The Lessons of Nauru

The Pacific island of Nauru is among the most unknown countries in the world.  This is hardly surprising – it is the fourth-smallest territory in the world (ahead of only Tokelau, Gibraltar, Monaco, and the Vatican), and there are fewer ethnic Nauruans than there are Oxford undergraduates.  But, for a time, Nauru had the highest GDP per capita in the world, and the slow decline from the financial orgy of the 1970s and 80s to its current state as a virtual province of Australia contains some fairly frightful omens for the future of other such rentier states. Nauru is (or … Continue reading The Lessons of Nauru

Cloud-Cuckoo Land

Now, I don’t often devote that much thought to economics, much less try to crystallise my thoughts into words, so I’m free to be proven wrong on this one.  But let’s have a quick look at the following sentence, taken from CNN’s report on yesterday’s economic plummeting: In their single worst day since the 2008 financial crisis, stocks plunged Thursday, with the Dow tumbling 512 points, as fear about the global economy spooked investors. If we focus on the important parts of this statement, we get two facts: the stocks plunged, and this was sparked by fears about the state … Continue reading Cloud-Cuckoo Land