The Wealth of Healthy Nations
In 1776, Adam Smith published An Inquiry into the Nature and Causes of the Wealth of Nations. Two and a half centuries later, his question remains the most important one in economics and arguably in public life: What makes a nation rich?
The answers have filled libraries. Some economists point to capital and machines. Others point to education, technology, institutions, culture, 3
The Wealth of Healthy Nations
geography or luck. Each answer contains truth. But a finance minister with a fixed budget cannot invest in "everything." She needs to know which investments carry the most weight, which are necessary but not sufficient, and which, once a country has enough, stop paying extra dividends.
That is the practical question this book sets out to answer.
Through statistical analysis, 10 economic pillars have been identified. Three of the pillars are engines that drive the differences between developed economies and seven pillars are foundations that are critical for a nation to become an advanced economy.
I call this the Prosperity Pillars Framework, and its central claim the Foundations-and-Engines Hypothesis: national prosperity rests on a set of foundation pillars that every advanced economy must reach, but among nations that have reached them, income is driven mainly by the health of the population and the openness of the economy to the world, reinforced by how fully the nation puts its people to work.
Hence the phrase on this book's cover: a nation's wealth is built in its hospitals and its harbors, and earned by the people who go to work in them.
The book is organized in three parts.
Part One: The Engines devotes a chapter each to the three pillars that drive differences in wealth among advanced nations: health, trade and employment.
Part Two: The Foundations gives each of the seven foundation pillars its own chapter. Each explains why the pillar matters, offers historical examples from the industrial rise of nations, and reports what the data shows.
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