Here are a couple snippets from Chapter 5 on Culture and Economics:
"For different nations around the world to all have even approximately similar incomes or wealth, despite their great differences in geography, culture, history, political systems, religious beliefs and the demographic makeups of their respective populations, would require virtually a miracle. Nevertheless, the status quo is by no means predestination, and the histories of particular very poor and very backward nations of the past that have moved to the forefront of human achievement and prosperity show what can be done. The dramatic rise of Scotland in the eighteenth century, Japan in the nineteenth century, and Singapore, Hong Kong and South Korea in the twentieth century all show what can be done—and, to some extent, how. None of these heartening examples of dramatic economic rises was due to the international transfers of wealth known as “foreign aid.” Nor were these economic rises due to “nation-building” by outsiders, whether foreign governments or various experts supplied by international agencies such as the World Bank or the International Monetary Fund. Despite the many attempts to blame the poverty of some nations on exploitation by other nations or by foreign investors, it would be hard to find many nations that rose from poverty to prosperity by ridding themselves of colonial overlords—however desirable that might be on other grounds—or by confiscating the property of foreign investors. Indeed, impressive lists of the failures, or even counterproductive consequences, of such approaches can be, and have been, compiled. Still less often can nations be found that rose from poverty to prosperity by expelling, or by driving out through oppression or mob violence, various minorities widely described as “exploiters” or “parasites”—such as the Jews in Eastern Europe, the Chettiars in Burma, the Asians in East Africa, or others in various other parts of the world and in different periods of history. Often the nations that drove out such groups were worse off economically after they were gone, and the nations that welcomed them were better off."
"If there is any common thread in these widely varying outcomes, it seems to be human capital—and the cultural values behind the acquisition of human capital. This can be seen by comparisons of nations and by comparisons of groups within given nations. When Charles Darwin stopped in Australia during his historic voyage around the world in the early nineteenth century, he compared the development of the area around Sydney harbor with what he had seen in South America: “Here, in a less promising country, scores of years have done many more times more than an equal number of centuries have effected in South America.” Argentina, for example, has been described as “among the world’s most richly endowed countries” with “extraordinarily fertile” land, in which the roots of some plants go down 15 feet in soil unencumbered by rocks. Unlike some other Latin American countries, Argentina’s population is predominantly of European ancestry. Yet Barbados, whose population is predominantly of sub-Saharan African ancestry—that is, this population originated in a region of the world much poorer than Europe—has a 40 percent higher Gross Domestic Product per capita than that of Argentina. Although the Barbadians arrived in the Western Hemisphere as slaves and the Spaniards arrived as conquerors, the Barbadians absorbed the British culture, in which they lived longer than the peoples of sub-Saharan Africa from which they came, and the British culture was very different from the culture of Spain, as regards the values attached to work, education, and entrepreneurship, among other cultural factors that the British promoted and the Spaniards often disdained. Cultural differences among groups within Argentina reinforce the conclusion that the inherited culture from Spain was no more economically productive in the Western Hemisphere than it was in Western Europe, where Spain has long been one of the poorer countries.'
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