Wealth - A political fallacy?

[Stunt]

I've been an avid poster on the P&N forums for years now and have participated in countless arguments over the most effective way to make people wealthier and better off. We all have debated various roles of government, taxation, political ideology and with all the various opinions (ie. raising minimum wage, cutting taxes, education investment, trade relations) we all strive for the same common goal even though our perceived path to these goals can contrast drastically.

What if wealth has nothing to do with where you are on the political spectrum, has nothing to do with a nations ideology, has nothing to do with the things we as a global community love so dear (government, patriotism).

It is my belief that a nations wealth is exclusively driven by a nation's natural resources, population, and climate. I read somewhere that the number of minerals and resources represents 90% of the world's total number. For example, Texas is known for oil, Pennsylvania for iron, Wyoming for coal, etc. During the industrial revolution, the US was able to provide it's own resources and didn't have to pay a premium or trade goods with other nations to progress their economy. No other nation in the world has the sheer diverse supply of natural deposits of resources than the United States. Combine that with a large population base to explore, excavate, produce and consume and you have a superpower in the making. Not because of a political party, not because of some act of patriotism, or domestic policies. The climate comes into play for the health and efficiency of the nation. If you cannot produce your own diverse and dietary complete food source, this can impact a nation's health and can serve as yet another resource; for example Wisconsin cheese, Idaho potatoes, Florida citrus, Maryland lobster.

Politics is merely a debate over two things 1) how services are administered to a population, 2) how much control one believes we should place on society based on personal morals. It is my honest opinion that private and public institutions are both wasteful (ie. too many people in public, too many bonuses and perks for private). The efficiency of each relative to each other is negligible. I mean in theory the free market thinkers understand the concept of economies of scale yet fail to concede that a single payer non-profit monopoly is able to offer the cheapest service (healthcare or law enforcement). Well some think national defense is still more efficient administered by the public sector 😉. In the end it's just a matter of who pays for it, either the individual though their take home income or individuals through their taxed income. I can't see how a shift from one payment method to another can stimulate so much growth that the person could significantly increase his wealth.

There's a reason why all wars in our history have been over resources, he who has the resources becomes the most powerful, not the country with the lowest taxes, or the country with the best trade deals; it is almost predetermined by the country's most basic landscape. Now that being said, obviously those who have this inherent wealth can squander it on making less opportunistic investments. I've heard that for every one dollar in education investment results in 40times that value in generated GDP. I'm sure there's a point where law enforcement becomes redundant and gives little payback for added investment. Pointless wars are another example of squandered wealth.

The sad thing is with all the resources in the US continuously being depleted and consumption growing rapidly with more and more citizens/businesses willing to take on more leveraged risk; the wealth is no longer being circulated within the nation but sent to other nations who have the resources required to satisfy the wildest dreams of each and every American. The "have" nation is slowly becoming a "have-not" nation and Americans need to ensure their limited resources are allocated in the most effective manner to maintain the superpower status they have enjoyed for so many years.

But getting back to the topic at hand; wealth being driven exclusively by resources, population and climate. European countries lack the diverse resources and climate required to support a diversified economy domestically. All goods must be bought or traded for. The Scandinavian countries, Russia and Canada lack the climate and population required for a thriving superpower. Asian nations lack resources but have turned their population into a means to trade for these resources quite successfully. African nations lack all 3 and that's precisely why economic development will never reach the same potential as other nations. In fact even with the huge wealth generation over the years though charity and global efforts, they continue to fall behind other nations. It's sort of sad to see that no matter how hard a nation or individual works, wealth and prosperity for the most part comes down to where you were born and nothing more.

That's my theory anyway...thoughts and opinions welcome.

 

[glenn1]

Originally posted by: Stunt
It is my belief that a nations wealth is exclusively driven by a nation's natural resources, population, and climate. I read somewhere that the number of minerals and resources represents 90% of the world's total number. For example, Texas is known for oil, Pennsylvania for iron, Wyoming for coal, etc. During the industrial revolution, the US was able to provide it's own resources and didn't have to pay a premium or trade goods with other nations to progress their economy. No other nation in the world has the sheer diverse supply of natural deposits of resources than the United States. Combine that with a large population base to explore, excavate, produce and consume and you have a superpower in the making. Not because of a political party, not because of some act of patriotism, or domestic policies. The climate comes into play for the health and efficiency of the nation. If you cannot produce your own diverse and dietary complete food source, this can impact a nation's health and can serve as yet another resource; for example Wisconsin cheese, Idaho potatoes, Florida citrus, Maryland lobster.

While those are components of wealth, they certainly aren't all of them - you're completely disregarding any and all types of value creation (services, intellectual property, etc) and have an almost "labor theory of value" concept of wealth. One of the posters on this page does a good job of describing what you're missing:



"I think the problem you have is that you think of wealth as a static, unchaniging quantity - that it can be shifted around, but not created or destroyed.

But wealth IS created by our own efforts. Or, as my father always used to say - 'The only ways to create weath are fishing and farming, mining and manufacturing. Everything else just moves it around.'

In this day and age, we might argue over what exact efforts really do create weath - but wealth can increase.

As a crude example, take two people out in the wilderness. Each is given a pile of branches. One person makes a hut out of the branches. The other just sleeps on top of the pile. The person who made the hut now has something of value - whereas the person who didn't manufacture anything is poorer. But the 'hutless' person can take a sticks from his pile and use them to harvest or hunt food. He can even exchange this food for the services of the hutmaker to make another hut. Both end up with shelter and food - much weathier than they were before when all they had were two piles of branches. The total wealth between these people grew.

And of course, there are activities that do NOT increase wealth. If the hutless person used his sticks to kill the hutmaker, then he could take over the hut - but the total amount of wealth would not have increased.

And finally, there are activities that DECREASE total wealth - such as the hutless man (in a fit of jealousy?) using his sticks to make a fire that burns down the hut.

I don't always buy the line that "if someone is getting richer, someone else is getting poorer."

 

[Craig234]

I can't say I agree with all or perhaps even much of your post, but it does sound somewhat like a point I would make:

That much of the 'political debate' is not really about the issues it's supposed to be, but rather serves as 'marketing' to keep people aligned with a part who has policies for other reasons, mostly determining the distribution of wealth. Ideology is a hell of a blinder to get people not to notice the policies being enacted on wealth.

Of course, some politicians have gone even further, for instance realizing that the more they say they're against deficits, the more deficit spending they are allowed to do.

 

[Pocatello]

Very good points. This country has the land and the resources to feed itself, so there is always hope. As long as this country is united, we have a chance. If not, we can become another Africa.

 

[sandorski]

I've made similar arguments in the past especially concerning Capitalism and the US. It's certainly not all determined by Natural Resources these days, but certainly at one time not long ago it was very important. Manufacturing, High Tech, and other Industries can provide the same benefit without Natural Resources these days though. Japan, Europe, and increasingly the US are examples of this.

 

[Moonbeam]

I am not too fond of simple explanations that explain everything. Admittedly, Albert Einstein, with his theory of relativity, and Moonbeam, with his theory of self-hate, seem to have hit upon such universals, but I am going with another solution here. "He who controls gravity controls the universe."

What are resources. They are concentrations of useful elements. But isn't just about everything we could want in sea water. With enough energy, free energy from the sun, we can desalinate the sea and make it rain. If you have energy everything else is easy. The surface of the earth is aluminum and glass, good for greenhouses and buildings. And the asteroids are waiting.

But what does it mean to be wealthy. Islam can tell you that. To be rich beyond compare is to be submitted. He who surrenders to the will of God or makes God's will his own is at peace with everything, no? The Buddha knew the secret too, no, when he died to his own ego?

Love is like a fountain the gushes forth infinite life. Hate is a vacuum that can never be filled. But we have been made to feel worthless and can't believe we were born with infinite wealth.

 

[Draftee]

Wealth is what you decide it to be. Wealth is commonly seen in monetary terms. But contentment should be seen to have the highest value. If you value contentment lowly, then your desire for money is high. Whilst the opposite is also true.

 

[Atreus21]

Originally posted by: glenn1

Originally posted by: Stunt
It is my belief that a nations wealth is exclusively driven by a nation's natural resources, population, and climate. I read somewhere that the number of minerals and resources represents 90% of the world's total number. For example, Texas is known for oil, Pennsylvania for iron, Wyoming for coal, etc. During the industrial revolution, the US was able to provide it's own resources and didn't have to pay a premium or trade goods with other nations to progress their economy. No other nation in the world has the sheer diverse supply of natural deposits of resources than the United States. Combine that with a large population base to explore, excavate, produce and consume and you have a superpower in the making. Not because of a political party, not because of some act of patriotism, or domestic policies. The climate comes into play for the health and efficiency of the nation. If you cannot produce your own diverse and dietary complete food source, this can impact a nation's health and can serve as yet another resource; for example Wisconsin cheese, Idaho potatoes, Florida citrus, Maryland lobster.

While those are components of wealth, they certainly aren't all of them - you're completely disregarding any and all types of value creation (services, intellectual property, etc) and have an almost "labor theory of value" concept of wealth. One of the posters on this page does a good job of describing what you're missing:



"I think the problem you have is that you think of wealth as a static, unchaniging quantity - that it can be shifted around, but not created or destroyed.

But wealth IS created by our own efforts. Or, as my father always used to say - 'The only ways to create weath are fishing and farming, mining and manufacturing. Everything else just moves it around.'

In this day and age, we might argue over what exact efforts really do create weath - but wealth can increase.

As a crude example, take two people out in the wilderness. Each is given a pile of branches. One person makes a hut out of the branches. The other just sleeps on top of the pile. The person who made the hut now has something of value - whereas the person who didn't manufacture anything is poorer. But the 'hutless' person can take a sticks from his pile and use them to harvest or hunt food. He can even exchange this food for the services of the hutmaker to make another hut. Both end up with shelter and food - much weathier than they were before when all they had were two piles of branches. The total wealth between these people grew.

And of course, there are activities that do NOT increase wealth. If the hutless person used his sticks to kill the hutmaker, then he could take over the hut - but the total amount of wealth would not have increased.

And finally, there are activities that DECREASE total wealth - such as the hutless man (in a fit of jealousy?) using his sticks to make a fire that burns down the hut.

I don't always buy the line that "if someone is getting richer, someone else is getting poorer."

I forget how, but don't banks create wealth?

 

[Genx87]

I think there is definately something to be said for having a lot of domestic natural resources. However the United States imports a lot of natural resources because it is cheaper to do so. Africa afaik has a lot of natural resources but the constant wars have stopped national progress on much of the continent. If you cant have peace it is hard to generate wealth.

 

[Ozoned]

Originally posted by: Stunt
The "have" nation is slowly becoming a "have-not" nation and Americans need to ensure their limited resources are allocated in the most effective manner to maintain the superpower status they have enjoyed for so many years.
...thoughts and opinions welcome.

I always knew you were a Neo-con.:thumbsup:

 

[Jaskalas]

Perhaps the United State's golden age last century was due to no wars at home, a decisive victory in WW2, and the general youth of the nation. Our resources were largely ripe and untapped at the turn of the 20th century, just in time to be utilized with the evolution of technology and the use of those resources.

The changes that came about between 1900 and 2000 were simply amazing. Never before, and possibly never again, in the history of mankind did our technology evolve so rapidly. Our nation was in the perfect position to make the most of it.

Never again will we feel the power and wealth that we had last century. We can be a strong nation, but we'll never again be that nation. The world's only Superpower is gone.

 

[GenHoth]

Originally posted by: Moonbeam
Admittedly, Albert Einstein, with his theory of relativity, and Moonbeam, with his theory of self-hate, seem to have hit upon such universals

:laugh:

 

[jackace]

Originally posted by: glenn1

Originally posted by: Stunt
It is my belief that a nations wealth is exclusively driven by a nation's natural resources, population, and climate. I read somewhere that the number of minerals and resources represents 90% of the world's total number. For example, Texas is known for oil, Pennsylvania for iron, Wyoming for coal, etc. During the industrial revolution, the US was able to provide it's own resources and didn't have to pay a premium or trade goods with other nations to progress their economy. No other nation in the world has the sheer diverse supply of natural deposits of resources than the United States. Combine that with a large population base to explore, excavate, produce and consume and you have a superpower in the making. Not because of a political party, not because of some act of patriotism, or domestic policies. The climate comes into play for the health and efficiency of the nation. If you cannot produce your own diverse and dietary complete food source, this can impact a nation's health and can serve as yet another resource; for example Wisconsin cheese, Idaho potatoes, Florida citrus, Maryland lobster.

While those are components of wealth, they certainly aren't all of them - you're completely disregarding any and all types of value creation (services, intellectual property, etc) and have an almost "labor theory of value" concept of wealth. One of the posters on this page does a good job of describing what you're missing:



"I think the problem you have is that you think of wealth as a static, unchaniging quantity - that it can be shifted around, but not created or destroyed.

But wealth IS created by our own efforts. Or, as my father always used to say - 'The only ways to create weath are fishing and farming, mining and manufacturing. Everything else just moves it around.'

In this day and age, we might argue over what exact efforts really do create weath - but wealth can increase.

As a crude example, take two people out in the wilderness. Each is given a pile of branches. One person makes a hut out of the branches. The other just sleeps on top of the pile. The person who made the hut now has something of value - whereas the person who didn't manufacture anything is poorer. But the 'hutless' person can take a sticks from his pile and use them to harvest or hunt food. He can even exchange this food for the services of the hutmaker to make another hut. Both end up with shelter and food - much weathier than they were before when all they had were two piles of branches. The total wealth between these people grew.

And of course, there are activities that do NOT increase wealth. If the hutless person used his sticks to kill the hutmaker, then he could take over the hut - but the total amount of wealth would not have increased.

And finally, there are activities that DECREASE total wealth - such as the hutless man (in a fit of jealousy?) using his sticks to make a fire that burns down the hut.

I don't always buy the line that "if someone is getting richer, someone else is getting poorer."

The only problem I see with your example is the Hut builder used his branches to make a hut, the other guy used his branches to hunt and fish for food. How is the hut builder supposed to build another hut if all the branches have been used? Someone, either the hut builder, the hunter, or a 3rd party has to harvest more branches, aka a natural resource. The hunter is already harvesting a natural resource, (food) so these 2 people require natural resources to increase their wealth. Sure they might not personally collect or harvest the natural resource, but without it neither increases their wealth.

 

[Stunt]

Originally posted by: Ozoned

Originally posted by: Stunt
The "have" nation is slowly becoming a "have-not" nation and Americans need to ensure their limited resources are allocated in the most effective manner to maintain the superpower status they have enjoyed for so many years.
...thoughts and opinions welcome.

I always knew you were a Neo-con.:thumbsup:

I'd rather have the US as a superpower than Russia, China, India. It's a lesser of two evils...
Personally I am a lead by example type, where military force is not used needlessly; case and point Iraq.

 

[SMOGZINN]

Originally posted by: jackace
The only problem I see with your example is the Hut builder used his branches to make a hut, the other guy used his branches to hunt and fish for food. How is the hut builder supposed to build another hut if all the branches have been used? Someone, either the hut builder, the hunter, or a 3rd party has to harvest more branches, aka a natural resource. The hunter is already harvesting a natural resource, (food) so these 2 people require natural resources to increase their wealth. Sure they might not personally collect or harvest the natural resource, but without it neither increases their wealth.

The point of the example was not to show how wealth can be built with out natural resources, but how two individual's (substituting for nations) choices in use of those materials determine their wealth generation. The sticks themselves were not wealth, it is how theose sticks were used that generated wealth.

 

[Stunt]

Originally posted by: glenn1
While those are components of wealth, they certainly aren't all of them - you're completely disregarding any and all types of value creation (services, intellectual property, etc) and have an almost "labor theory of value" concept of wealth. One of the posters on this page does a good job of describing what you're missing:


"I think the problem you have is that you think of wealth as a static, unchaniging quantity - that it can be shifted around, but not created or destroyed.

But wealth IS created by our own efforts. Or, as my father always used to say - 'The only ways to create weath are fishing and farming, mining and manufacturing. Everything else just moves it around.'

In this day and age, we might argue over what exact efforts really do create weath - but wealth can increase.

As a crude example, take two people out in the wilderness. Each is given a pile of branches. One person makes a hut out of the branches. The other just sleeps on top of the pile. The person who made the hut now has something of value - whereas the person who didn't manufacture anything is poorer. But the 'hutless' person can take a sticks from his pile and use them to harvest or hunt food. He can even exchange this food for the services of the hutmaker to make another hut. Both end up with shelter and food - much weathier than they were before when all they had were two piles of branches. The total wealth between these people grew.

And of course, there are activities that do NOT increase wealth. If the hutless person used his sticks to kill the hutmaker, then he could take over the hut - but the total amount of wealth would not have increased.

And finally, there are activities that DECREASE total wealth - such as the hutless man (in a fit of jealousy?) using his sticks to make a fire that burns down the hut.

I don't always buy the line that "if someone is getting richer, someone else is getting poorer."

Yes as mentioned above, this assumes each person is given an equal amount of natural resource to trade like a currency. In my example climate and resource will give a tribe in your example fish and shelter; a much more powerful position than those with no access to fish or branches. For example Europe's lumber was depleted a long time ago and shelter was constructed out of less efficient stone. This is a competitive advantage for the US and other nations with lumber. This access to resource increased the US's relative standard of living compared to Europeans. Obviously there are situations that work in the other direction but that's just an example.

I wholeheartedly support trade and a market economy where people can offer goods and services they provide but in the end the natural resources (lesser extent climate and population) will determine the wealth of the nation and drive education/innovation/intellectual property. Very seldom do you see a resource poor nation come out with a completely innovative and revolutionary product/service. I honestly can't think of one.

 

[Double Trouble]

If natural resources, population and climate were the only determinants of wealth and prosperity, we'd all be trying feverishly to get to Africa to enjoy their standard of living 😉 It just doesn't work that way. There is more to wealth than resources, and how wealth is created & distributed plays a large role in prosperity. All the resources in the world don't mean a thing if you live in a dictatorship are are starving while some small group reaps the rewards of resource ownership......

 

[Deleted member 4644]

Stunt, I don't know what your educational background is, but I think it is safe to say that your hypothesis has been proven to be incorrect. (I was a political science student in college).

Institutions (government, banking, etc), and to a lesser extent individual leaders have a huge impact on wealth.

Entire empires have risen and fallen because of the decisions made and not made by single individuals. Countries have been destroyed because of the ineffective structure of their institutions.

Resources, population, and climate were HUGE factors in earlier times. Even today, they are major, central factors contributing to wealth.

By the way, today, the U.S. does not have nearly the resource advantage you might think we have. 100 years ago, sure. But today, most of the resources of the world are concentrated in South America and the Middle East and Africa.

 

[Deleted member 4644]

Also, as others have stated, it depends what you consider to be wealth. Oil was totally worthless to Arabs in the 1800s before the British and Americans began to exploit it. Then, Oil itself was valuable to the Americans and Brits, but still directly-worthless to the Arabs themselves. They wanted money and guns for their oil.

 

[Stunt]

Originally posted by: Genx87
I think there is definately something to be said for having a lot of domestic natural resources. However the United States imports a lot of natural resources because it is cheaper to do so. Africa afaik has a lot of natural resources but the constant wars have stopped national progress on much of the continent. If you cant have peace it is hard to generate wealth.

African nations do not have near the diverse variety of resources that the US has, even with war resources will be extracted when they are able to trade on the open market. Look at Iran...they produce a ton of oil yet have a very poor status within the world. Perhaps you are using this as justification for all your "National Defense"; a strong and safe nation is a wealthy nation. That is crap, look at how many bombings Spain, UK have had, hell look at the OK city bombing and dare I even say 9/11. Even with these terrorist bombings, there was a minimal impact on the broad economy. The bigger hindrance to the economy has been the transfer of funds overseas to rebuild the nations attacked/destroyed.

 

[SMOGZINN]

Originally posted by: Stunt
I wholeheartedly support trade and a market economy where people can offer goods and services they provide but in the end the natural resources (lesser extent climate and population) will determine the wealth of the nation and drive education/innovation/intellectual property. Very seldom do you see a resource poor nation come out with a completely innovative and revolutionary product/service. I honestly can't think of one.

The old USSR is a good example of why this is not true. The massive country had huge amounts of almost every conceivable natural resource, but such poor economic and political strategies that they literally were starving.

Of course having little or no natural resources will cripple an economy, but few nations have that poor of an area. Most that do were gobbled up by the larger nations during the era of imperialism.

 

[Stunt]

Originally posted by: Deleted member 4644
Also, as others have stated, it depends what you consider to be wealth. Oil was totally worthless to Arabs in the 1800s before the British and Americans began to exploit it. Then, Oil itself was valuable to the Americans and Brits, but still directly-worthless to the Arabs themselves. They wanted money and guns for their oil.

I'm not saying one specific resource but the sheer quantity of a diverse supply of resources. Not having to send money overseas or trade away other goods to obtain certain needs/wants.

 

[Stunt]

Originally posted by: SMOGZINN

Originally posted by: Stunt
I wholeheartedly support trade and a market economy where people can offer goods and services they provide but in the end the natural resources (lesser extent climate and population) will determine the wealth of the nation and drive education/innovation/intellectual property. Very seldom do you see a resource poor nation come out with a completely innovative and revolutionary product/service. I honestly can't think of one.

The old USSR is a good example of why this is not true. The massive country had huge amounts of almost every conceivable natural resource, but such poor economic and political strategies that they literally were starving.

Of course having little or no natural resources will cripple an economy, but few nations have that poor of an area. Most that do were gobbled up by the larger nations during the era of imperialism.

Russia again does not have near the diverse supply of resources the US has and the climate does not lend itself to an efficient economic climate.

 

[Stunt]

Originally posted by: Atreus21
I forget how, but don't banks create wealth?

Banks create leverage and add a multiplier to the money supply. This is not wealth, it's inflation.

 

[Deleted member 4644]

Stunt, I am afraid to say that you are not understanding the difference between that which is necessary and that which is sufficient.

I agree with you that it is (or was) NECESSARY for a country to have a good climate and resources in order to be a superpower/wealthy.
That is, a failure to have a good climate or resources makes it impossible for a country to be a superpower or wealthy.

However, it is not SUFFICIENT for a country to have a good climate and resources in order to be a superpower/wealthy.
That is, having a great climate and resources can be ruined by a bad government, i.e. resources are not a guarantee that the country will be strong/powerful/wealthy.

Read what I wrote carefully and you have your final answer. Logically.


I will also add that TODAY, in an INFORMATION driven world, where intellectual property makes up a HUGE part of our GDP, natural resources are not clearly necessary.

Read:

"Over the past half-century, the increase in the value of raw materials has accounted for only a fraction of the overall growth of U.S. gross domestic product (GDP). The rest of that growth reflects the embodiment of ideas in products and services that consumers value. This shift of emphasis from physical materials to ideas as the core of value creation appears to have accelerated in recent decades....

..Only in recent decades, as the economic product of the United States has become so predominantly conceptual.."

http://www.federalreserve.gov/.../200402272/default.htm



HOWEVER, I agree with you that Physical Products are an important part of any economy, if for no reason other than the importance of diversification. If our economy is based 100% on IP, we are very vulnerable. At the same time, basing our economy entirely on physical products, in a modern world, would make us very weak and poor.