“Experiencing Success One Good Idea at a Time”
What you Probably Haven’t and Wouldn’t be Taught
about Wealth—and should be
Dr. Sherwood Kaip
Most people understand that they would rather be wealthy than poor. Unfortunately, thanks to common erroneous ideas floating around in the culture, most people do not really understand either wealth or poverty, or their role in it. Hopefully, this will shed some light on the subject.
Getting Wealth First, let’s consider wealth as getting what you want the way you want it when you want it. Notice that money has not been mentioned. You don’t want money for its own sake unless you are a coin collector. You only want money because it is by far the most convenient method of trading for what you do want, whether it is a microwave oven, a hunting rifle, a Bible, or music lessons. More money lets you obtain more things you want.
So how do you get what you want? That is, how do you improve your situation in the future from what it is now? How do you become better off (wealthier)?
There are basically two ways (not counting theft, etc.):
1. You can do things for yourself, such as grow some of your own food or build your own log cabin. There are many things you do for yourself which satisfy some of your wants, i.e., make you better off in your opinion—‘wealthier’.
2. However, in a modern society, and even in a fairly underdeveloped society, you actually get most of what you want (increase your wealth) by interacting with others: autos, clothing, heating oil, cell phones, housing, most food, those confounded music lessons, etc., etc., etc., come to mind.
What do I mean by ‘interact with others’? We obtain what we want mostly by doing favors for others, so still, others will do favors for us, usually using money as an intermediary. We could do each other favors directly. However, such barter would be unbelievably awkward. We may not have available what the other party wants at this time. And maybe the other party doesn’t even want anything right now!
When a neurosurgeon wants music lessons from a teacher, the teacher is probably not interested in having her skull cracked open at that time. So the music teacher asks the neurosurgeon to simply give her a certain amount of money instead. If the neurosurgeon agrees, then both the neurosurgeon and the teacher are better off than before. The neurosurgeon got the music lessons he wanted, and the music teacher got the amount of money she wanted so she could get a favor she wants from someone else able to provide it. That is, both are wealthier (better off in their opinions) than before the trade. This is key. Both gave up what they valued less to get what they valued more. Both are ‘wealthier’. In the absence of force or fraud, the process is MORALLY correct because neither party lost in the exchange—both gave up what they each valued less to get what they each valued more. What more could you ask other than that everyone else be your slave?!
This illustrates the principle on which the private sector operates: “I’ll do something good for you if you’ll do something good for me.” This process occurs very easily and naturally when people are free.
And since the two traders are part of the community, and no one else was involved, the community is also richer (wealthier). (It is important to note that in a very real sense, a trade using money is really only 1/2 a trade; the other 1/2 is when the person receiving the money uses it to get the favor (usually buy) that she really wants.)
So the whole point of the private sector is an individual ‘producing’ wealth for him or herself by giving favors to others so he or she can get favors in return. The more and better favors you give others (in their opinion, not yours) the more favors you get.
It is important to realize that when you give favors to others, you accumulate money until you get favors from others, i.e., spend the money. So having money simply means you haven’t asked for and collected all the ‘favors’ owed you yet.
Obviously, the private sector is a fabulous wealth generator. You ‘produce’ what you want by giving favors to others (usually for money) so you can satisfy your wants and needs by getting favors from still others (usually by spending money).