Qatar 5 — — OPEC
United Arab Emirates — — 22 OPEC #8
Kuwait 29 4 24 OPEC #11
Bahrain 47 20 33
Saudi Arabia 54 52 41 OPEC #1
Oman 61 59 48
Libya 72 72 170 OPEC
Lebanon 94 87 50
Algeria 108 103 89 OPEC #14
Tunisia 117 109 74
Jordan 121 124 90
Morocco 134 138 101
Syria 138 134 105
Egypt 144 121 –
Djibouti 155 159 97
Mauritania 167 163 138
Yemen 163 161 –
Sudan 159 167 145
Comoros 173 184 137
Iraq — — 171 OPEC #15
Somalia — — 172
Western Sahara — — –

I’ve ranked them partly from your list (as above) and partly from the Nationmaster figures (mostly CIA fact book). The three columns are the ranking (1 is good)

http://www.nationmaster.com/graph/eco_gro_nat_inc_percap-gross-national-income-per-capita

Also, note the flag for OPEC members and an additional flag for the top few oil producers in the world (2006 figures): http://tonto.eia.doe.gov/country/index.cfm

The only one that substantially bucks the trend is Iraq, and they are under foreign occupation after losing two recent wars and many years of economic blockade. Bahrain is not an OPEC member but it is a major oil producer. Oman’s oil production has been winding down but still it is significant.

If you really want to look at Europe, then compare Norway to Sweden — both doing well, similar technology levels, similar education and culture, but Norway’s high oil production makes a clear difference.

There’s a lot more to it than just where the resources COME FROM, consider carefully where these resources ARE GOING TO. The guy who sells a resource does well while stocks last, but the guy who buys the resource uses it to stoke industry and build the next generation of technology. I think you will find that USA, Europe and Japan are huge consumers of resources and I would argue that this is both the cause and the effect of their internationally competitive economies. The US will no doubt drop a peg or two after recent efforts and they will feel the pinch when they are no longer able to easily obtain vast quantities of oil.

Countries don’t compete because businesses do. Businesses in some countries have advantages because of the economic and social development of those countries.

Fair enough, that’s definitely a valid criticism of his point, but I suspect you overstate the extent to which it’s a problem when looking at anything other than the poorest nations today. Krugman was primarily criticising those who claim that the U.S. must remain competitive with other large economies. I’d agree that if the U.S.’s ability to import oil shrivels because its spending power grows less rapidly than other net importers this has the potential to significantly affect living standards – but only if the U.S. does nothing to reduce its dependence on oil. In principle, even with current technology, the U.S. could use half the oil it does and still maintain very high living standards, so it’s still largely an issue of domestic productivity.

Not entirely how your post fits with the preceding discussion Tel,

There was some suggestion that nations do not compete with one another. I was bringing up a few counter-examples demonstrating that not only do nations compete, but that being the “loser” in such competition will leave a nation with a poor economy, unhappy people (who emigrate where possible) and probably a weak military as well.

Oil and gas are energy sources that largely get burned away, so dont sit anywhere – and while oil and gas have properties that make them especially attractive as energy sources, ultimately what we want is the energy supply, not the actual commodities themselves. To maintain a prosperous economy, its simply necessary to have a reliable and inexpensive energy supply – it doesnt really matter too much where it comes from (though the current near ubiquity of the internal combustion engine does make compatible fuel sources particularly valuable).

There’s a lot more you can do with oil than just burn it, indeed some would say that burning oil is a singularly stupid waste of an excellent chemical resource. At any rate, people have demonstrated a desire for oil, presumably they want it for a reason, someone will get the stuff, thus others will miss out because no new oil is being created.

In the future, with new technology, alternative energy (for argument’s sake, let’s say solar) will no doubt be available and then some other resource will become greatly desirable (e.g. zinc and bromine for batteries to store that solar energy). Same principle will apply with those materials. Krugman’s “no competition” principle is based on the presumption that physical-world material resource bottlenecks are never significant, which is quite frankly a total crock.

Gold and silver are not that different to other elemental resources whose value is primarily in a combination of their scarcity, convenience and what they can be used for.

The point is that if the resource can be used for something, and you have access to the resource and some other guy does NOT have access to the resource then you get to do cool stuff, and he gets to come to you asking for some. Gold and silver are primarily useful for electronics and for jewelery, both of which are desirable and make people happier. Electronics also have secondary uses improving the nation’s technology, productivity and infrastructure. Copper supply is so tight that people will steal live cables for the metal value, and in some parts of the world they won’t even try laying down twisted pair communications cable because the theft is too high to make such things economically viable.

Krugman claims “Any countrys standard of living depends almost entirely on its own domestic economic performance, and not on how it performs relative to other countries”.

So let us presume that China has huge reserves of US dollars and China happens to need a lot of copper, so they buy whatever they can get. Result is that the international copper price goes up, industries in poorer countries simply cannot make the electronic devices that require copper because it is out of their price range. If you want another example, most of the world’s Neodymium supply is controlled by China, if you want to make high power magnets, you have to buy the stuff.

… it would be by then technically possible to create such metals artificially via nuclear fusion (just as it was created initially).

The availability of energy sources many orders of magnitude cheaper and more powerful than what we have now would change so many things. I will say that whoever has access to the best tools and best research equipment now will probably be the first to gain access to the next generation of hyper energy supply and they may decide that it is more efficient to use this to conquer other nations rather than sharing the secret of how it works.

Oil and gas are energy sources that largely get burned away, so don’t “sit” anywhere – and while oil and gas have properties that make them especially attractive as energy sources, ultimately what we want is the energy supply, not the actual commodities themselves. To maintain a prosperous economy, it’s simply necessary to have a reliable and inexpensive energy supply – it doesn’t really matter too much where it comes from (though the current near ubiquity of the internal combustion engine does make compatible fuel sources particularly valuable).

Gold and silver are not that different to other elemental resources whose value is primarily in a combination of their scarcity, convenience and what they can be used for. There doesn’t seem to be any particular advantage in “gathering” them, with the possible exception of using gold reserves as a form of ultra-secure monetary saving: generally the most worth you’ll get out of a commodities is by adding value to it by converting into a product that large numbers of people desire.
And there’s not really much reason to be concerned about the world running out of gold and silver, given that if we ever were to reach a point where all naturally occurring gold or silver was all locked up in artefacts so desired by their owners that they weren’t prepared to trade them with others who wanted them for their metallic content then there’s reason to suppose it would be by then technically possible to create such metals artificially via nuclear fusion (just as it was created initially).

Having said that, I do think there’s good reason to suppose that this century will be marked by the impact of energy and resource shortages, that while technically may well be temporary, will have lasting effects on global development.

We seem to be getting desperately off topic now…

Another thing to consider is human talent. Of course, this is not a finite resource: we seem to have no difficulty making more humans, some percentage of those will have natural talent, a good education system can assist in this area as well. However, at any given moment, the nett supply of human talent will not change quickly so it is always faster to import skilled labour than to attempt to foster local talent. A fair chunk of the population of Silicon Valley were imported direct from India (and don’t forget Bangladesh) and to some extent from China too. The importer gets to be selective in these situations and the logical thing is to give preference to the best quality imports.

A nation that can gather both human talent and desirable commodities will improve all of its industries, deliver more luxury items to its population, and put itself into a superior position to make war as well (or at very least give it a better defense against the next guy out there making war). If they choose to spend this boon on education, research and other future-seeking investments, they will also be in a better position next generation.

I’m sounding like a broken record now, so I suspect this argument has run its course. If you honestly believe that you are doing the best you can for citizens in third world countries by turning a blind to what often goes on in factories there, then fine. But the reality is that such conditions are allowed to prevail only because for the vast majority of consumers in Western nations it’s “out of sight and out of mind”.

I think there are 3 things we need to investigate/take into account:

1 the type of factories we have here also require capital accumulation from earlier profits and while Nike has those, local manufacturers that supply to Nike might not;

2 if nike builds a factory in china I would be surprised if it was a dingy sweatshop because nike would probably prefer not to have such a thing;

3 but nike is more likely to use contract manufacture and if the US, say, mandates safe working conditions for all imported garment manufacture then factories will not get moved to cheaper labour until the labour cost difference justifies the capital cost, which would slow the opportunity for the poorest to get on the work ladder.

I’m not saying your are definitely wrong, but I think there is a lot to it. The fair trade mantra often enough hides real problems for the people supposed to be benefited. But, if, as Patrick says, you let the sweatshops get on with things then the vast majority of the workers in them are starting on the ladder up. Trying to regulate from here, Europe or the US by fair trade controls will most likely substantially delay that process at the cost of the poor buggers who want the work.

I don’t believe that’s true at all. There’s still two big advantages that developing countries have over developed ones, and that’s huge pool of relatively unskilled labor available, and the fact that relative living standards and costs means that their wages will always be substantially lower.
Even if factories were required to comply to the same level of environmental, health & safety regulations that apply in developed nations, they’d still be able to produce inexpensive items in very large quantities in a way that developed nations couldn’t expect to compete with.

As far as considering it a charity – yes it would be wonderful if everyone voluntarily saw that because what they’re paying for inexpensive oversea-made goods doesn’t properly capture the longer term environmental and social costs involved in their manner of production, they should give a little bit extra to groups committed to improving conditions in such countries. But people by and large *don’t* see that, and I suspect the groups that do such work rarely operate as international charities anyway. I know myself I’ve bought plenty of cheap toys from China, largely because I have no choice – if I had the choice of buying the toys that my son wants more expensively from manufacturers that did adhere to better environmental and labour standards then I probably would. But worse, there’s not really anyway for me to determine exactly what are the environmental and labour standards that the manufacturers are maintaining, and further there’s no good way for me determine just what is the right price to pay to ensure good standards are maintained.

As far as your “reduced distortions in the market” claim goes – it strikes me that the market is currently highly distorted anyway, because the people who will ultimately pay for the costs associated with poor labour and environmental standards are not, by and large, the ones paying for the products being produced.

My second response is that I am not sure what better outcome is being proposed – the most reasonable interpretation of your comments meets my first response. If however you are proposing that in effect we practise a form of charity, paying more than we need to for goods in order to provide for better social and environmental conditions for their producers, then I have a third response.

My third response is that if what you are proposing is the charity described then why don’t you give the difference to World Vision or a similar organisation? That way you would simultaneously achieve the presumably desirable ends of
– not giving the middle-men a cut of your charity,
– a tax deduction, saving you cash and enabling you to give even more to charity,
– reduced distortions in the market for t-shirts creating more reliable demand fostering greater production in third world countries, with the benefits discussed above, and
– a warm fuzzy feeling inside.

But that assumes that no better path is possible! My point is that we’ve already been through the hardship of fighting for decent working conditions in Western nations – but suddenly we’ve decided it’s OK to buy products produced under conditions that are often not even close to something that we would tolerate here.
And it’s NOT about the pay – of course it’s not going to be possible to pay the sort of wages we enjoy in Western nations. But the cost of providing decent and safe working conditions is not only not that high – I would suggest that in the long term there’s a significant net cost in exploitative and unsafe working conditions. But we in developed countries, who are the ones who can most afford to, are by and large not going to be the ones to pay those costs.

Likewise, we’ve already learnt the lessons of what happens when industries are free to ignore externalities associated with environmental damage. Why on earth should we suddenly decide that it makes sense to go back ignoring them just because the factories are now in a distant country? It’s of course especially the case as we realise the extent to which environmental damage that might appear local often ends up having global effects – and I’m not just talking about global warming here, but e.g. the huge dust and smog clouds that blow across the Pacific from China.

The protectionism is obvious. The soft-left paternalism (SLP) is, I suspect, basically NPOV’s view: those conditions appear intolerable to me they must be intolerable.

The catch is that we don’t have either formal or practical open movement of labour, so even if the SLP is well-founded, it is irrelevant to the question: what is in the best interests of the labourer?

To my mind the best interests of the labourer are the proliferation of sweatshops and other labour-intensive industries. In the first place s/he is employed, which for present purposes may be assumed to be better than subsistence without employment. Secondly, the growth of these industries will push wages up, and stimulate broader growth as those wages translate into consumption, in addition to the original constructions, visits from middle management and concerned NGOs, etc.

After all the industrial revolution is not such a distant stage of our own path to luxurious comfort.

And Pedro is spot-on when he points out that only thing that really correlates with environmental consciousness is wealth. Soft-lefties like to think that some kind of ‘original’ or tribal state correlates with environmental consciousness, but in fact the correlation is only to the degree that not having any alcohol correlates with sobriety.

I think the best answer to the exploited worker argument is that as productivity increases the wages go up too. In my lifetime I’ve seen the source of clothing move around the world. That’s just from looking at the labels. Some industries have moved from country to country chasing cheap wages. The good point to note is that every move is evidence that the wages have gone up where they were operating.

Japan and Hong Kong is where the cheap toys came from when I was a kid.

Well one might be any increase environmental impacts that occur by moving a clean modern factory in Australia to a dirty polluting one in China. Now sure you could argue that it’s not up to Australians to pay for the environmental damage being done by factories in China, but ultimately somebody has to pay for it, and probably better us than future generations of Chinese that are still not as wealthy as present-day Australian taxpayers.

One other issue that has always concerned me is the degree to which sweatshops get away with maintaining pretty rotten labor conditions largely because the consumers they sell to simply don’t see what’s going on. If we had to walk through the factory that produced some of the goods we bought, we’d almost certainly think twice about it. Now if China can produce t-shirts more productively than Australia simply because of economies of scale or because there’s far more lower skilled workers there for whom the pay rates being offered (which might seem extremely low to us) are still a significant step up from what else is available to them, then fine, I don’t have an issue with it. But if they are producing t-shirts more “productively” because they are getting away with rubbishing the environment or obviously exploiting workers in ways that there really is no excusing, then it’s not clear to me that the human race as a whole is better off from such an arrangement.

We have traditionally had adjustment programs for workers and industries affected by reductions in protection. From memory the milk levy to pay for the dairy industry adjustment program has only just been cancelled. Whether those programs do much good is a question that is beyond me. I prefer the idea of longish but fixed lead times for the reduction and then relying on welfare to cover the dislocation.

Here’s an alternative way to think about it NPOV. Lets say the US had 100% barriers against all Chinese products.

(a) Would middle class income still have been stagnant?
(b) Would the middle class be better off without Chinese products?

I’ll assume the answer to (a) is yes, since some other country would have filled the gap if China didn’t exist, and the answer to (b) is certainly yes. Even if the US had tariffs against everyone, you’d still have to convince me that the middle class income would have risen rather than stagnated. This seems to me a function of the fact that going from rich to exceptionally rich is hard (especially with a fairly average education system).

I wouldn’t dispute that, and I’m not proposing that the correct way to address the issue of any reduction of medium-paying jobs is to re-erect trade barriers.

“I suspect it would be hard to find many examples of people who have in the long run had their income reduced because an industry migrates to China.”

I agree that in Australia at least the extent of this problem has been overstated by many. But there is considerable evidence of it in the U.S., where middle class income have been stagnant or falling for some time.

Real wealth is valued (desired) land, goods and services, so we only get richer through productivity increases. I guess you could easily enough find supporters for the idea that the world is not made better by more plastic toys. But more toys comes along with more medicine, food, housing, education etc etc.

I suspect it would be hard to find many examples of people who have in the long run had their income reduced because an industry migrates to China. I’m sure some exist, but unemployment has been going down and so those guys not making plastic toys are probably doing something better. No question there are dislocations that need to be worked out. Plenty of that happened when the tariff wall came down.