Resources and Wealth

Resources. It’s 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 won’t 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 natural resources within a nation’s borders, the wealthier that nation is. 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 to the point where there are too many people than there are jobs for them to fill. Fresh water can be contaminated in so many ways that can diminish the already finite available fresh water. And gold can be hoarded by individuals or nations. But ideas are infinite and ideas are made into reality by an educated populace, which is one of the reasons Ben Franklin, Thomas Jefferson, and Abraham Lincoln were all strong supporters of free public education, including college level.

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 in order to benefit all it’s citizens. Long term wealth is achieved by maximizing the value gained from scarce resources that are not infinite and by guaranteeing that potentially 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, its called money. That was why we had a 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. In reality though, using a commodity resource did not fairly represent the sum total of any one nation’s wealth.  Yet the idea that backing a currency with gold or some other commodity makes a currency more worthy than a currency based solely a nation’ actual resources is faulty. The truth is exactly the opposite. The problem with gold is that one must trade existing resources to obtain more gold and thereby enhance their wealth or initiate a war which drains resources and the gold obtained may not equal the resources expended. By evaluating a nation’s wealth solely on its resources, then a nation can grow it’s internal wealth solely by nurturing it’s resources. Our dollar is backed by the nearly inexhaustible resource potential and by not recognizing this, we are at risk of losing that nearly infinite potential.