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Highest gdp per head of population

  1. Jan 20, 2008 #1
    Which country has the potential to have the highest GDP per head of population if its economy was run perfectly? Can one country run a perfect economy if its trading partners do not? Is there a country that can get by on its own with internal markets?
     
    Last edited: Jan 20, 2008
  2. jcsd
  3. Jan 20, 2008 #2

    EnumaElish

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    I think the answer to your 1st question will depend on the unique resources (natural and human) that any society can command. There is a literature on your 2nd question, about business cycle synchronization (for example, through trade). Most countries can "get by" on their own, but their income without trade would be lower than that with trade. When there is no trade, the larger the internal market, the more successful the economy.
     
  4. Jan 21, 2008 #3
    The top richest countries will probably always be very small ones with very special situations, such as Monaco and Luxembourg. Monaco is a tax-haven less than 2 square kilometers in area, inhabited by many extremely wealthy immigrants. Its GDP per head is about $70k. Luxembourg is a bit bigger, about 100 miles squared. It is also a tax haven, but also has a very large banking industry.

    Besides these tiny tiny countries, there are Norway and Ireland, which both have about 4.5 million people. Small, but not ridiculously so. Norway is up there because it is sitting on more oil than any other European nation, and has a government that invests it rather well. Ireland has very low corporate tax rates, which have recently been attracting corporations to set up headquarters in Ireland, bringing in tons of new income and high-income citizens to Ireland.

    In most cases, the richest countries in the world are relatively small and have special circumstances that allow wealth to be spread amongst relatively few people. Of the top 10 richest countries, 3 have less than 1m people, 5 have less than 10m people, and only 2 have over 10m people; The Netherlands and the USA. The netherlands has about 16.4m people, and the USA has about 300m people.

    Among large countries, the U.S. dominates in GDP per-capita. The third most populous country in the world is consistently in the top 5 richest year-to-year. It is unique to have such wealth spread out amongst so many people. Comparing it to countries with between 100m and 500m people, it dominates. But those countries are Indonesia, Brazil, Pakistan, and other countries that are not at similar stages of economic development. A better comparison would be to Western European nations, Japan and Canada, which are all equally developed, but have circumstances and economic systems that vary.

    According to the International Monetary Fund, the U.S. has a GDP per-capita of $43,000. Canada and Britain are the closest large nations, at about $35,000 each. Australia has $33,000. Japan, France, Germany and Italy all have about $31-32,000. These nations all have diverse economies with many different sectors, just like the U.S., and all are about 25% poorer than the U.S. is.
     
    Last edited: Jan 21, 2008
  5. Jan 22, 2008 #4
    LUX isnt a tax haven if you live there, they have income tax etc etc same as everywhere, but a lot lower than its neighbours, but that isnt saying much.

    Most European countries are tax havens if you dont live in them.
     
  6. Sep 1, 2009 #5
    There's good reason for that, too. The U.S. also has special circumstances: a history of being an experiment in economic freedom.

    The one in which the economy is not "run" at all. Economic liberty is the key to prosperity.

    It's easy to forget that the U.S. went from nothing to the highest standard of living among large nations by not having a managed economy. Now that the U.S. economy is more regulated while other countries' markets have become freer, they are catching up.

    Those that favor more economic regulation seem to ignore the huge difference it makes in long term prosperity. I've heard it claimed that were it not for historical economic oppression in the world, Jesus and his disciples would have had cell phones.

    While that may be a slight exaggeration, the point is a good one. Restricting economic liberty has very negative long term economic consequences that vastly outweigh any apparent advantages.
     
  7. Sep 2, 2009 #6
    What is your definition of a "perfect economy"?
     
  8. Sep 2, 2009 #7
    some guano island in the pacific island of Nauru
    few people and massive exports of the guano

    then the bird dropings ran out

    then next was burnei

    but wiki list three lists
    our CIA
    the world bank
    and the IMF
    all have a different top country and amts too

    none list my guano island
    so who knows
     
    Last edited: Sep 2, 2009
  9. Sep 3, 2009 #8

    Hans de Vries

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    How then is it possible that all those "Socialist welfare states" in North Western Europe
    score better as the USA in terms of GDP per capita?

    http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita


    Regards, Hans
     
    Last edited: Sep 3, 2009
  10. Sep 3, 2009 #9
    Notice that the post I was replying to specifically was talking about large countries, and that the U.S. dominates GDP per capita among large countries. And it specifically pointed out that many small countries had high GDP per capita because of various special circumstances.

    Obviously a small country that is sitting on a gold mine can have high GDP for reasons other than conducive economic policies.
     
  11. Sep 6, 2009 #10

    Hans de Vries

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    My question was:

    How then is it possible that all those "Socialist welfare states" in North Western Europe
    score better as the USA in terms of GDP per capita?

    The obvious answer is that these countries do invest a lot in their most important resource: Their people.

    1) By giving high quality and affordable education. (accessible, in principle, for all)
    2) By providing high level health care (both cost-effective and with very low administrative overhead)
    3) By helping people who get unemployed, by preventing them too fall to deep, en by helping them to get on their feet and working again.



    In your assessment of the US health care system you may want to consult this list:

    http://en.wikipedia.org/wiki/List_of_countries_by_infant_mortality_rate

    A US health care system at the level of that of Sweden or Norway would have prevented
    around 1,000,000 US citizens from dying unnecessary in their first year of life.


    Regards, Hans
     
    Last edited: Sep 6, 2009
  12. Sep 6, 2009 #11

    Vanadium 50

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    That's not a very good statistic to use as a proxy for overall health care, I'm afraid. One is that the line between infant mortality and stillbirths is drawn differently in different countries, which makes comparison difficult. The other is that the US is a big place - why is the infant mortality rate in Colorado 60% higher than in neighboring Utah?
     
  13. Sep 6, 2009 #12

    CRGreathouse

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    I don't think that being a tax haven is a special situation. Any country could choose to lower its taxes. (They don't because they feel that the benefits aren't as high as the costs.) Setting the tax rate would surely count as a part of running the economy perfectly.

    Being small is special, though. You can always increase per capita income by splitting a country*.

    * Unless all people in the country have exactly the same income, which would require (among other things) that there is either 0% or 100% unemployment.
     
  14. Sep 6, 2009 #13

    Hans de Vries

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    There's a follow-on at the other, more appropriate, thread.



    Regards, Hans
     
  15. Sep 6, 2009 #14
    This is simply not true. If it were, socialist countries in general would have greater GDP per capita than the U.S., which is obviously not the case.

    The small countries you mention are exceptions to the rule, for various reasons, obviously other than socialist policies.
     
  16. Sep 7, 2009 #15

    Hans de Vries

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    So, the IMF, the World bank and the CIA are all lying ??
    Just check the lists with the North Western European countries on the map:

    http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita

    Regards Hans

    [​IMG]
     
    Last edited: Sep 7, 2009
  17. Sep 7, 2009 #16
    Well, if they are claiming that North Western European countries are representative of all socialist countries, they are.

    Again, if you want to isolate a policy with an effect, you cannot cherry pick the data, you must consider all countries with the relevant policy, even if it's not in Western Europe.

    This is the most famous type of the faulty use of statistics.

    Like I pointed out in the other thread, your examples of Sweden and Norway do rate above average (~70) in the index of economic freedom overall, despite universal health care. Certainly higher than most other European countries, so they do follow the general trend that more economic freedom means higher standard of living.
     
  18. Sep 7, 2009 #17
    Umm, you can't quote the CIA - the Speaker of the House (# 2 in line to be President of the US) said the CIA lies to her all of the time.
     
  19. Sep 8, 2009 #18

    mheslep

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    Washington, DC @ $138k!!! each looks to be a good candidate :rolleyes: So to have the perfect economy, the first step is to locate the federal government there, have said government gather vast power unto itself, and then I expect all other factors are no better than 2nd order effects.
     
    Last edited: Sep 8, 2009
  20. Sep 8, 2009 #19

    mheslep

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    Wrong list. If we want to compare GDP across countries, we need to use PPP GDP.
    http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

    1 Qatar 85,868
    2 Luxembourg 82,306 (population 0.5m)
    3 Norway 53,451 (population 4m)
    4 Singapore 51,142
    5 Brunei 50,117
    6 United States 46,859 (population 307m)
    — Hong Kong 43,811
    7 Switzerland 42,783
    8 Ireland 42,539
    9 Netherlands 40,431
     
  21. Sep 8, 2009 #20

    mheslep

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    In looking at the extent of government control of the economy and redistribution of wealth, the devil is in the details when comparing countries. One could make the argument that the US is more collectivist than several other European countries, Ireland in particular. We could say for instance that the Netherlands has a more free market oriented system than the US - once we consider the trillion dollar medicaid and medicare government run systems in the US.
     
    Last edited: Sep 8, 2009
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