The New Wealth of NationsnIhave just returned from a trip around the world; a tripnwhere among other things I explored why certain nationsnsucceed brilliantly and other nations stumble along innpoverty with marginal economies.nIn previous travels to South America, I accepted thenstandard south-of-the-border excuse that its poverty andnproblems were caused by “Yankee Imperialism.” It soundednlogical and was reinforced by my (then) orthodox liberalismnthat had to find “victims” and “oppressors.” “Poor Mexicon— so close to the United States, so far from God,” spoke fornall of South America.nI also assumed that this complaint was too universal, toonpassionate, not to contain truth. Likewise, Africans have fornall essential purposes a single excuse for their poverty:ncolonialism. They would have successful countries but fornEuropean domination. All of this was reinforced in my mindnand theirs by the U.S. academic community. The “dependencyntheory” is the standard academic explanation andnteaches that many of the developing countries are being heldnback and oppressed by the developed countries, and thatntheir poverty can be largely explained by our wealth.nBut time and experience made me at first skeptical, thennantagonistic, to these explanations. I was greatly influencednby reading Larry Harrison’s powerful book, UnderdevelopmentnIs a State of the Mind, where he brilliantly comparesnArgentina with Australia, Haiti with Barbados, and Nicaraguanwith Costa Rica. He postulates that failure is “homegrown.”nEssentially updating Max Weber’s The ProtestantnEthic and the Spirit of Capitalism, Harrison shows hownRichard D. Lamm is a former governor of Colorado andndirector of the Center for Public Policy andnContemporary Issues at the University of Denver.nby Richard D. Lammn•••,’• ^i’. ••n’nW’t^–^n^^–vV?*^^n”yy^ y-n-^ A. .!/• <•nf^nculture can “either facilitate or get in the way of development.”nHe went to Latin America with the U.S. Agency fornInternational Development (AID), and acknowledges thatneconomic development is a mix of many factors, but hisnthesis is that the single most important one — culture — isnrarely discussed. I made his thesis my travel companion on anrecent visit to Latin America, Africa, India, and Asia, andnfound it immensely useful in explaining various levels ofneconomic success and failure in those areas.nA new equation is slowly emerging that helps explain thenwealth of nations: a theory that emphasizes culture andnvalues. Classic economic development theory looked atnmany factors in examining national power, but emphasizesnthe presence of natural resources. A country without ironnore, coal, oil, or substantial other natural resources could notnbecome a modern economic power. A dated but classicneconomic study on Italy showed that while Rome oncenruled the globe, in the modern economic world, Italy didnnot have sufficient natural resources to become a majornindustrial power. By extension (though not covered in thenstudy), Japan, Taiwan, and Hong Kong could never becomenmajor economic players. Wealth, when it was not plunderednfrom someone else, was homegrown and created out ofnindigenous natural resources.nBut Japan, South Korea, Taiwan, and Hong Kong (andnothers) have shown us that it is the human resources thatnplay the greatest role in economic development—not thennatural resources. Nations poor in natural resources cannsubstitute human resources for coal and iron ore and stillnbecome wealthy and prosperous. Renewable human skillsnare more important than the one-time inheritance of naturalnresources.nThese new industrial models often import raw materialsnnnOCTOBER 1991/25n