The USA as a case study in resource-based development
In modern times, Americans are inclined to attribute their country’s distinctive economic performance to such factors as entrepreneurship, free enterprise, education, work ethic or technology. As a matter of history, however, natural resource sectors were central to the American economy from colonial times through the nation’s ascendancy to global economic preeminence. Products of the forest were vital to the British Empire, while the Atlantic fishing industry was substantial enough for Adam Smith to write in 1776: “The New England fishery in particular was before the late disturbances one of the most important perhaps in the world.”
Towering above the farms, forests and fisheries was the American minerals sector, which rose to global stature in the late nineteenth and early twentieth centuries, forming the backbone of the country’s world leadership in manufacturing. This chapter describes and analyzes this resource-based development with primary attention to minerals, the nonrenewable resources so often maligned in the body of thought associated with the phrase “resource curse.” The main theme is that American mineral abundance should not be characterized as an “endowment” provided by nature to a passive recipient nation, but was instead the humanly constructed product of extensive investments in exploration, transportation, mineralogical skills and the technologies of extraction, refinement, metallurgy and resource use. The institutional arrangements that supported these developments are identified and compared to those of other countries of comparable size and geological potential.