The New Ideas Blog

Given my attacks on unethical wealth accumulation, which are probably taken by some as attacks on wealth or the wealthy, I think it’s time for this post. It is about how good money can be, and why we need rich people - even if we never join there ranks.

When Ana (my wife) first came here from Ecuador she was surprised and happy to see people with disabilities - even people in wheelchairs - working in Wal-Mart. Hiring those with disabilities is rare in Ecuador. And though seeing a seventy-year-old woman cleaning at McDonald’s may make some here sad, it is also a wonder that the old can find jobs (another group that is rarely hired in poorer countries).

These things did not result from legislation, as people might suspect, but from the great economy we had at the time. Where we lived there were businesses which had been running with too few employees for years. They would hire almost anyone who applied. That’s a wonderful thing for those looking for employment.

Part of it was also due to the incredible success of some large companies. A small shop might not be able to accommodate employees with wheelchairs and other needs, because of the financial costs. But the scale and efficiency of a Wal-Mart makes the expense affordable. A lot becomes possible when companies can become wealthy.

As for the personal wealth of individuals, that too benefits those who never directly share in it. It is wonderful that Bill and Melinda gates can give billions to various causes, and I suspect that this is money which will accomplish more real good than government programs normally do. It is also nice just to have wealthy people who can explore our world in ways that could never be accomplished if we were all equal in income, like going to the poles or ballooning around the world.

Personal wealth allows for a level and scale of innovation that no government bureaucracy could match. A rich man can take an idea and run with it despite everyone saying it won’t work. Or he can invest in a man or woman who has an idea but no money to pursue it. Thousands of technology companies have been started using “venture capital” from the rich to finance ideas from those without money, for example, providing millions of jobs and countless new products.

And we should never dismiss new products and “just more toys.” This year the first fully functional bionic hand is being used by hundreds of amputees around the world. The new “Touch Sight” camera allows those who are blind to take photos. The user holds it to his or her forehead to feel the braille-like screen, which creates a raised image of whatever the camera is pointing at. Medical advances too have come from private wealth.

My hope is that we will always allow enough freedom to people for them to become wealthy. It hurts nobody when a man becomes rich by finding new ways to create value. He enriches the whole world, and keeps a small part for himself. The trillions in added in real productivity to the world by “Windows” software have netted Bill gates a fraction of that value. Economies are not a zero-sum game in which one mans income comes at the expense of another’s.

Just imagine the simplest historical example: A man invents a tractor and so quadruples the amount of food a farmer can grow. Fewer people go hungry and the fewer people need to farm, freeing up their creative powers for other purposes. Soon the whole world is a richer and better place and that inventor grows rich taking just a tiny fraction of what he has created - that part we call profit. Now he can give to charity or finance other great ideas or do what he likes.

What if that man did it only for money? It still hurt no one, and if he put that money in the bank and did nothing more, it provided loans necessary for homes and other businesses. A wealthy man cannot help but share his wealth, for money is dynamic and cannot be of value even to the owner when hidden away. And that tractor would not have be bought if the value to the farmer were not more than the money traded for it. In other words, whatever the inventors motive, we have a system where he has to serve the interests of others to make his money, because all are free to buy or not.

People sometimes say that money doesn’t matter. Tell that to a mother who needs expensive medicine for her child. Money matters, and though we can make the mistake of loving it for its own sake, we can also through our love learn how to use it as the wonderful tool that it can be.

Most of the poor of the United States live a life that kings of the past could only dream of, with television, flush toilets, cars, new medicines and more. This is the result of an economic system which for all of its imperfections still allows people to get rich by finding ways to serve others. Look around you and you see the wonders of wealth.

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Tags: poor, rich, wealthy, wonders of wealth

This entry was posted on Saturday, November 29th, 2008 at 9:24 am and is filed under Economic Theories, Philosophical Ideas, Political Ideas. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.