In recent months I have been advancing the idea that the fundamental fact of human life up to now, that land is life, has been invalidated by the industrial revolution.
My argument is that in the agricultural age the essence of wealth and survival was to possess land that could grow the food that kept you and yours alive and to defend that border to the death. But today the possession of food-growing land is a footnote. What matters is the knowledge to make things and the means to trade those things across the world. Or just download stuff from the Internet.
In the terms of a World Bank paper on capital that you should read, learn, and inwardly digest, this question is the difference between physical capital and intangible capital. For instance, compare the US and Russian Federation, then the oil state of Iran, then two traditional enemies, Greece and Turkey.
With these numbers, you can see that it makes no sense to invade another country, kill all the men and rape all the women, and loot and plunder it. Because the real wealth of the country is in the intangible capital that exists between peoples' ears.
First of all, do you see how the big story for the US is "intangible capital?" It's about 82 percent of the total wealth of half a million dollars per person. Hey, how about Russia where it is about 15 percent of $39,000? Or the oil state of Iran, where it is 26 percent of $24,000?
Now, I put in Greece and Turkey because I met with my Greek friend last week and he pointed out to me that for Greece, land is very important, because the Turks are always turning up with some government boat harassing some Greek island. In particular, the Turks are interested in the hydrocarbons beneath the Mediterranean Sea. The only policy for the Greeks is to stop the Turks in their tracks, wherever those tracks appear.
You can see that for the Greeks, intangible capital is 85 percent of total wealth whereas for the Turks it is 75 percent of a much smaller number. Is it surprising that the Turks, with a very low intangible capital number, are still interested in territory and the natural capital of oil resources?
So I would adjust my argument about land vs. knowledge. The fact is that tons of people in this world are still obsessed with physical capital: land and oil wealth and factories. And until they are up in the stratosphere with the US in the intangible capital game they are still going to be living in the old world, where, in the words of fictional Gerald O'Hara, plantation owner, "land is the only thing that lasts."
But Gerald O'Hara was wrong, and his world was going away even as he spoke. It is knowledge and its application in human innovation that is the thing that lasts. The question is: what do we do while the world is still full of people that believe that land (or physical resources like oil and gas) is the only thing that lasts?
The answer is the one that my Greek friend gave me. It is all very well for us advanced types that have moved on from the old ways to say that land doesn't matter any more. That doesn't cut any ice when you are dealing with people that are still living in the past. You gotta stop the land fetishists dead in their tracks. You gotta defend your land while there are still people in the world that think that the answer to their problem is to acquire someone else's physical resources.
Of course, the great demonstration of the futility in the modern era of land conquest in search of wealth was the Hitler invasion of Russia, in search of Lebensraum in the east. No, Adolf, you idiot. Germany in the 1930s was one of the most advanced countries in the world, having just invented relativity and quantum mechanics. And hey, the Otto cycle for spark-ignition cars and the Diesel cycle for compression-ignition cars have German names: I wonder why? Germany had no need of Russian wheat-growing areas, nor yet of Caucasian oil fields. In fact Germany, by 2000, had more per-capita intangible capital per capita than the United States. Russia, to this day, is way behind. Its intangible capital is a pathetic $6,000 per person.
Of course, it certainly helped Germany that in the Cold War it had the United States defending its border and asserting that the Soviets better not put a foot into Western Germany, and forget trying to force that Fulda Gap, comrade.
So, even though land doesn't matter much any more, you still need to garrison the border to keep the barbarians out.
Maybe build a wall.
My argument is that in the agricultural age the essence of wealth and survival was to possess land that could grow the food that kept you and yours alive and to defend that border to the death. But today the possession of food-growing land is a footnote. What matters is the knowledge to make things and the means to trade those things across the world. Or just download stuff from the Internet.
In the terms of a World Bank paper on capital that you should read, learn, and inwardly digest, this question is the difference between physical capital and intangible capital. For instance, compare the US and Russian Federation, then the oil state of Iran, then two traditional enemies, Greece and Turkey.
| Country | Natural Capital | Produced Capital | Intangible Capital | Total Wealth |
| United States | 14,752 | 79,851 | 418,009 | $512,612 |
| Russian Federation | 27,217 | 15,593 | 5,900 | $38,709 |
| Iran | 14,105 | 3,336 | 6,581 | $24,023 |
| Greece | 4,554 | 28,973 | 203,455 | $236,972 |
| Turkey | 3,504 | 8,580 | 35,774 | $47,859 |
| Germany | 4,445 | 68,678 | 423,323 | $496,447 |
With these numbers, you can see that it makes no sense to invade another country, kill all the men and rape all the women, and loot and plunder it. Because the real wealth of the country is in the intangible capital that exists between peoples' ears.
First of all, do you see how the big story for the US is "intangible capital?" It's about 82 percent of the total wealth of half a million dollars per person. Hey, how about Russia where it is about 15 percent of $39,000? Or the oil state of Iran, where it is 26 percent of $24,000?
Now, I put in Greece and Turkey because I met with my Greek friend last week and he pointed out to me that for Greece, land is very important, because the Turks are always turning up with some government boat harassing some Greek island. In particular, the Turks are interested in the hydrocarbons beneath the Mediterranean Sea. The only policy for the Greeks is to stop the Turks in their tracks, wherever those tracks appear.
You can see that for the Greeks, intangible capital is 85 percent of total wealth whereas for the Turks it is 75 percent of a much smaller number. Is it surprising that the Turks, with a very low intangible capital number, are still interested in territory and the natural capital of oil resources?
So I would adjust my argument about land vs. knowledge. The fact is that tons of people in this world are still obsessed with physical capital: land and oil wealth and factories. And until they are up in the stratosphere with the US in the intangible capital game they are still going to be living in the old world, where, in the words of fictional Gerald O'Hara, plantation owner, "land is the only thing that lasts."
But Gerald O'Hara was wrong, and his world was going away even as he spoke. It is knowledge and its application in human innovation that is the thing that lasts. The question is: what do we do while the world is still full of people that believe that land (or physical resources like oil and gas) is the only thing that lasts?
The answer is the one that my Greek friend gave me. It is all very well for us advanced types that have moved on from the old ways to say that land doesn't matter any more. That doesn't cut any ice when you are dealing with people that are still living in the past. You gotta stop the land fetishists dead in their tracks. You gotta defend your land while there are still people in the world that think that the answer to their problem is to acquire someone else's physical resources.
Of course, the great demonstration of the futility in the modern era of land conquest in search of wealth was the Hitler invasion of Russia, in search of Lebensraum in the east. No, Adolf, you idiot. Germany in the 1930s was one of the most advanced countries in the world, having just invented relativity and quantum mechanics. And hey, the Otto cycle for spark-ignition cars and the Diesel cycle for compression-ignition cars have German names: I wonder why? Germany had no need of Russian wheat-growing areas, nor yet of Caucasian oil fields. In fact Germany, by 2000, had more per-capita intangible capital per capita than the United States. Russia, to this day, is way behind. Its intangible capital is a pathetic $6,000 per person.
Of course, it certainly helped Germany that in the Cold War it had the United States defending its border and asserting that the Soviets better not put a foot into Western Germany, and forget trying to force that Fulda Gap, comrade.
So, even though land doesn't matter much any more, you still need to garrison the border to keep the barbarians out.
Maybe build a wall.
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