Coconut Theory
In a tropical island, every one
sleeps under a coconut tree assigned to him. He wakes up only when a coconut
falls on his head once in a while. He eats the coconut and goes back to sleep.
He is lazy due to the nice weather (no need to find shelter) and the nice
resource (the coconut tree). He is happy and rich by his own standard. However,
he is lazy, fat, and stupid due to the lack of any need to work, exercise, and
think out of his ‘perfect’ environment.
The worst that happens to the
natives is borrowing coconuts from other natives with the coconut tree as
collateral or cut down the coconut tree to make a canoe without plans to
replenish coconuts in the future.
This is a simple theory. It can
be used to explain how and why many countries are rich, poor, and continue to
be so. Let’s check how this theory stacks up with countries.
It also explains why people
migrate to places with lots of coconuts. It is demonstrated by Chinese during
war time to South East Asia and the Irish moving to the US during potato
famine.
U.S.A.
The U.S. is one of the richest countries due to its
development, highly educated citizens,
hard-working immigrants and the huge natural resources per capita (i.e. having
a lot of coconuts in my theory). The U.S. is declining as
we spend more time enjoying our wealth (borrowing coconuts so he can eat more)
rather than creating more wealth (i.e. not planting new coconut trees in my
theory).
The wealth is
equivalent to the bountiful of coconut trees that were available originally and
the many that were planted by our ancestors. There were fewer natives to
consume the total number of coconuts, so there was a surplus of coconuts grown,
eventually to be given away (as welfare and entitlements). Many of our citizens
have no incentive to plant more coconut trees (work) when they have unlimited
coconuts to them (generous welfare).
Because of
WW2, most coconut trees in the world were destroyed while ours were isolated
from the war. We were rich to ship our better coconuts to the rest of the
world.
God gave us
plenty of natural resources, good soil and climatic wealth (coconuts hidden
under the land) and hopefully we continue to be wealthy. Unfortunately, we’re
now consumers (of coconuts) instead of producers (planting new coconut trees).
Why the U.S.
is falling? We cut down a lot of coconut trees and make spears. We use the
spears to threaten our neighbors to give us coconuts. In some cases, we borrow
coconuts.
Norway
Norway is the richest to its population
group (3 millions) while Brunei is richest in its own population group. Norway
is rich due to its rich resources and its intelligently governed wealth. I hate
to compare any country to Norway as most likely we are comparing Apples to
Melons.
From its long
coast line Norway has rich off-shore oil fields and abundant fish exports which
is second in the world-- only 6% of its export, after China but far, far #1 per
capita wise. Because of the world's oil addiction and food dependence secures
its income flow.
Peru has a long coast line, but it is not wealthy. My
theory does not apply fully here, as there are always exceptions. It could be
Norway’s educated citizens, close location to its trade partners and buying
assets around the world (planting more coconut trees). The dividend payments
allow Norway to prosper for decades. They have about 600 billion sovereign fund
to be shared by 3 million citizens. Simple math!
Norway will
be rich for centuries to come as they plant the coconut trees all over the
world.
Iceland
Some smart
guys suggested cutting down all the coconut
trees (their financial asset) make canoes (more global banks) so they can earn
a rich life by fishing (lending). The world blindly loans them with coconuts.
When the fishing (no global market esp. after 2008) fails, their land is lost
with no coconuts and no coconut trees left. Do not bet all the coconuts in one
venture and always have an exit strategy.
Singapore and SE Asia
Singapore is rich due to its important location for the sea
route for trade and commerce, as well as being the cultural intersection
between the east and the west and its industrious citizens (most are Chinese).
When the hard-working folks land on a land of coconuts (i.e. resources), they
naturally become rich.
Mekong River
is a good resource providing fishing, irrigation, transportation, and fertile
land in the delta for SE Asia. Hence, SE Asia should be rich, and at the same
time attracts hard-working immigrants from India and China to enhance their
wealth. However, the river is being polluted by industries and the future is
cloudy.
Japan
Japan has few
natural resources. Its only resource is the educated and hard-working citizens.
With a decreasing population and the policy not welcoming immigrants, Japan
will face problems.
Haiti
Haiti used to
have enough coconuts for its small population. French imported African slaves
to the sugar cane plantation and changed the allocation of natural resources
per capita. Coupled with frequent natural disasters and bad governance, Haiti
becomes the poorest country in the world.
Haiti and
many countries have their coconut trees destroyed by hurricanes from time to
time. That’s why they’re always poor. So are some states in the US that suffer
from periodic flooding and hurricanes.
UAE
When the west
helped UAE to explore its oil resources (the hidden coconuts under the sand)
about 50 years ago, UAE becomes one of the richest countries. She expands in
different areas and it could be over-expanded. When the oil dries up in 100 or
so years and/or the shale energy competes better, they could be in big trouble.
[Update: the problem appears as of 1/2015.]
Russia
Russia is a
country full of resources (coconuts). Its citizens become lazy having a good
time under the ‘coconut’ tree. Chinese are just the opposite. That’s why the
Russians hire the hard-working Chinese to tender farm in the border while they
enjoy life with plenty of Vodka.
The primary
reason why USSR fell was the temporary low prices of their resources oil and
timber (coconuts). Trying to be #1 was another reason.
China
China has roughly 20% of the world population, but it has far less than 20% of
the world resources (coconuts). For example, it has only 6% of the world land
area. The situation was worsened in the last 300 years during the Opium Wars,
and then semi colonization by the eight countries (led by Brits, the opium
pushers). It bankrupted China by their colonial masters. It caused massive
migration to escape from the land without coconuts. It was followed by WW2, war
lord era and then the bad governance. Their bitter lessons ensure this
generation and the next generation to work hard and be smart. When they do not
have ‘coconut trees’ (the colonial masters cut most of them down), you have to
work hard or die.
China ranks
#2 in the economy. It is only important to its trading partners. Its own
citizens care about their living standard which is about the middle in the rank
of all countries.
Greece
Greece has
its natural resources: tourism (coconut). Euro gives them unlimited borrowing.
Olympics boosted their dumb ego. The result is bankruptcy.
Caribbean
islands
Literally a
lot of their coconuts are destroyed from the hurricanes every year. It makes
them poor even they have a lot of coconuts (ample sunshine and beaches for
tourists). Many set up tax shelters for rich folks and corporations. It is
similar to earthquake prone countries.
Hong
Kong & Singapore
Both have
good governance learned from Britain and are supported by hard-working Chinese.
Hong Kong is rich due to its proximity to China and Singapore due to the sea
port location between the East and the West. Coconuts are in many forms.
Ancient
civilizations too
Greece, Iran,
India, China and Italy are among the oldest civilizations. Most do not do well
in today’s economy and many of their citizens have immigrated to other
countries. My theory suggests that they have exhausted their coconuts (farm
land and metals) throughout the long history. Hence, they have to migrate to
lands with more coconuts. To illustrate this, there is a huge discrepancy in
natural resources (oil, metal and farm land) between China and the U.S., which
has a relatively short history.
Corporations
too
Microsoft was a tougher company with
more innovations fifteen years ago than today. However, they are enjoying easy
profitability of upgrades of Windows and Office (coconuts planted by their
ancestors). For a long time, she only has one successful new product, the Xbox.
Her managers are counting their bonuses instead of taking risk. The Coconut
Theory works again.
Rich families too
It is very
rare to have rich families that last over three generations. The first
generation grows the wealth (planting coconuts), the second generation enjoys
the wealth, and the third or fourth generation usually becomes poor due to the
easy life.
Conclusion
So far, no
one tells me that this theory has been ‘discovered’ by others. Shamelessly I
claim it is mine. To me, it is just common sense.
Afterthoughts
·
I did not have a coconut tree (i.e. financial aid or
money from my dad), and that is why I worked two jobs in my first summer while
attending college here. The first one was a bus boy job from 5 pm to 10 pm. The
other one was cleaning slot machines from 4 am to noon for 5 and usually 7 days
a week. Lack of coconut makes you desire to work hard or you vanish. With an
average IQ, I can make it by working hard in a land of coconuts.
My
children have too many coconuts and they live in a more lavish life style than
the old man. They ask me why I work that hard during my retirement or why I
still go to Burger King with a coupon even they do not treat me like a king.
·
According to my friend Norman, the problem with a small
place filled with coconuts is someone would likely to colonize you and steal
your coconuts as happened to Norway during WWII. Similar to China about 250
years ago. Once a while, need to cut down one among many coconut trees to make
spears to protect the rest of the coconuts.
