Why Aren't All Nations Equally Productive?

From American Vision:

Why Aren’t all Nations Equally Productive?


By Bojidar Marinov
Published: November 17, 2010

XWelcome Googler! If you find this page useful, you might want to subscribe to one of our RSS feeds for updates on this topic and others.In an article I wrote a while back, “Where Does Productivity Come From,” I pointed to the mechanism for creating greater productivity. Productivity comes from sacrificing present consumption and applying the saved resources to building and improving the production base. There is no other way.



In a private email a reader disagreed somewhat with my article. He said:



“Your analysis is a bit too simplistic. If increasing productivity was so easy, then why aren’t all nations equally productive?”



This is a very good question. In fact, it was the question that the old discipline of political economy has been struggling to answer throughout the 19th century. This was the very title of the most important book of the first great author in Political Economy, Adam Smith: An Inquiry into the Nature and Causes of the Wealth of the Nations. Smith did not answer the question above, though; he only gave the mechanism and the necessary external conditions for creating wealth: Free capitalist society based on division of labor, self-interest, and freedom to act. Throughout his book, Smith kept his focus on the external conditions, as if external conditions by themselves could create wealth. For Smith human choice is in a sense predetermined – given the right conditions, people will always choose what is good, and therefore the right conditions are the cause for wealth.



Then Marx came along and stated bluntly that the answer to the question is beyond the human choice. The economic base of a society blindly follows the technological development of the tools of production, and the social superstructure blindly follows the economic base. The changes in technology are inevitable but their origin is mystical; it’s just one day a nation wakes up having all the necessary conditions, and the Industrial Revolution starts. Just how exactly the conditions happen to come, and why they come to some nations and not to others, no one knows.



Then the economists in the 20th century decided that the answer was not worth researching, and the old discipline of Political Economy disappeared from the stage. They preferred to be “modern economists,” which in the language of the 20th century economics means “economists who research new ways for the State to appropriate wealth from its private citizens without inciting them to revolt.” The reason for this shift was a small book, almost a booklet by the academic standards of the day, written by the last great representative of the old breed of scholars. The author was Max Weber, and the book was The Protestant Ethic and the Spirit of Capitalism. Max Weber committed an unbelievable treason against the academic world of his day: He used the method and the terminology of the rationalism of the Enlightenment to strike a blow at the very heart of Enlightenment; he took the Christian religion from the Kantian noumenal world and gave it a very real significance in the phenomenal world. No one could refute Weber, so modern economics preferred to not notice him and changed the entire question.



Then, in the post-modern world that emerged in the 1960s and 1970s the question of why some nations are wealthier than others became a banned question in the academic circles. All cultures became equal in terms of moral validity – except the West, which was morally inferior – and therefore comparing cultures in terms of tangible, quantitative standards was against the spirit of the time. The question of the causes of the wealth of the nations meant some nations were more successful than the others, and the new paradigm couldn’t afford such a notion. The question of wealth was allowed only when it was necessary to subsidize Third World countries with the wealth the West had produced.



Where was the Church all this time? How did pastors, theologians, and missionaries answer the question about the causes of the wealth of the nations?



They didn’t. Many Christians didn’t even ask this question, let alone answer it. A question that could have been one of the greatest arguments for evangelizing the world in the 20th century was left unanswered by the Church. Only with the publishing of R. J. Rushdoony’s Institutes of Biblical Law the situation started changing slowly, one convert at a time.



So how do we answer the question: Why aren’t all nations equally productive? Is it because productivity is a product of many more unknown factors than simply sacrifice and work, or is there another reason?



In order to answer it, we need to answer a different question: What makes men choose certain course of action? Of all possible choices, why do some nations and individuals choose what is good for them and their future, and others choose what is not so good?



Remember Robinson in my previous article. Ask yourself the question: What can make Robinson choose not to eat for half a day and invest his time in making a pole? What makes Robinson different from Friday and his tribesmen? Why can Robinson develop a civilization in several years, and Friday can’t? What makes the difference between civilization that produces wealth and a savage society that only consumes it?



The Christian answer should be: The difference is in the religion.



The economy of a nation is a product of the many choices the individuals and the collectives in the economy make. These choices are made on the basis of a set of values, and these values are the product the worldview of the individuals and their collectives. People act on the basis of ultimate beliefs about themselves and nature, and they take their ultimate beliefs from their ultimate authority – their God. What their God or gods are will determine whether they will sacrifice or steal, whether they will invest or consume, and whether they will improve or destroy. All the “circumstances,” all the “historical factors,” all the “social forces” in a society depend on that one thing: What God or gods that society believes in.



An atheist society would believe in the ultimate purposelessness of all life. There are no absolute values, and therefore there are no absolute sanctions. Therefore all economic action must be by default devoid of moral purpose except as far as the immediate survival of the individual is concerned. Even if a few individuals in such a society might be driven to save, invest, and innovate as a whole the society will be directed toward securing only the basic needs and little else. Effort has no ultimate meaning. Communist societies were a perfect example of this. Consistent atheism combined with the ideology of power created economies where all economic action was directed only to securing the political power of individuals or groups over other individual and groups. Productivity was never increased.



A Buddhist or a Hindu society would believe that the material world is an illusion that we need to escape from. Time and material resources are only traps that keep us slaves to the illusion, and the faster we escape from them the better we are. Therefore sacrificing present consumption for future goals is impossible simply because “sacrifice,” “present,” “consumption,” “future,” and “goals” are all dangerous illusions. When combined with the cult to the ancestors – as in China or Japan – it creates a stagnant society that never looks to the future not attempts any changes in the society for fear of provoking the ancestors to wrath.



A thoroughly humanistic liberal society focused on maximizing pleasure will seldom attempt any sacrifice or forbearing present consumption. It will attempt to manipulate reality to create wealth but in the final account it can only consume what others have created. The later Roman Empire and the West today are good examples of that; both have tried to create wealth through debt and inflation, and thus have only destroyed what others have created. Europe today is a great example of a society where the populations are so devoted to their secular humanism that they hate the very idea of having to decrease their pleasure in the name of better economic future. Secular humanism is suicidal, economically.



Only a Christian society with its belief in a personal God Who rewards obedience and hard work will have the meaning and the incentive to sacrifice present consumption and invest for the future. That’s what makes Robinson – the character of the Puritan author Defoe – different from all the others: His belief in the Providence of God, his belief in his own position as God’s appointed agent on this planet, called to exercise dominion under any circumstances, is what can give him the impetus to build his little civilization. Even if not every individual in a Christian society is thrifty and industrious, as a whole that society will have more people willing to sacrifice and work hard, and expect positive results from their efforts. And as result, only a Christian society can experience long-term economic growth and increase in productivity.



So, to answer the question above: Why aren’t all nations equally productive?



Answer: Because all nations don’t have the same religion.



Call it “simplistic” if you wish.