Marian L. Tupy is a senior fellow at the Cato Institute.
President Donald Trump talks about power and national strength as if it were stored in the ground. Drill more. Mine more. Control more territory. Even the recent talk of acquiring Greenland is sold as “national security.”
The instinct is familiar. Armies run on fuel. Factories need inputs. Supply chains break. A country that cannot access key materials can be coerced.
But the conclusion does not follow. In the long run, nations do not become rich and safe by hoarding rocks. They become rich and safe by building the rules and habits that turn knowledge into production, and production into strength. They become rich and safe through ideas.
That is how the United States rose. America had plenty of natural endowments. So did Russia, Venezuela and Congo. What made the U.S. exceptional was a system that rewarded discovery, experimentation, entrepreneurship and scale. When that system works, resources stop being fixed constraints and become problems to be solved. When Santa Barbara, California, suffered from prolonged drought, for example, it built a desalination plant to increase its fresh water supply.
American economist Julian Simon said it plainly: The ultimate resource is people. Scarcity is not mainly a story about nature’s endowments. It is a story about human ingenuity unleashed under good institutions. If markets are allowed to work and innovators are allowed to profit, scarcity gives rise to substitution, efficiency and new supply.
Nobel Prize-winning economist Paul Romer put the same point into modern growth theory. Ideas are non-rival: My use of an idea does not prevent your use of the same idea. That is why knowledge can compound. A new process, a better algorithm, a more efficient design can lift productivity across an entire economy. A barrel of oil can be burned once. A good idea can be reused forever.
That difference matters for national strategy. A resource-first worldview fixates on controlling supplies. An ideas-first worldview focuses on how quickly a society can adapt when supplies are threatened.
Consider the example of semiconductors. Chips do rely on physical inputs. A chip begins as a wafer of ultrapure silicon. It is built layer by layer using photolithography, etching and deposition. That requires specialty chemicals, high-purity gases, ultraclean water and small amounts of metals. It also relies on precise tools and components that must perform at atomic scales. The physical inputs are real. They are also not the main story.
The main story is know-how. The value in advanced chips lies in design, process control, yield improvement and the capital equipment that prints features measured in nanometers. If you doubt that, look at where the bottlenecks appear during shocks. They usually show up in fabrication expertise, tooling and complex manufacturing coordination, not in running out of sand.
The same pattern shows up in energy. The shale boom was not a gift from geology. The hard-to-extract hydrocarbons were known to exist. What changed was technology and business practice. Firms learned how to combine horizontal drilling, hydraulic fracturing, better seismic imaging and faster learning curves. What looked like scarcity was, in part, ignorance. Knowledge turned low-value resources into high-value ones.
Measured in time prices — how long people have to work to afford something — many commodities have become cheaper over the past four decades, even as population and consumption have risen. That is not magic. It is what happens when innovation and trade expand. Prices are signals. When a material becomes scarce, the price rises and human creativity is pointed at the problem. New supply is found, waste is reduced, substitutes are adopted and techniques improve. The constraint lessens or disappears.
That is why Trump’s resource obsession is a strategic distraction. It tempts policymakers toward the wrong tool kit: territory, quotas, subsidies, industrial micromanagement, political allocation.
If the goal is genuine security, the best place to start is not a map. It is our own rule book.
Want more domestic energy and minerals? Streamline permitting. Set clear, enforceable standards and stick to them. Reduce the ability of well-funded opponents of progress to delay projects for years without bearing costs. Speed up environmental reviews. Make timelines predictable so investors can plan.
Want more resilience in the supply of critical inputs? Encourage competition in mining, refining, recycling and substitution. Keep trade with allies open. Reduce tariffs that raise costs for downstream manufacturers. Expand skilled immigration. Stop treating every large project as suspect.
Now add the fiscal problem. America’s long-term vulnerability is not that it lacks a particular mineral. It is that it is building a mountain of debt while interest rises and politics resists reform. Debt is not only an accounting issue — it is a strategic one. A heavily indebted country has less room to maneuver in a crisis. It spends more on servicing yesterday and less on investing in tomorrow.
That is not fixed with resource theatrics. It requires sustained growth and higher productivity. That means faster innovation diffusion, more business formation, more investment and fewer barriers that protect incumbents and punish builders.
Trump is right to care about the supply side. He is wrong to think the path to greater productivity runs mainly through controlling more stuff. America’s durable advantage is its capacity to generate and apply ideas under a relatively free and flexible business environment.
That is the strategic resource that compounds.
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