A new report on prosperity ranks Finland first and the United States ninth. Scandinavian and North European countries dominate the top spots. Canada is seventh. The report looks at nine factors that shape prosperity – economic fundamentals, entrepreneurship and innovation, democratic Institutions. education, health, safety and security, governance, personal freedom, and social capital.
October 27th, 2009 at 1:41 pm
What a crock. That’s really a measure of how Scandanavian your country is! “Social Capital”?!? “Governance”? The deck is stacked.
Hong Kong’s results are interesting. In the past, HK has benefited from the benign neglect of being a crown colony. Has anything really changed in that regard since China took over?
October 27th, 2009 at 8:04 pm
Is Ireland really that prosperous at the moment?
October 27th, 2009 at 9:35 pm
“Economic Fundamentals” is strange. Hong Kong is #1. Tomorrow they could be #29 (China).
October 28th, 2009 at 12:22 am
Buzzcut, while I agree it’s hard to get agreement on what makes a “perfect” list, the Scandinavian countries actually rank highly on this type of list pretty often.
Of course it’s easier for small countries (especially those part of a market of 300 million people)to achieve some of these things, but I think you should at least be open to the idea of other countries maybe finding good solutions to things in a different way.
I’m in Australia, which sit about halfway between the USA and Scandinavia on many economic and social topics. We have lower taxes than the Noridc countries, but on the other hand, we also have decent unemployment assistance, a flexible tertiary education sector, and a mixed health sector.
None of these are perfect, and I don’t like paying taxes any more than anybody else. Having said that, I think the American economic model may have worked well for the Industrial Age, but not so well now (and I’m not just talking about the current nasty downturn).
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October 28th, 2009 at 12:57 am
Buzzcut, while I agree it’s hard to get agreement on what makes a “perfect” list, the Scandinavian countries actually rank highly on this type of list pretty often.
Of course it’s easier for small countries (especially those part of a market of 300 million people)to achieve some of these things, but I think you should at least be open to the idea of other countries maybe finding good solutions to things in a different way.
I’m in Australia, which sit about halfway between the USA and Scandinavia on many economic and social topics. We have lower taxes than the Nordic countries, but on the other hand, we also have decent unemployment assistance, a flexible tertiary education sector, and a mixed health sector.
None of these are perfect, and I don’t like paying taxes any more than anybody else. Having said that, I think the American economic model may have worked well for the Industrial Age, but not so well now (and I’m not just talking about the current nasty downturn).
As this website is fond of saying, cities are where the action happens, but part of how well they can do comes down to national policies. Does it benefit a nation overall if those citizens who are born in poor regions are not given any assistance to improve their lot, or cannot afford to move due to health care issues? Just as importantly, if certain regions are just left to wither on the vine, is that sustainable, productive, or efficient in the long term?
As a small and open trading nation, Australia’s industries have been opened to global competition over the last 25 years. Many have gone to the wall, but others (such as education) have prospered. Part of the change has been able to happen because the Government needed a way to lift the skills of the overall workforce. So, rather than just “letting the market decide”, they aimed at this goal with “HELP” (Higher Education Loan Program). Provided you are smart enough to pass a test, and there are enough places, the Government will fund tertiary study here up front (one degree each for undergrad and postgrad), and you pay it back at a low rate of interest over your working life once your income reaches a certain level.
I’m not saying this is the only way to lift education levels, and I’m aware many universities in different countries offer scholarships and the like. But the difference is that they are limited in scale, whereas this is nationwide, and has worked well in hitting its target. I know this because I am one of those who would have no viable way of getting tertiary education without it.
To my understanding (not that I’ve been there), parts of the USA are incredibly rich, and other areas are dirt poor. In my view, part of the reason for this is that the American model allows (or at least does not tackle effectively) big gaps for its citizens in both education and health care.
Maybe another part of the topic relevant to Creative Class issues is to do with network effects – or “birds of a feather” flock together. The “old school tie” works well for those who are middle-class or upwards. But what if you live in a city where the social fabric has broken down, and many of the people you know have poor literacy and numeracy skills (among other issues).
When and how are such people going to be exposed to new ideas that can actually help them to see that there are better ways of doing things? On network TV? At the run-down local library? Or will they simply continue to rely upon the same sources of information that their parents did, because nothing new penetrates their part of the world?
America has long been a world unto itself, protected by oceans and a common market of 300 million people. The GFC is showing many Americans that they do, in fact, have links to the rest of the world they may have only been dimly aware of – and that ideas which challenge the status quo may actually have some value….
Would be interested to hear any views on this
October 28th, 2009 at 11:01 am
Scott, these rankings are quite common. The Scandanavian countries do so well because the people doing the rankings are either Scandanavian or are liberals who envy those countries. Thus, they look for measures that make the Scandanavian countries look good.
That’s how you get measures like “governance” in a ranking of prosperity.
Like I said, the deck is stacked.
October 28th, 2009 at 12:21 pm
Buzzcut–just curious, what kind of variables would you include in a “prosperity index” that would make “liberal and/or Scandinavian” countries perform less well? And how would you define prosperity? Since I’m Scandinavian I probably have a Scandinavian perspective on this, and would be very interested in hearing about yours!
October 28th, 2009 at 12:47 pm
Don’t get me wrong. Some of those measures are fine. Entrepreneurship rates, economic fundamentals, things of that nature.
Maybe I’d look at home ownership rates, median per capita wealth, you know, things that actually measure how prosperous you are.
And that’s not to say that the Scandanavian countries wouldn’t still do well.
It just gets my back up when I see things like “Health”, which you damn well know counts things like longevity and infant mortality, which are very loaded statistics.
October 28th, 2009 at 1:18 pm
No Scandinavian offence taken
I appreciate a good discussion! Would you include variables like “personal happiness”, “job satisfaction” etc., in other words more subjective (and less economic) measures too?
October 29th, 2009 at 8:29 am
Looking at the spatial distribution of the index shown in the report, I don’t see how one could argue the index isn’t measuring prosperity in some form. The problem, however, with this index and most (if not all) indices is that people take the rankings (which are inevitably going to be presented) to seriously. I mean, change the construction of one variable, you get a new ranking. Change the weighting procedure, you get a new ranking. Include a new sub-index you get a new ranking. So, in my opinion, don’t focus on the rankings because they are just about meaningless within small ranges.
For instance, if you compute the standard deviation of the index… then the values of the index for the top ten countries are statistically equivalent (i.e. there are no meaningful differences in the values of the index, and i mean it is not even close).
One last comment, i wonder why they don’t discuss how the sub-indices were created in the report. They say they are a combination of over 70 some odd variables… but there is not mention of which ones. I bring it up because i find it a bit amusing that Spain and Austria have better scores on economic fundamentals than the U.K., U.S., Germany, or Israel. Somehow, that just doesn’t pass my sniff test. Let me get this straight, Spain and Austria (among many others) have better economic fundamentals that the U.S., U.K. or Germany (all of which are in the top ten rankings for most innovative counties)?
October 29th, 2009 at 11:04 am
Happiness is a notoriously loaded statistic. I don’t think “happiness researchers” even have a robust definition of it.
I’m not a statistician, only an engineer, but I deal with enough data in my work to know that a lot of these measures are total crap. And that’s not even getting into the regressions that guys like Florida do that have laughably low correlation coefficients, which he proceeds to use to draw sweeping conclusions.
October 29th, 2009 at 1:54 pm
I fall in the middle here, I agree with Buzzcut that the statistics are loaded but also agree that the western European countries are making lots of progress by implementing business-friendly lower-tax policies and the like. But, really, from where do the major breakthroughs in culture, technology and overall innovation, particularly street level innovation, come? The U.S. The iPhone, Twitter, Facebook, new music, especially blended melting-pot new music that transcends and synthesizes everything that’s out there (Lupe Fiasco for example)… from where does all of that come? The U.S. So the nerds and statisticians come up with all of the indexes they want, the reality is that America is and will continue to be the driving force culturally, creatively and economically– across the board. But it’s great to see other countries implementing positive strategies too.