Thursday

I've always been taught it to be called 'the natural resource curse' but I guess that is synonymous with the Dutch Disease? I was speaking strictly in theory, I lack any evidence, that is what I'm looking for. And by initially rebuking the free market, I was referring to having lots of protectionist policies and to be more isolationist like early America so that industries develop. However, I think the proper response to that is that while refusing to import, trading countries will obviously counter with tariffs of their own and also without importing a country will see slower advancements in technology.

I'm working on a paper with a friend and we're looking for some empirics on different nations successes and failures with either globalizing (freeing their markets of regulation, adopting capitalsim, and/or lowering protectionism) or by socializing (increasing government size in either revenue, services and goods provided, etc.) Also, does anyone feel there is a treshold for development for a country to reap the benefits of globalizing? In a preliminary discussion we argued on whether a developing nation would actually see more growth under a more socialist/communist regime as opposed to a 'free market.' There were really two points: 1) The natural resource curse, an undeveloped nation has no industry in which it has an absolute (maybe comparative?) advantage so it will have to rely on its commodities as primary exports and will compete with other undeveloped nations to trade with industrialized nations. 2) Instituations vs Geography, while Sachs' research may not be entirely credible; however, if a country initially rebukes the free market it impliments better institutions (good economic rules, like private property) and is less reliant on its geography (natural resources).

While that article is pretty insubstantial, it does raise a good question; do we witness a decay in the free market practices if morality increases? I think the answer is yes, we see people condone government regulations that affect free markets negatively, and that's on both sides of the mainstream political preferences in the US. Republicans are anti-immigration, despite immigration empirically showing economic growth and democrats obviously favor a lot of protectionist policies that hinders international trade.