In fact, countries that have allowed wealth to grow and spread owe nothing to large deposits of natural resources. Peter Bauer, in a short article, reminded readers that “sustained prosperity owes little or nothing to natural resources; look at history, Holland which reclaimed large parts from the sea in the 17 century; Venice, a rich world power build atop a sandbar; and now West Germany, Switzerland, Japan, Singapore, Hong Kong and Taiwan, just to name the most obvious examples of prosperous countries with little land and few natural resources, but clearly not short on human resources.” By contrast, “in the middle of abundant land and vast natural resources, pre-Colombian American Indians remained in poverty, without domestic animals or knowledge of the wheel while in Europe, with much less land, the people had become wealth and developed a rich culture.” 

 

Moreover, having a resource that, if used properly, could be valuable, can even end up being damaging. Wealth is only created when a society stumbles upon institutions that respect and make people respect life, property and contracts; when citizens know that no arbitrary decision is going to benefit or hurt them; when they know that their prosperity depends on personal effort and alertness to society’s needs, recognizing the market rewards those who meet those needs before they become apparent. If a society fails to establish the rule of law over arbitrary will, a big oil deposit or precious metal mines could end up being an obstacle to prosperity, because the government’s temptation to take over the resource and use it to feed revenue streams is huge. And if the state’s resources do not depend on taxpayers, but on extracting a resource from the ground, the people become less necessary to power. We need look no further, For example, than the rise in oil prices. It has intensified the nationalist movements in Latin American and Russia.