The underlying rationale for this conjoining of the fates was to eliminate the agency problem. Since their fates were one, the captain would do everything in his power to save the ship. There was no bailout option. On most scheduled multiengine passenger flights, the flight crew doesn’t have the option of choosing a fate distinct from their passengers. We can apply the same principle to the Third World. We should want every poor country to prosper. But to achieve this, we should adjust the incentives of their leaders so that it is in their own interest to build up their countries rather than to loot them, move to New York and then damn America.
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this is pretty much what’s happening in california right now. the state is being looted by bad budgeting. even as the tax base leaves the state–the state employment rolls are exploding. the mexicans know quite well that when the state goes bankrupt the USA will bail them out. of course they will curse the USA for insulting them for their incompetance along the way. after all they were not incompetent. rather they were looting california. … and doing a good job of it. would it be their fault that california goes bankrupt. no. no more than it is the fault of mexicans for coming to the USA. rather the fault is with americans for being weak and feckless.