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Notes from "Wealth and Poverty"

Updated: Sep 6, 2023

These are my notes from the amazing book "Wealth and Poverty" by George Gilder. They are raw and unedited.

Wealth and Poverty by George Gilder

The most obvious rule of social science is that people will abuse any free good.

Capital and labor are not competitive but complementary. As workers become more productive, employers hire more not fewer. Capital linked with knowledge releases creativity and new employment. While overtaxing capital subverts the processes of job creation and reduces wages and salaries.

Government is not the content of an economy. It is a carrier, a legal context,And supportive structure.It supplies plus debility of law, monetary consistency, And defense that allow creative enterprise to flourish.

The reason that capitalism Succeeds is that its Laws accord with the laws of mind.It is capable of fulfilling human needs because it is founded on giving which depends on sensitivity to the needs of others. It is open to faith and experiment because it is also open to competition and bankruptcy. Capitalism accumulates the capital gains not only of its successes but also of its failures Capitalized in new knowledge. It is the only appropriate system for in a world in which all certitude is a sham. The dynamics of economic growth thus consist of the fundamental process of all growth and development in nature and thought - a largely spontaneous and mostly unpredictable flow of increasing diversity and differentiation and new products and modes of production.

When one produces an unduly complicated solution to a problem, one has not a solution but a new problem.

A world without innovation succumbs to the shore laws of deterioration and decay.

As long as men are profoundly rational, economic development will seem impossible and it will not occur. Instead, as Galbraith showed, there will exist an equilibrium of poverty.

Such waste and irrationality is the secret to economic growth, because no one knows which venture will succeed, which number will win the lottery. A society ruled by risk taking and freedom rather than rational calculus, a society open to the future rather than planning it, can call forth an endless stream of invention, enterprise and art. In order to have growth openness must be joined buy a certain bullheadedness, some Keynesian animal spirits and a certain optimism and willingness to risk. In order to take the hill someone must dare first to charge the enemy bunker. Heroism, willingness to plunge into the unknown,In the hope that others will follow, is indispensable to all great human achievement.

Throughout history the fastest growing countries have been the ones they have been endowed Not with things, but with free minds and private rights to property.

High taxes raise the rate of return that an investment must promise before it is undertaken.

Inflation redistributes resources from the private sector to the government. Inflation is a tax. As such it reduces federal deficit below its official levels. Mostly paid by the holders of money and bonds.

The best way to control inflation and contain its effects is private sector growth.

The crucial question in a capitalist society is the quality and quantity of investment by the rich.

There is a paradox of redistribution. Beyond a certain point already reached in most modern democracies raising the taxes on high income earners leads to more, not less, luxurious living by the rich and to less, not more, support and opportunities for the poor.

As a general principle all public sector work that is created to develop jobs rather than to accomplish a needed end May be assumed to represent waste. The waist reaches will be on the immediately unprofitable activity and imposes far wider costs public sector work necessarily deters the creation of real jobs.

The man who shapes the future must live ever in doubt and thus thrive on faith. The future of Western democracy and capitalism depends on whether this faith in the future still prospers in the lands that gave it birth.

The man who seeks assurance and certainty lives always in the past.

Capitalism is the most effective way of expanding wealth, not chiefly because it offers the most powerful system of incentives, the most tantalizing arrangement of carrots and sticks, but because it links knowledge with power.

It is extremely difficult to transfer value to people in a way that actually helps them. Excessive welfare hurts it’s recipients.

Government can neither create wealth nor effectively redistribute it. They can only expropriate it and watch it dissipate. Under capitalism wealth is less the stock of goods and more a flow of ideas and information, the defining characteristic of which is surprise.

Of all the entities on the face of the globe it is the legal owners of businesses Who have the clearest interest in building wealth for others rather than spending it on themselves. And is usually only the legal owners who know enough about the sources of wealth to maintain it.

An economy can continue to grow only if its profits are joined with entrepreneurial knowledge. Wealth can increase only if the people who created control it. Divorce the financial profits from the learning process and the economy stagnates.

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