Economists ill-serve themselves be describing economics as being about the allocation of scarce resources. It is about the creation of resources. Oil, for instance, is described as a natural resource. It isn’t. In and of itself it is simply sticky glop. It was human ingenuity that turned this goo into something the world can’t live without.
Free markets are about the constant process of turning scarce resources into abundances, making today’s luxuries into tomorrow’s commodities and necessities. A little more than a century ago, the automobile was a toy for the rich, one that cost more than the equivalent of more than $100,000 today. Henry Ford’s moving assembly line turned this rich man’s toy into something every working person could afford and into an instrument that vastly raised the world’s standard of living. Thirty years ago the cell phone was as big as a shoebox, had a short battery life, and cost $3,995. Today there are more than 5 billion phones around the world. They evolved from just incorporating telephony to being handheld computers. In America even the poorest of the poor today have cell phones.
Gilder understands the intangibles of capitalism. Wealth comes from ever expanding pools of information. The greatest source of wealth creation is the human mind. Entrepreneurs don’t need all their money to meet their basic needs. But the reason they should be able to continue to own the wealth they create is precisely because they are better at reinvesting that capital- and thereby multiplying it for the benefit of us all- than government bureaucrats are.
The two areas most in trouble today-education and health care-have the least scope for free enterprise.
From the forward by Steve Forbes for the new updated edition of Wealth and Poverty by George Gilder
Redistribution of wealth is at best a short-term success because the government is unable to redistribute the true source of that wealth, the mind. This is why immigrants who arrive with nothing are able to amass fortunes in less than a generation.
Redistribution of income is disastrous for the common good for two reasons: it enslaves the recipients into a subsistent and dependent culture with all the social ills that accompany such policy, and it retards the growth of wealth available for everyone by extracting it from the parties who are its most responsible stewards.