Robert Samuelson has an interesting op-ed in the WaPo on the issue of the poverty trap arguing that Gregory Clark's thesis of culture as being the rate determining step on the path to wealth (or more accurately the path out of poverty).

Clark suggests that much of the world's remaining poverty is semi-permanent. Modern technology and management are widely available, but many societies can't take advantage because their values and social organization are antagonistic. Prescribing economically sensible policies (open markets, secure property rights, sound money) can't overcome this bedrock resistance.

It is interesting to note the Deniehy and Harpur saw little difference between political and social organisation. To 19thC Republicans they were one and the same: as reduction of tyranny led to increased liberty and consequent greater individual moral expression.

The article continues:

"There is no simple economic medicine that will guarantee growth, and even complicated economic surgery offers no clear prospect of relief for societies afflicted with poverty," he writes. Various forms of foreign assistance "may disappear into the pockets of Western consultants and the corrupt rulers of these societies." Because some societies encourage growth and some don't, the gap between the richest nations and the poorest is actually greater today (50 to 1) than in 1800 (4 to 1), Clark estimates.

There may be another component in play where the ability of social organisation to harness and leverage complexity toward positive outcomes. Joseph Tainter has argued that fossil fuels and their incredible return of energy on burning have allowed our societies to increase in complexity and the consequent energy consumption without adverse affects.

But the use of fossil fuels has enabled social complexity as well not just physical complexity through technology. Farming is a pretty bare existence with the risk of crop failure being constant, not to mention poverty, hunger, taxes, and not having enough members in your family to do the manual labor on the farm.

Until you throw in fossil fuels and industrial nitrates. Suddenly tractors, irrigation and fertilisation lead to over-production. But that is useless until you have super-cargo ships to carry the over-production to city markets around the globe, and rail to transport the grain and livestock, and trucks, and roads, and shops, and malls, and just-in-time computing inventory systems, and credit cards, etc.

Without the social organisation able to underly that complexity then the bump is difficult. It may be that the physical analogy is friction where a scalar coefficient describes the force that has to be overcome. Alternatively it may be quotient where the present complexity off the social organisation is divided over a base organisation that represents the minimal level of complexity to sustain a prosperous economy.

Probably the closest thing to that which is being tracked these days is the corruption report.

More Reading on Wealth

• Wealth
• Social Organisation
• Complexity
• Joseph Tainter
• Gregory Clark
• Complexity Quotient