Wealth and Sex, Part II

In the previous post, I argued that wealth is the ownership of socially desirable property. That assertion begs the question, "Is wealth, therefore, a limited resource?"

The answer is "It doesn't have to be." The great genius of the free market is that it allows humans to engage in wealth creation, an activity far more socially beneficial than wealth redistribution. Even if the benefits of wealth creation are skewed to the wealth creators themselves -- and who better deserves them -- the mere fact that wealth has been added to the world is nothing short of wonderful.

Wealth creation occurs when individuals pursue rational self-interest, engage in a division of labor, and trade freely among themselves, all under the rule of law. In other words, business creates wealth. On that basis alone, business is an institution of tremendous social benefit for mankind. Rather than attack business people as greedy, we should be celebrating business people as heroes.

However, when individuals pursue their own advantage at the expense of others, use force to assign and control the labor of others, and limit the freedom to trade, they engage in wealth destruction. This does, indeed, make wealth a limited -- and vanishing -- resource. Witness the history of Argentina.

At the time of the American revolution, Argentina was as prosperous as the new American nation. After generations of anti-business government policies and the inevitable destruction of vast and vital stores of wealth, modern Argentina finds itself in the precarious position of an emerging economy.

Emerging, yes. But only after a terrible and senseless submergence.

Image property of Walter O. LeCroy