Customer Reviews

Wealth and Poverty

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During the Reagan Revolution this modest, simply stated summary became the "little red book" for those who ascribe to the approach to economics that the fountain of progress, on all fronts, resides in the principal that money is best left in the hands of the entrepreneur, the individual citizen, who will ferret out opportunity in the most obscure and untapped parts of the economy; as opposed to those who ascribe to the Keynesian approach of taxation and redistribution of wealth. Unfortunately, the tag, supply side, was given to Gilder's insight. In reality Gilder describes a demand side approach to economics in which the individual becomes the bird dog, finding and investing in the new and often unknown demands that society needs to advance, as opposed to the demand stimulus coming from the unimaginative, and atavistic bureaucrats of the central government.

At some point in the last 15 years, the meaning of three key terms changed: "need" now means wanting someone else's money; "greed" means wanting to keep your own; and "compassion" is when a politician wants to arrange the transfer. You're actually accused of "lacking compassion" if you object to this kind of redistribution. According to George Gilder's marvelous "Wealth and Poverty," this so-called "compassion" is nothing but a very misleading, pious moral high ground.

One of the chief critiques of capitalism over the years by socialists, liberals, clergymen, and--most notably--the poor has not been of its practical achievements, but rather the perception of its moral character. Most of them have got the idea that the source of wealth comes from sinful, anti-Judeo-Christian avarice. Wealth, they often assert, comes from "taking," and therefore the way to combat poverty is to "take" it back and redistribute it. But as Gilder explains, the essence of capitalism is "giving."

Capitalists "give" of themselves without a predetermined return. That is to say, they make investments without a predetermined return; and a gift is not something given necessarily without any return. It's perfectly consistent with the Bible, in which you often gave alms in the hope of some form of return; perhaps a blessing. It's risking your life to create comething without any assurance of return. (Liberals confuse this with gambling, which is a zero-sum game. That's why it's not "risking." Capitalists are giving of "themselves" without a predetermined return. Not just putting down some money and making no effort and having no moral engagement in the activities they're pursuing. That's the difference between gambling and capitalism.)

Also, the mechanism of the market neutralizes greed because selfish individuals are forced to find ways of servicing the needs of those with whom they wish to exchange. It's true that various people often approach economic exchanges with motives that fall short of the Biblical ideal Gilder discusses here. But no matter how selfish a person's motives may be, as long as the rights of the other parties are protected, the greed of the first individual cannot harm them. As long as greedy individuals are prohibited from introducing force, fraud, and theft into the exchange process, their greed must be channeled into the discovery of products or services for which people are willing to exchange their holdings. Every person in a market economy has to be other-directed.

Unlike socialism, capitalism recognizes several necessary conditions for the kinds of voluntary relationships it recommends. One of these conditions is the existence of inherent human rights, such as the right to make decisions, the right to be free, the right to hold property, and the right to exchange what one owns for something else. And, believe it or not, capitalism also presupposes a system of morality. Capitalism should be thought of as a system of voluntary relationships within a framework of laws which protect people's rights against force, fraud, theft, and violations of contracts. "Thou shalt not steal" and "Thou shalt not lie" are part of the underlying moral constraints of the system. Economic exchanges can hardly be voluntary if one participant is coerced, deceived, defrauded, or robbed. This should be obvious to most people living in America today.

Gilder also explains how capitalism is consistent with the Biblical view of human nature in another way: it recognizes the weaknesses of human nature and the limitations of human knowledge. No one can possibly know enough to manage a complex economy. No one should ever be trusted with this power. However, in order for socialism to work, socialism requires a class of omniscient planners to forecast the future, to set prices and control production. This is what stagnates enterprise in socialist economies. And it's also a good way for an individual to lose their political freedom as well. For what is to be produced does not depend on the demands of consumers, but on the independent decisions of government planners; production, therefore, is more likely to serve the purposes of planners, of the state, than those of a consumer. That's a freedom you sacrifice under socialism. And as the sole producer and employer, the socialist state finds it easy to restrict political freedom that could be used to replace centralized powers. Eventually, you have Noam Chomsky popping up on the Killing Fields trying to tell you that "it's not that bad."

Gilder's frank assessment of how the welfare state has driven husbands from the home--especially black homes--by aiding single mothers is disturbing. The average total relief package for a single mother with three children is more than $19,000 a year--tax free. By comparison, a traditional two-parent family of four with a higher income of say, $22,500, has only about $18,000 left after taxes. Poor women might be poor, but they're not stupid. Niether are poor young men, many of whom quickly realize that by their own efforts and means they are unable to provide as well for their families as Uncle Sam. Too many mothers decide not to marry the fathers of their children; they marry welfare instead. As we enter the 21st century, 70% of black children are born into fatherless homes.

So, in effect, the modern state continually releases us from our duties to our next of kin--our familial duties--at the same time it increases our duties to total strangers, whose lives we wreck when we provide for them (with a little coercion from Uncle Sam, of course) government assistance. Even now as we approach the year 2001, we keep hearing collectivists saying "we have more to do" and "there remains much to be done." It's kind of analogous to Mao's Long March--a Long March to the moon without a bridge, and we just keep walking in circles and we're told both that we're making progress and that we're not making enough progress. This is certified insanity, yet most people fail to see it.

George Gilder's "Wealth and Poverty" is one of the most important books on capitalism and the effects of welfare on its recipients you'll ever buy.

I read this book some years ago. I have always considered it to be a definitive book on the subject of supply side economics. Mr. Guilder makes the salient point that capitalism starts with giving. Socialist take note. Every high school student should have read this book, prior to graduation. I am buying the book today for my high school aged daughter.

This book which most of us, who read books like this, read 20 years ago should be reread again today. The prescience and accuracy of its viewpoints are worth prolonged cogitation for members on either side of the aisle. Perhaps it could be recommended reading along with the cliff notes of Adam Smith's "Wealth of Nations"? Okay, at least for Graduate students in the social sciences?

Gilder points out that we have been misled by popular economics as it relates to how we increase wealth and curtail poverty. He then introduces the concept of Supply-Side Economics to the general reader. He fulminates about how misguided policy has undermined the true source of wealth that is to be found in such nonmaterial forces as creativity, technological adventure, and the motivation to strike out for new territory in economic enterprise. He talks about how the blunting of incentives and the efforts to redistribute the wealth, in a just fashion, only serve to keep the poor in poverty. He contrasts this with his description of the true capitalist as one who invests energy and money today for a return he may or may not receive in the future. Is this not the model for describing the difference between children and adults? Is it not a model for delayed gratification one which most of the world eschews? They instead opt for a metaphorical traffic jam at the waterhole of natural resources with the alpha chimp and his cohorts ripping off the biggest piece.

When Gilder talks about the LEFT getting it exactly backwards it reminds me of what Balint Vazsonyi writes about in his book "America's 30 Years War: Who's winning?" He says, "contrary to the prevailing (classic Marxist-Leninist) thinking that economic conditions provide the foundations and everything else is "superstructure", the truth is the other way around. Our spectacular economic success is the result of a unique legal-moral foundation upon which a successful political system has been built".

To show how deep the roots of misguided economic thinking go consider that even Christianity is built on a communistic notion of sharing, and an abhorrence for profit that is seemingly earned on the backs of the laborers. This results in men of the cloth, all to often economically illiterate ones, preaching the wrong formulae to the poor. Basically, "you're poor because they're rich". This Liberation theology is echoed in Marx's backward reading of human nature and the economic consequences of risk and reward. Gilder sets us straight.

Amazing isn't it? We still have academics teaching this LEFT-wing nonsense in respected universities across America while their acolytes storm the barriers in Seattle, Washington, Genoa, etc; all in an attempt to wipe out a system that has brought greater wealth to more people than any other in human history, something even Marx himself acknowledged.

Too me, it's about a pursuit of power and money at the top that is coupled with a reliance that those further down the pyramid of man will continue to engage in blocking and denial. Thus the proles can act as enablers of the "Priests" of the LEFT, those who commit the worst sorts of human crimes (see "the Black Book of Communism"), their zeal inversely proportionate to the laws of unintended consequence which they continue to violate with reckless abandon.

Perhaps a futuristic pill will be uncovered that will allay the LEFT's fevered assessment of mankind's ills and grant them the ability to reason while providing them with much needed relief from their pervasive envy. Read this book along with Myron Magnet's "the Dream and the Nightmare" to get a feel for the intellectual firmament of the Bush II administration, and pray for another cable network.

Wealth and Poverty has been called the "Bible" of the early
years of the Reagan administration, and rightly so. Not
only is it an easy-to-read introduction to supply-side
economics, its novel approach to economic theory will cause
anyone to rethink what they believe about how economics
works and affects them.

This book is 30 years old, but it presents an enduring case for the free market. An important point made in this book is that when any person starts a business in a relatively free market, the first thing he has to be concerned with is what OTHER people want, need and desire. In other words, free market capitalism actually FORCES entrepreneurs to first consider the others.

Gilder makes a cogent argument about why we should not worry about income distribution, that indeed, concern about income distribution is harmful

This book speaks to the heart and soul of the conserative movement. A very engrossing, interesting, thoughtful read which speaks to the wider concepts of the economics and sociology of wealth creation.

This is a great book. Welfare replaces community and family with government for the price of a few bucks a month. The result is NO guidance to prevent unwed teen mothers, crime, drugs, and no role models to inspire learning and family/community bonds. The end result is we get people very much alone just making it up as they go along (and not being very successful at it).

Misguided well-intentioned welfare has increased the suffering in this country to an astronomical level. Why? Because of misguided guilt-ridden middle class and the politicians what take advantage of them.

Think back to pre-welfare. You had fraternal organizations that provided guidance and charity (but not welfare and tolerance of slacking off). Everything from group health insurance, mortgages, business loans, to daycare was provided within the group. You were part of an extended family and subtle peer pressure kept you honest and provided a plan to follow. They darn sure wouldn't have allowed their sons to gang bang (most gangbanging happens because their isn't any way out). All this was replaced by government welfare.

Any linking of corporate welfare (a business entity) and personal welfare is about as misguided as they come. I hate statist corporate welfare!

Charity is needed -- not beurocratic welfare! Write on!

"The most important event in the recent history of ideas is the demise of the socialist dream," begins Gilder's masterful moral defense of supply-side economics. No one makes the case for capitalism as compellingly as Gilder, because he refuses to apologize for entrepreneurs.

Why don't those left-wing-extremists realise their paternal holier-than-thou attitudes are what really are responsible for anyone remaining in poverty. They that actually do "care", owe it to those they profess to care about to find out whether or not their cherished nostrums do anything more than make themselves feel better. Those that see the light become conservative. It's that simple. It's that complex. Enjoy the book!