Monday, May 01, 2006

Captain’s Book Review: “Culture and Prosperity”

“Culture and Prosperity: The Truth About Markets - Why Some Nations Are Rich but Most Remain Poor” by John Kay

I learned about this book through an interview with the author on NPR’s Diane Rehm show. A few points the author made caught my attention and I wanted to learn more.

In his interview, Dr. Kay talked about some basic ideas of why some nations are rich but many are still poor (just like the title of his). I wanted to know what the reasons were. Is it because rich nations keep poor nations poor on purpose? Is it because the rich nations suck all the wealth out of poor countries? Or is it because poor countries just don’t have what it takes to become prosperous?

I wanted to know the answers because I was hoping to get an insight into what was in store for the financial future of Iraq – the country where I was born. I also wanted to know whether or not (as an American) to feel terribly guilty when I see people starving to death in Africa and other areas. Whether guilty or not, I wanted to know what can be done to raise these people up to at least decent standards of living.

To be honest, I was a bit disappointed with the answers Dr. Kay gave. According to him, rich states are not rich because they suck the world dry. Nor are poor states poor because of oppression by rich states. Instead, it is a complex interaction between culture and economic systems that determine a nation’s status. In fact, through trade, rich states help poor states become a little less poor.

I was also disappointed to read that there is really nothing that a country can do to pick itself up from out of poverty. Prosperity must evolve over time and a system that works in one country does not usually work in another. Dr. Kay argues that a country must develop the social scaffolding of prosperity before it becomes rich. Changing an entire nation’s attitudes and morals is very difficult, if not impossible. Government corruption is a viscous cycle that seems to never end. Countries with excellent natural resources, like much of Africa, seem to be magnets for corrupt government officials – though I am not sure which causes which.

It’s too bad, though. It would be nice if a country could just follow a certain set of rules and regulations and become prosperous. I often fantasize about being ruler of a fictitious state and how I would run the state wisely and open-minded, learning from the mistakes of others. I guess that’s why I like games like SimCity and Caesar.

It was also disheartening to read that even the most well thought-out course of action can end up being wrong – or worst, disastrous. Dr. Kay give several examples of both governments and companies that tried their best to lead their nation/company in the right direction but failed. It makes you think of your own life. Right now, you might think that going into engineering (for example) is the best career choice later to find out that it was a terrible mistake. And if it does work out, then it was just luck – or so Dr. Kay made it sound in his book.

Overall Impression
I thought the first few chapters and the last few chapters are definitely worth reading. They contained the information that I was looking for when I checked the book out. The middle chapters of the book were not very interesting to me. It seemed that Dr. Kay went into “economic geek” mode. For a while, I felt like I was reading an economics textbook. If I were an economist, then I might have understood and even liked reading those middle chapters.


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