I recently read a newsletter article by Simon Black that was very timely for this Moving Out of the Country series. In it, he describes the main reasons why some countries are poor and some are prosperous. He’s been to over 120 countries, so he uses this data set for comparisons.

He describes three factors:

The first set is cultural. Wealthy nations have a culture that values hard work. Knowledge. Productivity. Innovation. Risk-taking. Saving. Self-reliance.

I’m not trying to say that people in poor countries don’t work hard. Far from it.

The point is that if working hard and saving money are strong CULTURAL values (which tends to be the case in Asia), a country is going to do better.

I’m not as well traveled as Simon, but I’ve seen exactly what he’s talking about, not only in different countries, but in different cities and neighborhoods throughout the US. Some local cultures are about hard work and saving your money, others are about doing whatever you want and yelling at the government to help pay your bills. The latter are always poorer. Always.

Second, wealthy nations have much better institutions. The rule of law is strong. Private property rights are strong. Corruption is limited. Regulation is sensible. Taxation is reasonable and efficient.

It’s simple; no one wants to do business in a corrupt dictatorship.

This is what separates most countries in Africa and South America from countries like Singapore. Singapore is hugely successful despite having zero natural resources, an extremely racially diverse population, and being heavily in debt, because it has strong rule of law. (I’ll be talking more about Singapore in the next installment in this series.)

Lastly (and most importantly), wealthy nations have an “inclusive” economy.

This means that people aren’t medieval serfs toiling away for the establishment. If someone develops skills, works hard, and takes risks, they’ve got a good chance of moving up the socioeconomic food chain.

As Simon states in his newsletter, this is the trait the US and West in general is losing. He’s right.

When looking for your country A, B, or C, you should pay attention to the above three traits. It’s also interesting to notice that the entire Western world is losing all three of these traits, and more so every year.

By the way, do the three traits above tend to indicate the ideology of left-wingers, or right-wingers and libertarians?

Interesting, isn’t it? Maybe socialism, redistribution of income, and the welfare state aren’t very good ideas. Hmmmmm…

In the next post, I’ll get to what I promised last time: a list of countries for your possible country C and D, where to save / invest your money, and where to base your legal business entity. Stay tuned.

3 Comments on “Moving Out of the Country Part 4 – Poor vs. Prosperous Countries

  1. Hey BD, I found myself over on this blog because this hits close to home for me right now. I’m about six-seven months out on fully leaving the US. Depends on my home sale. It has nearly doubled here in five years and I’m a vagabond at heart. It feels like the time is right. I also can see the writing on the wall in the “west” and think it’s best to move to a more stable place.

    I gave it a lot of thought and weighed my options carefully and chose a place kinda in between poor and prosperous. It’s on the list on part one. They have the reputation of being lazy or carefree. It’s not a culture that values hard work. I don’t get that’s is awful there like a beach resort or anything but I have read a bunch of people complaining about it. Mostly spoiled Americans.

    Is that a disadvantage from your perspective? It seems like the guy that’s willing to do the work will get the business. Or is it the A-hole that’s not conforming culturally? My industry is very nichey and I feel like no one there is doing what I can. I also makes me instantly valuable for getting a passport and/or citizenship. Which is the number one reason I chose this nation. Number two was that it is literally far away from humans. Just like you stated on Canada and EE I want to be far far away form the problems.

    Isn’t it better to be the strong fish in the weak pond?

  2. hey have the reputation of being lazy or carefree. It’s not a culture that values hard work. I don’t get that’s is awful there like a beach resort or anything but I have read a bunch of people complaining about it. Mostly spoiled Americans.

    Is that a disadvantage from your perspective?

    If you’re living the Alpha Male 2.0 structure, then no, it doesn’t matter since your income will be location independent and coming from the more prosperous and hard working countries rather than the lazy country you live in.

    If you’re instead trying to make money directly from the lazy people in a lazy culture, then it might matter, depending on exactly what you’re doing. It’s difficult to say.

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