Quotation of the Day…

by Don Boudreaux on July 12, 2011

in Complexity & Emergence, Growth, History, Innovation

… is from the final sentence of Stanford University economist Gavin Wright‘s September 1990 American Economic Review article “The Origins of American Industrial Success, 1879-1940″ (reprinted as Chapter 13 in Robert Whaples and Dianne C. Betts, eds., Historical Perspectives on the American Economy: Selected Readings [Cambridge: Cambridge University Press, 1995], pp. 455-479; the following quotation is on page 476 of the Whaples-Betts reader):

[H]istorical resource abundance was itself largely an outgrowth of American industrial success.

Note carefully the direction of causality.  Julian Simon, I fancy, nods approvingly.

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vidyohs July 12, 2011 at 8:28 pm

Let me ask you a question, Don. I know your past comments about the misrepresentation of the word resource when referring to what is in reality raw materials, and that it is the human and what he is able to do with those raw materials that is the real resource.

Am I correct is thinking that it would be more appropriate to just use the words raw materials when referring to oil or ore in the ground, trees in a forest, etc. etc.? Wouldn’t that more accurately frame the subject and thus the debate?

Don Boudreaux July 12, 2011 at 8:32 pm

“Raw materials” is indeed a better term than “natural resources” – because nothing is naturally a resource; nothing is a resource unless and until human ingenuity first figures out how to use that material to satisfy human desires at a cost that is affordable.

Josh S July 12, 2011 at 8:58 pm

You think fracking opened up a world of raw materials, just imagine what would happen if we could send robots inexpensively into deep space to mine asteroids.

Makes you wonder July 12, 2011 at 9:10 pm

“But at Chicago and elsewhere in the freshwater universe they’re playing Calvinball (and what a good coinage that was from Mike Konczal). All kinds of novel and implausible effects — effects that weren’t in any of the models they were using before the crisis — are invoked to explain why we’re in a sustained slump; strange to say, all of these newly invented models just happen to imply the need for tax cuts and a shrunken welfare state.”

How odd that Krugman-who doesn’t need to write letters to the NYT to get in it-called out freshwater economics today and no one here notices.

jjoxman July 12, 2011 at 9:25 pm

Why waste our time?

vidyohs July 12, 2011 at 9:35 pm

Taking from Peter to support Paul is not, and never was a good idea, it is obvious on the face of it to any one with an IQ above zero. There is no real way to state how bad an idea it is except to say it is just plain freaking stupid.

Ignoring the stupidity of taking from Peter to support Paul as a bad idea, and proposing the taking from 100 million Peters to support 200 million Pauls does not convert stupidity to genius. It is still stupid, just compounded stupidity.

If Krugman and Makes you wonder believe that increasing taxes and increasing the welfare state is the only intelligent way to encourage this nation to prosper, then we know their intelligence is measured in that single digit, zero.

SheetWise July 12, 2011 at 9:45 pm

I think we both agree that Krugman’s intelligence is not zero — or even close. He’s given up on economics, and is now talking religion. Unfortunately, he sees religion as the church — not the congregation — and his church is the state. I don’t expect he will actually say anything important about economics any time soon.

vidyohs July 13, 2011 at 6:11 am

You’re right. The loonies present us with a choice in deciding how we view them, as either totally stupid for persisting in the face of hard long existing evidence, or as liars totally prepared to lie about reality and showing contempt for the intelligence of their audience.

In anything I have posted in the past, or will post in the future, you can always assume that I always have that choice as one of the bedrocks of my thought regarding any particular looney or the breed as a whole.

Josh S July 12, 2011 at 9:41 pm

Do you not ever read Krugman’s column? Every other day, he writes about how all we need to stimulate growth is a proletarian uprising. It’s not like this is anything new.

justintempler July 12, 2011 at 9:43 pm

“Calvinball — making up new rules on the fly to justify whatever you, for some reason, want. ”

Hey Krugman pot->kettle->black

Jim July 13, 2011 at 10:29 am

What I did notice is that after re-iterating that the stimulus wasn’t large enough (again), he recently wrote that state subsidies to prevent public sector job lay-offs was not very efficient, when in 2009 he was saying it was a very clever and efficient method to distribute stimulus.

Subhi Andrews July 12, 2011 at 9:26 pm

Singapore, apparently, has the highest concentration of millionaires than any other country. 15% of its populations are millionaires. As you would suspect most other countries that come half way close to Singapore are also countries that would be generally lean to freer markets. Nothing like free markets when it comes to helping the general prosperity of a region or a nation.

Subhi Andrews July 12, 2011 at 9:26 pm

Singapore has no raw materials. The only resource it has are it’s people.

Dan J July 12, 2011 at 9:33 pm

Let them elect Obama and watch that all end.

Mesa Econoguy July 12, 2011 at 10:02 pm



Methinks1776 July 13, 2011 at 8:17 am


Jim July 13, 2011 at 10:30 am

haha. Quote of the day.

Justin P July 13, 2011 at 12:15 pm


Subhi Andrews July 13, 2011 at 3:22 am

Sorry guys, the link didn’t work in that comment. I found it on Scott Sumner’s blog

Here is the link


SheetWise July 12, 2011 at 9:59 pm

15% won’t get you elected in a feel-good democracy — but it will get you fleeced.

Rage July 13, 2011 at 6:21 am

Singapore is a underdeveloped country which is moving fast to a developed country.

Methinks1776 July 13, 2011 at 8:18 am

Have you been asleep since the 1960′s? It’s developed.

dsylexic July 13, 2011 at 9:01 am

LOL. not as developed as your redneck of the woods y’all

Jim July 13, 2011 at 10:36 am

I wonder what our economy would be like if we were developing the largest oil depository in the world right here in the USA.

Perhaps some day the states will make it illegal for the federal government to obstruct the development of resources of their citizens. Federally elected politicians can not decrease federal government power without state help.

SheetWise July 13, 2011 at 10:08 pm

“Federally elected politicians can not decrease federal government power without state help.”

We could elect Senators from state legislatures, we could re-embrace apportionment, we could outlaw property taxes, and we could embrace sales taxes. That’s the help we should provide.

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