The ingredients of sucker economics are the following:
- insiders controlling some resources through an organization
- a reservoir of outsider suckers
- a meritocratic ideology
- the rule of law
In the past, if you wanted to enjoy the labor of others you’d have to conquer them by force and enslave them. Such brutal methods have their drawbacks. Military conquest is costly. Also, slave motivation is hard. Hit them to much and they will die. The smart ones might also simply kill themselves or intent escape. There is also a slight risk of rebellion. So you leave them a glimmer of hope: after many years of good service, they can buy their freedom. With such a smart incentive, productivity is guaranteed.
Now, if only the slaves could come work by themselves, no conquest required. Wouldn’t that be more efficient? Welcome to modern times. If you control the resources of a country, you can start the the other way: first advertise your meritocratic ideology and rule of law. Hard working and gullible outsiders will start flowing in. The system seems fair: the law is the same for everybody and hard work is rewarded.
But rewards are heavily taxed while resources are not. It is such a pity that in those conditions hard workers will take a lifetime to buy those resources from insiders. It is not known at the time, but resources might be exhausted or diluted to irrelevance as more and more suckers pour in.
Still, there is hope for the children of suckers. Even though the capital acquired by their ancestors is minimal, all they have to look for is new place where their competence and hard work will be rewarded… Haven’t they heard of this city or country somewhere that is selling the meritocratic dream?