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This. Besides, there is only one measure that has been proven to reliably increase business climate and thus GDP - lower taxes and bureaucratic weight. And Eur

by loxs 4y ago

This. Besides, there is only one measure that has been proven to reliably increase business climate and thus GDP - lower taxes and bureaucratic weight. And Europe is heading in exactly the opposite direction.

majormajor 4y ago
This is one of those things where counterfactuals, reproducible-experiments, and meaningfully-sized datasets are pretty much impossible, but my first reaction to this is that there are countries with fewer taxes or "bureaucratic weight" than China - or even the USA - that haven't seen a ton of prosperity and innovation on par with what happened in those two over the past decades (a bit earlier for the USA) as a reward.
- vidarh 4y ago
  If you look at GDP graphs, it's pretty clear that most national economic policy, including taxation has extremely little effect on growth in and of itself. Regional and global economic trends (which, to be sure, national economic policy might nudge a bit) coupled with the level of stability seems to be a far stronger predictor of GDP. That is, companies adapt to higher or lower taxes because there are significant markets they want to access and worst case it's a question of finding ways of funnelling profits out. What is far harder to adapt to is war, revolutions, or indeed rapid changes in the tax regime.
- inglor_cz 4y ago
  Bureaucratic weight comes in different flavors: overregulation vs. corruption. Countries like France or Italy exhibit overregulation, but their bureaucracy fundamentally works according to the law. Countries like Iraq or Nigeria may have fewer bureaucrats and regulations than France or Italy, but these bureaucrats have many more possibilities to demand a completely wanton bribe or else. Critics of libertarianism often tout African countries, with their relatively sparse public sphere, as counterexamples, but it seems to me that they miss the point entirely. It is not about formal structures, but about "how many people can veto your business intents if they feel like it". Even NIMBYs actually fall into the same category.

by loxs 4y ago

majormajor 4y ago

This is one of those things where counterfactuals, reproducible-experiments, and meaningfully-sized datasets are pretty much impossible, but my first reaction to this is that there are countries with fewer taxes or "bureaucratic weight" than China - or even the USA - that haven't seen a ton of prosperity and innovation on par with what happened in those two over the past decades (a bit earlier for the USA) as a reward.

vidarh 4y ago
If you look at GDP graphs, it's pretty clear that most national economic policy, including taxation has extremely little effect on growth in and of itself. Regional and global economic trends (which, to be sure, national economic policy might nudge a bit) coupled with the level of stability seems to be a far stronger predictor of GDP. That is, companies adapt to higher or lower taxes because there are significant markets they want to access and worst case it's a question of finding ways of funnelling profits out. What is far harder to adapt to is war, revolutions, or indeed rapid changes in the tax regime.
inglor_cz 4y ago
Bureaucratic weight comes in different flavors: overregulation vs. corruption. Countries like France or Italy exhibit overregulation, but their bureaucracy fundamentally works according to the law. Countries like Iraq or Nigeria may have fewer bureaucrats and regulations than France or Italy, but these bureaucrats have many more possibilities to demand a completely wanton bribe or else. Critics of libertarianism often tout African countries, with their relatively sparse public sphere, as counterexamples, but it seems to me that they miss the point entirely. It is not about formal structures, but about "how many people can veto your business intents if they feel like it". Even NIMBYs actually fall into the same category.