How capitalism has been undermined by poor governance

Capitalism’s “ruthless efficiency” has been undermined by poor governance, a lack of competition and central banks’ over-enthusiastic money printing, says Andrew Van Sickle.

Americans drinking beer
Two beer companies control 90% of the US market
(Image credit: © FRANCOIS PICARD/AFP via Getty Image)

One of the most intriguing statistics in economic history is that in 1914 Argentina was richer than Germany. Its GDP per head was 92% of the average of 16 developed economies. In 2014, its income per capita was 43% of those same 16 economies. Why? “There is a lot of ruin in a nation,” said Adam Smith. But not an unlimited amount. Economies can shrug off a great deal of poor governance, but Argentina breached the limit. Dictatorships, a poor education system and statist, populist policymaking were fertile ground for hyperinflation in the 1990s and recent debt crises.

What about the developed world?

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Andrew Van Sickle
Editor, MoneyWeek

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.