Creating Your Own Wealth
Many people don't understand that wealth can be created. My first counterexample for them: who did Steve Jobs steal all the iPhones from? If wealth is a zero-sum game, where one person’s gain is someone else’s loss, where did the phones come from? This simple example shows wealth can be created. A surprising number of people seem to believe profit is a function of sufficient malevolence. Wealth creation always attracts entitled predators.
The fewer people you employ in the process of wealth creation, the harder it becomes for people to claim that you “exploited” others. Some software entrepreneurs make billions by themselves, like J.K. Rowling did writing books. Satoshi Nakamoto (Bitcoin) and Notch (Minecraft) are early examples.
The closer value creation comes to pure authorship—symbols typed straight from the mind—the harder it is to deny the merit of the person who generated those symbols.
You can write a piece of software on a computer and then set up a website, and people will pay money for your software. What are you actually doing there? With no natural resources, just by hitting keys, you created a pleasing configuration of electrons.
At a very fundamental level, you created order from disorder. You created a more useful configuration of zeroes and ones from random order. The internet allows you to clone and export your creation to millions of users around the world who just click to pay for it.
Power compels; money persuades.
We don't have the right metrics to measure wealth creation yet. We can measure the profit and loss of a business, but we don't yet have a widely accepted way of quantifying the wealth produced by voluntary transactions with a business.
Money seems to be locally zero-sum (after a trade happens, Person A has -$1, Person B has +$1), but actually money is globally positive-sum. In a voluntary exchange, A and B both gain in wealth because they both get non-monetary benefit from making the trade.
Wealth creation is the technological creation of order. It is the difference between a bunch of bricks lying on the ground and a house; the difference between a bunch of pieces of wood lying on the ground and a chair. You can see those differences in physical space.
When people are confused about wealth creation in a physical example, they say, “You must have gotten the bricks from somebody. You must have gotten the wood from somebody.” Most of the value, though, is in the ordering of those materials. Often the value of raw materials is not anywhere near the value of the assembly process: the know-how, the machines, and the effort required to put the raw materials together.
The examples on a computer (like a new piece of software) are more obvious because they are pure—the materials have no cost. The new creation is just an electron configuration. Nobody says you took that from somebody else.
