The law of conservation of wealth

We read many theories on laws of conservation, such as laws of conservation of momentum, mass or energy etc. I would say there should be a law of conservation of wealth as well. Before this is rigorously proven, it would remain very much a hypothesis of its own. Hear me out on what I mean and its implication to Malaysia:

In a country if there is no natural resources and also no positive balance of trade, the only available wealth within the land would always remain a constant. Naturally in this way, whatever wealth gained by one family or one group would be at the expense of the other remaining groups or families. On the other hand, if this nation has oil, timber and industries that export goods in big quantities, which draw in revenue from abroad, and the amount of which is more than sufficient to offset whatever to be imported, then this extra portion from outside would be the added wealth to be distributed to the people, even though it might not be shared in equal proportions. A nation of the first nature would be more suited to have a economic or political system such as socialist or communism in place to run the administration of it so that every one of its citizens gets its fair share to sustain their livelihood. While the second kind, would be typically a capitalist state whereby most of the countries in this world had adopted this particular model, inclusive of Malaysia.

The world has changed so much and every country is aspiring to become a developed nation. Whether this could be achieved or not, is very much dependent on the people and also the leaders they elected to lead them to the right direction.  If everyone in a country works hard and emulates the good models of the developed nations under the guidance of good and prudent leadership, with some fine tuning and adjustment, taking into consideration the diversity and differences of respective local environment and conditions, it is just a matter of time that these countries will progress themselves and be categorized under developed nations. While aiming to achieve this, we in general very much forget the law of conservation of wealth still applies in all situations. The wealth gained by one nation, it must be at the expense of other nations! There is no such thing as every nation in the world will gain enough wealth and be in the league of developed nations!  To make it simple, this could be likened to the case of everyone wanted to become the boss and no one to become employees.

China has emerged to become a super economic power recently, probably at the expense of huge trade deficit with the US, to some extent at the expense of Malaysians losing many jobs when FDI pulled out by MNCs to move their production facilities to cheaper China, etc. It would come to a point where every nation in the world is scratching their head as to how strategies could be adopted to be more effective in generating more wealth. For example drawing up more aggressive migration policies causing brain drain which attracts the best minds into the country or creating regional situation and taking side to enable more supply of advanced weapon or fire arms to conflicting parties facing threat, and hostility etc. It is not a surprise to reason out why everyone is eyeing on oil fields and why different nations are in constant conflicts under the pretext of allies belonging to different politically aligned blocks. To safeguard their sovereignty, they decide to amass more powerful and advanced weapon as their priority. They have foregone other nation building activities and spending which could be beneficial and doing more good to their own people. Such sales of weapon would easily help to wipe clean a huge portion from the trade deficit account that is being accumulated over the years.

Some countries are willing to allow their citizens to work under adverse and harsh condition or sweat shop environment in an effort trying to gain a head start in gathering more wealth. In doing so, it  triggers the protest from human rights activist groups that demand their working condition to be improved to a level in par with the advanced nations. There is a constant tussle over this human right issue, in the process of rounds and rounds of negotiation, more time is bought and the working condition is gradually improved hand in hand with their wealth condition! What a smart move to tackle whatever hidden agendas!

China with its huge 1.3 billions population has gathered enough wealth over the past decade, coupled with its strict capital control policy to cap its outflow of  foreign exchange would very much remain a self-sustaining economy by virtue of its huge domestic market. On the other hand, small population nations like Malaysia must compete with all the up-rising neigboring countries in order to move itself away from the pack and grab whatever remaining, after countries such as China, India or even Brazil had taken a big chunk from the "constant wealth" cake of this world. With the gradual drying up of oil wells, and the depletion of other un-replenishable natural resources, all Malaysians have to work together in the face of ever increasing world competition to achieve our vision 2020. Note that we are competing as a nation against the rest of the world and not amongst ourselves, for the cake is out there and not within us anymore!

The law of conservation of wealth will continue to apply and nations that are left out of the race could go bankrupt is not a myth, this would be a common happening of cruel reality for us all to witness very soon in the future!