Economic Outlook

Regular readers of this column know that—every so often—we "open up" the Economic Outlook space, and use it to provide a forum from which to present the views of various economic writers and thinkers. In the past years, we've so featured the work of Walter Prescott Webb, C. Vernon Myers, and others. Well, the following assay—reprinted with permission from Mr. R.E. McMaster's economic newsletter, The Reaper—struck us as just the sort of commonsense analysis that MOTHER's readers would appreciate and profit from. R.E. has, in relatively few words, cut through much of the mumbo-jumbo that characterizes the public statements of the economic "establishment" . . . and revealed the simple, beautiful truth that any nation's real wealth is based solely upon the richness of its natural resources and the productivity of its people.

BREAD IS BASIC

When we talk about economics these days, the words and phrases which quickly fill the air are: "supply side economics", "marginal utility", "Chicago vs Keynesian economics", "monetary and fiscal policy", "inflation", "petrodollar recycling", and so forth. All these buzz words are evidence of the frame of reference from which they spring, that of urban intellectuals. They are products of a culturally sophisticated age, marked by mathematical complexity and computer technology. Collectively, economists focus on money as an absolute in the financial/economic system. Money is king, and calls all the shots. Money is the measure of wealth and worth, both net and personal. We are dealing here with a mind set that saturates our society.

In a few moments of fleeting fantasy, let's assume that we are the remnant of a boatload of people. We are shipwrecked and marooned upon an island in the Pacific. All we have are the clothes on our backs and the resources of the island, in terms of economic goods. With no hope of rescue, we start to build an economy. We begin with the basis of economic production . .. land and labor. These two must work in harmony for there to be economic progress and production. (Notice that there has to be production before there can be consumption. Our economic order today often gets the cart before the horse.)

Assuming that our island is located in a moderate climate, receives ample rainfall and sunshine, is blessed with lush vegetation, trees, fertile valleys, streams, and an abundance of animals, we have the foundation necessary for producing economic wealth. Certainly, we should be thankful that we aren't marooned on a desert island. The resources available on an arid island wasteland make the production of economic wealth far more difficult, if not impossible.