What are the Building Blocks for Wealth and Prosperity?
Reduced to their essence, wealth and prosperity are the result of an ever increasing demand for finished goods. The four building blocks to create wealth and prosperity are the demand for finished goods, the natural resources which provide the raw materials, the energy required for production, and the human creative spirit to imagine and create the vast cornucopia of things people want and need.
Now that we are in a great national recession and part of a great world recession, let’s look at how a nation may approach aspects of wealth and prosperity.
How can the United States help restore the flow of wealth to its organizations and its people? The governing institutions can have, if they choose, a large positive affect on three of the four building blocks and have a significant effect on the fourth component.
First we need to make a friendly environment for the harvest of natural resources. Ease of obtaining permits, reduced regulation and research initiatives for the discovery of future natural resource reserves. There can be regulatory and environmental considerations, but they can not be hostile or repressive to the effect of bringing the harvesting of resources to a crawl or a stand still.Next we need to aggressively develop domestic energy sources to power the engines of wealth creation. The United States should concentrate on the energy sources that are most compatible with our current energy infrastructure. Once abundant traditional energy is available for our industries, we can start on an ambitious R&D program for next generation energy sources and power generation.
Next we unleash the creative power of American ingenuity and enterprise. This part will be more difficult because the United States has slipped so far away from supporting the creative genius of our citizens and organizations. First we need massive deregulation so that the result is that we support the creation of businesses with the least amount of bureaucratic and regulatory overhead. For the most part, this just means getting out of the way of free enterprise. Next we have to re-negotiate our international trade agreements so that US business is competitive in the world markets. This would include dealing with nations, such as China, that create an unfair advantage for their manufacturing sector by manipulating their currency. Once the playing field is even, we should provide some short term incentive for our industrial base to bring their industrial operations back to the United States. Next we should try to inspire labor unions to help in making our domestic industry more competitive. Unions may be receptive to helping out with making our industry more competitive if we are successful in negotiating better trade agreements. Better trade agreements would have the effect of increasing our domestic manufacturing base which is something labor unions should enthusiastically support.
The fourth building block is the one that we have the least control over. Demand for goods is a fickle creature beyond the control of men and institutions. Demand is a product of population cycles, business cycles, political cycles, and just about every other cycle you can think of. The whims, desires and psychology of the population can further complicate the understanding of demand cycles. There are strategies, however, that can put us in the best possible position to reap the most reward from the power of demand. Optimizing the first three building blocks, resources, energy and enterprise will put the most people possible to work and that will do a great deal to provide our people with the money they need to buy more finished goods including houses, a leading driver of our economy.
How should we approach waning demand during down times similar to our current economic situation? Free the forces of enterprise to minimize the effects of lower demand. Work to increase global markets for American made goods through better trade deals. Look to the future. Provide incentives for science, math and technology education and careers for our up coming generations. Provide incentive to increase research and development in the areas of science and technology in our educational institutions and our research based industries. These incentives should be used for pure unbiased research so that markets and not politicians select which technologies are industrialized. This strategy will help buffer the lack of demand in down times and will create a strong foundation for a new era of wealth and prosperity during the next economic up cycle.
Do It Here – Do It Now – Do It in the United States of America