Single sourcing
Posted by aogSunday, 01 July 2007 at 17:30 TrackBack Ping URL

Via Just One Minute is a book review by Nial Ferguson about a book that explores the causes of economic failure in Africa. It touches upon the “resource trap” in which a wealth of natural resources seems to be a curse rather than a blessing. As always, two thoughts —

I have my own thoughts on why this might be so, and I think one key is not resource wealth per se, but monocultural resource wealth. A frequent counter-argument to the resource trap is that the USA has a lot of resource wealth and it’s done OK. But the USA has a lot of different resources, so there is no one dominate resource. In places that seem trapped in dysfunction by resources, it’s a singular resource. E.g., oil, or diamonds, etc. But the key thing is that it’s a singular resource that dominates everything else about the nation. That creates the equivalent of a welfare system where major success consists solely of seizing control of that dominant resource (or a big chunk of it). The men of power are those who control that resource, and no competing power center can arise. As our Founders realized, it is in the inter-play of roughly equal factions that good governance can arise. A single source of wealth, a single font of power, is doomed to dysfunction.

On the other hand, it makes me wonder about how this would affect magic based societies. Would magic count as such a dominant resource that will mire such a society in dysfunction? Would access to such a resource destroy the ability of a society to advance in the manner the Anglosphere has? Perhaps all those sword and sorcery novels that had despotic, dysfunctional societies because it suited the plot were more insightful than they are given credit for being.

Comments — Formatting by Textile
Tom C., Stamford,Ct. Monday, 02 July 2007 at 07:46

Human beings are still the top resource in any economy. Foreign aid, “Democracy”, anti-imperialism and ideological relativism have been the main exports of the western elites to developing countries and emerging economies over the last century and the ‘progressive’ predisposition of those elites has probably caused most of the damage. The rule of law, property rights and limited, constitutional government have been been secondary concerns of the western bureaucracy during this period and the price is being paid by the so-called ‘third world’. Timing is everything. As the progressive programs fall out of favor in the west, a return to basic, first principles can do nothing but help those developing economies. The ‘zero-sum’ economic thinking that is characteristic of some resource based societies as well as the attraction to socialism and utopianism among western elites has produced a toxic mix which needs to be discredited once and for all.

erp Monday, 02 July 2007 at 07:56

Nicely said Tom. Our people are our most important resource. Everything else is just gravy. BTW - You must be the sole non-lefty in Stamford, Ct.

Michael Herdegen Monday, 02 July 2007 at 08:19

Would magic count as such a dominant resource that will mire such a society in dysfunction?

Only if the magic required some rare or geographically-concentrated substance to work. If it just required talent or practice, then it would seem as if magic, (just like technology throughout history on our Earth), would be spread out among competing groups and cultures.

It’s like water, I think. If there’s plenty of water, then everyone can be a farmer. If the water can be controlled and/or hoarded, then it’s a lever of control.

Tom C., Stamford,Ct. Monday, 02 July 2007 at 09:26

Does Marxism qualify as magic? It’s certainly fostered by ‘magical thinking’. Marxism and cargo-cultism have an awful lot in common.

Annoying Old Guy Monday, 02 July 2007 at 10:09


While true, I would say that the existence of a single dominant resource prevents the realization that people are the most important resource. That is likey why multiple resources are much less damaging, because once there is comptetion among extractors for the people to run the process, that lesson becomes much clearer.

Mr. Herdegen;

Yes. That’s one of the themes that super hero comics (particularly X-Men type ones) don’t explore. Think of just the economic value of their powers (which are effectively magic) and what that would mean in real life.

Annoying Old Guy Monday, 02 July 2007 at 10:11


I don’t think Marxism is magic, I think it’s a response to viewing economic activity as magic. Now there’s an interesting concept to work with — does Marxism make sense in a magic based economy, where magical powers are rare and obtainable only by luck?

Michael Herdegen Monday, 02 July 2007 at 10:41

Think of just the economic value of their powers (which are effectively magic) and what that would mean in real life.

I think that one reason why the comics don’t explore that issue is because the world would be very altered, perhaps beyond easy recognition, and for dramatic (and sales) reasons, the comics-makers want an easily-recognized world, ours, with the heros and villains “dropped in”.

That’s also why the various Star Trek series depicted a universe that was radically different from that which would actually exist, if the postulated backround technologies ever came to be in existence. They had to have a society and culture to which a Twentieth Century American could relate.

Marxism only makes sense in an urban environment of large-scale industry. If magical powers were rare and obtainable only by luck, then mages would be the equivalent of successful prospectors in the 19th century.

Michael Herdegen Monday, 02 July 2007 at 10:52

People are NOT the most important resource in places where there are an overabundance of people, and not nearly enough potential for productive activity - usually for societal reasons. Really, culture is the most important resource, as Israel neatly illustrates.

Tom C., Stamford,Ct. Monday, 02 July 2007 at 11:14

Michael- If one believes in capital magically appearing within the context of the labor theory of value can one say Marxism ‘only works..’ anywhere. The magic of Marx comes from his misunderstanding of the nature of economic creativity. The human mind, and the more minds the better, is the source of capital. Defective cultures distort creativity and the creation of capital while minimizing the efficient utilization of labor and other more scarce resources.

Michael Herdegen Monday, 02 July 2007 at 11:46

I think that you may be overvaluing the role of capital. ´

Further, “the human mind, and the more minds the better, is the source of capital” = the labor theory of value, so you may actually be in basic agreement with Marx.

erp Monday, 02 July 2007 at 12:08

Labor doesn’t equal the human mind. Marx uses labor as interchangeable cogs in the machine of socialism. The symbolism of the factory scene in “Dr Zhivago” was such an excellent example of same.

The human mind and body must be free to soar and create. Our people are the only resources we need. Everything else we need or want can be conjured up by our magicians aka American ingenuity.

Tom C., Stamford,Ct. Monday, 02 July 2007 at 12:33

Michael- You’re mistaken. Capital i.e. communications, computers, drill presses, assembly lines, efficient mass production tecnique, infrastructure, marketing, power delivery, ‘just-in-time’ inventory control etc,etc,etc are products of creative thought around which labor is added to create value. Marx saw all value EXCLUSIVELY from ‘labor’ or physical activity. That’s what he meant. I have no idea what you mean.

Michael Herdegen Monday, 02 July 2007 at 14:04

Since Marx wrote, in Das Kapital, that “labour-power or capacity for labour is to be understood [as] the aggregate of those mental and physical capabilities existing in a human being”, (emphasis added), I’m pretty sure that you have, let us say, a “unique and personal” interpretation of Marx.

Thus, given that communications, computers, efficient mass production techniques, marketing, ‘just-in-time’ inventory control, etc., etc., are products of creative thought in whole or in part, they are in fact “labor” in whole or part, and their value cannot be attributed to capital alone.

Everything else we need or want can be conjured up by our magicians aka American ingenuity.

Exactly, “American” ingenuity. Thus my point about culture, or what Tom & I might call “capital”.

Annoying Old Guy Monday, 02 July 2007 at 14:25

I agree with erp — Marx’s failure was to not understand specialization and the consequent non-equivalence of different types of labor.

Bret Monday, 02 July 2007 at 15:03

Countries with multiple resources are basket cases as well, for example the Congo. For any ex-colony (that became “ex” last century), Tom C. identified the problem. Most people believe that the west oppressed the colonies. Maybe so, but that was nothing compared to the oppression after the imperialists left and left a bunch of dysfunctional ideologies behind.

So basically what I’m saying is that the whole natural resource curse has everything upside down. Places that had resources were colonized. It was the imperialists leaving that caused the problem.

Norway has oil and derives a great deal of its wealth from oil. It doesn’t seem to be doing too badly.

Tom C., Stamford,Ct. Monday, 02 July 2007 at 15:37

Marx had a unique interpretation of capital as derived from nothing but surplus labor value thus the means of production might as well have fallen out of the sky. According to him, value is determined by the cost of the labor inputs alone so profit, or return on capital, might be compared to theft. Private ownership of the means of production is at fault for this situation of ‘profiting at the expense of labor’ since labor in itself determines the value of production according to the LTV. The absurdity of this theory is in it’s ignorance of the basic mechanism of the marketplace where ‘value’ is only determined by the price paid for the product in a free exchange rather than the ‘value’ of the labor inputs. Purposeless labor is as counterproductive as misdirected capital investment. We saw the absurdity of ignoring this simple fact in action during the Soviet Union since it was based on the belief that no matter what was produced value was being created. Capital can occasionally create value without the kind of labor inputs described by Marx although ‘labor’, in the marxian class sense, really cannot absent capital.

Michael Herdegen Monday, 02 July 2007 at 16:16

We can agree that the Soviet Union was absurd.

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