America has a wealth problem

America has a wealth problem

America has a wealth problem

America has a wealth problem. America is consuming wealth faster than we are creating it. Wealth according to Webster is "large amounts of money". Adam Smith defines the wealth of a nation as the sum of all valued goods. Valuable goods are assets, materials and things used and needed by people. Money is a tool to trade various goods. Money buy itself has no value without supporting goods. Profit is to companies as wealth is to nations. When people, companies or nations produce more goods than they need, they accumulate their goods to be traded for other goods and services using a trading resource called money. Adam smith said there are three requirements for gathering wealth; self interest, free markets and division of labor. These elements today translate into entrepreneurship, money and productivity. Without wealth there would be little or no Government.

These are four ways to create wealth, grow it (agriculture), extract it (mining), make it (manufacturing) or design new products (applied engineering). There are three types of people in the world; people who create wealth, people who distribute wealth and people who consume wealth. While all three types of people are needed to create a vibrant and growing economy, when wealth consumption exceeds wealth creation growth and prosperity decreases.

America, as is true for most great nations in history, accumulated a great deal of wealth in the past. This was possible because of the world economy, her resources, her values (democracy), infrastructure (free markets), and productivity (best value). America produced the highest quality products at the lowest prices throughout the world. Today, this is no longer true. Other nations have become more productive and produce (manufacture) more wealth. America has abandoned a primary source of wealth called manufacturing because other nations are more competitive. America has become a service economy. A service economy consumes wealth. America must borrow wealth to sustain our current quality of life.

What must America do to regain her wealth and our quality of life? We must reinvent our manufacturing capability and our productivity. We must treat our manufacturing capabilities as a strategic treasure. We must educate our work force to competitively create wealth through manufacturing. We must elevate the profession of manufacturing to a valuable discipline. We must implement a business process called competitive productivity; providing the best values throughout the world. Without these measures our future is bleak.

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