Dear Friends,
It seems to me that we have the term “Failed State,” maybe it’s time we added to the vernacular, the term “failed Economy.” The definition of a Failed Economy would be an a national economy that cannot support it’s population. So any country that cannot produce the economic output to feed, cloth, and house it’s people it is by definition a Failed Economy.
Another characteristic of a Failed Economy is that the people want to leave the country. If the general migration is out of a country then that country has a problem. It is experiencing a Failed Economy. Until it can get out of the way of the entrepreneurial people within it’s boarders it will continue to have a Failed Economy.
The term “feed, cloth and house” is relative. It can mean different things in different countries. But the floor can be seen by all. If there is famine, that country has a Failed Economy. If the country needs money sent in from it’s citizens, that live in other countries, it has a Failed Economy. To feed a people all a country needs to do is allow the free market to farm the land. Despite the name calling, modern agribusiness is still producing productivity gains, in the field of agriculture.
A nation need not produce the actual clothes that it’s citizens wear. It need only produce the equivalent economic output, (or more), to purchase them from another country. The international trade produces more opportunities for growth to a nation than theoretical total independence. Think of the Dead Sea versus the Mediterranean. The Dead Sea is not connected to the ocean, the Mediterranean is. Scientists say that the Dead Sea will be dry in our children’s lifetimes. No such prediction has been made of the Mediterranean.
It is poor policy for a government to try to get into the housing business. The free market can find the equilibrium price for housing in a nation. The market will produce houses as efficiently as possible. If the government insures that the process is open and nothing about the transaction is hidden, that government will have adequate housing. If a house is built of straw, and the purchaser knows the consequences of this buy, the house should be sold. Perhaps the house will burn down and perhaps it will not. But both parties know the facts. Like an organism evolves, the style and methods of home building will be more and more to the tastes of the people and the durability will improve as well, that is the natural progression of a market system.
If a country wants housing to be expensive and only for the elite, it need only highly regulate the means of house building, not the means of the sale of property. To regulate the means of house building is to decide minutia like the rise and run of staircases, the thickness of concrete walls, or even if there must be concrete walls, etc… To regulate the major aspects of housing is even more counter productive to effective housing policy. Things like the style and size of houses are far better left in the hands of people deciding for themselves what they want to live in.
So in all cases it is the State that stands in the way of a rectifying a Failed Economy.
