Rich Land, Poor Land

Why are some countries rich while others remain poor?

Source: Growth Economics Blog

Some countries are wealthier than others. This fact has inspired all kinds of discussion and analysis over the years, from Adam Smith’s The Wealth of Nations to Marx’s Das Kapital, to Jared Diamond’s Guns, Germs, and Steel. One factor is geography. Some places have more resources: fertile soil, natural ports, precious metals.

But it’s not enough to have stuff. A society has to use it effectively. North America has always been blessed with temperate weather, convenient rivers for transportation, and abundant sources of energy. These weren’t really appreciated, however, until Europeans began to arrive in the 17th century.

Sometimes a great idea or new technology transforms an economic backwater into an industrial powerhouse. Ready access to coal, limestone, and iron ore allowed Pittsburgh to grow into a great metropolis by the early 20th century. But even more important was Andrew Carnegie’s vision to build and run the world’s most advanced steel mill.

Nations have the potential to grow wealthy because of their resources, but they need the rule of law, property rights, and the intellectual capital to develop these resources. As we consider where to invest, how to invest, and who to invest with, it’s important to remember: it’s not just what you have—it’s what you do with what you have—that matters.

Douglas R. Tengdin, CFA

Chief Investment Officer

By | 2017-07-17T12:22:05+00:00 April 5th, 2016|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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