Lessons from Capitalism for Personal Development
I have recently read Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism by Ha-Joon Chang. It talks about how developed countries followed a certain path during their growth boom but now, after achieving growth, they preach the opposite to poor and developing countries. This reminds me of the online influencers who themselves are successful but romanticize & preach everything but their actual success factors.
While everyone has their own personalized philosophy on how to grow, I found personal lessons from the essential messages of the book. Let’s discuss them one by one.
- Free trade reduces freedom of choice for poor countries. Keeping foreign companies out may be good for them in the long run.
Free trade between nations is when there are no regulations, like tariffs or trade terms & conditions, on industries to import goods. This is bad for the home industries that must mature to remove import dependence and achieve growth in the near future.
Thinking about Free Trade parallel in my life, I feel that importing(buying) food (from the restaurants) instead of maturing myself will make me end up spending more money on food in the long run. Moreover, I can be more healthy and independent if I learn to cook just enough to sustain myself.
Similarly, products and services that I am paying for which disallow me to build my capabilities is hurting me in the long run and hence must be avoided as much as possible.
- Investing in a company that is going to make a loss for 17 years may be an excellent proposition.
The equivalent of investing in yourself (maybe not 17 years but 17 months) to gain a few skills like business or programming — this might lead to expenditure where you aren’t earning for a while or not getting a job that’s paying as per your expectation, however, in the long run, realizing that this will be the best path to achieve the desired level of income.
- Some of the world’s best firms are owned by the state.
Look at how the technology industry in China has grown with the support of the government.
While the startup culture is everywhere, we also must realize that working with an established organization system helps us build and ship a product with more resources & support. I am sure there are limitations around working in a system as compared to working as an individual, but again best ideas are the ones that work around those limitations
- Borrowing ideas from more productive foreigners is essential for economic development.
This is a straightforward translation — learning from the best/success cases around self. If someone is good at work, learn from their work ethics, learn from the best athletes, gymnasts, or writers, or programmers. It is essential because sometimes, for example, finding the best way to learn how to write a program might not strike for a while, so learning from someone else is more efficient.
- Low inflation and government prudence may be harmful to economic development.
Low inflation usually signals the demand for goods and services is lower than it should be, and this tends to slow economic growth.
So when there’s extra time or energy left there’s a chance that there’s more that can be done to boost output and growth. Overspending resources if the key! Squeezing more activities and setting goals higher that should look daunting is the only way to achieve more when there’s demand for self-growth.
- Corruption exists because there is too much, not too little, market.
It might feel like corruption is the end of things and working hard isn’t worth the efforts, but having an abundance mentality is the key. While eyeing that job or promotion it might feel unfair if someone else with contacts makes it through, it is important to remember the abundance of opportunities out there in the market to put up another fight!
- Countries are poor not because their people are lazy; their people are lazy because they are poor.
One’s personality is “poor” because the faculty of mind & body are lazy; the faculty of mind & body are lazy because the personality is “poor”.
Saying that I am clearly not smart enough for this might be because the mind feels so. I have been there. Not paying attention to difficult math problems because I believe it’s too tough for me and hence being bad at it! It is interrelated. Sure, there might be a limit to which subject I can or cannot understand, but I haven’t done enough to reach that point before declaring that this is too tough for me. This argument sounds like a Catch-22, but is an optimistic one!