I chanced upon a hypothesis by Deirdre McCloskey who suggests that the roots of modernisation can be traced to the Dutch revolt of 1568 against Spain. But more provocatively, she suggests that it is the jealousy that people feel about others (including other nations) that motivates economic growth.

The desire to keep up with (or rather, outdo) the Joneses is the great motivator:

“the success of commercial Holland stuck in the craw of English people, the way the recent success of innovative Hong Kong and Taiwan stuck in the craw  of mainland Chinese people, and inspired them to imitate”, and India imitated China after 1991 (p. 29). 

Her summary: “The chain-like causation of successive Bourgeois Revaluations is similar to the causation of nationalism in reaction to conquering  nationalisms,  English to French, or English to Indian”. [Source]

Does this make sense? I think it adds an important insight, although it is painful to note that countries like India refuse to imitate!

Even if India merely imitated good economic policies from other countries (which India can get readily by downloading from the internet, or by reading BFN), it can do FAR better than by continuing with outdated stupid socialist ideas.

In the meanwhile I've read a short book by Deirdre and will talk about it separately. Definitely an author I recommend.

Related posts:

1. What can a government do to increase innovation in society?
2. With merit frowned upon, why would any competent academic remain in India?
3. India’s increasing poverty even as growth takes off
4. Deirdre McCloskey on innovation and laissez faire. SUPER brilliant!
5. Government kills a truck driver who refuses to pay a bribe
6. “Maximum Retail Price”, the absurd idea that socialist India has invented
7. Towards a theory of innovation
8. Economic growth does not necessarily mean more press freedom
9. The rapidly increasing pace of innovation by Indian businesses
10. The dangerous idea of equality