Philadelphia Reflections

The musings of a physician who has served the community for over six decades

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Store of Value

Think for a moment how huge stores of sand -- silicon -- changed from almost worthless to immensely valuable when someone got the idea to borrow a considerable amount to transform it into silicon computer chips. It wasn't his money which did it, it was borrowed. It wasn't even his sand, and it quickly became worthless again when someone else put it to more desirable use. According to our standards, the inventor became a billionaire for making this contribution to society, and when he died other people got to spend money they never earned. (Actually, it was many innovators cooperating.) That's our system, and anybody else is free to try to imitate it. Its main justification is that millions of other people got jobs or even wealthy because he risked bankruptcy and they didn't.

The same simple process gave us general prosperity when lots of people did it; many succeeded and some failed. Some succeeded, but made atom bombs; some succeeded and made addicting opiates. Some watched the general process and surmised, in a century we can realistically expect the rest of the six or seven billion on Earth to become involved in a race to eliminate poverty worldwide before others blow us all up. Because, although we have achieved a lot quickly, some will still live and die in poverty, because we didn't achieve it soon enough. Give us some of it, or we will blow you up. Must we give it all?

There are other ways to summarize the economic world, and they could easily triumph. The pirates may enslave the producers, for whatever purpose they have not explained. The have-nots may outvote the haves, causing us to choose falsely between sympathy and democracy. The people who inherited warlike genes may enslave the people who inherited innovative genes, particularly if the non-innovators also inherited genes to persuade with false arguments. Or the innovators may have inherited the Crusader mentality of Convert or Die. But praise of greed may lead to the triumph of greed, and we may agree to a false premise. A false premise that we must choose between becoming the enemy and defeating the enemy, using logic when we need to use self-interest. As the athletic aristocrat George Washington reminded us: Only if you are strong, will other people leave you alone.

 

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