Monday, December 19, 2005

The Wealth Of Nations

The average American has $513,000 in wealth. Really. Ronald Bailey discusses "a new study from the World Bank, Where is the Wealth of Nations?: Measuring Capital for the 21st Century, which makes estimates of the contribution of natural, produced, and intangible capital to the aggregate wealth of 120 countries."
80 percent of the wealth of rich countries consists of intangible capital. "Rich countries are largely rich because of the skills of their populations and the quality of the institutions supporting economic activity," argues the World Bank study.

As noted above, 90 percent of intangible capital is accounted for by years of schooling and the rule of law.
Where is the Wealth of Nations? convincingly shows what countries need to do to create wealth and lift billions of people out of abject poverty. Establish the rule of law and educate people. The big question that the World Bank researchers don't answer is : How can the people of the developing world rid themselves of the kleptocrats who loot their countries and keep them poor?