The distinguishing feature between countries is the differences in the quantity of capital goods that each has accumulated since their beginnings. As a thought experiment, if you were to imagine there were no inhabitants on earth, it would be easy to see that no country would have been endowed any special factors of production - other than land and labour. With that understanding, it becomes clear that the capital accumulated over the thousands of years must have a significant bearing on the productive capacity of each nation. Factors of production such as land and labour are god-given - or for the non-believer - nature-given original factors.

Land and labour combine to produce capital goods. The sole purpose of capital goods is to produce consumption goods to satisfy future wants. We read in [link to Saving, Producing...] that individuals postpone consumption today to enjoy equal or greater consumption in the future. An equally timed production plan - one that matches production length with consumer waiting time - was seen as a prerequisite for successful want-satisfaction in the future. These mechanisms are explained in the previous post.

For capital goods to be created, land and labour must combine. This combination needs to be deliberate and the agents involved are guided by plans. The plans being in turn guided by the demands of the consumers. It is consumers who have signalled their desire for future want-satisfaction. Their signal is evidenced by abstinence from consumption today; this mere act of abstinence is sufficient to release resources from the economy to be channelled into productive activities. This means the act of postponement of consumption and combination of land and labour (to produce capital goods) takes place in tandem.

In short, deferment of consumption and creation of capital goods are deliberate activities. They are neither preordained nor uniform in degree across all human races, geographies and time periods. The fact that western society has a higher degree of prosperity today only means that the program of saving, capital-creation and a higher degree of want-satisfaction began a few centuries earlier than when these ideas caught up with other societies such as in Africa or Asia.

The low level of capital goods in some countries means the needs of consumers either go unmet or would take a very long time to be met. What capital goods do is that it transports consumers and producers near to the successful event of want-satisfaction. In the absence of capital goods, producers must first combine land and labour to produce the former. Once the capital goods come alive, they must again combine with labour to produce consumer goods. Preexisting capital goods help avoid step one, directly transporting to step two.

The entrepreneur who employs capital goods in production activity is nearer to the goal of consumer needs. On the other hand, an entrepreneur working without the aid of capital goods must start from the beginning - using original factors of production. In buying machinery he buys those original factors production plus time; that is the time by which production length is shortened. Therefore the correct description of capital goods is land, labour and time stored up. The difference between production using capital goods and one without consists in time. For this reason, capital goods are also called intermediary goods; like a station between original factors of production and the final goal of consumption goods. Intermediary goods help time-travel faster to the ultimate destination: that is, consumer want-satisfaction.

The shortage of capital goods amount to a dearths of time. Capital goods equal store value of time. It helps in traversing the distance of want to want-satisfaction in a quickly. W.S Jevons wrote in The Theory of Political Economy that want-satisfaction happens sooner rather than later in a capital intensive society. Intermediary goods offer temporal gain.

A capitalistic society can offer consumer goods without having to resort to strict savings, without resorting to increased manual labour and without exploiting original factor such as land. A country in a race to catch-up with a capital-rich country must resort to repression in savings (forced saving with reduced interest reward), repressed labour (extra work-hours accompanied with low wage-rates) and wanton exploitation of nature.

Without resorting to xenophobic tendencies and causing suffering to the locals, a poor country can bridge the time-gap (time needed to catch-up) by opening its borders to capital goods import. By doing so, it could reset its date of eventual want-satisfaction to an earlier date. It doesn't have to resort to forced abstinence from consumption today to accumulate capital goods. The benefits to the capital-exporting country are in the form of a greater volume of consumer goods at ever-cheaper unit costs. The importing country benefits through higher want-satisfaction sooner rather than later, lesser manual labour, more technology absorption and benefits from copycat local production. Yet, these benefits are masked by cries of exploitation by nationalist and communists voices.

The difference of the starting times between countries - of accumulating capital goods - explains much of the difference in its prosperity levels. There could be other serendipitous factors that aided the process, none which are too important in itself, such as favourable weather, presence of transport friendly natural waterways etc. But for these, there are no unique human differences between the people of various countries. The high current standard of living enjoyed by some countries today is due to an early realization of time-preferences and the benefits of production using accumulated capital. This realization happened earlier in some countries and later in others.