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Decolonization and wisdom of masses

by on 28/11/2017

I just spent few weeks in Eastern Africa, touring villages, as well as the bush. The villagers live according to their ancient customs selling girls at their fourteens even if educated in schools managed by missionaries for 6-10 cows, to give birth to children. They live out of nature, or what it produces, while destroying it. The village headmasters have dictatorial authority. For example they decide who will get land to build house in the village and who not. The alternative is to leave to the cities, directly to the slums, where the unemployment is close to 100%. The only positive development is, that the villagers understand how important for them is conservation of wildlife, that brings tourists, who are the only source of cash money for them, even if most of the income from tourists collect the white or Indian lounge owners. In 1970’s when Mugabe took over the power, Zimbabwes population was about 6 million, now it is close to 17. The economy grew zero so the problems grew three times. This is an example of decolonization in one African country. But the others, with less violent government are not doing much better. This is what i call cultural trap. On one hand it is romantic, fashionable and valuable to try to preserve the unique cultures, on the other hand it is not sustainable, and Europe will pay for the necessary expected collapse, either by mass immigration or buy extreme nationalistic regimes. I don’t know what is worse.

I’m now trying to understand and write a book about, how political systems based on “wisdom of masses” fail on the long run. Take for example the Athenians democratically murdered Socrates or more recently elected Hitler, or even voting for Brexit, while the reality obviously contradicts any kind of reasoning claimed by Brexiters.

Then you have a very commonly accepted argument by the whole spectrum of politicians and economists (except of the Marxists, who live in different and even more devastating misconception), that reduction of taxes is good for economic growth. It is not. I emphasize IT IS NOT. It depends on the circumstances. Taxation is about allocation of resources from the private sector to the public governmental sector. Now it is will know that utility from the marginal investments have the same propensity to decline as any item in the economy. So if private sector will have more resources relatively to the public governmental sector, the utility from it’s investment will be lower compared to an alternative investment in the public sector.  You can see this phenomena in the practical terms ; in the US you have relative under investments in all the infrastructure and services provided usually by governments,  federal or local. This is why you have no fast trains,  but over invested toll roads, no good public education but excellent universities,  so on, so on. The conclusion. Low taxation is bad for economic growth in the US, exactly as in countries with high taxation and high public spending it is bad for economic growth to increase public spending.

But i can add the question, what it is utility in economics?  Does economic growth necessarily create positive utility. If it produces more and more and bigger and bigger private cars, that cause traffic jums, slows down the transportation and pollute the environment, is this economic growth valuable? What kind of utility is it? If economic growth is about creating jobs, like jobs of miners in coal mines is there any marginal utility from this activity, and if yes what is the balance between the negative impact of certain economic action and its positive utility?

  1. What is a price of 6-10 cows in Eastern Africa? (Asking for a friend)



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