The disparity in the wealth and poverty of nations is starkly evident and has been a perpetual source of puzzlement and inquiry for centuries. Why do some nations languish in heartbreaking poverty while others prosper? Is there a poverty trap that some fall into accidentally and are unable to get out of without external help? Can they be helped, and if so, how?
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Things change. That’s the nature of the universe we live in. There’s little we can do about that, and the change is not always to our liking. Still, we are better off with change. Had it been an unchanging world, we would not have been here. We are complex creatures and it takes time for complexity to arise from simpler beginnings. Change and with it increasing complexity has been around since the beginning of the universe some 13.7 billion years ago. By now you would expect that we would have worked out the implications of this and become fully prepared to deal with it. Sometimes in our blindness to them, we fall into traps of our own creation.
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People value freedom. Actually, not just humans, all sentient beings want to be free. But only in human beings does the impulse to enslave others find expression so widely across space and time. The desire to control others is a primitive instinct which I believe will be with us for a long time. That instinct lies at the foundations of organized religions and organized crime. It is also that same instinct that motivates the power-hungry to promote a command and control government.
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There are two broadly defined systems of organizing the production and allocation of goods and services in a society. One system is called the market and the other command and control. We all have first-hand experience with both systems since childhood. As kids when we traded stuff with our friends, we were using the market. At home, we were under the command and control system of our parents. Both systems worked in the limited contexts of family and friends. Do they work equally well in when the context is a large, modern-day economy?
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When you find that there’s a disconnect between expectations and reality, it is no use denying the reality. It may be time to question the assumptions that underlie the expectations.
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Counterfactuals are generally instructive and entertaining. But in some cases, it can be deeply distressing to consider them. Those leave us sadder although wiser. And at times they provoke us to anger and outrage because we finally understand what might have been. That outrage could motivate us to act and thus change what we can. As Omar Khayyam, the lovable old wino and polymath wrote about the sorry scheme of things, “Would we not shatter it to bits and remold it nearer to our hearts’ desire?”
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There comes a time in every endeavour when it becomes imperative that one does a bit of arithmetic. As the late John McCarthy used to say, “Those who refuse to do arithmetic are doomed to speak nonsense.” Doing a bit of arithmetic is important not only to avoid nonsense but also to get a feel for what we normally would miss since our brains are not naturally attuned to figuring out the state of the world without the help of numbers. In this piece I lean upon a few sums to help me understand the broad implications of one facet of economies — their growth rates.
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Different parts of the world have different degrees of prosperity, as is clearly evident if you look around even cursorily. Indeed that fact is so obvious, persistent and ubiquitous that it is not the least surprising to us. It is almost as if it is an unalterable feature of nature and therefore there’s nothing we can do about it. But why is it so? Why do some groups of people do better than other groups? What are possible factors that determine the fate and fortunes of various groups?
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Economic prosperity is neither impossible nor inevitable. There are scores of examples on either side of the prosperity divide. From these we can learn quite a bit about what it takes to be economically successful.

Prosperity eludes some countries while others flourish — but not because of some deep, dark, mysterious reasons. Economists know what works, what doesn’t work and why. Here I present some basic bits related to the subject from a personal perspective.
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Why are some countries poor while others rich? That’s a more complex question than the question why a particular person is rich and another poor. The difficulty in the latter case arises because an individual is at the mercy of factors out of its control, while in the case of a collective, the collective determines its destiny through the choices it collectively makes.

There’s the problem of endogeneity when one considers the collective: society determines the environment, which in turn determines how the society functions. In this series, I will explore one simple idea, and it is this. Societies that steal are less able to produce the good society in contrast with societies that are in some sense honest.

The good society is one which is at the very least, not materially impoverished. I believe that theft is a factor in the poverty of societies. If indeed it is so that stealing is implicated in the poverty of nations, then it is possible for us to figure a way out of the problem. That we will see in the end.
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