What is the most important factor in the wealth of a nation:?

Question

raw materials, capital, or labor. I think it is capital, am I right?

Answer 1

Raw materials would be the most important, but in many countries, mostly in the Middle East and Africa, they can be taken by outside influences.

Labor is also really important, but it depends if it is skilled labor or not. India has a huge growing population of skilled labor, helping their economy grow.

Capital is probably the most important in real world situations, but it needs to come with some entrepreneurial people to put it to the most profitable use.

Answer 2

It's a trick question; there is no answer that is always right.

For example, in the U.S. economy, the abundance of raw materials (including farmland and timber) has been crucial. On the other hand, the development of the Japanese economy after World War II is due almost entirely to its skilled labor force - it had very little in the way of raw materials or capital.

Jane Jacobs would argue, and I think she is right, that two critical factors are the availability of markets - usually big cities - and the proper management (government) of your own cities. See her "Cities and the Wealth of Nations".

That's one reason almost every economist agrees that opening up markets in the developed world to producers in the undeveloped world is critical to the economic development of third world countries, and almost as many agree on the importance of such social factors as rule of law; freedom to move, hire, and fire; etc.

Answer 3

debt of the people.