Archive for October 6th, 2009

I’ve been to Norway, Australia, and Iceland and they are all among my favorite nations, but are they really the three best places to live, as is implied by the latest Human Development Report from the United Nations? Here’s a brief blurb from the U.K.’s Daily Mail:

The UN list, which saw Norway retain its status as the world’s most desirable place to live, ranks sub-Saharan African states afflicted by war and Aids as the worst. Data collected prior to the global economic crisis showed people in Norway, Australia and Iceland had the best living standards… The United Nations Development Programme (UNDP) index was compiled using 2007 data on GDP per capita, education, and life expectancy, and showed marked differences between the developed and developing world. …Liechtenstein has the highest GDP per capita at $85,383 in a tiny principality home to 35,000 people, 15 banks and more than 100 wealth management companies. People were poorest in the Democratic Republic of Congo, where average income per person was $298 per year. Five countries – China, Venezuela, Peru, Colombia and France – climbed three or more places from the previous year, driven by greater earnings and longer life expectancy. China, Colombia and Venezuela also scored better due to improvements in education.

I’m very skeptical of the U.N. report. I strongly suspect migration patterns would show more Norwegians, Australians, and Icelanders emigrating to the United States rather than vice-versa. And the ratio presumably would be even more lopsided if it included unsuccessful residency requests. Isn’t that a more accurate measure of the best place to live? In any event, the U.N. report actually does have some interesting pieces of information. It turns out that two tax havens, Liechtenstein and Luxembourg, are the two richest nations. This suggests these places are doing something right, but in the upside-down world of international economic policy, low-tax jurisdictions are being pressured by high-tax nations to adopt bad policy (see here for more information).

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Thomas Sowell makes a very good point about the ostensibly brilliant advisers working for President Obama. If these smart people think that a high IQ somehow entitles them to “plan” the economy, then history shows the results will not be pretty. This is the difference between intellect and wisdom. Unfortunately, Obama’s people have very little of the latter. The late Nobel Laureate, Friedrich Hayek, referred to this trait among certain intellectuals as the “fatal conceit” and it is an especially common affliction in Washington as Sowell opines:

Many people, including some conservatives, have been very impressed with how brainy the president and his advisers are. But that is not quite as reassuring as it might seem. It was, after all, Franklin D. Roosevelt’s brilliant “brains trust” advisers whose policies are now increasingly recognized as having prolonged the Great Depression of the 1930s, while claiming credit for ending it. …Brainy folks were also present in Lyndon Johnson’s administration, especially in the Pentagon, where Secretary of Defense Robert McNamara’s brilliant “whiz kids” tried to micro-manage the Vietnam war, with disastrous results. There is usually only a limited amount of damage that can be done by dull or stupid people. For creating a truly monumental disaster, you need people with high IQs. Such people have been told all their lives how brilliant they are, until finally they feel forced to admit it, with all due modesty. But they not only tend to over-estimate their own brilliance, more fundamentally they tend to over-estimate how important brilliance itself is when dealing with real world problems. …Argentina began that century as one of the 10 richest nations in the world– ahead of France and Germany– and ended it as such an economic disaster that no one would even compare it to France or Germany. Politically brilliant and charismatic leaders, promoting reckless government spending– of whom Juan Peron was the most prominent, but by no means alone– managed to create an economic disaster in a country with an abundance of natural resources and a country that was spared the stresses that wars inflicted on other nations in the 20th century.

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