Re: BOOK: The Mystery of Capital

From: Anders Sandberg (
Date: Fri Oct 19 2001 - 10:58:05 MDT

On Fri, Oct 19, 2001 at 09:52:32AM -0400, Mike Lorrey wrote:
> Amara Graps wrote:
> >
> > [You can be sure that communist-advocates or those against libertarian
> > ideas will point to Lithuania's situation and ask why this country
> > which had so fewer communists is struggling the most out of the three
> > Baltic countries?]
> Another possibility: Lithuania adopted a far more US-like constitution,
> where Estonia and Latvia adopted more european style systems, and as a
> result europe biases in favor fo the other two more...

Estonia removed trade tariffs entirely (a very un-European behavior),
and the results were so good that they are now in front of the queue to
join the EU - where they will have to insert tariffs again.

I doubt the constitutional form really matters much for outside
investments compared to things like culture and perceived stability.

The important thing about the former eastern bloc is that building a
working civil society is hard. Past oppression is only half of the
problem; now they are stuck in a halfway position where much of the old
bureaucracy remains (just look at and see
where they end up - Estonia is leading at rank 14, the Czechs at 26,
Russia is down at 127) while the lack of reliable property law makes
mafias both necessary (to protect you against threats) and growing in a
vicious circle. It is not easy to just get rid of a factor, since they
tend to interlock. On the other hand, it can be done, as several of the
former East bloc countries have demonstrated.

Just for fun, I did a plot of GDP per capita vs. economic freedom at

Maybe I have watched too many singularity presentations, but I cannot
help thinking there is a vertical asymptote at freedom = 1... (I'm not
serious about that; there is more factors than being free that play in,
and besides the loglogplot isn't as cheering).

Anders Sandberg                                      Towards Ascension!                  
GCS/M/S/O d++ -p+ c++++ !l u+ e++ m++ s+/+ n--- h+/* f+ g+ w++ t+ r+ !y

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