Today's WSJ has a book review by Hugo Restall of the William Lewis book The Power of Productivity. Based on 12 years of research for the McKinsey Global Institute, the book reports that Walmart's shakeup of the wholesaling/retailing world in the 1990's contributed half o the 2.5% annual productivity growth of 1995-1999.
"The U.S. is more open than almost all other countries to new business models and more prosperous as measured by per capita gross domestic product."
He further argues that developing countries could prosper by embracing competition and small government. The small government means a government too small to respond to protectionist demands.
"Competition is unlikely to take off in poor countries until the scourge of big government is brought under control. Mr. Lewis notes that governments in Brazil, Russia and India spend more than 30% of GDP, while the U.S. and European countries, at a similar stage of development, spent less than 10%. High tax rates lead to a large informal economy, which means that an even heavier burden falls on legitimate businesses."
He notes that, "In America people gripe about Wal-Mart, but by and large government allows it to roll on."
He also addresses education:
"Certainly if education were as critical as everyone seems to think, the U.S. would be in deep trouble. When Japanese companies were gaining market share, America's failing schools were fingered as one of the culprits. But after Japanese car makers opened factories in the U.S., they were able to achieve 95% of home-country productivity simply by better organizing the labor force. Illegal immigrants have even less formal education, but they can be brought up to American levels of productivity. The lesson is that on-the-job training is just as important as what workers learned in school."
Of course, that assumes that schools were as bad as they were made out to be -- an unwarranted assumption in my mind. (Doesn't mean they couldn't be MUCH better if we'd change our paradigm, but that's a whole 'nother field of beans.)