Difference between revisions of "Portal:Economic Freedom"

One way to understand American success is to look at wealth and poverty in the U.S. While some in America live with poverty, on average, we have enormous wealth. Both wealth and poverty are badly misunderstood, which is a problem for honest politics. To understand them is to strengthen our basis for making intelligent political decisions and dispersing the fog of political marketing.
Wealth and poverty can be thought of as two sides of the same coin. If you understand wealth, you begin to understand poverty and vice-versa.
So, what is wealth? It will be helpful to first say what it isn't.

It is easy to confound wealth and money and most of us do. They are not the same as we speak of them here. A large pile of gold coins makes you rich, but not necessarily wealthy. Gold (or cash) is a static asset. You can use it to buy things, but it creates nothing unless it is used to enable assets that do produce wealth. Once spent for consumption, nothing is left behind to generate a continuing stream of spending power.

George Gilder^[1] uses the illustration of oil rich countries. Several countries with the highest per-capita spending power are in the middle east. Their spending power comes from their oil assets. They can buy Rolls Royces, private Boeings, and build office buildings. But those are perishable things which, in themselves, generate no further income unless there are roads on which to drive or skilled people to use the offices, and unless they are put to use in wealth generating ways. When the oil is gone, those countries could become as poor as they were before the oil was discovered. They have more riches than wealth. Venezuela has much the same problem today, but is further down the road. They are a formerly rich country of little wealth, now in the process of going broke. Without its oil assets, Russia would be impoverished. Countries like England, Germany, Japan, the U.S., and others have wealth engines that relegate whatever oil assets they may (or may not) have to supporting roles.

Wealth is having the kind of enduring assets and capacities (such as work skills, schools, industries, roads, ports, airports, railroads, and a robust and honest society willing to work) that will generate future income.

Example: Steve Jobs had wealth - arguably, long before he was rich. His assets were useful knowledge, the vision to use it, the capacity to work for that vision, faith in the market place with no guarantee of success, and a government that guaranteed him the freedom to create something that we did not know we needed until he presented it to us. There are millions of other such examples created by more ordinary Americans who started from nothing and built their own futures. These are stories of wealth. There is a little truth to adage that "it takes money to make money", but it would be completely untrue to say that it takes money to create wealth. Let's talk about this within this topic.

Poverty can be thought of as lacking that which is wealth.

Okay. That is somewhat simplistic. One would not say that rich middle eastern countries are living in poverty. But, having riches vs. wealth, they have the potential to do so in the future if they are not able to transition to non-perishable income producing assets - all of which depend on knowledge, work, and a few other things that will be discussed in the articles assigned to this category.

Viewing poverty only as the absence of wealth also denies us the understanding to be gained by looking at the coin from both sides. Just as understanding wealth helps to understand poverty, understanding poverty provides insights into creating wealth.

This category is the place to insert articles about wealth, poverty, economics, and economic freedom, and how they have been effected by U.S. government policy and social customs and mores.
It is also the place to put articles that discuss capitalism and socialism as contrasting approaches.

1. ↑ Gilder, George. Wealth and Poverty. New York. Basic Books, Inc. 1981