Gambler’s Ruin
More than 200 years after Adam Smith, economists remain wedded to the idea that sustained periods of economic growth require the availability of large-scale investment capital. But, for poor countries, liberalization of international capital flows has failed to deliver the goods.
San Francisco – From Adam Smith (1776) until 1950 or so, capital was considered by economists to be absolutely essential for economic growth. You also needed a few good basic institutions. “Security of property and tolerable administration of justice,” as Smith put it.