Moochers, Buyers and Thieves

I've been thinking about this whole "they stole wealth from the third world" idea lately. Then I ran across this piece from George Gilder on National Review. George talks about how ideas and mental disciplines are as big of a part of production as are the raw materials... bigger actually.

It made me think about Saudi Arabia. The nationalists and the anti-colonialists decry the fact that the US, et al, are stealing the oil from the Saudis. The Saudi royal family and many other hangers-on in the kingdom are rich beyond imagination because we are paying them $85-$110 per barrel for something that costs them $5 to produce. Theft? Yes... but in the other direction.

I say that in jest, because in a non-coerced economy, we, the consumers, pay the producers what we think the value is and not a penny more. This is where we are with oil prices, right?

Back to the point of this post. How many cars, trucks, airplanes, plastics, fertilizer, cosmetics and on and on did the Arabs invent which would demand production of oil? Near as I can tell, ZERO. They just happened to control an inhospitable expanse of land that quite honestly, no one really wanted. Then Aramco came in in the 1930's and drilled for oil. They found it, they pumped it out, they transported it to the coast, they built the shipping terminals and they exported it, they refined it and then the sold it. The Saudis got to keep some of the money, but not very much and they still got rich.

Money is the reward for providing value. Ask yourself, what was the value-add from the Saudis except that they had pitched their tent and parked their camels in a good spot. The West did all of the work developing a market for the oil and the technology to extract it. Left to their own devices, the Saudis would be in the same situation as Chad right about now.

Don't get me wrong. I am not suggesting that they may not have been wronged. Did the Spanish totally screw the South American Indians in the 1500s and 1600s? Yep. Did we have our way with the Central Americans and the banana plantations? Sure, but that was then and this is now.

That genie is out of the bottle and all anyone can do about it now is whine about it.

This world has so many challenges ahead of us, that looking back for anything except the osmosis of experience is a total waste of time.

Everyone has a mind and most of us know how to put ours to good use. The Internet is the Great Equalizer in that just about anyone (except maybe the North Koreans) can get on and start producing.

Raw materials are nothing more than the bottom of the inverted pyramid of production. Yes, we need the materials, but our minds are what will make something useful and profitable of them. Take that away and all you are left with is dirt, sand and goo.


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