Your analysis is good. But what happens if the assumptions on which you base your analysis change? Carl from Chicago explains how the analyses on which much conventional tax- and retirement-planning advice is based can fall apart if lawmakers change the rules of the game. Carl points out that the rules have been changed before and probably will be again. The conventional advice no longer looks so wise.
Society
Review of “Annihilation from Withinâ€
Annihilation from Within
AfW is eminently worth reading and relatively likely to do some actual good in the world. But you haven’t grazed in here to read a blanket endorsement, and I’d be no blogger if I didn’t contend (with all-but-nonexistent credibility) with some portion of Iklé’s thesis; so for a thoroughgoingly unqualified critique, complete with annoyingly personal speculation and fuzzy intuition-laden commentary, read on!
(~2,700 words; approximate reading time 7-14 minutes, not counting lots of links.)
Anarchy Boomtime
In Newsweek, Silvia Spring marvels that the Iraqi economy appears to be booming even while the country remains mired in violence.
People are often surprised that economies can thrive without a high degree of politically enforced social order, but history tends to show that too much government is more likely to cause economic stagnation than too little. Most 3rd-world business people face the worst of both worlds. The government does a very poor job of providing physical security and a fair judiciary (important to enforce contracts), yet it imposes strangling taxes, jealously guards its prerogatives to decide who can and cannot engage in any particular economic activity, and individual government agents usually extort vast sums. As a result, the descent of a country into mild anarchy usually improves the situation. The actual security situation may not be that much worse, but all the parasitic government activity disappears. The situation turns into a net gain. It is quite common to read reports from 3rd-world countries during a civil war that shops and other businesses seem more full and busy than they did in time of “peace.”
The legendary economy of Hong Kong from 1945 to 1999 arose in large part due to the laissez-faire approach that the British government blundered into as a result of geopolitical concerns. The British needed to keep Hong Kong as a full colony to protect it, but that meant they could not allow a full fledged local democracy with the moral authority to impose a welfare and regulatory state. So they ended up with just a bare-bones government appointed by Britain that never tried to lay its hand too strongly on the people of Hong Kong.
Business people in Iraq find themselves in something of the same environment. The occupation government did not wish to get involved in potentially contentious economic policy, and the same lack of experience and consensus that keeps the newly elected Iraqi government from wiping out the insurgency also prevents it from implementing destructive economic policies. Left to their own devices and with huge pent up demand the Iraqi people are driving their economy strongly forward.
Simbabwe 1.6
Have you ever wanted to be a 3rd-World kleptocrat, pillaging your people and driving the entire economy into the ground? Boy, who hasn’t?
Now you can! If you have a Mac just download Simbabwe 1.6 and let your inner monster run wild!
Simbabwe stands for SIMulated zimBABWE. In the game, you get to play Robert Mugabe and have a chance to see just how fast you can wreck a formerly prosperous country.
Hopefully, the developers will soon come out with Simezuela and we can all find out how long it takes us to wreck a South American country’s oil infrastructure.
Why They Hate Us
Personal choices reveal our assumptions about human nature and how we see the great historical cycles. Or perhaps this is just how I see it, since our culture has benefited from an internalization of values & sense of personal responsibility. We see these as the mark of maturity – both in a man and in a civilization. Of course, temptations are constant from such a perspective, but this also gives us empowering choices.
Ray Fishman and Edward Miguel’s “Cultures of Corruption: Evidence from Diplomatic Parking Tickets” give us a clue to analyzing whether a nation has internalized its respect for property and the rule of law. I suspect it mainly reveals whether the world is viewed in tribal terms (us & them, those entitled & those not). Those entitled, of course, are not expected to observe the customs of other countries.