What happened to Argentina?
economix.blogs.nytimes.com
economix.blogs.nytimes.com
The graph about percentages of the population in primary schooling is quite interesting, and goes a long way to explain why Taiwan, poorer than Zambia within my lifetime, is now much wealthier than most other countries in the world.
Notwithstanding, these protectionist policies don't always work out (eg. see Indonesia's airplane industry). Furthermore, Korea and Japan have had (and still have) an extremely difficult time reversing protectionist policies due to the lobby groups that represent the vested interests of the now successful companies.
Mankiw mentions it briefly in The Principles of Economics[1], which if I recall correctly is the most widely-used economics textbook, saying "Economists are often skeptical about such claims, largely because the infant-industry argument is difficult to implement in practice...many economists are skeptical about the infant-industry argument in principle...Protection is not necessary for an infant industry to grow."
Paul Krugman spends a few pages on it in International Economics: Theory and Policy[2], saying "The infant industry argument seems highly plausible, and in fact it has been persuasive to many governments. Yet economists have pointed out many pitfalls in the argument, suggesting that it must be used cautiously.
First, it is not always good to try to move today into the industries that will have a comparative advantage in the future...Second, protecting manufacturing does no good unless the protection itself helps make industry competitive
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More generally, the fact that it is costly and time-consuming to build up an industry is not an argument for government intervention unless there is some domestic market failure. If an industry is supposed to be able to earn high enough returns for capital, labor, and other factors of production to be worth developing, then why don't private investors develop the industry without government help?
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In practice it is difficult to evaluate which industries really warrant special treatment, and there are risks that a policy intended to promote development will end up being captured by special interests."
[1] Mankiw's textbook: http://books.google.com/books?id=oRgQ2goeFzwC&pg=PT222&#...
[2] http://books.google.com/books?id=L5DaCeXtNq0C&pg=PA257&#...
Protectionism is bad. The reason it's still here is that individual politicians and rent seekers can still benefit at the expense of the rest of society.
Protecting local industry until it is globally competitive is not a good idea and not without costs. Economists have known about this for centuries. Look at the work of David Ricardo. Do you think Ricardo is wrong, since you don't think protectionism is bad?
Almost every group that had governed Argentina, gained power, rebuilt everything (laws, institutions, education...) until it got replaced or defeated.
A century of this, has left the country walking in circles, incapable of taking advantage of the oportunities that had appeared, and that might had improved its situation.
Nevertheless I don't lose my hope in my beloved country.
But I believe that it is also related to education. Uneducated people are the ones that elect the most corrupt/incompetent politicians and are the ones that never understand discussions about policies.
Off-topic: hope you guys get to the Worl Cup ;-)
http://www.nationmaster.com/country/ar-argentina/edu-educati... http://www.nationmaster.com/country/br-brazil/edu-education
Argentina's education was world-class for a significant part of the 20th century and is still pretty good. Unfortunately the article didn't provide any evidence or citations to back up its hypothesis.
"Uneducated people are the ones that elect the most corrupt/incompetent politicians and are the ones that never understand discussions about policies."
For starters, Argentina had many governments that were not elected by the people. Second, can you prove that educated people always make the choice that's best for the country? Third, there are abundant counterexamples of dictatorial countries that did great in terms of their economics and industrial development.
Like other people said, Argentina's problem is not education but the lack of coherent policies over the decades.
Well, first I never claimed and don't think that we're doing much better than you guys. Honestly, I am not bragging on anything. Now, I agree that Argentinian education is better than Brazilian. Your stats show it and I know it. But put it just like that is simply lying with stats. Argentina has 32 million habitants, Brazil has 180 million. Scale means a lot here; Brazil has almost six times more people. Similarly, India has a worse education than Brazil, but produces more knowledge and science simply because it is 5 times bigger.
> Argentina had many governments that were not elected by the people
I might accept that for a small part of the country's history, the military dictatorship. It is not valid for the whole period of Peronism and everything else since the 80's.
> Second, can you prove that educated people always make the choice that's best for the country
No I can't. And that's not my point. My point is that, in average, uneducated people make worst choices than educated people; not that educated people are infalible.
> Third, there are abundant counterexamples of dictatorial countries that did great in terms of their economics and industrial development.
Also not my point. I am not interested in seeing dictatorships working. I want to see democracies working.
(Uruguay had one of the highest rates of literacy and school enrollment in the Latin Americas.)
Indeed, Argentina's per capita income today is just $6,500, despite the nation's amazing cultural and natural gifts. Argentina is, in fact, highly literate-- I don't think that explains why it has stumbled.
If not, what is the point of your comment?
If you do, I'd be interested in your perspective beyond this quip, particularly your thoughts on the Chicago school's involvement in forming economic policy there.
How many other variables did Glasser analyze? And more importantly, how many variables from 1900 can we even quantify? Education is closely correlated with a number of other variables - quality of governance, IQ, culture, religion, level of development, etc. But there is no good way to quantify those variables for 1900 Argentina. Education may correlate well with growth, simply because its an excellent proxy for governance/culture/level of development.
It seems like the author picked an arbitrary variable to make a point without enough subject knowledge or citations to back it up. Just visiting Argentina would make it glaringly obvious that the education hypothesis doesn't explain anything.
I think it's unfair to focus on the lack of details in Glaeser's blog post, when it links to his 52-page paper[1] (which the post is a quick summary of). In the paper, he writes: "the Buenos Aires data suggests that less than one-half of the population could both read and write in 1869. By 1895, the next available data point, the literacy rate had shot up to 72 percent, which still meant that a substantial portion of the population was unable to either read or write. It isn’t until 1939 that more than 90 percent of the population in Buenos Aires is literate."
It appears that he is focused more on the historical conditions of Argentina's education than on present-day conditions.
[1]http://www.economics.harvard.edu/faculty/glaeser/files/Glaes...
Long-run national success is built on human capital, both because of the link between schooling and technology and because of the link between education and well-functioning democracy.
That is a fairly profound statement when you consider the general state of the American educational system. I never fail to be amazed at how poorly US college and university systems are run. They are full of bureaucracy and little good teaching is done.
I don't know much about the subject, so I'm hoping to get a bit more insight into this.
I suspect that even if our system isn't great and as good as it could be, it's still has a leg up on most education systems out there
In fact, according to him, evolutionary biologists have been slowly draining out of the USA for years now (mostly into Europe).
I'm an American who's traveled in Europe a fair bit. I've had several conversations with Greek, Swedish, and Hungarian teachers. All were universally critical of teaching in their countries, the main thrust being that it was almost all driven completely by rote. Teaching in greece was so bad that a large number of families hire outside tutors just to teach things like English and classical greek and latin.
There's a Chinese institution that publishes a comparison of all the world's major universities, based on number of paper citations to its faculty. It's been a while, but US universities held all but 2 positions in the top twenty (Cambridge and Oxford were the only non-US universities). Research is not the same as learning, but its probably as good a proxy as we've got.
Two other proxies would be number of Nobel prizes and number of patents issued. At least in absolute numbers, the US does quite well. Not sure about the more relevant per capita numbers, though I'm certain Israel would crush in the patent category.
While I largely agree with your statement in broad terms, it's too sweeping and doesn't control for things like ethnicity. We will never have great teaching anywhere until we get rid of the teachers' unions.
Journal publishing and citations are heavily based on social networks and the intricacies of the modern grant system. I really wouldn't trust citations to be a good indicator of research or advancement. A better thing to look at would be the flow of real world improvements that come out of a universities research. Unfortunately, there is no systematic measurement of that flow.
I'm a grad student in English Lit at the University of Arizona, and I'm not so sure: many of my freshmen talk about what it's like being in 500-person classes, their interactions with GATs who don't speak English, and so on, which appear to be common at big R1 schools.
It seems to me that the major thing the U.S. has going for it is competition between universities to a large extent; after (and sometimes during) high school, one has a wide array of choices, ranging from vocational schools to community colleges to liberal arts schools to R2 / R1 universities. But I'm not sure the latter are great for undergrads, though they're amazing for grad students.
The better question is whether the US will eventually implement real competition in the primary and secondary arenas, so as to avoid problems like this: http://www.newyorker.com/reporting/2009/08/31/090831fa_fact_... .
What a myopic article, so many things are ignored, he's trying to put blinders on us.
Trade protection and autarky have long been defended by words like "self-sustenance," and the like, but such policies have never turned out well: just ask India and China before they modernized and liberalized their economies.
"Peron might have been mistaken on many counts, but so many things are ignored behind the veil of apparently protectionist policies, like worker protection and upliftment, social infrastructure growth, etc."
Maybe: but by virtually every metric, Argentina is now worse off than countries like Spain and Italy, which have (relatively) liberal economic policies and relatively high rates of education.
I am against publicly owned corporations and services but I'm against raw short-sighted capitalism, too. Some of the privatized public corporations had operating surplus, were not monopolies and were worth billions. Those were given to foreign investors who bought them taking credits over the same assets bought. Then proceeded to raise prices, perform massive layoffs, and vacuum capital to service companies owned also by those same investors.
I am quite against socialism (left or right) but you clearly lack knowledge on Argentina. The country is far more complicated that you might think.
Well, modernization and liberalization of economies have increased the economic divide in India. It's not that liberal economic policies are wrong, just that their implementations are always skewed by greedy corporations. A government's responsibility is not only to cater to cash sinks but also the people they govern, which especially in India, is the poor majority. Of course the GDP goes up, there is no question about that. But at what cost?
For the sake of free-market policies and rampant industrialization, people are displaced without their consent. For example, dams alone have displaced more than 30 million people in India.
Successive governments like to publicize decreasing poverty figures, which are constantly rebutted by independent agencies.
A 2007 report by the state-run National Commission for Enterprises in the Unorganised Sector (NCEUS) found that 77% of Indians, or 836 million people, lived on less than 20 rupees per day (USD 0.50 nominal, USD 2.0 in PPP), with most working in "informal labour sector with no job or social security, living in abject poverty." [http://www.reuters.com/article/latestCrisis/idUSDEL218894]
If people are losing their land without their consent, then the market isn't free. I guess we're losing the original meaning of "free market", here, which is just the latest in a list of such redefinitions to suit whatever the politicians want to do, while saying nice things. The euphemism treadmill strikes again! :)
This seems a little optimistic. Having a large gap between the rich and the poor does in fact cause problems (e.g. social unrest).
Compare and contrast:
The US, Canada, Japan, and western Europe, Australia, New Zealand.
Maoist China vs. Hong King, socialist India, the Soviet Union, Germany under the National Socialist German Workers Party versus today, East Germany vs. West Germany, Africa, Vietnam, Cambodia, etc, etc, etc...
IMHO, it's quite hard to understand a right-leaning socialist government from the point of view of a US citizen. There's no reference.
I don't buy the article's explanations thus far; though it appears to be one of a series and I look forward to reading more.
But I also am not swayed but your assertion that progress in a socialist country is too alien for we crass capitalists to gauge.
Another interesting book looks at the welfare programs instituted in Nazi Germany as part of their corporatist 'third way' economic system (supposed to avoid reliance on free trade industrialism and inoculate against cosmopolitan bolshevist appeals): http://www.amazon.com/Hitlers-Beneficiaries-Plunder-Racial-W...
Right-leaning socialism was the original socialism in practice in Europe.
That sentence doesn't even make sense. The whole point of industrialization is to boost economic output. That's what it does almost by definition.
http://en.wikipedia.org/wiki/Peron (not great but a good start.)
there's a lot of issues in the history of argentina that are brushed by in an attempt to make this a simple economic policy debate.
for example, they were quite politically unstable. there was a coup in the 30s, 40s, 50s, 60s, and 70s. the ruling military government died in the 80s after a brief war. a prosperous economy is difficult to foster without a stable governmental structure, regardless of what that structure is.
(Anyone want to plot education-in-1900 vs. coups-in-20th-century?)
I'm not sure if I agree with the hypothesis, but I'd rather hear a specific counter-argument. Your condemnation seems more suited to a rebuttal of the typical 'Argentina is poor because it's socialist' idea.
I feel he does start of with the capitalistic premise. Only later is education hypothesized as a major culprit.
I wouldn't disagree that he's starting from a standard narrative, but his argument doesn't require those causes as premises to explain Argentina's lack of growth.
Some of the book is available online through google books.
He argues that one reason South Korea did so well after the war was that the US adopted enlightened economic policies with regards to property rights.
Human Capital is seen as a risky asset due to its volatility. From a intellectual capital management perspective, my guess is that Argentina has not been successful into converting its Human Capital into Structural Capital.
Education is one of the tools of such conversion. With my limited knowledge, policy and society design are the high level effective tools for the job.
I think Peron was quite positive, and the author forgets to note that before him Argentina was controlled by English companies who took the best part of the profits from the beef industry.
Are Argentines poor because they are poorly educated, or are they poorly educated because they are poor?