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March 13, 2008



On a technical level, what you say seems very true and that is useful because it gives managers a big clue about how to make things better. However, the real underlying reason is surely the greed and selfishness of those who have already got wealth. This, many may argue, is an unavoidable consequence of human nature, so not very useful to point it out (yet again). However, I contend that human nature is first and foremost adaptable to its environment. In a world that promotes competitive acquisition (like the present one), people are trained to be nasty. We could, as a matter of policy, promote empathy and care for one another - leading (I contend) to a more humane human nature. It's our choice.

Scott Hughes

That is very interesting. I wonder how bad economies can be made more productive. Were they always like this? It seems like a lot of people in the world were better off before the West industrialized. Why is that?

Patrick, London

The vast majority of the difference between rich and poor nations can be ascribed to culture and attitude towards hard work. Read David Landes book 'The Poverty and Wealth of Nations'.

A little example. Last week was my daughter's birthday party. We shared the party and venue / entertainer with another one of her classmates - who happens to be an Arab girl. My wife and I did basically all the work, all the preparation and all the cooking and decorating. Such effort as was put in by the other family was all done by the mum. Father invisible. How will the Muslim world really become internationally competitive with a rent seeking attitude to work? When the oil age is over they're stuffed.


I agree with Keith. The nature of humans is the only reason for the observed inequality. I would not blame the nature, however, because many natural objects and processes are constructed in a way leading to the same size (income) distribution. In the nature, this is the result of energy exchange and dissipation. One can not construct a matter with all electrons having the same orbit, some should have smaller some - higher energy. Same is observed in human society. Everybody has to find some income taking it from the outer world. So, everybody has to make decision on that place s/he wants to obtaine in the income distribution and fight. The number of slot for given income is limited by the overall distribution. Bad thing is that you can not invite extra person to your level of income - just to exchange positions with lower incomer. Therefore, this is everyday decision of each and every person on the fairness of the current income distribution and everyday fight for own place what stabilizes the distribution itself. It is as it is and only altogether we can change it by some enforced agreement on fair redistribution of income. (I do not think it will happen.)

As a conlusion, remember that it is your everyday decision that other people have to have lower income than you have makes the poverty. Nothing else.

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