[p2p-research] Abundance Destroys Profit [was: Tick, tock, tick, tock… BING]

[J. Andrew Rogers]

On Mon, Dec 14, 2009 at 2:39 PM, Andy Robinson <ldxar1 at gmail.com> wrote:
> It does raise the issue, though, of how come Nevada is economically stable
> when similar peripheral regions are not, and how come the population are
> better-off than the similar population in the likes of Niger and Mauritius.
> Is it because the outflow of money is less, because the prices of primary
> commodities and services are higher/fairer, because the prices of primary
> commodities are subsidised or treated preferentially, because of the
> indirect impact of the option of out-migration on wages, because of general
> entitlements arising from being an American (such as access to jobs and
> welfare), because there has never been a full-scale colonial plunder?  I'm
> sure a lot of peripheral countries would love to be doing as well as Nevada,
> outflows or not...


Nevada has an interesting history. It started out as a fairly
conventional state when created, but had withered away to almost
nothing by the 1900s. At one point, it only had a few tens of
thousands of people in a State the size of a large European country.
Someone got the bright idea of rebooting the State of Nevada.  To
quote from a historian quoted on the Wikipedia page:

"Nevada, in a burst of ingenuity, built an economy by exploiting its
sovereignty. Its strategy was to legalize all sorts of things that
were illegal in California ... after easy divorce came easy marriage
and casino gambling. Even prostitution is legal in Nevada, in any
county that decides to allow it. Quite a few of them do."


Nevada is an odd state. It makes much of its money by openly
exploiting the incompetence, corruption, and legal morass that is
California. If it did not have a wealthy basket-case as a neighbor it
probably would not have done as well as it has.  A beautifully
executed example of inter-governmental arbitrage.

So Nevada did not always have famously libertarian laws, it was an
experiment to try and salvage the state. To this day, the Nevada
Revised Statutes are very thin. Shockingly so. The law is silent on an
enormous range of topics for which most US states write volumes of
legislation. And if the law is silent, you are allowed to do as you
wish with the caveat that the Common Law standards of personal
responsibility apply. Contracts are enforced very strictly in Nevada,
for better or worse.


It is worth pointing out that many of the other states in the mountain
West have taken a similar if less extreme approach, following Nevada's
lead. This has been at least partly responsible for growth and
urbanization of that region over the last few decades.



-- 
J. Andrew Rogers
realityminer.blogspot.com