Wealth is not a Pizza

This podcast by Russ Roberts is a breath of fresh air in thinking about jobs and wealth. From the Econtalk website, “Russ Roberts talks about the claim that for capitalism to succeed there have to be people at the bottom to do the unpleasant tasks and that the rich thrive because of the suffering of those at the bottom. He critiques the idea that capitalism is a zero sum game where to get ahead, someone has to fall back. He also looks at the evolution of the least pleasant jobs over time and how technology interacts with rising productivity to make the least pleasant jobs more pleasant.”

One of the great quotes from this podcast is when Roberts says, “Wealth is not a pizza. There is no sense in which my success makes you poorer. In fact, in general, one person’s success makes other people richer, not just in a monetary sense, but in the full sense of the word. So when people complain that Bill Gates or Sam Walton have to ‘give something back,’ they have to be charitable – both people are or were, Bill Gates and his foundation are, and Sam Walton was when he was alive – but they don’t “owe” people something. To say you have to give something back implies you took it. But Bill Gates and Sam Walton didn’t get wealthy by taking, they got wealthy by providing a product that people preferred to the alternative, and only chose their products because they found it more beneficial than the alternative. True, they did give money to Bill Gates and Sam Walton, but they got something in return that they evidently valued more highly [than their money]. So they, through that voluntary exchange, were made better off, as was Walton or as was Gates. Wealth isn’t a fixed pie, one person’s share does not mean that other people get less…”

SDG,
The Farmer

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One response to this post.

  1. Posted by Larry Walker on September 30, 2009 at 1:24 pm

    This is a great point. Many people have the idea that there should be a cap on how much someone makes because whatever they make is something that someone else isn’t making. This just isn’t true. Rush Limbaugh explained this on the Jay Leno show a couple of nights ago, and Atlas Shrugged does an even more thorough job-Read Atlas Shrugged! (but don’t take to heart her theological ideas)

    Reply

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