stands.

Read the link.

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Early America had strict limits on immigration from Ireland, among other nations. Perhaps the notion that they are not distinguishable from Anglo-Saxons serves the same purpose as your notion today.

It's additionally worth noting that the immigration policy that opened America's floodgates for the so-called huddled masses was spearheaded by a guy named Kennedy. Perhaps the Irish are simply a gateway ethnicity?

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If your theory were correct, then Anglo parts of the world would always have been more successful, but this is not the case. There were historical eras where the most successful parts of the world were in the Mediterranean, East Asia, or India, or the Middle East. Anglo dominance is a recent phenomenon, driven largely by the geographic luck of being close to and able to colonize the Americas. Anglo dominance is also reversing as countries in other parts of the world such as East Asia start to catch up. Also, the recent convergence between Anglo and non-Anglo countries is entirely due to non-Anglo countries catching up, not Anglo ones getting worse.

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Prof. Cowen from 2016 wrote: https://marginalrevolution.com/marginalrevolution/2016/08/what-if-there-are-no-more-economic-miracles.html

"Denmark’s overall economic record is gloriously boring. From 1890 to 1916, per capita growth averaged about 1.9 percent per year, and if in 1916 you had forecast that this pace would continue for another 100 years, you would have been off by only about $200.......the experience of Denmark and other “no drama” growth stories provides some clues to the future of developing economies. The East Asian growth model, for all its wonders, belongs to HISTORY. Slow and steady may be the only option left. For whatever reasons, few countries have been able to scale up their educational successes as rapidly as the East Asian tigers."

What's the point of going into authoritarianism if the outcome is anyway slow and steady growth? What made Prof. Cowen update his priors?

My fault, it was an Alex's post.

Anyway, growth rate does not inform very much. Authoritarian regimes can contribute to high growth rate, but: (i) is there a cap to growth, and (ii) is the GDP sustainable?

There is natural experiment running right now about authoritarianism and growth. In 10 years or less we'll see what happened to the Gulf States (UAE, SA, Bahrain). Will they be richer than democracies or will they hit a wall? Will they successfully pivot to services or will they stay stuck on oil?

AXA -- I long thought a major reason for Korea and Taiwan successful growth was the point that in the break out growth period their population had been educated under the Japanese model.

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Also to consider is that where there are very wealthy (and small) non-democracies, their GDP/capita is generally not really reflected in the consumption levels.

Consider how Singapore has great GDP growth numbers, but essentially flat levels of household wealth and consumption (and a falling share of consumption as wealth). They're not actually getting richer in terms of living standards. (Sing currently is about 20% above HK in GDP per cap, but consumption as a % of that GDP/cap is only something like 60% of HKs).

So there's some degree here to which small countries which are non-democratic can probably "jook the stats" a bit.

This is probably going on China as well to some degree.

"Closed" societies:

a) probably have systematically less trustworthy data and

b) leaderships who often engage in systematically more activity that inflates attractiveness to investors (GDP growth) without this actually being reflected in living standards

Hence, looking at consumption growth and democracy may find slightly and subtly different patterns, especially adjusting for catchup growth potential (non-democracies tend to start poor).

Indeed, the lure of authoritarian regimes is that a lot of people dream about being the oppressor that captures the riches. Thus, the GDP per capita number is nearly useless because it is not distributed among the population.

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Just as an aside; 20% bigger over 25 years is a pretty big deal. It's an additional 0.7% growth per annum (ceteris paribus). Most politicians in the west would love that.

Economies grow at a decreasing rate. Developed countries are at the flat top of the curve. They grow through technological advancement.

Underdeveloped countries are low on the growth curve so growth is steep. This is an artifact of mathematics, not marvelous planning.

The town in Alaska with a population of two has 100% growth when the sole woman gives birth to twins.

Lesser developed nations not only grow from a low base, they get to borrow technology developed by others, free riding off their public goods.

Lesser developed nations are also often marvelously inefficient, and small improvements in institutions masquerade as economic growth.

China's recent rapid development isn't remarkable. What is remarkable is that it took them 5000 years to start. At one time this was one of the most technologically advanced civilizations on the planet, albeit still primitive. Not surprisingly, every one of those first movers has been left back several economic grades. They are historical losers. China appears to be the first exception in the next few decades, God willing. India as well. I prefer not to have the world's two largest nations be piss poor.

At one time this was one of the most technologically advanced civilizations on the planet, albeit still primitive. Huh?

Why huh?

I thought it was common knowledge that the cradles of civilization were in China, Mesopotamia, India, and Mesoamerica? Relatively speaking they were the most technologically advanced places on the planet. Even as late as the 17th century, China had technology that Europe did not.

But even if you poo poo the primitive tech of ancient China, fact remains they were an early civilization that SHOULD have developed technology faster than other places. I submit that local institutions retarded that growth. Every culture had lengthy feudal and monarchical periods, but somehow China got left behind. I hypothesize that Northern latitudes led to earlier development of energy which drove technology. Seems the closer to the equator, the less tech. On the other hand, it could just be an issue of Ag having a comparative advantage. Trade also seems to affect technology transfer, and Asia was profoundly xenophobic.

Check out a map. China was a northern civilization, in fact the most northernly of the cradle civilizations. Moreover Chinese civilization originated in the north of the country and only later did it come to encompass the subtropical south.

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China developed, as a civilization, fairly late; far later than the Indus Valley, Mesopotamia, Egypt. Minoan civilization even developed earlier. I actually find it tough to call them early civilization, so much as a"Late Civilization" which avoided the "Dark Age" regress through isolation.

China's claim to fame in that area is that it developed spontaneously with no direct influence from any other civilization ( until much later). That"s unlike, say, ancient Greece or Japan.

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If it's the most technically advanced civilization on the planet, how can it be "primitive"?

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Fair point, Willitts; 0.7% isn't quite so interesting to a poor country which can get up to 6% growth, compared to a wealthy country which is struggling to get a 1.5% long-term growth rate.

That would still support the idea that democracy becomes economically attractive to wealthy dictatorships, as their catch-up growth cools, though.

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If one rationale for democracy is that it helps limit government abuse, is it therefore entirely up to citizens themselves in any democratic commonwealth--irrespective of official and formal government police powers--to address and tackle "democratic abuses"?

Under what conditions can the government of a democracy legitimately police "democratic abuses"? (What anthropological criteria must a functioning democracy subscribe to in order to be a functioning democracy? [How well do contemporary democracies enunciate their specific anthropological assumptions?])

Of course, "anthropological assumptions" or premises may prettify the subject unduly: we might just as well or perhaps more fruitfully inquire after what governing assumptions and premises concerning "human animality" a self-professed democracy implicitly or explicitly professes.

(I myself cannot see that American democracy boasts dominant or cogent accounts of either "human anthropology" or "human animality", which leaves American democracy presenting the dread aspect of an exotic zoo being mismanaged by some of its most feral and vicious inmates.)

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To summarise:

Property rights (strongly raise) growth rate
Political rights (slightly lower) growth rate

P(Political Rights | Dictatorships ) = 0
P(Political Rights | Democracy ) = 1
P(Property Rights | Democracy) = 1
P( Property Rights | Dictatorship) < 1

There's our model, people, and it puts dictatorships at both top and bottom of the table, depending on their attitude to property rights. And here we have the Mencius Moldbug critique of democracy. Y'all reactionaries now.

Aren’t property rights just political rights once you scratch the surface?

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GDP (or GDP per capita) only corresponds to happier people up to a point, then other criteria control. More holistic measures of well-being have been around for a while but haven't caught on precisely because aligning policy with perpetual GDP growth enables the capture of so much wealth by the plutocracy (or whatever term you prefer). At the risk of sounding a bit cynical, why is there so much support for the study of economics in GDP terms and relatively little for alternatives? Perhaps because it benefits those that control large amounts of capital?

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20% higher GDP makes a big difference in geopolitical power. It means, for one thing, that the US can support a huge military and the average American will be richer than the average Frenchman. Also that there will be a constant brain drain to America. The elites in European countries actually do find American geopolitical dominance frustrating and frequently do attempt to emulate America by, e.g., liberalizing their labor markets, although they are usually unsuccessful. If China (the only non-democratic country that anyone cares about) is doomed to per capita GDP 20% below the US, its rulers will be constantly frustrated by their lack of geopolitical power. (Of course, that may make them dangerous.)

Agree. I tell people in financial planning classes that every additional $1000 per month of income is life changing for most people, including people with assets exceeding a million dollars.

Same for national GDP. There is some amount of increase that makes a nation capable of extraordinary increases in public goods.

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Good point, it’s interesting how voters in Europe and even some developing countries resist this sort of liberalization and don’t seem to care as much about GDP growth and the geopolitical strengths it brings. I’d bet China’s leaders would be thrilled if China’s per capita GDP reached 20% below US levels though.

Also, the military issue is interesting. It does seem like democracies are better at war. It’s hard to think of an autocracy defeating a democracy of equal or larger size in a war but there are many examples of the other way around. Perhaps the real benefits of democracy are not economic so much as geopolitical.

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"20% higher GDP makes a big difference in geopolitical power. ... If China (the only non-democratic country that anyone cares about) is doomed to per capita GDP 20% below the US, its rulers will be constantly frustrated by their lack of geopolitical power."

I think you are conflating GDP and GDP per capita.

China with a GDP per capita of 80% of the US, would have a GDP 3x the size of the US's. And thus it would have much more economic power than the US and likely much more geopolitical power.

Good point, in addition, the geopolitical power is more affected by unadjusted total GDP, whereas standard of living for the general population is affected by PPP GDP/capita.

No, you still need GDP (PPP) since most goods and services are bought within the country.

y81: "the average American will be richer than the average Frenchman"

But the typical French works 20% fewer hours than a typical American while the gini coefficient is smaller. The GDP per capita per hour is only 5% higher in the U.S. than in France.

True, but that's at a cost of having more workers. Forcing shorter work weeks bumps employment up, but obviously at a cost of less pay per employee.

France actually has a Labor Force Participation rate 10% higher than the US despite having an older population.

That's both good and bad. Good because steady work tends to make people happier, but bad in that you can't afford as many people not actively working. There are a substantially higher percentage of stay at home moms raising kids in the US than there are in France, for example.

OECD figures actually suggest that USA and France are near parallel - https://data.oecd.org/emp/labour-force-participation-rate.htm

With differences in age distribution (France low at young ages; entry is trickier in European systems, though the market is relatively inflexible once an individual finds a position).

The US just seems to produces and consumes more overall.

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I think that stuff that goes along with Democracy (the expressive/signalling components of voting and other peaceful political activities) are superior goods and therefore as incomes rise we see a greater "demand" for them. So its reverse causality.

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We may have some measurement problems here.

Germany was a weak democracy, I grant, but it did not turn from poor to prosperous in 1945 because of that Hitler guy.

The Russia of Putin is no democracy, but it is more free and prosperous now than in the 1930s under Stalin. Do you think a democratic Russia would be less successful than under Putin?

You hold up China as Exhibit A for democracy does not contribute to growth. But was China doing better under Mao? China is closer to political freedom now than in 1960. And why did the more democratic Taiwan generate a higher standard of living than Communist China?

And you are missing spillovers. Non-democratic developing economies benefit fantastically from trade with, investment from, and technology from democratic capitalist countries. Those countries are free riders. If the US and Europe had been Maoist, China could not have coasted on developments from US and Europe.

More questions. If Cuba and Venezuela turned democratic, would their standards of living go down? Isn't it an odd coincidence that Chile is capitalist, democratic, and has the highest standard of living in South America?

Would you counsel all the poor African countries to be autocratic to improve growth? Worked in Congo and Zimbabwe, didn't it! Would Iran be better staying autocratic?

It seems that autocratic countries have more variation. Chile is a good example, as its capitalist economy developed under the autocratic Pinochet.

I do think a democratic Russia might be doing worse than Putin’s Russia. Democratic Russia in the 1990s did very badly on the economic front.

China is another good example of how non-democracies seem to have higher levels of variation. Mao was very bad for the economy (though life expectancy and population growth did well under Mao), while the current non-democratic government and Taiwan’s non-democratic government from 1945-1990ish had much faster growth than most democracies, such as India.

Spillovers go both ways, if the US and Europe had been Maoist, China would have gained less in technology transfer, but would also not have had to deal with geopolitical threats such as colonialism or the US blockade during the Mao era, and would also not have to worry about climate change. Overall it’s a bit of a wash.

Iran and Cuba (and even Venezuela to a lesser extent) are also bad examples because they are countries under US sanctions. Is their poverty caused by autocracy or sanctions? Probably a bit of both. In the Iranian case though, it’s probably mostly the sanctions as equally autocratic but US-friendly countries on the other side of the Persian Gulf are doing much better economically.

Venezuela gets 80% to 90% of its revenues from petroleum-related industries. For basically the entire duration of the Chavez and Maduro regimes, US refiners have bought all the oil Venezuela has offered to sell to them. And if the US ever decided not to buy it, other countries would.

Venezuela is not Cuba. You can't make the case that Venezuela's economic implosion was caused by any kind of US sanctions.

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Those countries are free riders. If the US and Europe had been Maoist, China could not have coasted on developments from US and Europe.

The US and Europe coasted on developments in the New World and Asia during their own rise. The maize, potatoes, squash, etc. that are food staples in Europe now came from the New World, for instance. Cotton, still an important crop in the US despite a lack of slaves to attend to it, isn't native to that country. A major motive for the expansion of the Dutch and British empires was the acquisition of whatever was available in Asia. Why are we hearing that groups of people like the Chinese are "stealing" technology from the West? Who owns the rights to knives, or even the metallurgy required to make them? Does someone seriously believe that it's possible to retain a noteworthy idea for exclusive use? That I should ever be the only person, or that citizens of my country of residence, should be the only people able to effectively repair ball-point pens? Non-private display of anything will mean that others will adopt it eventually. So what?

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"GDP per capita in the United States is about 20% higher than in Sweden, Denmark or Germany and 40% higher than in France but I don’t see a big demand in those countries to adopt US practices. Indeed, quite the opposite!"

But maybe they should. One of the ideas that I have that most people disagree with is that it seems to me that those countries get amazingly lttle for their taxes.

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To bring up the eclipse of the Arab Spring, and the recent rise of populist politics as an argument against 200 years of successful democracy is stupid. Regarding China, well, it is to early to say. Only thirty years ago China was a complete mess and the world was wondering if it could feed itself.

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i recommend "How Asia Works" by Joe Studwell. I wasn't happy about it, but he gives a good argument that the Asian economies that succeeded, Japan, South Korea, Taiwan, China, did so because of a period of targeted government control of industrial production, for example.

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Democracies are from Venus, dictatorships are from Mars.

There is a theory that Mother Nature rolls the dice more with men than with women, because individual men are more expendable than women for successful reproduction of the species as a whole. This theory purports to explain why there are more male overachievers and top performers, but also why men are disproportionately represented among prison inmates, suicides, and life's losers in general. It's a just-so explanation that can't really be seriously debated in an angry woke world.

By analogy, dictatorships roll the dice much more than democracies. If power is concentrated at the top, everything hinges on whether the top guy is Lee Kuan Yew or Pol Pot. So perhaps in the natural order of things, in the long term, the (few) very richest and the (many) very poorest countries in the world will be dictatorships.

Or perhaps China is just a special case. For centuries their civil service examination system put clever people into positions of power and prosperity, which was surely favorable to their reproductive success. But that's another (deplatformable) story altogether.

In Chinese history, eunuchs were very clever and yes were in positions of power. However, their reproductive success was not so favorable.

I think only a small percentage of officials were eunuchs, particularly ones at the very top. The justification was that if they had children, they might be tempted to seize power and start their own dynasties.

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Democracy is an idiosyncratic system that happened to flourish in a few corners of Europe: ancient Greece, modern Britain and Switzerland, for instance. And that too shall pass away.

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>If democracies don’t substantially increase growth, why are they rich?

Peace, order, rule of law? Things a democracy isn't necessary for, but often provides. Is there a "herd immunity" kind of effect in which less democratic countries benefit from existing in some kind of (trade, political) relationships with a sufficient mass of mostly democratic countries, such that they too are peaceful, orderly, and (mostly) follow rule of law?

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I recommend the recent Free Thoughts podcast with Stephen Davies on how the modern world got rich.

Davies cites the rise of innovation as being responsible with the longevity of our current world being due to the powerful finding profit in not stamping out innovation as a threat. Democracy grew as an innovation in governance that kept forces at bay. But we are now facing many who want to control innovation through global regulation.

From this I take it that for democracy to survive you need an elite who benefit from the churning it introduces to the "ruling" class thus avoiding factional violence.

https://www.libertarianism.org/podcasts/free-thoughts/how-did-western-world-get-rich

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Robin Hanson speculated along some similar lines roughly a decade ago:
http://www.overcomingbias.com/2009/12/china-ascendant.html

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a common feature of most democracies is debt... most of them are drowning (slowly) in it....why is that so?

crikey, since 1981, national debt has risen to around 100% of GDP and tax rates on oligarch income have dropped dramatically. Earlier (1946-1981), U.S. national debt had fallen from 120% to around 30% of GDP with oligarch income tax rates up to 91%.

Starving “the beast” (federal government), while somewhat popular, may have had unintended consequences. In 1981, the tax base began deteriorating as the income share of the bottom 95% of U.S. tax filers started eroding.

Starving the tax base (95% of tax filers) perhaps facilitates starving the beast. In a democracy, would a wage earner support forty years of wage stagnation to starve the beast? Could freedom from a better wage be that popular?

It's gonna get worse. Somehow the Protestant work ethic that supposedly got capitalism into gear has been perverted by public employee unions and their political enablers into lavish, publicly-funded retirement programs, such as this. while the drain on whatever treasury this comes from is a negative, the cultural regression is even more significant. This really can't continue.

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Reasons:

1) Why would non-democracies with no rule of law be lent money? They're mostly gonna embezzle it.
2) Democracies tend to be high per cap GDP and high labour share of GDP as consumption. Hard to grow out of debt.

Having people be too willing to lend you money and being too rich to easily grow out of your debts is a "nice problem to have".

It's for sure not because non-democracies are "fiscally responsible".

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"the answer appears to be reverse causality (from wealth to democracy)"

I think this is true, but I'd add some further nuance. A few years ago (2014, I think), I made a spreadsheet of rankings of countries on various freedom indexes (religious [Pew], economic [WSJ/HF], press [RWB], and democracy [EIU]). At the time, at least, if one looked at the countries in the best category of the democracy index, basically all of them also had great religious, economic, and press freedom ratings. I doubt I'm the first person to do this or come to this conclusion, but it struck me at the time that some people, at least, had been making the wrong inference.

The wrong inference is that if we want people to enjoy these freedoms associated with democratic society, we should give them democracy and these things will necessarily come with it. Lots of bad US foreign policy seems (at best) to be based on this idea.

The right inference, in my view, is the opposite: give people religious, economic, and press freedom and then, over time, they will be ready for democracy. In fact, I would further specify that religious liberty empirically seemed to be a general precondition (I would stop short of calling it a "cause") for economic and press freedom, just as all three seemed to be preconditions for democracy.

There also seems to be some logic to this: religious freedom requires the right to own and use property for religious purposes as well as propagate and print one's religious teachings. So religious freedom includes an aspect of economic and press freedom as well. Once a nation has religious liberty, it is simply a matter of expanding the economic and press freedoms inherent to it to all other spheres of society. Religious liberty seems to be their foot-in-the-door. Or at least it can be and has been historically, with a few notable exceptions. And inasmuch as economic liberty correlates with increased wealth, if my inference is right it would support the idea that some significant level of increased wealth is indeed a prerequisite (albeit indirectly) for democracy.

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The world’s leading industrial economy was a nondemocracy until at least 1884, after a century of industrial revolution.

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In early 1994, while the recently ex-USSR Russia was in chaos as they tried to introduce democratic reforms, I visited nascent-economy China and met (with my b-school group) a senior government official. Being naive (i.e., obnoxious Western) students, we asked why China was not going to democracy. The answer was fascinating:
1) The people are not ready for it, both culturally and economically. They have never had the vote and could not be relied upon to understand how to use it if they did.
1A) People are starving still. That's more important than the vote.
2) If you institute democracy under those circumstances, you get chaos.
3) We have hundreds of millions of people below the poverty line. Imagine chaos with that many people.

"We have a billion mouths to feed. Once they are fed, we can consider democracy."

25 years later - look at China and Russia. You tell me...

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Do you have any sources to back your claim that there's revered causality going on here? Any papers looking at the effect of economic growth on the development of democratic institutions?

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