The “standard of living” of any country means the average person’s share of the goods and services which the country produces. A country’s standard of living, therefore, depends first and foremost on its capacity to produce wealth. “Wealth” in this sense is not money, for we do not live on money but on things that money can buy: “goods” such as food and clothing, and “services” such as transport and entertainment.A country’s capacity to produce wealth depends upon many factors, most of which have an effect on one another. Wealth depends to a great extent upon a country’s natural resources, such as coal, gold, and other minerals, water supply and so on. Some regions of the world are well supplied with coal and minerals, and have a fertile soil and a favorable climate; other regions possess perhaps only one of these things, and some regions possess none of them. The U.S.A is one of the wealthiest regions of the world because she has vast natural resources within her borders, her soil is fertile, and her climate is varied. The Sahara Desert, on the other hand, is one of the least wealthy.Next to natural resources comes the ability to turn them to use. China is perhaps as well off as the U.S.
A. in natural resources, but suffered for many years from civil and external wars, and for this and other reasons was unable to develop her resources. Sound and stable political conditions, and freedom from foreign invasion, enable a country to develop its natural resources peacefully and steadily, and to produce more wealth than another country equally well served by nature but less well ordered. Another important factor is the technical efficiency of a country’s people. Old countries that have, through many centuries, trained up numerous skilled craftsmen and technicians are better placed to produce wealth than countries whose workers are largely unskilled. Wealth also produces wealth. As a country becomes wealthier, its people have a large margin for saving, and can put their savings into factories and machines which will help workers to turn out more goods in their working day.
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