Wealth Economics

The creation, trading and utilization of wealth is the foundation on which all economic models are built

1) Humans are wealth creators. (We turn clay into pottery, iron or into autos, seeds into crops, crops into food)

2) Humans trade wealth. (the farmer trades his wheat for money, then trades the money for clothing, vehicle's, and fuel etc.)

3) Humans trade wealth. (the farmer trades his wheat for money, then trades the money for clothing, vehicle's, and fuel etc.)

4) Humans are wealth destroyers. (We break the dishes, wear out the cars, and eat the food.)

5) When humans create more wealth than they destroy the world gets richer.

Given these four axioms lets create a world that works with no one left out. Poverty must be eliminated because it is a major contributor to crime, war, terrorism, high taxation, overpopulation, environmental destruction, and the abuse and exploitation of women and children.

Poverty is the lack of wealth. (food, clothing, shelter, medical care, etc.) To end poverty we need to create and distribute more wealth.

Creating Wealth

Individual Wealth Creation - In the end it is the individual that creates the wealth. We would ideally like as many people as possible to become creative, productive, efficient wealth creators.

The keys to wealth creation are; resources, capital, knowledge, specialization, tools and genius.

Resources: Over the last 200,000 years, famine has been humanities single biggest killer. So it is no surprize that we have a deep fear of shortages of any kind. Because of this fear of shortages, few people are prepared to take advantage of and benefit from the coming abundance. The book ABUNDANCE by Peter H. Diamandis and Steven Kotler documents what is happening today.

Capital: the world is awash in money. It was this massive surplus that drove bankers and others to make reckless loans. And this surplus is one of the reasons that cutting the interest rates by the Fed has had little positive effect on the economy. Also compare the capital needs to build a steel mill or auto factory and the startup cost of Facebook or Google. With a massive surplus of capital the idea of capitalism is now obsolete.

Knowledge: With so many scientists and inventors working today we are flooded with new ideas and opportunities, many of them undeveloped. The Kurzweil newsletter is an exciting way to keep up with the number of new opportunities that science and technology is producing.

Specialization: The amount of specialization is the biggest difference between poor countries and rich ones. For it produces far greater efficiency in the use of people, resources and knowledge. Today the internet is making more specialization possible. If someone specialized in making pink shoe laces. Their local market would be too small, but if they market them worldwide they might build a million dollar business.

Tools: A 35,000-year-old stone ax, with ground edges is the oldest known tool.

From that simple beginning tools have continued to evolve and greatly increase our wealth creating ability.

Genius: as Allan Snider says, “Everybody has an inner genius. It’s the educational system and our limiting beliefs that prevent us from tapping into our inner genius.” Many probably most people that are doing dumb jobs can with some venture capital and IQ 1000+ training become job and wealth creating entrepreneurs. Calling all transhumans, our rapidly changing world needs you!

Wealth Distribution

Five ways of distributing wealth, charity, government jobs, wealth creating jobs, self-employment, green entrepreneurs.

Charity and welfare

   Charity and welfare are good and needed for, orphans, victims of disasters and others incapable of caring for themselves. But there are three problems when it is able bodied people we are supporting. First welfare does not get the them out of poverty, it only keeps them alive so they can go on suffering and reproducing.. Second: welfare is paying out,  trillions of dollars a year, for them to destroy wealth. They eat food, ware out clothing, heat and air-condition their homes etc.. This destruction of wealth makes the world poorer, and making the world poorer is not a rational way to reduce poverty. Third they are contributing to the destruction of the environment.

Government jobs

    Government are necessary, and provide many benefits like fire and police. Government jobs are easy to create, but they often turned out to be inefficient wealth creators. Ever watch seven government workers repairing a road, with two working, five watching?  This is not the best way to create a prosperous world. A more serious problem especially in third world countries is the large number of government employees whose main job is to create red tape that impedes others in their efforts to create wealth. THE MYSTERY OF CAPITAL by Hernando De Soto is about how red tape keeps millions of people stuck in poverty.

Red Tape Kills

   The governments response to the thalidomide tragedy that cause thousands of birth deformities, was the enactment of more laws requiring the approval of new drugs. The goal was a good one, to protect people from the greed of drug companies. The result is a massive bureaucracy, which takes years to approve new drugs. This has prevented several dangerous drugs from reaching the market. It has also slowed up by ten to twenty years the introduction of many safe and effective drugs. The result has been the unnecessary deaths of thousands of people whose lives could have been saved had not the drug become mired in endless red tape. Also a major part of the cost of drugs is the cost of the red tape. It is likely that the delays caused by the bureaucracy has killed more people than it has saved. If I am sick I would like to have the choice to take a new medication without waiting for the government to approve it. All I would like is a clear statement from the drug company of ongoing test results in humans and animals. The only protection I would want is a severe penalty for deceptive information. Then I am free to make up my own mind as to taking or not the new drug.

Tax the Rich

   For me, not being rich, this sounds like a great idea, after all the rich don’t need all their money. What to they do with it anyway? Well they spend it on all kinds of stuff. When they buy a fancy car they cause some company to employ workers to make the car, and these workers are efficient at creating wealth in the form of cars. And this is true of most things the rich buy. In fact the source of all jobs on planet earth is people spending money. So the more money the rich spend the more jobs there will be. It turns out that they cause more wealth to be created much more efficiently than do governments. So moving money from the rich to governments causes less wealth to be created. The other thing rich people do with some of their money is bank it, and the banker loans it out to someone who spends it thus creating more jobs. Also the rich invest their money in money making companies, and these companies spend the money in such a way as to maximize the creations of wealth. So even though I’m a bit envious of their wealth, letting them keep it leads to more wealth creating jobs then given the money to some government. The rich are wealth creators and governments worldwide tend to be great destroyers of wealth.

Wealth creating jobs

    Most businesses must turn labor into wealth, or they go out of business. The necessity of profits makes their payroll a more efficient way of distributing wealth then government jobs. They do need watching though for some of them show little regard for the environment or worker safety.

   How hard should I work? Ideally for the country I should go all out and produce as much as I am capable of. But I for me why? If I worked really hard it would make my co-workers look bad because I could outproduce them. Also most of the benefit of working hard would go to the shareholders. So I went along producing about the same amount as my co-workers. It was also understood that most if not all of the new ideas would come from out boss.

   Eventually our jobs went to India, I don’t think that they were any more productive then we were but they cost only ¼ as much. Can’t really blame the company, for their competitors were using offshore programmers.

Self-employment

   We know from the work of the Grameen bank that ordinary people can with a little financial help and some training become wealth and job creating entrepreneurs.

The self-employed are often the most efficient wealth creators, because their self interest is more closely tied to the results. I’ve often heard that it take two or three workers to replace an owner. No surprize as I never really worked all out when I was working for someone else.

Green entrepreneurs

    This is the best answer we know of for green entrepreneurs not only create jobs for other but also put them to work cleaning up our environment. The GREEN ENTREPRENEUR DEVELOPMENT SCHOOL provides training, venture capital, and marketing support, making it possible for ordinary people with little or no money succeed as green entrepreneurs.  

Appendix

http://hplusmagazine.com/2013/04/22/capitalism-is-dead-long-live-transhumanism/ Fourth Paradigm Economc changes