National Success

1. Sampling Bias: Pro points out the problem of sampling bias, which comes down to ruling out variables. Obviously the bankers in Luxembourg will not serve as effective comparisons for national success, so we are in agreement. 2. Jurisdictional Competition: i) Theory: Immigration may serve as a check on governmental actions, but the significance is minimal. Most governments are subject to their voter base and legal structures. The success of these nations is largely dictated by wise social and economic policies, which then brings in higher rates of immigration as an after-effect. For example, if Sweden's government attempted to cut public services and lower tax-rates to theoretically bring in foreign investment, it would not happen because the voter base would not allow it. In fact, capital relocation is also largely dictated by political stability and economic profitability, which happens AFTER a nation dials in the right policies. And vice versa, if a nation is so unsuccessful that its citizens do not have the means to effectively relocate, then low immigration will correlate with undeveloped nations, but it's not the cause for success/failure. ii) Example: A) Individuals My opponent formulates a spreadsheet to demonstrate the correlation between high rates of immigration and national success, but the whole paper is widely generalized. Comparing developed nations in Europe to undeveloped nations in Africa, is in itself, comparing apples and oranges. African individuals will obviously not be very mobile, for there are few roads or cars to travel in. However, when comparing developed nations under equivalent circumstances, there isn't much of a correlation. For example, the top ten developed nations have an average immigrant population of 12.4%, the next ten have an average of 15.8%, and the next have an average of 11.7%. The correlation between success and immigration in these nations is negligible. As national success declines linearly, immigration rates fluctuate. Thus, the only notable difference can be found between undeveloped, developing, and developed countries. I extracted information from these sources and calculated the results myself. I left out oddball variables, such as Japan, Luxembourg, Andorra, etc: http://en.wikipedia.org... http://en.wikipedia.org... B) Corporations Ireland certainly underwent some improvements over the last 20 years, but so has the rest of the world. Although average tax rates have fallen, that doesn't mean it's the cause behind modern economic growth. With some of the most successful nations currently having the highest tax rates -- Australia, Norway, Denmark, the Netherlands, etc -- it isn't accurate to attribute success to low tax rates. This is because costs are not the only factors corporate investors worry about, but instead profit (revenue - cost). Sales factor into investments, and thus long-term economic growth. Because the world's most successful nations have effectively distributed wealth to poor and middle-class citizens, increased consumption has given rise to larger profit margins, which initiates capital accumulation within these countries' borders. Such programs include subsidized education, healthcare, and employment -- all of which enhance the average citizen's disposable income. Without such programs, aggregate demand would diminish, and so would sales projections, thus capital investment. Instead, the excess resources would remain idle and unproductive. For instance, Armenia might have a low-cost business environment, but if there is nobody to sell goods and services to, then why bother investing there? There aren't going to be any profit opportunities. On the other hand, Denmark is currently one of the largest investment hubs in the world. This is because businesses are not attracted by costs alone, but also by infrastructure, an educated workforce, and aggregate demand. Taken together, these positive features cannot be incorporated under a low-tax environment. 3. Market Growth: i) Theory It is true that governments cannot discern market prices directly nor perfectly accurately, but they can make observations and act similar to markets. For instance, if a state authority wants to contract a private construction company to repair a road, it can auction off the employment opportunity by handing the job to the lowest bidder, which acts similar to markets. Not to mention, governments are not always supposed to act like markets; in fact, markets do not always produce optimal outcomes. The healthcare industry requires high educational and technological components to qualitatively function, which inevitably leads to high prices for consumers. In this scenario, the role of the government is to provide insurance for people that cannot afford basic health procedures, which circumvents the issue that markets naturally cause and cannot fix. Working examples include nearly every developed nation on Earth, so this theory does not adhere to a Nirvana Fallacy. ii) Examples For the rest of this topic, my opponent is explaining a mathematical model he used to predict GDP growth, but I'm not sure what the point of it is. He points out that economic growth from previous years will have an impact on current growth levels, but what this has to do with the resolution is beyond me. If my opponent is attempting to mathematically correlate economic prosperity with lower tax rates, then there is simply no way this can be done by anyone short of a professional statistician. Economic growth builds on itself, so exponential gains will take place, regardless of tax hikes or cuts. 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 -- trends would also follow between nations based on comparative tax codes. But, this isn't the case, for Norway has considerably higher taxes and higher GDP per capita than the US does. Also, the USA's changing tax rates don't coincide with economic growth very much either... However, I'm not really sure if that was even what my opponent was getting at. Some elucidation would be helpful.