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>>You'd be astonished at how many who start out with the Ferrari wreck it in short order and how many who start out with bricks become very strong because of it.<<

Outlying cases are irrelevant. Of course people overcome the odds in both directions. But given equal driving ability, the Ferrari will always win the race, take the prize money, and buy their children a Ferrari.

>>People who start out with wealth seldom create wealth.<<

What is the basis of that statement? Bill Gates was born to a very wealthy family. Warren Buffet was born to a stockbroker-turned-Congressman, so definitely at least upper middle class. Carlos Slim Helu has been quoted saying "I came from a wealthy family. I have always had money."

Seems the top three wealth-generators in the world were born wealthy. They attended Harvard, Columbia, and the university consistently ranked the best in Latin America, respectively.

The only thing I'm astonished at is that there are people who have so little understanding of how the world works that they think poverty and wealth are not both self-perpetuating.




Only the real world is not a race and there is no prize money. If you own a big factory, you get richer not because God gives you a prize for having a bigger factory than everyone else, but because your factory creates wealth, out of nothing.

Wealth does tend to perpetuate itself, as in the above example, but this is hardly lamentable. And "poverty perpetuates itself" is basically a bombastic way of saying "lack of wealth doesn't, in and of itself, create more wealth", which is natural and could never be otherwise.

Of course, that's if we ignore the psychological component of it. But what can you do about that? Go into people's homes and tell them to stop being such feckless idiots?


">>People who start out with wealth seldom create wealth.<<

What is the basis of that statement? Bill Gates was born to a very wealthy family."

I'm pretty sure Bill Gates made more cash than he created wealth. Those are orthogonal concepts. It's possible to make cash without creating wealth or indeed, destroying it (ex: "successful" spammer that destroys the value of email). It's also possible to create lots of wealth without making money (the example is left as an exercise for the reader).


About the only way to make money without creating wealth is to steal it from somebody else. Typically when somebody pays you for something you did, it's because they'd rather have your service or product than the cash they paid for it. Typically this means you created something valuable (or that the dollar is depreciating so quickly everyone's eager to get rid of it, but more on this later).

The spammer created value to the companies advertising and more importantly created a whole market for spam filtering solutions (the same way virus writers created a huge anti-virus market, to the extent that some wonder if a lot of viruses are not actually written the AV vendors themselves).


This is the broken window fallacy. Making a "market" in window repairs by smashing windows doesn't create wealth.


"About the only way to make money without creating wealth is to steal it from somebody else."

Well. Let's say you have a company M that creates X wealth and has a monopoly. And then you have companies A, B, C, D, E and F that create 7x wealth but are driven out of the market by M's monopolistic practices. M indeed creates wealth, but the market is actually getting less than it would without it. It might not be called stealing, but I feel robbed.

Similarly, I'm pretty sure the value the spammer is creating for the companies they advertise for is largely offset by the value it's destroying for the masses of people they advertise to. Besides, the kind of "products" sold by "companies" via spammers is not exactly friendly neighborhood or good quality (if there's even an actual product at all).

edit: "Typically when somebody pays you for something you did, it's because they'd rather have your service or product than the cash they paid for it."

Sure, but maybe there's another service/product that could give you much more for the same money but you don't know about it because of propaganda (marketing, FUD) or simply because the company has been driven out of the market unfairly, as I said earlier.


Don't confuse a net loss of wealth with wealth not being created. If everybody got an equal portion of total wealth, then monopolies and spammers would be bad, but since somebody wins (even though there are more losers), wealth is technically created.

A better scenario is the "creative destruction" when one industry is displaced but society overall benefits, i.e. cars over horses, Wikipedia over Encarta over Britannica, etc.


"Don't confuse a net loss of wealth with wealth not being created. If everybody got an equal portion of total wealth, then monopolies and spammers would be bad, but since somebody wins (even though there are more losers), wealth is technically created."

I must have read wrong. You're saying spammers are not quite bad?...

"A better scenario is the "creative destruction" when one industry is displaced but society overall benefits, i.e. cars over horses, Wikipedia over Encarta over Britannica, etc."

The new industry replaces the old one because it creates more value than the old one, no? I think car factories create more value than stables...

Also, in the monopoly case it's a company that hampers global progress to protect its own interests. I like to seek win-win scenarios so that doesn't resonate well with me.


I meant bad in the economic sense, where no one is better off. The spammer is certainly better off for his work even if everyone else is worse off.


I don't see how you could come to that conclusion. His products are in damn near every home and office in the first world. They helped bring PCs to the masses and make computing affordable.

Love 'em or hate 'em, his company is one of the most significant of modern times. He generated lots of wealth.


> It's also possible to create lots of wealth without making money

Habitat for Humanity comes to mind.




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