National Success

=== Con Arguments === 1) Democracy Con's sole theory for national success is democracy. He explains nothing. Here are some reasons to be skeptical: a) The masses cannot allocate resources effectively since they ignore market prices. b) In the United States, the chances one vote will make a difference are at best 1 in a million [1]. That is basically zero. There is no reason for an individual to invest time or energy into the process. People have no reason to spend sufficient time intelligently directing national policy. c) Caplan explains: “in politics as in religion, some beliefs are more emotionally appealing than others. For example, it feels a lot better to blame sneaky foreigners for our economic problems than it does to blame ourselves. This creates a temptation to relax normal intellectual standards and insulate cherished beliefs from criticism — in short, to be irrational.” [2] Irrationality in politics will persist because the individual costs are low (see above). The political arena will persist as an emotional playground for people's self image. So there are many good reasons to doubt democracy can cause success. === Pro Arguments === 1) Sampling Bias Con concedes this point. He simply says that we should “rule out variables” in order to overcome this issue. He hasn't explained how, or followed through in the rest of the debate. Countries Con points to like Denmark [3] and Sweden [4] have unique industry compositions. So sampling bias appears in Con's case. I avoid this when I take countries in aggregate. 2) Jurisdictional Competition I) Theory Con's account is that countries implement wise policy and then immigrants and capital come. This is exactly what I said. Governments try to attract immigrants and investment by implementing beneficial social policies. Their efforts culminate in a higher tax base. By Con's own numbers, immigrants make up around 13% of a country's tax base. This is a large monetary incentive to the nation, so it makes sense they would pay attention to it. ii) Example A) Individuals Con doesn't want me to compare developed countries to poor countries - But this is the whole point of the resolution, to see how successful countries are different from poor ones. Con thinks African countries probably have lower immigration rates because of relatively high transportation costs. -First, he's got no source showing that its prohibitive for an African family to move to Denmark. If he does find a source, the major barrier will probably be Denmark's elitist immigration policy [5]. -Second, poverty is an insufficient condition to prohibit migration [6]. -Lastly, if Con persists, he can simply take the poorest of the poor countries out of the data pool and rerun the numbers. Con says there is no correlation because he's broken the top 30 countries down by 10's and found no correlation. -I can just claim that its a small sample, so there are bound to be errors. The overall differences are not so egregious and could be chalked up to differences in immigration policy and language barriers. I would challenge Con to repeat this technique on his metrics and see if he gets a perfect trend. -Con is right that there is no correlation with success once you only look at successful countries. Nothing correlates when the group is homogeneous. -The numbers are still much higher than the overall average, indicating that immigration is a necessary condition for success. B) Corporations Con writes that some countries still have high tax rates, so low taxes aren't necessarily the root cause of success. Corporations also worry about political stability etc. I'm not arguing low taxes, I'm arguing jurisdictional competition. Maybe corporations can put up with higher tax rates if Denmark gets everything else right. The point is that these countries are competing for foreign investment. Lowering taxes is just one way they can do that. If Con disagrees, I would challenge him to provide an alternative explanation for why corporate and top income tax rates have universally declined, while capital mobility has soared. See source [8] of R1. Con also writes a bunch of nonsense about aggregate demand and idle resources. These points don't matter. I just want the readers to know that I picked up on it, and am choosing not to take the bait. Even if Con proves that markets are dumb, it just means that countries compete by offering better environments for investment. 3) Market Growth I) Theory Con writes that the state can mimic the behavior of markets His example only shows states can utilize competition to provide services. The point was that the state can never know which services to provide in the first place because it does not have market prices on its inputs. They appropriate capital by force. Con writes that governments can do some things better than markets, like redistribute wealth. But market growth is still a necessary condition for economic success, and only markets can produce growth. If governments later take that growth and use it on social programs, fine, but theory and my model shows that the wealth isn't growing anymore. So markets are a cause of national success. ii) Example Con says he's not sure what the point of my model is - Its to show that I can explain economic growth entirely with markets... to prove that the state contributes nothing to the growth of GDP because it can't allocate resources efficiently. So when Con tries to say that government investment in education causes growth, we can see it is empirically false. Con says I'm not a professional statistician. Con himself has argued a crude econometric model for countries citing that high tax nations are sometimes successful - So he should either take his own advice and stop making statistical arguments, or else stop telling anecdotes and default to my holistic model. Con writes: “Economic growth builds on itself” - My model does build on itself, since each year contributes growth to subsequent years. Con writes: “so exponential gains will take place, regardless of tax hikes or cuts.” - But my model can show exponential growth because “C” is compounded sequentially. My model is also called "Sum of Centered Exponential Declines"... donno how he missed that. Con writes: “if changes in the tax code did have substantial effects on comparative growth rates, then a linear data correlation would trend with historical tax changes” - This is silly because Con just said that economic growth builds on itself and is exponential, so a linear correlation is impossible. Con writes: “Norway has considerably higher taxes and higher GDP per capita than the US does.” Con doesn't give me any data for this. My gut is that Norway has a higher initial growth coefficient, which is a signifier of initial capital and industry type. Norway has 28 times more oil per capital than the US [7]. Conclusion I'm disappointed with Con. His arguments amount to nitpicking my methodology. At best, his criticisms force me to throw a few countries out of my data sets. He got lackluster results when he did so on immigration. The sole piece of Con advocacy is Democracy, which he never developed or even tagged. Con's turn. [1] http://en.wikipedia.org... [2] http://www.cato-unbound.org... [3] http://en.wikipedia.org... [4] http://en.wikipedia.org... [5] http://www.workpermit.com... [6] http://en.wikipedia.org... [7] http://www.nationmaster.com...