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Mental Models discussed in this podcast:
- Corruption
- Property Rights
- Government Ownership of Means of Production
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You can find out more information by listening to episode 11 of this podcast.
Show Outline
Two Key Characteristics Shared by Russia and China
- High Government ownership of key businesses
- Could lead to corruption
- Businesses could be influenced to make uneconomic investments
- I can’t trust the numbers. (Due to the communist government)
- Corporate frauds are more common
- Both Russia and China have a critical lack of property rights.
Summary:
If you are going to make any investment you need to be sure that your principal is safe and a reasonable return on your investment is likely. Lack of strong property rights threatens my principal and government control of businesses threatens my reasonable rate of return.
