The wealth of any nation is finite. The more of it the rich concentrate in their own hands, the less there is left for everyone else.
Wrong! Wealth is NOT finite, it is infinite. People generate wealth through their labor, creativity, talents, etc. This is your key problem, the failure to understand wealth is not finite. When you believe such a fallacy, it causes you to think the wealthy should only become so wealthy else the poor can never become wealthy. It makes you believe there is only so much wealth and the wealthy have it all.
The truth is, wealth is generated, so wealth is limitless. Now the people who are wealthy in a nation, especially a free market economy nation like our own, generally got wealthy because they were smart with their money, were successful at free market capitalism, and had the drive, motivation and ambition to succeed. Many came from abject poverty to become wealthy. Seems to me, the really "smart" person might want to listen to them, learn from them, try to emulate them and find out about how they were successful.
Just total opposite of what you want to do.
How can wealth be infinite. Is the annual GDP number 'infinity'?
A nation can only generate so much wealth per year; the more of it the Rich keep, the less for the rest of us.
How could wealth be finite? If it was finite, no nation could possibly be more or less wealthy, than any other nation.
GDP is irrelevant to the point. The amount of wealth that is created in a given year, does not mean that it is not possible for more or less to be created in a given year.
If your car is yellow, does that mean it was impossible for it to be red or black, or some other color? No, it happen to be painted yellow. That doesn't mean it could not have been some other color. Just that yellow is what it was.
Wealth, is not static. Wealth is inherently dynamic.
First off, let's define what wealth is. What is wealth? Is wealth the $$ in your bank account? No.
Wealth is stuff. Things. Objects. In accounting terms, 'assets'.
A $, is actually just a green bit of paper with ink on it.
If you want to know what wealth is, just leave two people stranded on deserted islands. Leave one with a trillion dollars, and the other with a life time supply of food, water, building supplies, propane, a grill, and whatever other supplies he could need.
Between the two, who is wealthy? The guy with the dollars, or the guy with the stuff? Of course the answer is the guy with the stuff.
The only value $$ has, is what you can trade for it. That's it. It has zero intrinsic value.
So we have established that wealth come from stuff. I should also mention services, which are also wealth. The guy on the Island with a natural gas hookup, and electricity, and running water, would be more wealthy than the guy with a bunch of dollars, and no services.
Based on that, why do we say that the amount of wealth that can be created is infinite?
Because the amount of products and services that can be produced is inherently dynamic. Even then, the value of the products and services are even more dynamic.
Every individual can change their production. GoPro was created by a guy who sold sea shell necklaces. His wealth production went from something extremely low, to something extremely high.
Additionally, every person that goes from living on welfare producing zero wealth, to producing something of value, drastically changes the amount of wealth produced.
Every person who keeps a job instead of retiring, increases production of wealth.
Every young person who get's a job, instead of playing PS2 video games, increases the production of wealth.
Now in theory there is some maximum upper limit to how much wealth could possibly be produced in a single year.
If we forced every single able person, to do the absolute most valuable labor possible, you could in theory determine the maximum number of people, verses the maximum value of the labor, verses the maximum number of hours that could be worked, and thus you could assume that's the maximum amount of products and services the country could produce.
The problem there is, you don't know who can work. I was working at 6 or 7 years old. One winter break, I was shoveling side walks for $5. Worked all during break and beyond. There's a story of Nick Vujicic, who was born without arms or legs, and he got his real estate license, and was buying and selling real estate over his computer, making tons of money. I know a guy who was doing home remodeling on the weekends, tossing news papers in the morning, and had a full time job. The mechanic that I have work on my car, does car repair from his garage, after he gets home from his regular job.
So you don't know who can work, or how much they can work.
Additionally, you don't know what high value labor there is, because what work there is to do, is constantly in flux. Who knew 10 years ago that we'd have smart phones? Who knew there would be a massive industry of software development for Smart phones? Who knew we'd have tablets? Who knew everyone would have LCD screens 15 years ago?
The economy is dynamic, and what labor has value, and what value it has, is constantly changing.
Thus, just as we said, wealth is inherently dynamic and ever changing.
Now, as to the "the more of it the Rich keep, the less for the rest of us."
The problem is again, that you think wealth is static. Wealth is not static. It is either being created, or being consumed.
Wealth is NEVER static. If you buy a car.... that car is dropping in value. That wealth, is being consumed.
Worse, the rate of consumption is dependent on the people involved. If you find a person who doesn't take care of their stuff, and you give them some rich guys Porsche, in a just a few short years, that Porsche will be just as much a junker, as the car they had before.
Even if they did try and take care of it, an expensive high value car, tends to have expensive high value repairs. They likely wouldn't have the means to maintain the car even if they wanted.
The difference between the wealthy and the poor, is generally that the poor consume their wealth, and the rich invest their wealth.
Two people buy corn seed. One cooks it up, and eats it. The other plants it, and reaps a dozen bushels of corn later. The first is starving later, and the other ends up wealthy.
It's the difference between the PinBall people and the Beer Pong people.
Where does that come from? Warren Buffet. Buffet has a great story from his youth. When he was in high school, he worked a paper route. Instead of blowing his money on soda, and smokes, and baseball cards, Warren Buffet saved his money and purchased a PinBall machine, which he placed in a local business, and there.... it earned more money.
Now I don't know about you, but when I was in high school, the popular thing to do was to buy a keg of beer, and go to someone's house whose parents were away, and play beer pong all night long, pissing your money down the drain.
Buffet didn't end up a billionaire because he was super smart, or because "the evil rich kept wealth for themselves". The reason he's wealthy is simply because he invested.
Did you know that if you deposit merely $100 invested into a growth stock mutual fund, from 20 to retirement, you'll be a millionaire or close to it?
But people don't. Take Michael Jackson. He made an estimated Billion dollars in his life time. Yet when he died, his estate was on the verge of bankruptcy, and he was in the process of selling off his wonderland ranch properties. Why? Because he consumed every dollar he earned.
Again, the reason the wealthy are wealthy, is not because they are hoarding, but because they are investing instead of consuming.
Take Sharon Tirabassi of Canada. She won $10 Million dollars. That's a lot of money. Imagine all the wealth that could be created if she invested that properly. Imagine all the jobs that could be created, and products and services provided.
Sharon Tirabassi 10 Million Lottery Winner Broke Catching The Bus News One
Instead she consumed it all, and she's broke now.
Steve Jobs, on the other hand only got $5 Million. He used it to purchase Pixar, which of course created hundreds of jobs, and box office hit movies, and later sold Pixar for a cool $5 Billion.
Did Steve Jobs hoard his money? No. He invested it. That's why he died a billionaire, and Sharon did not. That's how life works. It's not some evil trick by the rich people. It's merely the results of choices made by individuals.
