In reality, therefore, all countries, communities and individuals constantly seek and create the advantages on which to capitalize. As a consequence, none of them is permanent: in the very least, I can eventually mimic whatever you do if you are successful.
My personal view is that the main differential advantage we had and still have to a considerable extent is our... values and culture. It is the values we shared that led to the adoption of this particular Constitution and other laws. It is the values that allow us, unlike other countries to change presidents peacefully, without intervention by generals. And it is our values that allow each of us to maintain his or her identity and reach full individual potential. This all translates, in particular, into high productivity of labor and high stability of financial markets: the stability of our culture and institutions makes the country safe heaven for investments. If so, there is no more cost to multi-culturalsm than this: by loosing pride in and focus on our core, traditional values, we are also losing our competitive advantage.
Think about this: values is the only thing China, Ireland or Russia cannot duplicate. And we are loosing them rapidly. As for China, their competitive advantage is highly motivated and productive labor. The problem for us in not that labor is cheap, as some people erroneously think, but that it is slightly cheaper than ours.
How to combat this disadvantage? Well, back to values: Americans should start seeing once again the value of speaking and writing well, of knowing a foreign language and basic mathematics. A course in a community college costs only a few hundred dollars, but most prefer to spend thousands on TV sets and video games. That is fine. But then they should not whine that a Chineser an Indian is willing to do what it takes and becomes more productive.
Poland is rather similar in that its people are invigorated by the recently acquired freedom. I do not know enough specifics to have an opinion on how this will play out within the EU: it well may be that the Poles have thrown out one yoke for another.
I have no faith whatever in the long-term viability of EU as either economic power or a single polity. Its deterioration is delayed primarily because we, Americans, pay for the defense and innovation.
That's my one-and-a-half cents.
First let me thank you guys for taking the time to respond to my questions.
I wish I had sufficient time (and energy) to respond and address this topic...perhaps over time...
Let me say however, that Im dubious of economic policy when we lack sufficient insight and consistency at the fundamental principle level...when we lack sufficient fidelity in our models to run forward and backwards estimation predictors, and when we dont allow for sufficent complexity, chaos, positve and negative feedback, and nonlinearity effects to anticipate leveling off, inflection points, and other characteristics of non-monotonic curves.
In science and engineering...we know about all these things...we deal with them all the time when constructing models of the 'real world'. Many of these approximate systems cannot be solved in closed form...we rely on Monte Carlo or computer iterative techniques.
All of which is saying that in the early 20th century...Einstein and Heisenberg took up where Newton left off. Who out there in economics world is likelwise ready to examine Smith and Ricardo's theories, when scaled upwards to the global economy we have developing today?
Natures 'mathematical models', as we interpret them, dont seem to scale well.