Creating Wealth Must Be Evil

The idea that somebody who has created wealth must have done something evil seems to be rooted in economic misconceptions of wealth. Earlier in history when there were no property rights, the means to great wealth was to confiscate it often through war. Paul Graham has a little historic overview of wealth in his blog Mind the Gap: "I think there are three reasons we treat making money as different: the misleading model of wealth we learn as children; the disreputable way in which, till recently, most fortunes were accumulated; and the worry that great variations in income are somehow bad for society. As far as I can tell, the first is mistaken, the second outdated, and the third empirically false. Could it be that, in a modern democracy, variation in income is actually a sign of health?"

Today, although most people create wealth for someone else in exchange for money (money is not wealth), wealth is created, not stolen through corruption. With property rights emerging after the 16th century, wealth creation by the new middle class took off. Before then, there were two classes, the enslaved class such as serfs who could not claim the product of their labors and the aristocracy who inherited or were given their estates. There was no middle class until property rights allowed the creation and ownership of wealth by a bourgeoisie, the new merchant and ownership class that favored personal liberties, religious and civil rights, and free trade in opposition to the old feudal order.

But some think anyone who has created great wealth must have done something evil, such as somehow by stealing. Some think the difference between wealthy and poor people is unjust. All those people who want the product the rich entrepreneur has sold somehow want the wrong things and so inappropriately reward the rich entreprenuer with his high income. Perhaps the misconception centers around the fact that with the establishment of property rights and free trade, wealth creation no longer is a zero sum game in which it was stolen. Wealth is now created and it creates things that make others lives materially richer. Wealth creation by business and entrepreneurs is a process of creating things of value for others and thereby being rewarded for that value. A rich person is rich because that person produced something of great value to society. We know that because so many people voted with their pocketbooks by paying for the product. A wealthy person no longer represents someone who is corrupt or evil but someone who is of great value to society.