Wealth may be defined in a variety of ways; however, the following definition might properly be used to cover all classes:
Wealth consists of raw materials and energy so organized that we may use it to accomplish our purposes.
The earth together with other heavenly bodies constitutes a vast storehouse of raw materials and energy from which we may draw to create wealth. The elements of which the earth is composed (hydrogen, oxygen, carbon, iron, etc.) exist in an almost endless variety of substances, compounds and mixtures. They appear as gases, liquids and solids; as organic and inorganic matter.
When man organizes wealth, he selects from this enormous supply those items he considers best adapted to fill his needs and by using energy which is also available in a wide variety of forms, fashions these into consumable products which he calls wealth. Thus food, clothing, shelter, machinery and other products are nothing but the atoms and molecules of the earth so arranged and organized that they may be used to serve our purposes.
As we consume our wealth we disorganize those atoms and molecules of which our possessions are composed and thus render them temporarily unusable for those purposes they have been serving. [p. 110] But let it be recognized that these units of matter are, for all practical purposes indestructible so that they may be taken and organized again to serve as wealth the second time, the third time — yes a million times and never show the slightest sign of deterioration. When wealth is consumed all that is lost is the organizing effort and energy which made it wealth in the first instance. But the raw materials are still available and may be used over and over again for as long as intelligent man is around and has energy available to repeat the process.
It is entirely feasible to take the disorganized wealth which leaves the home and factory in the form of garbage, refuse and sewage, and reprocess these materials and organize them once again into the same usable products they represented originally. As a matter of fact this is what has been happening to some extent all along. No one will ever know how many times the same water molecule has appeared as tissue or fiber in plant or animal life or how many times a particular hydrogen, carbon, or iron atom has served our purposes. The recycling of waste products is going on all of the time and promises to become much more common in the future.
It is to be recognized that nature by concentrating large stocks of homogeneous substances in one locality has made the acquisition and use of raw materials much easier than it otherwise would have been. Large deposits of ore, fossil fuels and other substances have facilitated the organizing process enormously. As these deposits or natural resources are exhausted and organized into consumable products and consumed, they are usually scattered abroad on the face of the earth. This makes it expensive to gather them up again and sort them out for re-use. However our ability to retrieve and utilize what has been thus scattered is developing substantially faster than the reserves are being depleted. Also as the necessity therefor increases we will doubtless be more cautious with our waste products so that the retrieval task will not be so difficult. [p. 111]
It is undoubtedly true that most wealth is disorganized by consumption. However, another extremely important cause for the loss of wealth is entropy or the innate tendency of matter to reach the highest state of disorganization. Even if we do not consume our products but allow them to lie unused, the mere passage of time causes them to lose their utility. Someone has said that everything is on an irresistible march to the junk heap. The natural processes of deterioration and decay render much of what we produce unfit before it can be worn out or otherwise consumed.
Still a third factor adversely affecting the utilization of wealth is obsolescence. Some articles which we regard as adequate for our use at one time may be replaced by superior or more fashionable products and the old is then scrapped to make way for the new.
All of these factors conspire to render most forms of wealth unfit for use within a relatively short period of time after being produced, and thus condemn man to a life of ceaseless toil. We have had the sentence of labor for life passed upon us with no visible means of escaping therefrom. If we are to keep ourselves supplied with food, clothing and other products we must be continually engaged in the organizing process. Fortunately we need never fear that the raw materials necessary for the creation of wealth will become unusable. Matter is virtually indestructible and should serve us throughout eternity.
Before considering whether or not man is apt to be faced with a shortage of these indestructible elements, let us discuss the supply of energy without which the creation of wealth is impossible.
The sun has been the source of most of the energy man has used up to this point and from all we know it will continue to pour onto the earth all of the energy we can use for several hundred billion years or so if we will but to capture even a small fraction of the total amount available. During recent years the energy which the sun [p. 112] has stored in the form of coal, natural gas and oil deposits has been used at an ever-increasing rate. We have looked forward with fear to the time when these deposits might be exhausted because they have provided such a convenient and cheap source of energy.
However, the possible exhaustion of fossil fuels is no longer of really critical concern because of recent discoveries which makes available to us an almost limitless supply of nuclear energy. The physics books of today contain statements such as the following:
The modern world is built around an abundant supply of energy. This energy may be converted from one form to another to perform tasks for man. It may truly be said that an abundant source of energy is a country’s greatest national asset. The most useful supplies of stored energy in the past have been gravitational and electrical potential energy. Thus water stored behind a dam constitutes gravitational potential energy, while coal, oil, or the chemicals in a battery contain electrical potential energy in the arrangement of the electrically charged particles in the molecules. These sources are rapidly being depleted as world demands for energy become greater. Conversion of part of the mass of a nucleus to an equivalent amount of energy, however, promises to furnish an almost inexhaustible supply. (Fowler & Meyer, Physics for Engineers and Scientists, [1958] p. 496)
Let us summarize the main points discussed above concerning man’s creation and utilization of wealth. We take the indestructible raw materials with which the earth has been most generously supplied and then drawing from the inexhaustible sources of energy, we organize these raw materials into consumable products. This organized wealth then becomes disorganized either by being consumed or by deterioration accompanying the passage of time. But we can take these disorganized units of matter and utilize them to repeat the process again and again. Let us call this repetitive process the “wealth cycle” and note that it may be continued for as long as the supply of energy lasts. For all practical purposes the wealth cycle may be continued forever. [p. 113]
For it is expedient that I, the Lord, should make every man accountable, as a steward over earthly blessings, which I have made and prepared for my creatures.
I, the Lord, stretched out the heavens, and built the earth, my very handiwork; and all things therein are mine.
And it is my purpose to provide for my saints, for all things are mine.
But it must needs be done in mine own way; and behold this is the way that I, the Lord, have decreed to provide for my saints, that the poor shall be exalted, in that the rich are made low.
For the earth is full, and there is enough and to spare; yea, I prepared all things, and have given unto the children of men to be agents unto themselves. (D&C 104:13-17)
With this understanding of the nature of wealth we are now ready to consider whether or not there is likely to be a shortage due to a scarcity of raw materials. Such a shortage cannot occur until there is a shortage of available atoms and molecules with which to construct consumable products. Until so much of the earth’s surface is at one time incorporated into plant and animal life or into such things as food, clothing and shelter that difficulty is encountered in finding additional elements, compounds and substances with which to organize other products, there will be no shortage.
Such an eventuality is inconceivable within the foreseeable future. It is most obvious that at the present time we do not have even a millionth part of the available atoms and molecules incorporated into usable wealth. As an illustration of this fact let us consider the extremely vital compound, water, of which plant and animal life is mainly composed and which has an endless variety of other uses. When we compare the amount of water which is currently incorporated into usable products or being put to other beneficial use, with the oceans of it which are available, it is most apparent that we have not even begun to make full use of this resource. The same conclusion must be drawn regarding other compounds and elements which are vital to life and the exercise of freedom.
Furthermore since the wealth cycle is relatively short in most instances, and since the atoms and molecules of which it is composed are immediately available for re-use upon completion of the cycle, fears of a shortage of raw materials are quite groundless. When we speak of a shortage of natural resources what we really [p. 114] mean is that the most fertile soils are limited and already being tilled; the most accessible mineral deposits have been or are being mined; the water in a particular stream or location is currently being claimed or used by someone else. Everyone is aware there is an almost endless number of less favorable opportunities to produce wealth still open.
Therefore, a shortage, if it can be said to exist at all, amounts to no more than that there is a limit to the most advantageous opportunities and favorable locations. But this is unavoidable whenever, as is the situation on earth, there is a wide variation in resources, with a best at one extreme, a worst at the other, and numerous possibilities of varying desirability lying in between. It is most apparent that the earth could be made to produce millions of times more wealth than it now does without taxing its capacity in the least degree if men applied even their present technology to the task. Additional scientific discoveries can only expand this potential productivity further.
From this we must conclude that any shortage of consumable products which has occurred in the past or which will occur in the foreseeable future has been and will be caused by a lack of organizing effort on the part of man rather than from any shortage of raw materials and energy. Man’s inherently selfish nature may blind him to this fact and cause him to squabble over who has the right to consume the wealth presently being produced. But a true appraisal of the situation will convince the logical mind that there is plenty for all if men will address themselves to the task of creating new wealth rather than worrying about shortages.
The earth’s population has doubled within the past few years and threatens to double again in the near future unless nuclear war or some other catastrophe prevents it. But available figures demonstrate that with the increase in population there has been no increase in death from starvation but rather a decrease. This means that 3 billion people are having less difficulty obtaining the necessities of life than did 1.5 billion. This is true because the production of food, clothing and shelter is accomplished with much less human effort today than has ever been the case in recorded history. As power-driven machinery and cheap energy come into increasing use, the need for physical labor decreases correspondingly. People spend far less time and energy producing the necessities of life today than ever before and additional scientific advancement and technological progress promises to continue this trend. [p. 115]
There is no need to fear that the death rate from starvation will increase appreciably with 10 or 20 billion on the earth. Until the population approaches somewhere near the absolute physical limits of the earth to sustain life there is no reason to anticipate much change in the death rate from famine because of shortages of raw materials and energy. We have shown that such a shortage does not now exist and it will not exist during the foreseeable future.
Wherefore, men are free according to the flesh; and all things are given them which are expedient unto man. And they are free to choose liberty and eternal life, through the great Mediator of all men, or to choose captivity and death, according to the captivity and power of the devil; for he seeketh that all men might be miserable like unto himself. (2 Nephi 2:27)
But suppose the population approaches the finite limits of the earth’s physical size. For those who choose to worry about such an eventuality, we submit the following observations made by Frederic Bastiat over one hundred years ago on this question:
Nature’s relatively infinite prodigality with her forces keeps him (man) from being anything more than a mere custodian over some of them. Now, what will happen when men will have reached the limits of this bounty? It will no longer be possible for anything more to be hoped for in that direction. Inevitably the trend toward increased population will then come to a halt. No economic system can prevent this from necessarily happening.
Granted the tendency of the race to multiply, what will happen when there is no more room on the earth for new inhabitants? Is God holding back, for that epoch, some cataclysm of creation, some marvelous manifestation of His infinite power? Or in keeping with Christian dogma, must we believe in the destruction of this world? Obviously, these are no longer economic problems, but are analogous to the difficulties eventually reached by all sciences. The physicists are well aware that every moving body on earth goes downward and never rises again. Accordingly, the day must come when the mountains will have filled the valleys, when rivers will be high at their mouth as at their source, when their waters will no longer flow, etc., etc. What will happen then? [p. 116] Should the physical sciences cease to observe and admire the harmony of the world as it now is, because they cannot foresee by what other harmony God will make provision for a state of things that is far in the future but nonetheless inevitable? It seems to me that this is indeed a case in which the economist, like the physicist, should respond by an act of faith, not by an act of idle curiosity. He who has so marvelously arranged the abode where we now dwell will surely be able to prepare a different one for different circumstances. (Bastiat, Economic Harmonies, Van Nostrand 1964, pp. 264-265)
The amount of wealth produced varies dramatically from society to society and from one period of time to another. Those factors which determine how much will be produced by any given society might be classified under the following headings:
1. The natural resources of the country such as the soil, climate, mineral deposits, rainfall, water sources and forests.
2. The capital equipment available such as machinery, tools, equipment and power production facilities.
3. The intelligence, knowledge and ability of the people.
4. The amount of freedom from coercion and restraint.
5. The incentive of the people to produce.
It would be difficult to measure the relative importance of each of these factors; however, there are certain general observations upon which agreement might be reached.
While it cannot be claimed that there is any shortage of either raw materials or energy with which to construct wealth, it certainly is true that the amount of labor and expense required in the production process in some areas is much greater than in others. Nature has rendered it relatively easy for the people in some countries to obtain sustenance while others have had to strive much harder to reach the same standard of living.
However, a rapidly advancing technology is tending to diminish [p. 117] these location advantages. The lack of fertile soil, adequate rainfall, rich ore deposits and cheap power can to a great extent be remedied with fertilizers, improved farming practices, irrigation systems, cheap transportation and nuclear fuel. Scientific advancement has enabled a “poor country” to produce many times more wealth today than a “rich country” could have produced only one hundred years ago.
As technological advances have made available cheap power and power equipment, the relative importance of human and animal physical labor has declined almost to the vanishing point in some countries. Investment capital on the other hand has become a factor of great importance. For example, a man with a tractor and farm equipment can produce a hundred times more food than one working with his bare hands or a stick; a man with a truck, an airplane or railroad facilities can transport thousands of times more weight much faster than without such equipment; and one person operating a computer can make computations more rapidly than a large number of mathematicians working without such facilities.
Of course, we must recognize that the equipment and machinery which contributes so overwhelmingly to the production of goods and services is itself the product of labor. Furthermore, this equipment is constantly depreciating and becoming obsolete so that there is a continuing need to keep it in repair and replace it with new units from time to time. But let us note that these tools represent saved labor. They constitute work done and wealth produced by an individual over and above the amount he consumes. Unless a person saves a portion of what he earns and plows it back into labor saving equipment, research, and development, these capital goods cannot be had. In the production process this “saved labor” is many times more effective and efficient in the creation of most forms of wealth than is the labor which operates the machines.
Therefore, those nations with a large stock of labor saving equipment and cheap power will produce much more than the nation without such facilities. Any nation which desires to enjoy such advantages must have laws which allow the individual to benefit from his own “saved labor.” [p. 118]
Without a group of people possessing technical knowledge and skill, an industrial revolution can neither commence nor continue. Not only is such learning and ability essential for the invention and manufacture of capital equipment, but also for its operation, replacement and repair. Therefore before the miracles of production which are brought about by the use of cheap power and power tools can occur, there must be inventors and technicians with the ability to produce and use them. That nation whose people are intelligent and educated in the production and use of capital equipment and who are willing and able to spend time and money in research and development can truly produce a cornucopia of wealth in this age of great scientific advancement.
Let it be recognized, however, that the great discoveries which have made this electro-mechanical age possible have been made by merely a handful of men and that mass production and assembly line techniques demand much less skill and thought on the part of those who operate such lines than was demanded of those who manufactured their products with cruder methods. The operators of the machines are so often little more than automatons whose function is largely mechanical and repetitious. For such people little skill, ability, or learning is required.
Freedom and incentive are so directly related to one another that it seems advisable to discuss their effect upon the production of wealth at the same time. Intelligent man loves freedom and he is intensely aware that its exercise is utterly dependent upon the ownership and control of property. When he is permitted to enjoy the fruits of his labor and use the wealth which he produces to achieve his own objectives (or, in other words, exercise his freedom) the incentive to produce wealth is guaranteed and will exist somewhat in proportion to his love of freedom.
On the other hand if he is denied the right to own that wealth [p. 119] which he produces, or is so regulated in its use that he is owner in name only, the powerful freedom incentive is destroyed and with it all of that wealth which it could otherwise bring into existence.
Therefore, no matter how abundant the natural resources of a nation, how plentiful the capital equipment, or how able the people, unless the other two factors — freedom and incentive — are present, no wealth will be produced. Not only will freedom and incentive determine how much labor will be expended in producing consumer goods, but it will also determine how much “saved labor” will be invested in machinery, equipment and other capital goods.
Whenever government uses its power to prohibit the people from entering legitimate economic activities wherein they can produce wealth for themselves, or when it regulates the citizens in the use of their property or forcibly deprives them of what they have earned, it is to this same extent reducing the amount of wealth produced in that nation. The only alternative to the freedom incentive is forced labor. The truth of this assertion is painfully apparent when one compares the economic well-being of the people in a country where the right of private property is protected with the extreme want present in those nations who use the police power to deny this right.
Since wealth arises from the organizing efforts of the individual, moral people have always taken the view that it belongs to that person whose efforts created it. To deny the right of ownership and control of property to one who endured the pain of physical and mental toil to organize it is contrary to the rules of justice and common sense. Therefore, throughout history moral man has recognized and undertaken to protect the right of private property. In the succeeding chapter we shall discuss the nature and importance of this right and why it must be protected if freedom is to be preserved. [p. 120]
I believe in honest money, the gold and silver coinage of the Constitution, and a circulating medium convertible into such money without loss.
(Ezra Taft Benson, An Enemy Hath Done This, p. 145)
I have examined the Constitution upon this subject and find my doubts removed... The Constitution tells us what shall not be a lawful tender. The 10th section declares that nothing else except gold and silver shall be lawful tender ...
(Joseph Smith, DHC Vol. V, p. 289)
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