[rsj_hn]

You are confusing real and financial resources. Financial resources make sense at the micro level. If I have $100 and you have $10, I can purchase ten times the real resources that you can. But

1) that relative advantage doesn't correspond to an absolute advantage that can be compared across nations. A nation with ten times the market cap of another nation doesn't have 10 times the real resources. It may just have a more developed stock market, or a more financialized economy, or a lower discount rate, or more optimism for future earnings.

2) Neither does market cap mean anything for the nation as a whole. If I have 10 times the wealth of you, I can buy 10 times as many real resources as you can, but together we can still buy only all the real resources available -- when market cap goes up, that doesn't mean more labor is available to purchase, or the nation has more skills or more equipment. It could just mean that there is more optimism about future profits, or a lower discount rate. Market cap doesn't measure the real resources of a nation anyway -- it's a measure of the discounted flow of earnings, but not of the gross value add of the economy. For example, if labor costs go up, profits fall and market cap shrinks. But the real resources do not change -- the labor supply does not shrink. Just the relative price of labor and capital changes. These relative prices can fix the market cap at any point between zero and infinity (exclusive). All by tweaking the risk free borrowing rate, risk premium, and relative prices of labor and capital. You get zero information about the total size of real resources by looking at market cap, all the information is about relative prices for a given set of real resources. The same is true for the total amount of paper claims in an economy -- they give no information on the size of real resources available. They are dominated by relative prices. The proof of this is exactly the fact that the Dutch had such huge market cap when their real resources were so small.