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"Economies grow by exploiting scarce resources, people most of all." No, they don't. Economies grow because of cheap inputs. Every economic revolution is the r

"Economies grow by exploiting scarce resources, people most of all." No, they don't. Economies grow because of cheap inputs. Every economic revolution is the result of something becoming ridiculously cheap; the last one was oil, the current one is computation.

Edmond 13y ago
In the case of the US you could throw in centuries of free slave labor.
- VLM 13y ago
  That would imply that immediately before the civil war the south was a boomtown and the slaveless north was a rustbelt.
  - DoctorZeus 13y ago
    Not necessarily. Slavery might have indirectly assisted the north's industrialization in at least a couple ways. (1) Accumulation of financial capital in the hands of an investment class (2) Cheap cotton gave northern factories a competitive advantage.
    - VLM 13y ago
      That is a good point although there should also be a way to compare and contrast with other countries that didn't have slavery as an "advantage". Then you could try to back-apply the model to other countries, like if the English outright owned the Irish then economic growth would have increased ... or would it have?
      - DoctorZeus 13y ago
        Good question. It would take some serious time studying history to have even a decent guess.
DoctorZeus 13y ago
You can't reduce economic growth to single factor. Oil itself wouldn't be worth much without technologies to exploit. And without the right human capital, those technologies wouldn't exist in the first place. And without the right socioeconomic institutions in place (stable government, judicial system, etc.), we wouldn't be able to do much with either the technology or the resource.
Zigurd 13y ago
Are there any "cheap inputs" in Singapore any more? I remember going to Singapore when it was transitioning from low-cost to high-value manufacturing. Now finance is bigger than all manufacturing put together in Singapore, and electronics manufacturing in Singapore in heavily into high-value items like chip foundries that don't depend on cheap inputs.

Edmond 13y ago

In the case of the US you could throw in centuries of free slave labor.

VLM 13y ago
That would imply that immediately before the civil war the south was a boomtown and the slaveless north was a rustbelt.
- DoctorZeus 13y ago
  Not necessarily. Slavery might have indirectly assisted the north's industrialization in at least a couple ways. (1) Accumulation of financial capital in the hands of an investment class (2) Cheap cotton gave northern factories a competitive advantage.
  - VLM 13y ago
    That is a good point although there should also be a way to compare and contrast with other countries that didn't have slavery as an "advantage". Then you could try to back-apply the model to other countries, like if the English outright owned the Irish then economic growth would have increased ... or would it have?
    - DoctorZeus 13y ago
      Good question. It would take some serious time studying history to have even a decent guess.

DoctorZeus 13y ago

You can't reduce economic growth to single factor. Oil itself wouldn't be worth much without technologies to exploit. And without the right human capital, those technologies wouldn't exist in the first place. And without the right socioeconomic institutions in place (stable government, judicial system, etc.), we wouldn't be able to do much with either the technology or the resource.

Zigurd 13y ago

Are there any "cheap inputs" in Singapore any more? I remember going to Singapore when it was transitioning from low-cost to high-value manufacturing. Now finance is bigger than all manufacturing put together in Singapore, and electronics manufacturing in Singapore in heavily into high-value items like chip foundries that don't depend on cheap inputs.