Why Self-Sufficiency Matters (Or Why Europe's Growth Outlook Is Not Good!)

Tyler Durden's picture




 

Self-sufficiency matters. Bridgewater's Ray Dalio sees this logical concept as consistently an important ingredient for individuals, and even more so for societies as a whole, to become successful. As he notes in a recent missive, "self-sufficiency encourages productivity by tying the ability to spend to the need to produce," adding that is likely not controversial to state that people spend money they earn differently than money they are given (i.e. the connection between working hard and spending is a healthy one). By quantifying 'self-sufficiency' as one of the parts of 'the formula for economic success', Dalio shows that "Societies in which individuals are more responsible for themselves grow more than those in which they are less responsible for themselves." The nine-factor gauge of self-sufficiency provides some interesting insights into those nations most likely to experience above-average growth going-forward and those that are not; as European countries, notably Italy, France, Spain, and Belgium, all ranking at the very bottom on self-sufficiency. Perhaps, in order to encourage growth, these nations must enable their citizens' self-sufficient animal spirits by removing their pacifying nanny-state support?

 

Via Bridgewater Associates: Formula For Economic Success: Self-Sufficiency

As you know, we think the economy works like a machine and we think of ourselves as practical mechanics – or, if you prefer, we think it works like a body and we operate like a doctor. We believe that there is no point – in fact we think it’s dangerous and costly – to wish the economy works some way differently than it really does. Too often we hear people say “I believe…” based on adherence to a belief system and without substantiating why they have that belief. We don’t want to do that. We think that it is our responsibility to clearly explain how the economic machine works by describing the cause/effect relationships that make it up, and to do that for everyone to examine and poke at. We know that we all will learn more that way.

 

To us the existing discussion about what should be done to make our countries successful lacks the specificity and the testing of predictability that is necessary to make the discussion useful. For example, everyone knows that having a more educated population is better than having a less educated population, so naturally we hear that improving education is important to improving competitiveness. However, measurements of the value of education are lacking. If we simply educate people without considering the costs and paybacks of that education, we will waste resources and become less competitive even though we will become more educated. So the productive value of the education in relation to its costs is a more sensible way of measuring it. When measured, we should see how predictive it is.

 

What are the Keys to Success? Its seems intuitively obvious, and is in keeping with our experiences as a practitioners operating in many countries over several decades, that four factors drive relative growth: they are competitiveness, indebtedness, culture and luck. In a study that we did that we will send you shortly, we will show how we measured each of these and how they predicted subsequent growth, so we won’t go into that now. However, we would like to now have you focus on one of the components of our “Formula for Economic Success” – self-sufficiency – because we think it’s interesting enough to stand on its own.

 

Self-Sufficiency

 

It is both logical and consistent with the evidence to believe that self-sufficiency is an important ingredient for individuals and societies to be successful. Self-sufficiency encourages productivity by tying the ability to spend to the need to produce, it allows people to be free rather than dependent on others and it gives people self-respect. It is not controversial to say that people spend the money that they earn differently than the money that others give them – i.e., that the connection between earning and spending is a healthy one. If people have to earn money to spend it, they have to be more productive. Over the long run increases in living standards rise as a function of increases in productivity. So, it is not a big leap to presume that countries with greater amounts of self-sufficiency do better than those with less. Since self-sufficiency creates capability and independence it produces self-esteem. Studies on happiness have shown that once income levels surpass those required for subsistence, that these factors are more highly correlated with happiness levels than the amount of money one has. For these reasons, it is logical to conclude that self-reliance is both productive and satisfying.

 

In this Daily Observations we will show you how self-sufficiency varies by country and how it has been correlated with economic growth. You will see that there are significant divergences in how self-sufficient individuals are in different countries and that these differences occur for different reasons. For example, in some cases they are chosen (e.g., the amounts of transfer payments developed economies have are largely chosen) while in other cases that they are not (e.g., high self-sufficiency in the poorest societies is primarily the result of necessity rather than choice). Nonetheless, the evidence is clear. Societies in which individuals are more responsible for themselves grow more than those in which they are less responsible for themselves. To be clear, by self-sufficiency, we do not necessarily mean leaving people on their own. Cases in which people are helped to stand on their own and the help proves to be cost-effective encourage growth. Which Countries Are Most Self-sufficient and How Has Self-sufficiency Been Correlated With Growth?

 

To determine the answer to these questions we created indicators which we aggregated into a self-sufficiency barometer. We will explain how we did that and what the individual indicators showed, but to cut to the chase:

 

Which countries are most self-sufficient?

 


 

The chart shown above conveys those which are most-self-sufficient. As shown, Asian economies are measured as most self-sufficient, followed by Latin American countries. The English speaking developed world generally comes next. Finally, European countries, with the large European periphery countries like Spain and Italy, are the least self sufficient. The chart below shows these ratings. Look at it to see if you are surprised and note those surprises so that you can see what they are attributable to when we show you the composition of our barometer. For example, you might find it notable that “communist” China has greater self-sufficiency than the capitalist US.

 

 

How is this self-sufficiency barometer constructed?

 

To measure self-sufficiency, we look at 9 indicators related to

 

1) how hard individuals work,

2) how large government supports are relative to incomes, and

3) how rigid labor markets are (e.g., how easy/difficult it is to hire and fire).

 

While no one of these perfectly measures self-sufficiency, together they paint a picture that is highly indicative.

 

 

 

Our measures of working hard look at how many hours individuals actually work, the percentage of the population that is looking to work (labor force participation), the amount of vacation and holidays they take, as well as the effective retirement age. We measure the size of government supports by looking at the size of government outlays and the size of transfer payments to households.

 

Finally, we look at three measures to examine labor market protections: unionization as a percentage of the workforce, how hard it is for businesses to hire and fire, and how high the minimum wage is relative to the average income. To come up with an overall gauge, we weigh 50% our measures of how hard individuals in a society work and 50% the system of supports and protections, i.e., 25% for government supports and 25% for labor market rigidity. Within each gauge we mostly give equal weight to the individual indicators.

 

How well does a country’s self-sufficiency predict its next ten year’s growth rate?

 

To answer this question we gathered these indicators and put them together into the previously shown gauges and constructed this barometer in past years so that we could see how well they correlated with subsequent period growth rates.

 

We saw that the most self-sufficient countries notably outperformed the less self-sufficient ones, with an the overall correlation of about 43% to subsequent 10-year real growth in income per capita across all countries and time. As you will see in our subsequent study, other measures of competitiveness, indebtedness, culture and luck explained most of the rest. Self-sufficiency is a reasonably good predictor of growth in both the developed and emerging worlds when looked at on their own (33% and 39% correlated, respectively). Below we show the relationship of our aggregate self-sufficiency indicator against future growth for all countries across time.

 

 

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Sat, 11/03/2012 - 17:20 | 2944901 falak pema
falak pema's picture

baloney statistics blown up to cover the real issues, just like shadow banking baloon covers up real banking assets.

Hot air and lots of Sandys on the way to the financial sphere where there are more phony zombie experts than there are generals in the proverbial Mexican army! 

There is only ONE type of growth in all of FIRST world : debt inflation.

Sat, 11/03/2012 - 20:25 | 2945318 Silver Bug
Silver Bug's picture

Growth whats that?

http://schiffblog.blogspot.ca/

Sun, 11/04/2012 - 10:13 | 2945931 ParisianThinker
ParisianThinker's picture

Exactly!

Sat, 11/03/2012 - 17:20 | 2944902 gjp
gjp's picture

What a load of garbage.  You can work 24/7 your whole life creating financial swindles and you are 0% self sufficient because you depend on suckers to support your consumption.

Self sufficiency is the trade surplus / deficit and nothing else.  And the English-speaking developed world sits right smack at the fucking bottom, Dalio, you peddler of self-justifying sophistry.

Sat, 11/03/2012 - 17:29 | 2944926 buzzsaw99
buzzsaw99's picture

Indeed. The maggots are NOT self-sufficient nor do they produce an over-abundance. They feed on dead caracass.

Sat, 11/03/2012 - 23:28 | 2945599 Non Passaran
Non Passaran's picture

Without them others - who according to you do useful work - would have to clean the caracass. Looks like they are performing some value added work after all.

Sat, 11/03/2012 - 17:59 | 2944979 JoBob
JoBob's picture

At least a swindler works for what he gets. Even cheating people takes the willingness to get off your butt and put some energy and thought into getting money or whatever you are after. That is still being self sufficient as contrasted to the increasing multitudes that wait for the socialist goernment to send a check for food and one for housing and one for everythign else. Of course they don't feel attached to the money because no effort went into earning it.

There are those of us  here on ZH who actually do that old fashioned thing called "work" and take pride in our efforts. We are the ones who help build the asset side of the economy so our increasing number of governmental socialists can turn it over to those who wait for the mailman.

It is the Banker/hucksters who are in the business of spinning credit into their own web of financial security at the expense of all the rest.

At least they are working and not on the dole.

 

Sat, 11/03/2012 - 18:56 | 2945107 max2205
max2205's picture

Plot AMZN and other high PE stocks against growth. Will they get there?

Sun, 11/04/2012 - 10:15 | 2945933 ParisianThinker
ParisianThinker's picture

Fortuantely, I tuned in today and read a lot of wisdom. Dallo, is just a peddler of self-justifying sophistry. Merci for all that, gjp!

Sat, 11/03/2012 - 17:19 | 2944903 Hulk
Hulk's picture

Self-sufficiency, its an illusion Bitchez!!!

Sat, 11/03/2012 - 19:20 | 2945163 Urban Redneck
Urban Redneck's picture

But that doesn't mean dependency should be maximized.

Sat, 11/03/2012 - 17:20 | 2944907 debtor of last ...
debtor of last resort's picture

Growth on a finite planet never looks good.

Sat, 11/03/2012 - 17:24 | 2944915 debtor of last ...
debtor of last resort's picture

Competitiveness. With the 'c' of cooperation.

Sat, 11/03/2012 - 17:25 | 2944916 hairball48
hairball48's picture

We're getting a taste of just how self sufficient Americans are looking at the "victims" of Sandy. Most of those people in NY and NJ are pathetic whiners. They have no clue what self sufficiency is. Just one more reason I live in Montana.

Sat, 11/03/2012 - 19:10 | 2945132 Waterfallsparkles
Waterfallsparkles's picture

I cannot believe they do not have any food to eat.  It appears that they do not even have 4 days worth of food.  Do they normally shop every day to eat?

Sun, 11/04/2012 - 16:30 | 2945839 TWSceptic
TWSceptic's picture

Do they normally shop every day to eat?

 

Me thinks they shop every few hours at McD, BK, KFC...

Sun, 11/04/2012 - 01:57 | 2945755 Theosebes Goodfellow
Theosebes Goodfellow's picture

I was noticing the very same thing, Hairball. It makes you wonder just how stupid these folks can be. It appears that not very many thought to gas up before the storm hit. Or have enough food and fuel to heat their homes, or have a generator with a transfer switch to the house. Makes you wonder what they'll do when they wake up one day to discover their paper currency is worthless. If they're screwed now, just wait until that reality comes home to roost.

Sun, 11/04/2012 - 08:31 | 2945870 machineh
machineh's picture

Best sheeple quote ever:

Vikki Quinn, standing amid ruined belongings in front of her flooded house in Long Beach N.Y., said she felt lost. “I just keep waiting for someone with a megaphone and a car to just tell us what to do,” she said.

http://www.nytimes.com/2012/11/04/nyregion/fractured-recovery-a-week-after-hurricane-sandy.html?hp

Hand me your wallet, take off your clothes, and put this shopping bag over your fool head ...

Sun, 11/04/2012 - 08:52 | 2945879 Incubus
Incubus's picture

It's quite a realization and liberating when you discover that most people in the world are fucking clueless. 

They're just livestock.  You can't "free" livestock because their prison is their mind. You'd have to deconstruct their entire assumption of identity for that to happen.

And such a thing like that requires a minimum level of intelligence to even begin with.

Sun, 11/04/2012 - 21:52 | 2945893 TruthInSunshine
TruthInSunshine's picture

 “I just keep waiting for someone with a megaphone and a car to just tell us what to do,” she said.


 I've noticed that the people who wait to be told what to do are most statistically likely to be rendered down & ultimately turned into lube that's used to grease the gears of The New Normal Amerikan Apparatchik.

That's a very sad, pathetic yet relevant & indicative quote personifying much of what is currently wrong with American Culture.

Baa, baa, sheeple,
   Have you any wool?
Yes sir, yes sir,
   Three bags full;

One for the Bernank (to dispense to Buffett, Munger, JPM, et al.)
   One for the alleged sovereign state (that has to borrow from private entities & run deficits in order to thwart social/political implosion),
And one for the local treasurer
   That lives down my lane (for which I receive, assuming I am productive, 2 cents of each dollar I pay back as measured in real value).

Sun, 11/04/2012 - 22:51 | 2947590 Griffin
Griffin's picture

I relalised in the crash in 2008 that i had been clueless and absolutely wrong about everything i thought i knew about the economy and politics.

So i cleared my mind, forgot everything i previously believed and decided to find the information i needed on my own.

There is a huge number of servers packed with information all over the world and i can use the internet to fish for the stuff i want.  I spent the first 2-3 years doing that after the crash.

The only thing that is needed is a starting point, some bank that got robbed, pension fund, insurance company etc.

When you have been looking at the players and various scams they are involved in for a while you know more about the world you live in and view news and politics differently than before.

People usually dont think much about this stuff unless there is a very serious crisis that forces them to do it though.

 

 

 

Sat, 11/03/2012 - 17:26 | 2944919 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Crap. I just moved to Belgium (not kidding)...

Sat, 11/03/2012 - 18:31 | 2945047 bank guy in Brussels
bank guy in Brussels's picture

As you will find, Belgium is a terrific place to live

The article above is totally ridiculous shite ... one of those 'slow ZH weekend' articles

In fact, 'It's Great to Be a Belgian' -

hit song from the 90s - nearly all in English, quite funny - sung by a Brit, 'Mister John' Makin who happily lived the last several decades of his life here

« As I walk along the street
With my mayonnaise and frites
You can tell I'm as happy as can be

With my beer glass in my hand
Then you must understand
I'm a Belgian, so nothing worries me! ... »

http://www.youtube.com/watch?v=uTqknJDZrlI

Sun, 11/04/2012 - 09:16 | 2945892 ThirdWorldDude
ThirdWorldDude's picture

Sure 'It's Great to Be a Belgian', since you're home of the "capital of EUSSR" and thusly syphoning the wealth from all around Europe to bank rats, corporate shills and political whores. 

Also connect this to one of your previous statements about the free public transportation system in Brussels (I've always wondered if you get a free sack of Brussels sprouts in your supermarket?), and compare it to the free Roman Games

 

You didn't pay for that, someone else did!

 

Enjoy your "C'est la Belgique" lifestyle until Alaric Jr. decides it's time to pay you (pun intended) a visit.

Sun, 11/04/2012 - 14:36 | 2946407 steve from virginia
steve from virginia's picture

 

I thought this was a humor article until I remembered this was Zero Hedge ... where all are rednecks ... J.P. Morgan hard-money wannabes ... insisting that the proles need to pull themselves up by their bootstraps at all times.

 

Self sufficient at what, exactly? Singapore -- high on the list -- is an island, dependent upon the mainland of Malaysia for drinking water ... upon the rest of the world for funds, energy supplies ... upon the US Navy for defense.

 

Japan depends upon external credit, so does Europe, so does China ... which also requires imports of coal, iron ore, copper, lumber ... Europe is unraveling under our noses because it cannot afford to buy the crude oil from the outside ... that it absolutely depends upon.

 

Europe cannot to service the credit it requires to buy fuel.

 

US is one of a handful that could endure autarky provided it junked its entire auto fleet and turned its unemployed to agriculture ... ditto a handful of South- and Central American countries. Dependency is relative: all of industry is dependent upon a constant debt subsidy. Without debt ... funds from 'outsiders' ... factories are unbuilt, customers cannot afford the factories' products.

 

The present is dependent upon the forebearance of future generations. Our grandchildren cannot deny us the loans ... they certainly will refuse to pay them.

 

The world's citizens are dependent upon their governments ... as most in this world have nothing to offer but a willingness to behave themselves for a fee.

 

As for Dalio, he can take his Horatio Alger shoeshine boy bullshit somewhere else and smoke it.

 

 

Sat, 11/03/2012 - 17:33 | 2944924 Yen Cross
Yen Cross's picture

 Fraulein Merkels latest take on Europe. Angela Merkel: eurozone crisis will last at least another five years - Telegraph

  I wonder if the ECB will lower rates on 11-08?

Spain looks like it's going to play chicken Re; " not asking for OMT", until the ship is 1/2 way over the waterfall. eFXnews : Spain Won't Get Answers From Draghi On Conditionality Ahead Of Any Aid Request - Barclays

Sat, 11/03/2012 - 17:35 | 2944933 I am Jobe
I am Jobe's picture

Pussification of the Western Hemisphere is going strong. On more generatrion and it will be completed.

Sun, 11/04/2012 - 11:49 | 2946025 Svendblaaskaeg
Svendblaaskaeg's picture

"Pussification of the Western Hemisphere is going strong"

Derek Zoolander: Mer-man!!!! 

Sat, 11/03/2012 - 17:38 | 2944940 JR
JR's picture

As Obama supporters step up riot threats... if he’s not elected, Obama’s latest quote, “Voting is the best revenge,” seems to top four years of dividing Americans into polarized groups. Meanwhile the storm that Obama and Bloomberg planned to tame is breaking out of its cage with incredible scenes of misery and chaos.

Here are Drudge’s latest headlines:

'FOCUSED ON IT EVERY MINUTE HE'S NOT ON STAGE'...
Obama Ignores Question About Storm Victims' Frustrations...
Sandy death toll at 109; 'There could be more'...
Explosions jolt Manhattan residents...
2.5 million still without power...
Temps dip into the 20s...
Con Edison Distributing Dry Ice...
FREE FUEL FOR EVERYONE!
2-mile line on Staten Island...
Gov't tells public to stay away from free gas until first responders fuel up...
CRAIGSLIST: $15 a gallon...
Restaurant, hotel prices skyrocket...
Residents arm up: Bats, machetes, shotguns...
'It's Like The Wild West'...
'Anarchy in Queens'...
ODD-EVEN: NJ counties enact Carter-style gas rationing...
REPORT: FEMA RUNS OUT OF WATER...

It’s Bloomberg/Goldmam/Obama, of course, who now want to manage global governance by putting trillions in tribute into the cap and trade jackpot for freebooting Goldman Sachs and the world bankers to cope with - are you ready? - climate change! God help us.

Sat, 11/03/2012 - 17:47 | 2944950 debtor of last ...
debtor of last resort's picture

When de bond bubble goes down, when everyone wants his physical gold&silver, when DSK opens his biografie, when Hitlers body is recovered, and when the Bernankes of this planet admit. Yep, your toilet paper stack became worthless because you ate the wrong food and used all of it in just one week.

Sat, 11/03/2012 - 17:49 | 2944958 the watchers
the watchers's picture

Its this simple, if you don't want a debt implosion then you have to go back to classic capitalism,golden rule,you have collective bargaaning,in other words you pay your workers relative to the cost of living,as for lower cost countries you set tarrifs, this encourages those countries to raise standard of living lower tarrifs and increases exports all the while keeping debt being repaid and therefore keeping banking system on sound footing.

Simples

Sat, 11/03/2012 - 17:55 | 2944970 woolybear1
woolybear1's picture

He gets paid for this??? What a load of horse shit. 

Sat, 11/03/2012 - 17:59 | 2944980 onebir
onebir's picture

I think ZH could have liberally applied the chocolate argument here...

Sat, 11/03/2012 - 18:24 | 2945030 Implicit simplicit
Implicit simplicit's picture

I would think that true self-sufficiency would also contain measurements of the amount, and variety of general skill sets individuals have in a country for survival; though this would be hard to measure i.e- Being able to fix things without having to pay somebody to do it for you

Sat, 11/03/2012 - 18:43 | 2945067 Goatboy
Goatboy's picture

Reaction still peddling its truths (and interests) repackaged as "freedom" and "self-sufficiency"? lol

And poor (in terms of wealth) are buying it, believing that "libertarian" utopia, with its double-speak, will make them rich too.

Whenever I see a piece (of shit) like this article I cannot but immediately translate all mentions of freedom to profits for oligarchs, self-sufficiency to a carrot for gullible wanna-be "libertarians". Its such an awesome and stubborn misuse of positive terminology.

Same people brought about (using same mechanics) Patriot Act or Citizens United bullshit.

Keep waving flags for your owners believing its about your freedom.

btw Singapore is second on the list; a very small dictatorship. They are self-sufficient as much as a mentally retarded person. If they are on top of this "self-sufficiency" list along with China and India it becomes even more obvious what its all about.

Sat, 11/03/2012 - 19:03 | 2945123 Shigure
Shigure's picture

+ 1 Goatboy

Sat, 11/03/2012 - 20:22 | 2945176 honestann
honestann's picture

In other words, [positive and negative] feedback are real phenomenon.

NOBODY, most definitely including predators-DBA-government, should be in the business of worrying about what would make countries successful.  Each individual should decide what "success" means for themself, then work to achieve it.  Or if they want, they can lie down and die, or lie around and hope others feed and shelter them, or any other choice up to being the most productive human being in history.

If anyone is allowed to manipulate others to [supposedly] enhance "success", then everyone is a slave, and almost everyone will have little incentive to be honest, or to invest their time, effort and resources in productive activity.  Why?  Because the goals that constitute success for them will not be the goals chosen by the predators-that-be.

Bottom line:  Leave everyone alone, and let them deal with reality their own way.  Period.

Sat, 11/03/2012 - 19:26 | 2945179 Michelle
Michelle's picture

As economies develop it appears self-sufficiency declines, perhaps a response to urban living? Just a theory.

Katrina and the Staten Island residents are an example of a lack of self-sufficiency - compounded by a gov't response with promises to deliver them out of their misery. Nobody is responsible for themselves any longer, it's always someone else's fault, let's blame Bush, Obama, the wealthy, the poor, the over-used blame of climate change. Enough already!

Jeez, our rough and tumble ancestors are rolling over in their graves listening to our whining!

Sat, 11/03/2012 - 20:28 | 2945299 ekm
ekm's picture

Do you people understand now that: Slavery is a choice

 

I do not agree with the list, but the logic is strong.

Sat, 11/03/2012 - 20:28 | 2945326 balz
balz's picture

I don't like that indicator. Self-sufficiency does not mean one has to work more hours than no self-sufficiency. I can work all day long at the farm and I would do it as leisure time if I was working elsewhere. This is not work. You can't count work hours when you are self-sufficient.

Sat, 11/03/2012 - 20:37 | 2945340 Itinerant
Itinerant's picture

Go through these self-sufficiency measures with a black slave in mind, or slaves in classical antiquity, or the exploited proletariat forced off the land in the 19th century: No vacation -- check, no transfer payments, no retirement, labor force participation 100%, hours worked off the chart, minimum wage zero, no transfer payments or government outlays for health care. Best of all, no unions.

By the way, I am in favor of hard work and self-sufficiency. An alternative measure could take the ratio between income from current employment and unearned income (from assets). The good old USA would be at the top of the chart for the disjunction between unearned income relative to income from current employment.

Sat, 11/03/2012 - 21:08 | 2945376 Black Forest
Black Forest's picture

Initially I read TLD as FLD in the upper graph, and thought is was Florida. Then I was disappointed. Sorry.

Sat, 11/03/2012 - 22:16 | 2945492 Mediocritas
Mediocritas's picture

I came into this article expecting to agree with it but then, after reading how the calculations were conducted, had to conclude that it's either a load of bullshit, or the author and I have very different interpretations of what "self-sufficient" means (I think it's the latter).

50% of the weighting for the metric of "self-sufficiency" is hard work. According to that metric, a nation full of (debt) slaves, nose to the grindstone 24/7, even if it's doing something utterly pointless like shuffling numbers in a finance job, would result in an excellent "self-sufficiency" score. Hmmm.

"Self-sufficient", by my understanding of the term, means the ability to sequester resources needed for survival and, if you're lucky, for recreation. It has little to do with the quantity of work, it's about about the qualities of that work, something this survey doesn't cover.

So while I agree in principle with the conclusion, that self-sufficiency (within reason) is a good thing that promotes robustness, I don't agree with the way it was calculated in this OP or the ordering of nations in that list. I've lived in the English speaking world and throughout Europe. There's no way that Americans, Aussies, Canadians & Brits are more self-sufficient than Poles, Greeks, Czechs, etc. The latter still know how to live off the land when it comes down to it.

Sun, 11/04/2012 - 08:30 | 2945866 AurorusBorealus
AurorusBorealus's picture

I agree with you.  Your points are spot on.   I would add an additional point to yours.   The problem with the United States is that labor is taxed heavily... incredibly so when one includes Social Security, Medicare / Medicaid, Welfare, state and local wage taxes, and now insurance tax.  Capital is taxed lightly and imports are allowed into the nation duty-free.  The result is a society which has lost the ability to produce most of the things they need for day-to-day life, including clothing, furniture, electrical equipment, and so forth.  Self-sufficiency is not so much a matter of individual self-sufficiency (as a division of labor allows for economic progress), but of the ability of a society (which typically coincides with a nation-state, except in post-colonial territories where the colonial boundaries do not correspond to the social / cultural realities) to sustain itself.  Surpluses can and should certainly be traded, but each society must maintain the ability to provide for its basic needs.  Each individual, not so much.

Sun, 11/04/2012 - 10:57 | 2945966 Bob Sacamano
Bob Sacamano's picture

Self sufficiency would suggest NO borrowing.  If we could just get governments and individuals to stop borrowing (i.e., stop consuming more than they generate in income), much would be better.

Sat, 11/03/2012 - 22:20 | 2945507 michael_engineer
michael_engineer's picture

I think the author of this article could in a way be practicing a form of this :

http://www.zerohedge.com/contributed/2012-10-28/cointelpro-techniques-di...

"COINTELPRO Techniques for dilution, misdirection and control of a internet forum."

There's no mention of the underpinning basis for all of the economy which are critical resources and energy. The rest of the economy is derived from that basis.

Have noticed that ZH sometimes let's articles like this through. Possibly for the amusing comments that result. It's like an intelligence test.

Sun, 11/04/2012 - 12:15 | 2946067 John_Coltrane
John_Coltrane's picture

If critical resources were the chief factor then Nigeria would be near the top of successful countries as would most of Africa.  Culture is the key.  At one time in this country (e.g. pre-1960) it was considered disgraceful and undigified  to take government handouts.

Sun, 11/04/2012 - 13:07 | 2946195 ekm
ekm's picture

Agree, 1000%

It's not what you have. It's what use you make of what you have.

 

That's culture.

Sun, 11/04/2012 - 13:05 | 2946194 ekm
ekm's picture

Michael

If you had read a lot about Ray Dalio, you'd have understood that he knows what you are saying extremely well.

 

But, as a top predator, he can't show all his cards.

Sat, 11/03/2012 - 22:58 | 2945568 q99x2
q99x2's picture

Exile the globalists and lock down the boarders. Hang the middle men from the tallest trees. Give me liberty or give me more.

Do NOT follow this link or you will be banned from the site!