Genghis Khan and Spain are the subject of this blog. There have been different economic models or systems that have worked over time and one of those is a sub-set of extraction. Another way to look at extraction is that it is the null set of value added. It is every thing else but value added. Look at extraction this way. You can dig Gold out of the ground or catch fish out of the stream or you can steal the stored wealth of someone else. Like any kind of extraction, the wealth to be extracted is limited and if you have too many mouths to feed, the system fails. It also fails when you steal all the money out of the bank and spend it. In the short term, stealing can make a person or a country rich and that translates into a higher quality of life for its members. Remember that quality of life is the objective of the economic game.
First let's look at Genghis Khan. In 1200 AD, about the time Mohammad was cooking up his franchise, Genghis Khan was stealing all the wealth from Asia and Europe. Stealing can make one rich very fast and it did for Genghis Khan, but like all societies when they get very rich, they get very adverse to real work, such as, value added. I don't think that value added was big on Genghis Khan's list of strong points nor high on the list of those who followed him. A side point was that as the domain of Genghis Khan got larger and larger it became much more difficult to manage "centrally". He had to institute tighter and tighter control over the freedom of his followers and in the end as the places to steal from got fewer and the number of mouths to feed got larger, and his empire collapsed. It was very predictable.. The only question was how long it was going to take. Lesson, too many people and too big of a control system and no more wealth to steal.
Now, Spain. I have read a lot about how Spain conducted themselves in the New World and how they stole the wealth that the Native Americans had accumulated. They are still finding sunken Spanish ships loaded with Gold. Remember that there were many more people in the New World at the time Columbus discovered the New World than there were in all of Europe. Native Americans had been here for over 30,000 years accumulating wealth along with being superior farmers compared to Europeans. Native Americans knew a lot more about math and astronomy than did the Spanish at the time. Europeans did not even recognize "zero" in the number scale. After stealing all that wealth from the New World, what does Spain look like today? They are bankrupt. Their people are more concerned about clothing styles than real work. Even their language is preoccupied with gender. There is a "he" and "she" on every noun. What mind came up with that idea? Back to the blog. Stealing was so easy and Spain go so rich that they declined just like Genghis Khan. Their people got lazy and did not want work any more. Isn't this what happened to Argentina too?
The bottom line is that you can not have a long term economic system based on stealing. Now look at us. Isn't Obama and his liberal group doing just exactly what Genghis Khan and Spain tried to do? Isn't he stealing from those who have earned their wealth and giving it to those who have not? Isn't it also having the same affect on those who get the stolen wealth that it had on Genghis Khan's and Spain's people? There are just some principles of human nature that can not be changed no mater what flag or name it goes by. You can't build a sustainable system on stealing no matter how hard one tries or how many eggs have to be broken in the process. Interesting isn't it?
