To look at this in a broader context, we are basically arguing over positive vs. negative reinforcement.
In my home country, the older generation was brought up in the "spanking/scolding/ridiculing" parental philosophy. They scolded and spanked their kids (yes, that includes saying things like "you're so stupid"), yet many of these kids turned out just fine. But the downside is this: those with lower EQs or who thrive more on positive reinforcement may not get the encouragement they need to excel in life.
Now look at, say, Americans, who believe mainly in positive reinforcement (ie. no spanking, no ridiculing, etc.). This is the carrot approach. It works well all in all, though I think these parents shield their kids so much from physical or emotional harm they may not grow up with a chance to learn to handle bruised feelings or frustrations. They may end up being eggshells because their parents treated them so. Also, kids who grow up with too many compliments may end up cocky.
I have an American friend who has a disciplinarian type for a father. Knowing my friend, I think he would have done better in life had his parents given him more encouragement. However, that type of parenting would be just fine with someone like my brother, who loves to be pushed.
I think a smart parent will know when to give a carrot and when to use the stick and how not to use each to excess.