A Systems Perspective 1: Resources in Country growth

22 Mar
What we make & have and how we get it.
This is one of my academic posts based mainly on class theory of International Economics, History, Geography, and IR, along with my development economics post Agricultural Trade Doesn’t Work for Poor People , and a sociology posting The Next Globalization is Local . Today I explore the hypothesis that we ascended to economic empire by resource-use (and debt- other post & Other Post Nicole Foss ..) reliance in Economic growth, and use that to extrapolate outwards in my blog about a response to a pending resource recession.
1880-1953

The US ascention to greatness

I hope to prove with this post, like all my other posts, that Economy is not separate from the environment, and history has a large impact on the future of the USA. Information about online
masters degrees
is available for people who want to further explore global growth and economics issues. Advanced study is often beneficial for moving toward a full understanding of the complexities of our modern economy.

Economic history growth of the Economy:

World Economic Finance and how we ascended 1879-1945: the United States grew absolutely and relatively in relation to other countries at this time, due to capital intensive production (steel), resource intensity (factories for export and trade), and internal composition of our business sectors during this time. Conditions for growth were ripe, and there was a ton of land for taking. We expanded our transportation infrastructure, cultivated a secondary (internal) demand for goods and services, and invested heavily in our non-renewable resource extraction (table 1). In California, as an example, “earthy goods” of timber, gold, coal, oil, fish, agricultural products, natural gas and energy are a big source of productivity, combined account for around 40%-70% of where people were employed in productive California (table 2). There was a 64% resource intensity gain of GDP during this time period that we grew 1879-1941.. Just look at these tables:
Resource development is a compelling and under-told story of history.

Walker, Richard A. 2001

Often, this value depletes the source it’s built on. It’s sort-of a “resource bonanza” capitalism that made private property, surplus, money and investment; in a word <b>growth</b>. Where did this welfare come from? Since the industrial revolution, production systems did change a lot during this time, and regional transportation networks took off like the modern-day internet. But if we’re looking to replicate real growth in other countries (or our own) in the present day and avoid recession, it necessarily involves real. production. on this sort of scale by human means. And it better be sustainable, too.. It’s hard to imagine a future society with no environment left. FYI, there are plenty of precedents for recovery for the US but most often it’s going to war that eventually gives us the boost.
for a recession: see other post

What happens in a recession is a glut of private investment, depleted savings and cut back on spending. Other than the unemployment, the big thing is that a recession dulls growth. If there’s not a big growth engine going (like a wind turbine, or the government), it’s going to be hard to get out of. You need small business startups, good ideas, and spending, and all three are hard to come by.

For a recession, all you need to have happen is a sudden freeze on further loan money, or a slowup in our dependent resource, oil- like the depletion of a big field. Both of these are like higher taxes on the American people. Next post Wednesday for more projections.

World economic solutions now require the same set of real components as they ever did historically: Capital, tools, education, resources, land, technical knowhow, training, and finance. If we are going to start the steel or car industry up, these are the components we need.  Steel would be the hundreds of thousands of jobs to ward off financial recession, but I’m not sure we have the resources in the United States to stimulate uncompetitive industries. Wind turbines actually require a lot of steel– clean energy production would stimulate domestic growth in these sectors. Can we expect to continue to extract the marginal utility of the resources we are producing, like we did the financial sector? Maybe, but it’s going to cost more and money’s scarce.


Skip to present day:

Because this is a blog and not a paper, I can move on and make sweeping recommendations. Woo! In this way, I feel I’m expanding the scope of the blog content backwards and forwards, if you’re interested in more of the analysis look into contents . If you know someone who works or dreams or thinks in these industries, please share.


The sustainability sector:
The cool thing about this is that sustainable technologies specialize in using <em>less resources</em>, and we have the tools available in the US. Less resources: less waste, less oil/coal, less imports, more locally, more here and less there. Tools available: Manufacturing, training, research programs, and financing would all happen in the private sector and lead to the hundred-thousands scale middle class jobs… [For more information about this see 350 for the Economy

]

The skilled labor argument:
What you’d want to do to prove this is prove that our US Production (Exports) has to be done here: we have more highly-paid workers than our imports… unfortunately this analysis doesn’t hold up. Compared to China or Taiwan yes, but compared to Europeans we are not unique nor have we been in this sense..

The tech sector:
I alluded earlier to the internet being like the road system, and I want to come back to that. If you’re looking at the business of increasing productivity with technology, great. The internet has facilitated the most revolutionary speed and information and communications developments in business since, well, the interstate system we built under FDR. But Amazon.com, or comlink incorporated in India, doesn’t really change the production model! Jobs are coordinated better, systems are coordinated better, it eliminates the middle man but at best these are all communications-information revolutions. Not production exports. Sorry IT sector, internet services sector can be as great or as big as it wants, but if we still have the same supply chain, and same goods being produced? That’s the bubble. It’s not going to change the bottom line. Just work at a higher velocity.
The Agricultural sector:
This is the big sustainability sector that America has a comparative advantage in. We have land, resources, training, and production technology to be a big producer of fresh foods that are in high demand. *(not just corn! there are other markets..)

For space sake:
The Importance of farming in Society. (Typepad Post)

Thanks for reading! This Wednesday, I will be further discussing the link between oil price and a recession, and what the implications of peak oil and shortages and driving cars and heating your home will be for that.

Be sure to stop by http://eddiemill.wordpress.com/
Continue Reading: A Systems Perspective 2

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4 Responses to “A Systems Perspective 1: Resources in Country growth”

Trackbacks/Pingbacks

  1. A Systems Perspective 3: Ecologic Economics « A Global Organic Mindset - March 26, 2010

    [...] post 1: Resources in Country Growth Post 2: Oil, Energy, and the Economy Possibly related posts: (automatically generated)Kyrillos: The [...]

  2. Business …”but some are more equal than others” « A Global Organic Mindset - May 3, 2010

    [...] countries to produce for bigger markets. All these things require some set-up work (note: really energy-intensive and also capital), but once they are in place factories offer huge benefits to the cost-per-unit. The same is true [...]

  3. For next week: sustainability series! « A Global Organic Mindset - May 3, 2010

    [...] « A Systems Perspective 1: Resources in Country growth [...]

  4. Resources By Country | AllGraphicsOnline.com - March 18, 2011

    [...] 1: Resources in Country eddiemill.wordpress.com [...]

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