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 does not have to think when he just wakes
up and eats. 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 on how 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.
U.S.A.
The U.S. is the richest country due to its developed and 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; on credit – living beyond our means!) rather than creating more wealth (i.e. eating up most of the coconuts and 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). Are you incentive to
plant more coconut trees (work) when you have unlimited coconuts (generous
welfare)?
Because of
WW2, most coconut trees in the world were destroyed while ours were fine. 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).
Norway
Norway is the
richest to its population group (3 millions) while Brunei is richest in its own
category. Norway has more money than God because of its long coastal line and its
intelligently governed oil wealth, so everything works better there. 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 addition 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!
...
UAE
When the west
helped UAE to explore its oil resources (the hidden coconuts under the sand)
about 50 years ago, UAE becomes the richest country on earth. 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.
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 by fighting the Afghan war (sending coconuts to foreign land without asking for return).
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 250 years during the Opium Wars, and then
semi colonization by the eight countries (helping 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.
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, 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.
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