The Undiscussed Secret of Prosperous Nations

Prominent business mogul and podcaster Patrick Bet David recently made a video about drastic increases in car insurance rates. Citing a report from The Bureau of Labor Statistics, Bet David showed how insurance costs rose drastically over just 12 months. Digging deeper, he found that while inflation has driven car prices and associated costs higher, the real driving force behind the increased cost of insurance is a massive increase in car theft.

One of the video's commentators also made an important point. In addition to theft, it was pointed out, many people (from individuals to mechanics to doctors) take advantage of such situations, viewing insurance claims as a chance at "free money" and doing all they can to take as much as possible if the opportunity arises. 

In both instances, the perpetrators may feel justified in their actions. The car thief might be a poor kid who joined a gang in hope of gaining wealth and respect, and excuses his behavior by telling himself that he is just doing what he has to do to get ahead in a tough world. 

Those who abuse insurance claims may also feel justified, as if theirs is just an isolated case where they play the role of David getting one over on the Goliath of multi-billion dollar insurance companies. After hearing numerous stories of people being cheated, in turn, by these massive corporations, it's easy to ask, "What's the big deal?" After all, they can afford it, right? We heard this excuse many times during the BLM lootings in the summer of 2020 (and ever since): "They have insurance — they can pay."

The problem with both sides taking advantage of each other at every opportunity is that, in the end, someone has to pay. Someone else has to bear the responsibility.  

Mass immigration (both legal and illegal) is another perfect example of this. We don't often consider the costs — whether the costs to the DHS for filing claims, law enforcement, and detention; the costs to the legal system to assess cases as they arise (in increasing numbers); the taxpayer-funded costs of food, housing and maintenance throughout the process; or, the financial and social costs of the increases in crime that come with it. It's easy to pretend it doesn't affect us directly, but the tax bill, along with increased inflation, job scarcity and cost of living, might beg to differ.

Those who benefit from this do not bear these costs the same way. Politicians can vote to raise their salary with inflation. In addition, it costs politicians nothing to incentivize illegal migration by using tax dollars to pay for migrants' lodging, food and legal bills, as long as it does not negatively impact their chances of reelection. In fact, among their supporters, whether left-leaning voters or corporate interests seeking ways to depress wage growth during inflationary periods, politicians who "help" facilitate mass immigration are often preferred by both sides. But again, the costs of this behavior are left to the rest of us. 

The common denominator that all these things share is a lack of personal responsibility. You see, the cost of offloading responsibility doesn't disappear just because no one wants to claim it. At some point, someone has to pay, someone has to do the clean-up. This is the distinction between cultures that prize personal responsibility and those that do not. 

When someone takes something that isn't his, cheats a deserving party, gives out tax dollars to those who have never paid into the system, or leaves his garbage for another to pick up, he is avoiding personal responsibility and leaving it to another to handle. 

Looted stores may submit insurance claims to cover their losses, but the insurance companies aren't going to eat that cost alone — they will raise rates. Those rate increases then affect the profitability of stores in those areas, which subsequently may force those stores to move. This is embodied by a story out of Oakland, one area where even fast food chains are leaving because of high crime, making the cost of business too high to be worth maintaining a presence. Of course, the very people who lose out are the ones who wanted lenient criminal justice policies to begin with, but they often fail to see the connection between the policies they support and the effect it has on their community. 

It is this lack of personal responsibility that leads to what is often called "the cycle of poverty." An individual might think his theft from a store doesn't matter; he is just one person, after all. But when that thinking becomes widespread, the damage becomes systemic. The crime chases away business, which removes jobs, which causes poverty, which leads to more crime, which drives away talent, which creates a vicious downward spiral that is extremely difficult to reverse without significant and often brutal efforts, as has been seen with Nayib Bukele in El Salvador and Rodrigo Duterte in the Philippines. 

This is the under-discussed secret of successful nations and a cultural trait that, until very recently, was common in the Western world. Nations like Switzerland, Norway, Singapore and Japan are wealthy and successful owing in large part to their culture of high trust, brought about by people who take personal responsibility very seriously across collective society, or enforce strict rules that ensure it.

While robust legal systems act as basic insurance of cooperation (necessary for success), high-trust cultures go a step further by not only avoiding the need for expensive, time-consuming legal proceedings, but also ensuring honest, dependable interaction. Every executive will agree that honest, dependable interaction is an underrated, but highly-valued, part of any business dealings. Yes, you can take cheaters to court, but everyone is happier when business can be conducted with dependable honesty.

Societies behave similarly. When people can trust that their society as a whole will function at a level of trust and good faith that exceeds the bare minimum requirements of the law, then they can focus their attention on their personal portion of the division of labor, leading to greater success for the nation as a whole.

In contrast, if individuals must be concerned with criminality, scams, the abuse of goodwill, and dishonest dealings from the other sectors of society, they cannot remain focused on their sector, and much energy is wasted on attempting to meet these various concerns.

This is very much the difference between most developed and undeveloped nations. While the previously-mentioned nations developed within high-trust or (as in the case of Singapore) strictly-enforced cultures, similar-sized nations like Haiti or even larger nations like India, Nigeria or South Africa struggle to create society-wide prosperity, due largely to a lack of that exact culture of personal responsibility and honesty.

If one leaves food on the road in Japan with a sign saying, "take one, if you wish," the Japanese will generally obey the request. If the same took place in South Africa (or Baltimore, for that matter), and no one was directly watching, it would be unlikely that there would be anything left for the second person in line. If you walk by rivers in India, Africa or Southeast Asia, you will see literal tons of waste products filling any available empty spaces. One of the saddest examples is the Taj Mahal in Agra, India. It is one of the wonders of the world and the single most iconic landmark in India; yet, if you visit, you will find that the areas directly surrounding this architectural and cultural marvel are overflowing with garbage.

Photo Credit: Reuters, 2018

This isn't caused simply because the people there care less about their environment than we do here (though that is part of the problem.) It is because those who should be tasked with preserving the nation are more concerned with their own gain. In most of these nations, corruption is the number one cause of such issues, despite numerous anti-corruption laws. This is because laws are meaningless unless culturally enforced.

The garbage filling the rivers of developing nations impacts tourism, the health of the people and their willingness to invest in their nation. The ecological aspect, in turn, affects the entire world and costs billions of dollars per year in remedial efforts by people who had nothing to do with filling the rivers in the first place. By ignoring their responsibility, those in power in the regions where garbage is being dumped into the rivers pass the costs onto others.

We see this increasingly in the West, as well. As we allow and even encourage greater irresponsibility, we are seeing not just widespread cultural deterioration and immense pain, but also massive economic decline.

Businesses only looking out for themselves cause environmental and health issues, destroy lives, and can bring economic collapse. Healthcare organizations only caring about their bottom line brought us faulty COVID "vaccines," and middlemen caring more about the bottom line than the effect brought skyrocketing costs. Individuals caring only about their own personal gain and not caring about its effect on those around them create dangerous neighborhoods, or allow themselves to be used to push destructive policies. 

Every action has a ripple effect, and in closed systems (like neighborhoods and nations), those ripples affect each of us, in return. We don't always notice how. But, like the tree falling in the forest, it still happens whether or not we notice. As such, we should be grateful to those who created the high-trust societies that have brought such tremendous prosperity, while doing our part to ensure they remain so for our children.

Arthur is a former editor and consultant. Born in India to missionary parents, he spent his early career working in development for NGOs in Asia, Central America, and Africa.

Arthur has an educational background in history and psychology, with certifications from the University of Oxford and Leiden in the economics, politics, and ethics of mass migration and comparative theories in terrorism and counterterrorism.

He is currently launching CivWest, a company focused on building capital to fund restorative projects and create resilient systems across the Western world.

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