Dear Friends,
It seems to me, what has always made wealthy societies, is access to resources made possible by trade. Especially those people with few local natural resources. Because places that import most things become industrial centers. Even in ancient times. Look at the pre-pottery Neolithic “city” of Sefer Tepe, a major hub of bead production. It could exist as a permanent community before agriculture. Trade, commerce and industry have always been, and always will be wealth creators. At the other extreme, we find that societies with an abundance, tend not to advance, have much industry or engage in trade. Why should they? They have all they need. It’s shortages that create the need to trade, and trade that brings in foreign resources and ideas, that lead to innovation. All of which lead to wealth.
The existence of pre pottery neolithic permanent settlements have baffled archaeologists since their discovery. I maintain they were trading and industrial centers. Much ancient technology required tools that are stationary. It’s hard to imagine how a stone cup would be made without specialized tools. While a flint arrowhead or pestle are easily fabricated in the field, a stone cooking pot isn’t. Moreover, it’s easier to kill a few rabbits, and trade them for a stone cooking pot, than to spend the time to make one. A hunter gatherer existence is nearly perfect competition. Any advantage, no matter how small… is huge. That’s why places like Karahan Tepe existed. As prehistoric trading and fabrication centers for the local population. That fed itself, not by agriculture, but by trade.
Japan was a backwater for thousands of years, until they came into contact with Western culture, and science. Which the Japanese people sifted through and quickly adopted what they saw as the best of it. Then exploded in wealth, commerce and science. Today Japan is at the leading edge of technology, science and innovation. Not because it’s blessed with natural resources, but because it became a trading and industrial powerhouse. Hong Kong grew into an economic giant despite it’s diminutive size, because all it had was commerce. No food, little water and a speck of land, it had to trade for everything, on the world market. What could it offer in trade… except the product of their labor? So the leaders allowed free enterprise to flourish and so did the economy. Until the CCP took over.
Spain took literally tons of gold from the new world. Those riches made Spain the wealthiest nation on the planet. The Spaniards lived off that gold for a century. Once it was spent, they had no trade, commerce or innovation left. That had all gone away. Why learn a trade, why toil, and why farm… when there’s plenty of money? So people didn’t apply themselves, and when the money was used up, they became paupers. Rome was at one time the richest nation on Earth with the wealthiest capital. It became so rich, and that wealth made it so decadent, that it couldn’t field its own army. So it paid mercenaries to fight their wars. Until the mercenaries realized, why fight for the gold when we can just take it? So they did. Leading to the collapse of the Western Roman empire.
If a people want to be wealthy, the path is not to take money and live in luxury, not to abet cronyism, or to regulate the economy to death… but to engage in trade with the world, import, export, innovate, industrialize, and allow free enterprise to work. Educate the kids to be entrepreneurs instead of worker bees. Use the military to keep trade routes open… not force the will of the local elites on the world, or as a tool of politically favored corporations. These things are only possible when the government is limited, free of corruption and transparent. That’s how economies are made wealthy. Those that try to regulate, tax, and spend a nation’s wealth on boondoggles, eventually find out, once you run out of other people’s money, to make them unable to earn more… ya’ll gonna get poor.
Sincerely,
John Pepin
