- 5 weeks ago
Is it true that cold countries are richer and hot ones are poor? We debunk the biggest myths about climate and wealth, from the "sloth theory" to why germs love the cold. Then, we travel to Norway - a freezing, expensive country with a shockingly weak currency. How did this happen, and why is it still one of the world's wealthiest nations? Animation is created by Bright Side.
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Music from TheSoul Sound: https://thesoul-sound.com/
Check our Bright Side podcast on Spotify and leave a positive review! https://open.spotify.com/show/0hUkPxD34jRLrMrJux4VxV
Subscribe to Bright Side: https://goo.gl/rQTJZz
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Our Social Media:
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https://www.shutterstock.com
https://www.eastnews.ru
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For more videos and articles visit: http://www.brightside.me
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This video is made for entertainment purposes. We do not make any warranties about the completeness, safety and reliability. Any action you take upon the information in this video is strictly at your own risk, and we will not be liable for any damages or losses. It is the viewer's responsibility to use judgement, care and precaution if you plan to replicate.
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00:00For every 1.8 degrees Fahrenheit increase in a country's average temperature, the GDP per capita drops by at least 1.1%.
00:09To put it simply, with every step you take from the North Pole to the equator, not only do you get hotter, but you also get poorer.
00:20Even though life in freezing cold countries can seem miserable, 74.2% of the world's billionaires are concentrated in the global north.
00:30And there are at least four theories explaining that.
00:34The simplest theory is tied to biology.
00:37Cold weather is believed to keep germs away, leading to better health and productivity.
00:42Sounds good, but I'll challenge that later.
00:45Next, there's the sloth theory from ancient Greece, and it's more about climate in general.
00:52Greeks believed their ideal weather made them wealthier, while hotter regions were seen as less creative.
00:58The third idea is based on economic and anthropological studies.
01:04You see, experts noticed some time ago that colder countries have inclusive institutions that offer equal job and life opportunities and protect markets and private property.
01:15Naturally, such conditions promote healthy competition and boost wealth.
01:20The last idea is tightly connected to the previous one.
01:24Long story short, richer countries tend to distribute money better because they're more inclusive.
01:31Poorer nations often have extractive institutions where a powerful elite controls wealth.
01:37Well, you know the theory claiming that cold climates eliminates germs and the population of colder countries doesn't get so sick?
01:53I don't want to be the bearer of bad news, but the cold actually makes germs thrive.
02:00In the cold, we tend to stay inside with the whole house shut, so we share germs with each other more easily.
02:06Not only that, but during winter, the air is drier, creating the perfect environment for the flu virus to flourish.
02:13Humans are also more resistant to viruses and bacteria from their own environment because the constant contact with them makes our immune system stronger.
02:23If you look back at your history classes, you might remember that most British people struggled with the weather and bacteria found in America,
02:31while Native Americans themselves were mostly fine.
02:35And what about the sloth theory?
02:38Sorry, I don't mean it to sound offensive, but some specialists, ahem, they claim that, ahem, people in hotter countries tend to be lazier.
02:48But the truth is, the sun doesn't make us work less.
02:53Yes, the sun can make you a bit slower because you can dehydrate.
02:56But you see, the human body is biologically adapted to the climate of the place they're born in.
03:02This means that if you live in Canada, for example, you can endure the cold just fine.
03:08But Brazilians will probably handle hot days better than you.
03:12But if the sloth theory was true, how would you explain that people in Colombia work about 200 hours a year more than those from the United States?
03:23In fact, if you live in Cambodia, Myanmar, or Mexico, you're bound to work more than anyone in the world.
03:30Besides, hotter countries have a genius way to fight off laziness.
03:36It's called siesta.
03:38After lunch, it's normal to feel a bit sleepy.
03:41And if you have heavier meals, like the Spanish and Italians do, you'll get extra slow.
03:47This is why after lunch they usually have a siesta, also known as a quick nap, which improves your memory and thinking skills.
03:54It may sound like a siesta makes you work less, but people who nap after lunch simply work at different hours of the day.
04:03While you make shorter lunch breaks and go home at 6 p.m., in Spain, the lunch break lasts two hours and the workday ends at 8 p.m.
04:12They work when it's not so hot outside and even get to take a power nap.
04:19The past is also crowded with people who lived rich lives despite the scorching sun.
04:25The ancient Egypt civilization may have existed thousands of years ago, but they were one of the richest civilizations ever,
04:32even though they lived in a place that was super hot and super dry.
04:36We also have the Aztecs, who lived in Mexico back when Mexico didn't exist yet.
04:44This region is not so famous for its cold weather, I can tell you that.
04:48But the Aztec civilization still managed to have a capital that was bigger than London, Paris, and Madrid of the time.
04:56On top of that, many of the inventions we have today that make a lot of people rich were created thanks to math and science.
05:04Two things born in hot places, like Mesopotamia and India.
05:10Now, to make all those economic and anthropological studies sound simpler, let's start with the most obvious part.
05:17It's true that hotter countries usually make money out of their natural resources.
05:22They don't have such strong industries, and the money is concentrated in the hands of the elite.
05:28All of this reduces the GDP, that thing that estimates whether a country is wealthy or not.
05:33Remember we said richer countries have inclusive institutions?
05:38These institutions are basically laws that make sure people have equal job and life opportunities, including nice houses and a good salary.
05:47Poor countries are not very good at this inclusive institution thing, but it's not by choice.
05:54This is actually a consequence of the Age of Exploration.
05:56In case you were sleeping during your history classes, let me remind you.
06:02The Age of Exploration is that time between the 15th and 17th centuries,
06:06when many kingdoms in Europe were exploring the seas and setting up colonies all over the world.
06:12I know it feels like this was a long, long time ago,
06:15but many countries that were colonies back then only became independent during the 20th and 21st century.
06:24This is why many poor countries don't have solid industries and markets,
06:28because their institutions and laws date back to when they were still colonies,
06:32and their years as colonies depleted resources and didn't provide a good infrastructure.
06:37Besides, saying that private property reduces the income and inequality gap is kind of absurd.
06:45It's true that developing countries like Brazil and South Africa are highly unequal.
06:51But in the U.S., for example,
06:531% of the richest people in the country make 139 times more money than the poorest part of the population.
07:01And there were more than 700,000 homeless people in 2024.
07:06Besides, 1% of the world's population is wealthier than the rest of humankind put together.
07:14If inclusive institutions were really that powerful in richer countries,
07:18then there wouldn't be more than 1 billion people living in acute poverty all over the world.
07:23There's no point in saying that private property makes everyone's lives better
07:27if people can't even afford to have a house in the first place.
07:31And using the GDP to calculate the wealth of a country
07:34is not exactly the best way to understand poverty,
07:38because the GDP only considers how much money the industry itself makes.
07:43It ignores, for example,
07:45the question of whether people who work in those industries have good jobs
07:49if they are well paid and have a good life.
07:52The GDP also ignores inequality,
07:55which means it ignores those inclusive institutions we mentioned before.
08:00In the United States, there are about 835 billionaires,
08:06but 11% of the American population is still very poor.
08:11So, my hot take here is that inclusive institutions are not that inclusive,
08:16and that money is not that well distributed in the first place.
08:20Different cultures also have different concepts of what it means to be wealthy.
08:27In London, for example,
08:28being able to afford food, clothes, and shelter does not make you rich.
08:33To them, you're simply surviving.
08:36If you want to be truly wealthy in London,
08:38you might have to hire a housekeeper,
08:40buy a horse,
08:41and have a personal Pilates instructor.
08:44But to the Awaw or the Yanomami tribes,
08:48money doesn't even exist.
08:49They produce only the necessary,
08:52and if they have a surplus,
08:54they will trade with other tribes.
08:56I guess the fact that poor countries are all located closer to the equator line
09:00is not just a simple historical coincidence.
09:06Now, when you think of Norway,
09:07things that come to mind are the sun that never sets in the summer,
09:11unbelievable nature.
09:13The fact that it's one of the happiest countries in the world,
09:15even white bears that freely roam in the wild,
09:18I'm guessing they're happy too.
09:20Already planning your trip to this dream country?
09:23Well, don't rush.
09:24You'll have to review your budget.
09:26Fuel there is 10 to 15% more expensive than in other Western European countries.
09:31A meal at a cafe for one person will cost at least 30 bucks.
09:35Plus, consider yourself lucky if you manage to find a hotel at $100 a night.
09:40If you Google the most expensive country in the world,
09:43you'll see this list.
09:45Switzerland, which is memishly expensive.
09:47The United States, duh, been there, know that.
09:50Luxembourg is not a surprise either.
09:52And then, all of a sudden, you see Norway.
09:55Just so you know,
09:56a family of four would need over four grand a month just to exist in Norway.
10:01And it doesn't even include rent.
10:03Specialists say that Norway is around 7% more expensive than in the U.S.
10:07Norway is a bit weird, though.
10:10Usually, the richest countries have national currencies that are stronger than the U.S. dollar.
10:14Take Swiss francs, for example,
10:16or the Kuwaiti dinar, which is literally the boss when it comes to currencies.
10:20Like, one Kuwaiti dinar can snag you 3.25 U.S. dollars.
10:24Now, here's where the mismatch comes.
10:27The Norwegian krona is dubbed the weakest currency in the West.
10:31Well, how come?
10:33In the wild world of global currencies,
10:36the Norwegian krona used to be a tough player known for smart money moves.
10:40But surprisingly, it is now the weakest currency in the West,
10:44taking a big hit in the last decade.
10:47It has fallen hard against the U.S. dollar and euro,
10:50causing concern for central banks and money folks worldwide.
10:53The oil price rollercoaster is a major factor in the krona struggle,
10:57as Norway relies heavily on oil exports.
11:01But even with oil prices relatively high,
11:03it remains historically weak against major currencies.
11:07The weak Norwegian krona is affecting everyday folks, too,
11:11with prices rising on almost everything due to heavy imports.
11:15Inflation is growing, leading to interest rate hikes by the Nordisk Bank.
11:19High interest rates are hurting the housing market
11:22and making life more expensive for Norwegian citizens.
11:25So one of the supposed reasons for why Norway is so expensive
11:28might be weak national currency.
11:32What else is particular about Norway?
11:34Well, climate for sure.
11:36It may be hard to imagine a freezingly cold country plunging into riches.
11:40It's an imagery we usually see on social media
11:43with geotags Dubai, Saudi Arabia, or even Kuwait.
11:47And it makes sense to think now that all the riches are somewhere southward,
11:51as these places have strong oil-based economies and super-strong currencies.
11:56But in reality, better economies in the south are a current trend.
12:00Ever wonder why cold countries seem to be raking in the cash
12:04while the hot nations are just hanging out?
12:06Turns out, those living in chilly climates had to hustle just to survive winter.
12:11Think building shelter, stockpiling food, and keeping that fire burning.
12:15Meanwhile, those basking in the sunshine
12:18had it a little easier with hunting and foraging year-round.
12:22This theory holds true even in the land down under.
12:25Sydney and Melbourne, the top dogs in Australia's wealth game,
12:29also happen to be some of the coldest cities,
12:31while Darwin, the warmest city, is lagging behind.
12:35Some might argue that this theory doesn't hold up
12:37when we look at ancient civilizations
12:39or modern hotspots like tropical Singapore.
12:42But hey, times change, and so does wealth generation.
12:46Back in the day, it was all about farming.
12:48But now it's more about industry and innovation.
12:51So Norway may seem to have been bound to get rich historically and geographically.
12:57Still, it's not exactly so.
12:59Norway used to struggle a lot.
13:01Back in the day, it faced some tough times
13:03with harsh winters and tricky geography.
13:06They even had famines that pushed families to seek a better life in the US.
13:09So, how did Norway go from rags to riches?
13:14Yep, oil and gas played a big role.
13:16The country is small, but it has around 0.31% of all oil reserves in the world.
13:22But in Norway, there's more to the story than just black gold.
13:26For example, the top oil reserve is not some Arabic country, but Venezuela,
13:31which claims up to 20% of the world's liquid gold.
13:34Still, Venezuelan's economy is far from stable, so it's not all about oil.
13:41Although bested in forest size by other European nations,
13:45Norway was an unrivaled powerhouse in lumber during the Age of Sale.
13:49Thanks to its strategic fjord path,
13:52timber from its inland forests could quickly reach fjord-side mills and global markets.
13:56As railroads unlocked larger forest potential in other countries post the 19th century,
14:02Norway was Europe's timber king,
14:04bolstered by a world-class merchant fleet by the 20th century.
14:09The Norwegian timber wealth, coupled with early cooperative societal norms,
14:14spurred growth across several sectors, from agriculture to fishing and banking.
14:18Despite being labeled poor in the 19th century,
14:21Norway's GDP per capita outshone Eastern and Southern European nations.
14:27The nation's ascendancy continues beyond the discovery of its oil reserves.
14:32Norway is unique, with a small population but sprawling land.
14:36Despite its vastness, the Nordics are scattered
14:38and considered one of the most spacious countries globally.
14:42Much of the North's territory stretches beyond the Arctic Circle,
14:45offering harsh landscapes with thin topsoil covering the bedrock.
14:49The tough terrain in Norway, full of mountains and with a short growing season,
14:53limits arable land to only 2.2%, similar to Yemen.
14:58The scattered arable land in small valleys makes extensive farming impractical,
15:03a far cry from the efficient farming in the U.S.
15:06With a huge chunk of land and coastlines, but a small population,
15:11Norway makes some serious cash from its reserves.
15:14Plus, nature has been pretty kind in Norway,
15:17with rich fishing grounds, hydropower from rivers, and power from cold waters.
15:22And only then comes the little thing called oil.
15:25The late 50s saw a big discovery that changed everything for Norway's economy.
15:30Fast forward to today, and petroleum activities have been a major game-changer for Norway,
15:35feeding its economic growth and funding its welfare state.
15:38But Norway didn't just sit back and watch the money flow in.
15:44They made smart moves, like creating a sovereign wealth fund to manage their oil wealth for the long haul.
15:50The fund sees some big bucks,
15:52currently standing at 1.7 billion Norwegian crooner,
15:56or over 160 million U.S. dollars.
15:59Norway uses the interest from this fund to boost its annual budget,
16:02ensuring top-notch health care, education, and welfare for its citizens.
16:06And here's the kicker.
16:08Norway's not resting on its laurels.
16:10They're investing in sustainable technologies,
16:13like offshore wind power, to secure a bright future beyond oil and gas.
16:18Now, Norway may be expensive,
16:20but it can't compete with the world's costliest place to live, Monaco.
16:24It's almost four times more expensive than the global average.
16:27So, if you're looking to rub elbows with the rich and famous,
16:31look no further than Monaco,
16:32with property prices soaring to an average of over $50,000 per square meter in 2022,
16:39it's no wonder why this tiny country is a magnet for the la-di-da.
16:44However, there's a place that's particularly expensive for tourists.
16:48And I'm not talking about tourist traps.
16:50Neither Oslo nor Monaco can beat the prices in,
16:54well, take a second to make your guess.
16:56Ready?
16:56Welcome to Ashgabat, Turkmenistan's capital.
16:59A gallon of milk costs a whopping 15 U.S. dollars,
17:03while a standard internet subscription plan will set you back 168 U.S. dollars a month.
17:09Calm down, you're not poor.
17:11It's just an economic glitch.
17:13The reason for these prices is simple.
17:15The Turkmen national currency exchange rate in relation to dollars is fixed and never changes.
17:21One dollar equals 3.5 minutes, and has been so since 2015.
17:26Local prices in the local currency grew to inflation,
17:29making it not proportionate to prices in dollars.
17:33The exchange rate never changes.
17:35So, if you live there, such prices don't seem to be extraordinary.
17:38But, if you come with dollars, you're in for a pricey trip.
17:42That's it for today.
17:43So, hey, if you pacified your curiosity,
17:46then give the video a like and share it with your friends.
17:48Or, if you want more, just click on these videos and stay on the bright side!
17:52I'll see you next time!
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