The Intangible Wealth of Nations

by Don Boudreaux on December 20, 2005

in Standard of Living

Judging from this post by Arnold Kling, and this summary by Ron Bailey, this new book from the World Bank makes a point that’s vital and all but completely overlooked, even by the very best economists.  (The point is very much a Julian Simon one.)

Capital is mostly a process; not a stock of stuff.  Capital largely is a process of peaceful cooperation; a division of labor ever-deepened by market signals that contain more information than noise; an openness to economic dynamism; a culture of surpressing envy and applauding (or at least tolerating) honest success; a widespread acceptance of the difference between mine and thine, and an abhorence of those who refuse to accept this distinction; an acceptance, at least in practical affairs, of science, logic, and reason and a rejection in these affairs of faith, mysticism, and tradition-for-the-sake-of-tradition.

These intangibles go way beyond inventories, machines, and even precise bits of technical know-how.  They are the bedrock of civilization and prosperity.


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