detailed breakdown of a highly predictive model of future growth
To reiterate, my study of history has shown me that there are five big, interrelated influences that are driving the changing world order and that they tend to evolve in big cycles. In order of most concerning over the near term, they are:
- how well the internal order (system) works within countries, especially the United States, to influence how well people within them work together,
- how well the world order (system) works to influence how well countries work with one another,
- how well the debt/money/economic system works,
- the force of nature, and
- how well humankind invents and decides to use new and better approaches and technologies.
it’s a pretty good model
The economic health indicators that I will show would have predicted the subsequent 10-year real growth of the 35 countries shown over the last 70 years within 2% of the realized growth 90% of the time and within 1% 61% of the time.
big shifts in economic growth are about two-thirds driven by productivity and one-third driven by indebtedness
people are the biggest input to production "most productive workers per dollar of cost" will have the most demand
per-hour-worked cost differences of educated people ... is one of the best indicators of productivity
Other obvious and important factors that influence productivity include the cost of uneducated people, levels of bureaucracy, attitudes about work, raw material costs, lending, and capital market efficiencies—i.e., everything that affects the value of what is produced relative to the cost of making it.
cost-of-production arbitrage has been by far the largest driver of growth basically comes down to "the cost of the workers relative to how hard they work, their education, and investment levels [in capital to support them]"
The surest way to raise productivity is to give well educated, talented, hard working, inventive people financial resources in a country that runs efficiently.
While lots of elements of culture can matter, the ones that I find matter most are:
- the extent to which individuals enjoy the rewards and suffer the penalties of their productivity (i.e., the degrees of their self-sufficiency)
- how much the people value savoring life versus achieving
- the extent to which innovation and commercialism are valued
- the degree of bureaucracy
- the extent of corruption
- the extent to which there is rule of law