



(To begin, lets take a look at some juicy quotes from Adam Smith back in 1776)

Adam Smith the Big Blocker:

"Goods can serve many other purposes besides purchasing money, but money can serve no other purpose besides purchasing goods ."

"It is not for its own sake that men desire money, but for the sake of what they can purchase with it ."

- Adam Smith

In Short: The Netherlands & Great Britain had less gold, but were rich. Spain and Portugal had more gold, but were poor. North America was growing rich. China had the potential to grow richer. A prosperous society comes from trade, not possession of gold.

Then & Now:

Then:

Great Britain & The Netherlands:

Back "then" (1776) Great Britain and The Netherlands were two of the most economically prosperous nations on earth. Both of these nations controlled little land, and as a result little natural resources, however they did control something important, more economic freedom than many of their European neighbours which resulted in more capital formation, and productive labour.

Portugal & Spain:

Meanwhile, two of the poorest nations in Europe were Portugal and Spain . These two nations ironically owned/controlled most of the western world's gold and silver supply. They controlled this supply from their Central & South American colonies. After controlling the supply in their colonies they shipped the precious metals back into Europe and limited the exports to other countries. The net result was a cheaper gold price in both Portugal and Spain, but fewer goods available to the citizens as they were unable to utilise the commodity for proper trade (due to regulations).

The New-World (U.S.A):

The Declaration of Independence came into being the same year The Wealth of Nations was published. What would later become the United States of America was seen by Adam Smith as a bastion of economic growth where there was abundance in natural resources, and freedom to trade with little to no regulations preventing the people of the land from trading as they please.

China:

China had mostly always been wealthy in comparison to The West, however due to productivity increases in The West (not increases in gold stocks) China's relative wealth slipped compared to The West. Adam Smith saw the most unlocked potential in places like China if they were able to more freely trade with the world, as they already possessed abundant natural resources as well as vast amounts of labour.

"China has been long one of the richest, that is, one of the most fertile, best cultivated, most industrious, and most populous countries in the world. It seems, however, to have been long stationary. Marco Polo who visited it more than five hundred years ago, describes its cultivation, industry, and populousness, almost in the same terms in which they are described by travellers in the present times."

- Adam Smith

Now:

Great Britain & The Netherlands:

While "now" (2018), both Great Britain and The Netherlands remain two of the most prosperous regions in the world. These countries have sound rule of law and governance, however over various time periods more or less regulation/government involvement has reared it's head. Overall these countries remain wealthy, but have shown increasing state welfare (remember China back "then"?).

Spain & Portugal:

Spain and Portugal too appear to be generally wealthy (compared to 3rd world countries) however are still less prosperous than their more northern counterparts. A large percentage of the economy in both countries are unemployed and often seek employment in other countries. This all while approximately 25% of GDP is spent on social security (2012 - http://policyinpractice.co.uk/spains-welfare-system-an-overview/ ).

The New-World (U.S.A):

The New-World (in particular the U.S.A) which Adam Smith saw as having the right fundamentals to foster prosperity did indeed become the most prosperous regions in the world. This was not done by owning all of the gold, but by freer trade than their European peers during the same time period.

China:

In the most recent 30 years China has seen an explosion of growth, at present China contributes roughly $12 trillion to the world economy second only to the U.S.A with just shy of $20 trillion. Why did China have this explosion in growth, and did it in part have to do with the underlying fundamentals Adam Smith spoke of over 200 years ago?

Something to consider:

Did China's citizens wealth increase because of all of the gold they own?

Does "store of value" build wealthy societies?

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Behind the pay wall:

" Adam on ICOs, Core's Philosophy, Freedom, & the Working Race "

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