Why are small countries rich
povertyWhy rich countries only pay off when they are rich
How do you evaluate the world and its almost seven and a half billion inhabitants, such as human development or social progress? These are the questions that Alexander Dill asks. And right at the beginning of his book "Reevaluate the World", the social scientist emphasizes the importance of his undertaking.
"To this day, the world assessment is viewed as an expert topic, it is not given any real relevance. The major international problems depend largely on the assessment: How should an energy transition be financed when only a few countries are allowed to take out loans at zero interest rates? Peace reign when the displaced and occupied cannot rely on the solidarity of other peoples? The much maligned World Bank lends just 47 billion dollars per year - this is not even a quarter of the new loans that Germany alone takes out each year. "
Poor countries stay poor
For Dill, one thing is certain: the standards by which states are measured today are neither objective nor immutable. In ancient Greece it was the number of ships that determined the status of a nation. In the Middle Ages, the height of the church towers, in the Romantic era, the number of theater performances was a measure of development. And today? Above all else, the gross national product, the "sum of all goods and services that are produced in an economy", decides whether it is good or bad in the rankings. However, according to Dill, this is exactly what leads to the fact that rich countries remain rich - and poor countries poor - in the competition between states.
"In 2010, 35 percent of the income registered by the state in Germany came from 'assets'. Together with the constant income that the state has been able to post directly in its budget from the sale of government bonds, the 'magical' property income forms all at once a new source of growth for the gross national product. At the age of 88, the wealthy senior can buy a brand new Mercedes E-Class for 77,867 euros. He will drive exactly 5,678 kilometers with it in 18 months. The heirs sell the gem for 36,000 euros. Where is the difference Has the gross national product been corrected by this amount? No. The price was booked in full as economic output. "
Germany benefits as a lender
When Alexander Dill dismantles the gross national product in this way, this supposed foundation of all economic power is revealed to be permeated with air bookings. It's as entertaining as it is enlightening. If Germany lends Greece one billion euros, according to Dill, 900 million of it will flow back to Germany as commission, interest or fee. These are booked as income in the German gross national product - and thus consolidate Germany's place on the rating scale, although actually an unsecured credit risk of one billion euros has arisen. But Germany and other top 20 countries can compensate for this with government bonds that the German or European Central Bank issues and, if in doubt, buys them themselves. The problem: poor countries cannot do that because their currencies are worthless on the world market - they have to attract foreign currencies with high returns. Dill cites East African Tanzania as an example.
"In fact, the Tanzanian central bank had to offer an interest rate of 15.56 percent for the subscription of some government bonds in 2014. It can be ruled out that long-term investments such as roads, railways, electricity generation, water or regional banks can be financed with such interest rates yes then all would have to generate fantastic annual returns of 15.56 percent. The classification of Tanzania as "low developed" has the main consequence that Tanzania cannot make the necessary investments in its public goods itself. "
Measure wealth in terms of social capital
Instead, foreign investors are recruited, who in turn use their income to boost the gross national product in their homes. It is a vicious circle from which there is no escape for the Tanzanians of this world. Unless the world is valued differently. And to achieve that is the mission that Alexander Dill describes in the second half of his book. His initial question: Should Tanzania be at the bottom of the world rankings - a country that, unlike higher-ranking countries, knows no wars, terror, and famine? Dill believes: No - and therefore does not want to make the gross national product, but rather the social capital of a country, the measure of measurement. Dill already explained what "social capital" is in 2009 at the eco-social forum in Erfurt.
"Voluntary work, so-called undeclared work. That means, if someone works for the neighbor or his family, then we have to see it as part of the social capital. It is the same when people meet to play football, to pray or to sing, that is all values. And these values, which are transported there in such a community, make up its strength. "
Exciting thought experiment
Social capital, as different as it may be from country to country, should, according to Dill, also help to assess risks in real terms. His thesis: The decisive factor is trust in a nation. And that can also be achieved with social factors and measured against common goods such as the quality of drinking water or the state of nature. With such an assessment basis, all states would have an equal chance of getting rich. "Reassessing the world" is an exciting thought experiment - also and precisely because many economists do not want to follow the arguments of the sociologist, as Dill himself emphasizes several times. His book is particularly strong in analysis, especially where he works out examples. Anyone who has read them will in future critically question what appears to be objective measurement methods for rich and poor.
Alexander Dill: "Reassessing the world - why poor countries stay poor and how we can change that"
Oekom Verlag, 201 pages, 14.95 euros.
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