Natural Resources

The Significance of the Working Natural Resources
by Robert J. Russell, Founder and President
Westport Rivers Vineyard & Winery, Westport, Massachusetts

The wealth of all nations, everything that we possess and consume, everything that we have and use, comes from the earth’s natural resources – no place else.

The industries which use these natural resources can be called the Primary Industries. They are the originators of wealth through their use of the natural resources. These Primary Industries are farming, fishing, forestry, and mining- the farmer grows potatoes from the earth, the fisherman catches codfish from the sea, the forester cuts a pine tree and the miner discovers the gold. Each one in turn sells their product thereby creating new wealth. Farming, fishing and forestry are sustainable and renewable when wisely used. Mining is depletion oriented and non-renewable.

The concept of taking these products that come from the natural resources and doing something of value with them is called “adding value”. And it is the human brain, knowledge, which causes value to be added to the natural resources. The wheelbarrow is an example. The early person saw the round stone and the flat wood and devised the first wheelbarrow. In other words, humankind, through knowledge, has taken the products from the natural resources and created something new and in the process adding wealth to them.

The development of the United States is instructive in this process. The first Pilgrims were farmers and fishermen. Their wealth was measured by the products that their farms and boats produced. We began as an agrarian-maritime society. With time, the United States became an industrial society when knowledge, the human brain using materials from the natural resources, brought us automobiles and refrigerators. With the invention of the transistor, we became an information society. Today we are perhaps entering the virtual society where our lives are co-dependent upon electricity – the ephemeral electron. And it is important to remember that all along in this process the brainpower of the human is adding enormous dollar value to the products from the natural resources. In contemporary economics, this is called the “value added stream”.

A very simplified schematic concept of this is shown below as an upside down triangle. The area within the triangle are the dollars created within society. At the bottom of the triangle are the natural resources – the beginnings of all wealth. Movement upwards in the triangle is achieved through knowledge, which in turn, expands the economic value, the value added stream, of the natural resources. Facilitating this process are the “services” which help the process move along – as an example the truckers hauling the goods or the lawyer enforcing the laws. These services by themselves add very little value to the product, but they are important for facilitating the process of adding to the value of the products coming from the natural resources.

The United States faces the danger of becoming a nation enamored with the high technology of our economy and becoming a nation that has forgotten where the wealth originates from. We can become a “disconnected society” which forgets that original and all wealth begins with our natural resources.

Without the natural resources, we will not have a virtual society – or any society. If we are aware of this and apply it to our planning, we will know that the best way to protect our natural resources is to sustainably use them – and then capture the value added opportunities that they give us.

July 31, 1997