Comment by rsj_hn | Hacker News Reader

Comment by rsj_hn | Hacker News Reader

Parent Full thread

Ultimately the resources a nation has are the skills of its people and political will. No nations resources are limitless, and the Netherlands has far fewer real resources but much better skills and organizational capabilities.

The fact that the Netherlands was a former colonial power doesn't give them any "colony juice" that they can squeeze onto the ground and dams rise up like apple trees. They still have to design and build the thing given their smarts and labor, and Indonesia has to design the thing given their smarts and labor. The only difference is in the pool of available talent and the organizational abilities of the government to marshall that talent. Given Indonesia's much larger population and greater abundance of natural resources, it's a joke to suggest that it has no resources to build a dam whereas a tiny nation with fewer resources is able to do it. Indonesia's problem is that they are more corrupt and disorganized, and can't marshall their resources effectively.

Tiny country by land mass maybe, but you know the Dutch East India Company's peak market cap was (inflation-adjusted) 8x10^12 USD, right? If you don't understand the economic impact of early resource abundance, on the ability to construct education systems, universities, professional organizations, infrastructure, and industry, and the 'pool of available talent', then pick up a strategy game.

Otherwise just Rand-ian codswallop.

Yes, but those nominal amounts are just paper. They are a mechanism to marshall labor, nothing more. They don't correspond to real resources. This is an interesting fallacy -- I remember playing Freeciv, and you would get 1000 coins in the bank, and if you wanted to speed up building of some monument, you just spend the coins and poof, all these things get built, even if you don't have the labor or real resources to do it. The world doesn't work like that. In the real world, if you try to cash out your stock and sell it to build something without the real resources to do it, all that happens is inflation goes up. But a country really only has the labor and land and domestic equipment that it has, and it needs to use that to build all the dams. You can create paper claims valued at hundreds of trillions of dollars if you want, but it doesn't add a single hour of manpower to the country.

You are confusing real and financial resources. Financial resources make sense at the micro level. If I have $100 and you have $10, I can purchase ten times the real resources that you can. But

1) that relative advantage doesn't correspond to an absolute advantage that can be compared across nations. A nation with ten times the market cap of another nation doesn't have 10 times the real resources. It may just have a more developed stock market, or a more financialized economy, or a lower discount rate, or more optimism for future earnings.

2) Neither does market cap mean anything for the nation as a whole. If I have 10 times the wealth of you, I can buy 10 times as many real resources as you can, but together we can still buy only all the real resources available -- when market cap goes up, that doesn't mean more labor is available to purchase, or the nation has more skills or more equipment. It could just mean that there is more optimism about future profits, or a lower discount rate. Market cap doesn't measure the real resources of a nation anyway -- it's a measure of the discounted flow of earnings, but not of the gross value add of the economy. For example, if labor costs go up, profits fall and market cap shrinks. But the real resources do not change -- the labor supply does not shrink. Just the relative price of labor and capital changes. These relative prices can fix the market cap at any point between zero and infinity (exclusive). All by tweaking the risk free borrowing rate, risk premium, and relative prices of labor and capital. You get zero information about the total size of real resources by looking at market cap, all the information is about relative prices for a given set of real resources. The same is true for the total amount of paper claims in an economy -- they give no information on the size of real resources available. They are dominated by relative prices. The proof of this is exactly the fact that the Dutch had such huge market cap when their real resources were so small.

The Dutch are quite famous for their fight against the water and have build enormous resources (companies, knowledge, public administration) for building dams and the like. Doing 'their thing' all over the world, for example, in Indonesia...

The Dutch also have the Polder model of consensus decision making -- "a pragmatic recognition of pluriformity" and "cooperation despite differences", which is pretty much the exact opposite of how the United States is operating right now.

https://en.wikipedia.org/wiki/Polder_model

And that enabled big projects like this:

https://en.wikipedia.org/wiki/Maeslantkering

You can draw your own conclusions about what the Dutch think of people who don't believe in global warming, then lie about the Netherlands, then call reports with video evidence of their lies fake news, then deny they used the term fake news less than 60 seconds later. It's not consensus decision making if you can't even agree with your own words.

https://www.theguardian.com/world/2017/dec/22/us-ambassador-...

Historical background

Somewhat ironically, there is no consensus about the exact historical background of the polder model. In general there are three views on this subject.

One explanation points to the rebuilding of the Netherlands after World War II. Corporatism was an important feature of Christian Democratic, and particularly Catholic, political thought. During the postwar period, the Catholic, Protestant, Christian, social-democratic, and liberal parties decided to work together to reconstruct the Netherlands, as did unions and employers' organizations. Important institutions of the polder model, like the SER, were founded in this period. No single political party has ever had anything approaching an overall majority in parliament, so coalition government is inevitable. This makes parties extremely cautious, since today's enemy may be tomorrow's ally, all the more so in present times when the "death of ideology" has made it possible for almost all the parties to work together.

Another explanation points to the dependency of the Netherlands on the international economy. The Dutch cannot afford protectionism against the unpredictable tides of the international economy, because the Netherlands is not an autarkic economy. Therefore, to cushion against the international economy, they set up a tri-partite council which oversaw an extensive welfare state.

A third explanation refers to a unique aspect of the Netherlands, that it consists in large part of polders, land reclaimed from the sea, which requires constant pumping and maintenance of the dykes. So ever since the Middle Ages, when the process of land reclamation began, different societies living in the same polder have been forced to cooperate because without unanimous agreement on shared responsibility for maintenance of the dykes and pumping stations, the polders would have flooded and everyone would have suffered. Crucially, even when different cities in the same polder were at war, they still had to cooperate in this respect. This is thought to have taught the Dutch to set aside differences for a greater purpose.

Reply on news.ycombinator.com