Why the West is Richer than the rest of the world,
the Myth of Low Savings in Poor Countries,
Cannot explain the West’s breath-taking economic progress via one factor alone.
several contributing factors.
But the single most important one was “
the existence of an
that documented, archived, legitimized and
enforced these property rights.
1) Historical, Geographical factors
Knowledge is cumulative (since the days of
ancient Greece up to & beyond the Industrial Revolution) and technological progress
2) Cultural & religious factors:
Values, pluralism, modernity, religion.
Capital Accumulation –(The Mystery of Capital).
Capital is the force that raises
the productivity of labor & creates the wealth of nations.
It is the foundation of
Poor countries can’t seem to produce sufficient capital for themselves, no
matter how eagerly they may engage in activities that characterize a capitalist
In the last decade, any attempt to build capitalism without capital has shared the same
political, social & economic problems:
pervasive organized crime,
lack of rule of law (flagrant disregard for the law)
The Myth of Low Savings in Poor Countries
In the poorest country, even the poor save.
Value of savings among poor is roughly 40x all
the foreign aid received throughout the world since 1945.
wealth accumulated by poor is 55X the sum of all direct foreign investment.
term wealth includes money, physical resources & assets such as livestock, arable land,
buildings, gold & silver coins, jewelry)