Saturday, July 4, 2009

I, Pencil all over again

Tim Harford talks about why rich countries have complicated economies and poor ones don't:
One of the defining characteristics of the modern economy is that it’s awfully complicated. Even a fairly humble product such as a shirt might incorporate cotton from west Africa, oil from Indonesia to make the polyester in the button (manufactured in China), and designs sketched out by an Italian using American computer software. Then there is the sheer number of products: Eric Beinhocker, author of The Origin of Wealth, reckons there are probably 10 billion distinct products and services available in a modern economic environment such as London, Tokyo or New York. It’s a guess, but a fairly educated one. Beinhocker also estimates that for a traditional hunter-gatherer society, the number is closer to 300.
Headline explained here.

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