TECHNOLOGY AS WEALTH
Stuart K. Hayashi
Question:
I have a question. Today my hall director asked me: “If lots of
people are poor, why don't they just print more dollar bills?” I told him that if the Federal Reserve puts more bills into
circulation it'll bring down the value of the dollar and cause
inflation. This would also be bad for our international trade
because it'll make the dollar too weak. I also told him that if all the rich business owners have all the money, then the poor people A can't do business with them since they have no money, and in affect the rich people will start losing money. It's not a zero-sum game.
Now that I ponder this, there is only a finite amount of bills in circulation. Therefore, how can capitalists create more wealth if there's only so many bills to go around? And if they print more bills, it'll cause inflation. I hope you can clear this up for me.
Answer:
Wealth is so much more than having a lot of money. It also has a lot to do with the standard of living, which is raised, not only by the accumulation of money, but the availabity and usage of various goods and services which are spurned by technological innovation.
Take for instance, you and Alexander the Great.
Alexander the Great was the richest man in the world when he lived, wasn't he? He subjugated so many people, and he ruled over the land with great power. And yet, you, in many ways, are far richer than he was, because various aspects of your standard of living are superior, thanks to technological growth.
Alexander was rich, but he did not even have an indoor toilet. If he and other great monarchs wanted to send a message to someone in another country, he had to send a messenger to travel a great distance. It took him many days, weeks, or months to deliver a message, let alone take it back to its originator. And back in the days of ancient Egypt, the Pharoahs were lucky if they lived to the age of twenty-five. That was simply the natural order of things; that was the norm, and living till fifty was impossible.
Thanks to revolutions in the application of science to suit our needs, we can use the Internet to instant-message someone on the other side of the world in a second, while Alexander had to wait for so long. Thanks to the Internet, telephone, television, washing machine, sink, diswasher, lamp, pager, fax machine, credit card, automatic teller machines, computer, and automobile, we can all do so much more things, produce so much more, and all in less time than people who lived long ago, who drove slow carriages and communicated long-distance through smoke signals, messengers, and telegrams that one had to pay for others to decipher, and could be afforded only by the very rich. It is through mass production and economies of scale that even members of the poor community in this country can afford them, while Genghis Khan had no access to them whatsoever.
It is thanks to medical science that a middle-class person can live till 70, while Pharoahs seldom survived beyond their teens. (Incidentally, life spans would go back to being short if the Unabomber got his way and everyone lived like cavemen or jungle savages.)
The capitalistic process is so much more than money changing hands; it often means applying scientific knowledge to every day activities in order to save time and labor for people, in order to increase their producitivy and give them more opportunities to do other things. If a capitalist can't create an important new machine or originate a useful new service, he goes through great lengths to find the people who can, and tries to organize their efforts into a single cohesive product or service that people will value.
Thomas Edison couldn't have earned his twelve-million dollar forutne selling light bulbs if he didn't invent the light bulb first. Edison didn't just enrich himself; he enriched all of us by creating the lightbulb, which was more fuel efficient than the lantern, saving us money.
“Commodore” Cornelius Vanderbilt wouldn't have been the number-one shipper if he hadn't been the first captain to serve food on his ships, build bigger ships, and make them faster, saving passengers time and giving them the most value for their money.
Howard Hughes wouldn't have gotten as many defense contracts without putting retractable landing gear on his planes. Without retractable landing gear, jumbo jets would be too unsafe to fly on. It is because of Hughes putting retractable landing gear on planes that we can fly on jumbo jets in the first place, which allows us to move to other parts of the country or world, to more quickly and cheaply migrate to other domains of opportunity, and to visit loved ones. Getting to another state took so much longer in the old days.
Money isn't the only form of wealth; time and comfort are factors also. Time isn't money; time is life, because, when your time runs out, life ceases; more time means the opportunity--but not necessarily the guarantee--of getting the most out of your life. Comfort too is a part of wealth. If you can't ever find physical comfort or entertainment when you're rich, then why wish for wealth in the first place?
After all, money is valuable to you only so much as it allows you to buy more things that save time, provide necessities, increase comfort and security, and reinforce enjoyment.
Just printing more money creates no new products, no new services, and no new innovations. It just dilutes the value of each dollar and redistributes purchasing power from one portion of the population to another.
An innovation in technology that serves our needs and wants, on the other hands, creates more time and comfort for us. And, through mass production--a product of technology itself--it can become affordable to most people, rich, middle-class, and even some poor households. Now that is the creation of wealth.
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