Krupt.com - Projects and Artwork by Tim Hon
cv:2
pc:89
tc:15736

The Daddy Model of Wealth

(excerpt from P.Graham)

When I was five I thought electricity was created by electric sockets. I didn't realize there were power plants out there generating it. Likewise, it doesn't occur to most kids that wealth is something that has to be generated. It seems to be something that flows from parents.

Because of the circumstances in which they encounter it, children tend to misunderstand wealth. They confuse it with money. They think that there is a fixed amount of it. And they think of it as something that's distributed by authorities (and so should be distributed equally), rather than something that has to be created (and might be created unequally).

In fact, wealth is not money. Money is just a convenient way of trading one form of wealth for another. Wealth is the underlying stuff—the goods and services we buy. When you travel to a rich or poor country, you don't have to look at people's bank accounts to tell which kind you're in. You can see wealth — in buildings and streets, in the clothes and the health of the people.

Where does wealth come from? People make it. This was easier to grasp when most people lived on farms, and made many of the things they wanted with their own hands. Then you could see in the house, the herds, and the granary the wealth that each family created. It was obvious then too that the wealth of the world was not a fixed quantity that had to be shared out, like slices of a pie. If you wanted more wealth, you could make it.