`Mobile' and `Immobile' People and Societies

`Immobile' societies are based on agriculture and other natural resources, such as diamonds or oil. Wealth is derived from the territory, not from processes that transcend geographic location, such as those in a factory for assembling cars.

In an agrarian or oil pumping society, the loss of territory means the loss of wealth. No one can make more wealth by doubling the amount of oil in the ground. The only way to double your wealth is to capture more oil fields. But in an industrial society, you can double your output by building another factory.

... institutions, values, culture, indeed the whole outlook of these societies ...

must serve to protect, administer, and exploit the land. Otherwise, a neighbor will "capture the place".

In an agrarian society, or one based on other natural resources, the fundamental mechanism to create wealth is not additive. You can only defend what you have; you cannot build to gain more. Consequently, the society, and the people in it, and the institutions in the society that support it are all `immobile'.

Feudal lords, aristocracies and landed gentry, armed forces and police, government ministries, priesthood and bureaucracies provided protection to a place and, at times, imposed threats on neighboring, similarly immobile societies. A weak king or a weak ruler left his subjects at the mercy of his rivals. ....

One's gain of territory was another's loss. It was a zero-sum game world. Anything that would allow people to move more easily from one place to another was perceived as clear and present danger. It weakened one's power — and the tax base. Over time, people specialized in the myriad institutions of "immobile" civilizations and had a large stake in its survival. ....

In contrast, a `mobile' society creates a part of its wealth from processes that do not depend on the territory: a bottle making factory uses raw materials that come from the ground, whether they be oil for energy or sand for glass. In addition, however, the factory `adds value' to the raw materials by making the bottles.

However, a factory needs capital. Few people have all the money they need to buy a new factory themselves; they must collect enough, either by pulling together more investors or by borrowing.

Entrepreneurs must promise an imagined future in which the money returned over time is greater than the amount put in by the investors and lenders. The promise must look good to the investors; and the lenders must believe they will gain collateral if an entrepreneur defaults.

Consequently, a `mobile' society requires slew of different institutions and practices from an `immobile' society : not only must it provide for contracts between those who need money and can make convincing promises that ventures will turn out, but it must also provide a sufficiently reliable, quick, and honest legal system to enforce such contracts.

... encourage the move toward institutions that are the backbone of mobile civilizations: those that diminish corruption and encourage trade.

Fortunately, just as a predominately `mobile' society such as the United States, has people in it who are `immobile', societies whose past institutions favored agrarian or resource-based institutions have people who are `mobile'. For the US, the goal must be to shift the countries institutions, and do so successfully.

... offer each and every Iraqi a fraction of oil-revenues.... The other portion would be transferred to central and local governments, through institutions held accountable for the spending. This arrangement would ensure that people have an immediate stake in the new Iraqi system ... , and incentives to cooperate and prevent sabotage, and offer collateral to up-start small commercial entities.