America became great because it transformed its vast natural resources -- Iowa farmland, Mesabi iron, Texas crude -- into human capital, equipped with skills to succeed in the Information Age.
Now, when human capital is king, some look toward Texas and North Dakota and see natural-resource extraction as a path to economic rejuvenation. But if we look at Australia, the model of a major mineral producer, we see that widespread prosperity comes not from the stuff beneath the ground but from the stuff between our ears.
Yes, the U.S. would be fortunate to exchange its painful 8.2 percent unemployment rate for Australia’s healthy rate of 5.1 percent. According to the International Monetary Fund, at current exchange rates, Australia had the highest per-capita gross domestic product in the world in 2011, among all countries with more than 10 million people.
Australia’s extremely high per-capita nominal GDP of $65,000 reflects high exchange rates more than outsized GDP growth, but by any measure Australia has had some good years. From 2006 to 2011, its real GDP increased almost 13.8 percent. Over the same five years, real GDP in the U.S. grew only 2.75 percent.
Bloomberg
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