Resources and Wealth

Resources. It is a word we all hear and use every single day. In the office, a manager tells the vice president that without more resources (people) the project will not get completed on time. In geopolitics we learn about natural resources such as gold, oil, trees, fertile land, fresh water and so forth. The more resources within a nation’s borders, the more wealth that nation has. But resources are much more than able bodies or abundant quantities of gold. Resources can be cultivated and increased. It is implicit in the definition of resources I gave above. There are finite resources such as precious metals and fresh water, but there are infinite resources as well. People, for instance, can procreate until there are more people than there are jobs for them to fill. It’s possible, but the shortage of resources will drive birth rates down. Fresh water may become contaminated in so many ways that we diminish the already finite available fresh water. And individuals and nations have hoarded gold. However, an educated populace makes ideas a reality, which is why Ben Franklin, Thomas Jefferson, and Abraham Lincoln strongly supported free public education, including college.

What we can see is that by measuring a nation’s resources, including the investment made into cultivating those resources, we can fairly evaluate not how much wealth a nation has, but how it can improve that wealth to benefit all residents. Long-term wealth is achieved by maximizing the value gained from scarce resources that are not infinite and by guaranteeing that infinite resources are cultivated so that their wealth producing potential is not put at risk.

We have a way to measure the resources available to any nation; it is called money. That was why we had the gold standard at one time. We used gold to represent the comparable resources of America against another nation’s resources that were also on some precious metal money standard. While many still prefer using a metallic commodity, resources misrepresent the total of any nation’s wealth. Yet, backing a currency with gold or some other commodity decreases a nation’s wealth potential. (On paper at least). A currency’s worth based solely on a single resource is faulty. The problem with gold is that one must trade existing resources to get more gold to enhance their wealth or start a war, which drains resources. And wars do not guarantee the gold obtained to exceed the resources spent. By evaluating a nation’s wealth based on all of its resources, then a nation can grow its internal wealth solely by nurturing its resources. The nearly inexhaustible resources that back the US dollar mean America can and should use its stagnant capacity and manage resource availability instead of money availability. Resources constrain spending, and not recognizing this, we are at risk of losing that nearly infinite potential.