Paul Graham on Wealth
This essay is by Paul Graham. It is so full of good information it is hard to know where to start. Below he clears up the distinction between money and wealth. It explains why craftsman understand this concept in a very intuitive way. Surgeons are sort of the craftsmen of the medical world - we are sometimes put down for this by our medicine colleagues - but after reading the essay one can clearly grasp how philosophical differences between the two camps might develop. Read the whole thing. Note also the other forms of wealth creation that he points out. I particularly enjoy how he uses historical examples such as Florence to bring his points home.
The whole essay is excellent. Thanks to alex popescu for linking to Paul Graham’s page and turning me on to his essays.
“If you want to create wealth, it will help to understand what it is. Wealth is not the same thing as money. [3] Wealth is as old as human history. Far older, in fact; ants have wealth. Money is a comparatively recent invention.
Wealth is the fundamental thing. Wealth is stuff we want: food, clothes, houses, cars, gadgets, travel to interesting places, and so on. You can have wealth without having money. If you had a magic machine that could on command make you a car or cook you dinner or do your laundry, or do anything else you wanted, you wouldn’t need money. Whereas if you were in the middle of Antarctica, where there is nothing to buy, it wouldn’t matter how much money you had.
Wealth is what you want, not money. But if wealth is the important thing, why does everyone talk about making money? It is a kind of shorthand: money is a way of moving wealth, and in practice they are usually interchangeable. But they are not the same thing, and unless you plan to get rich by counterfeiting, talking about making money can make it harder to understand how to make money.
