Wealth Is Knowledge

Economist George Gilder explains how capitalism is the most charitable system 

By Andy Kessler of The WSJ. Excerpts:

"I asked the author and economist George Gilder about wealth creation. “Wealth is most essentially knowledge,” Mr. Gilder says. “Let’s face it, the caveman had access to all the materials we have today. Therefore, economic growth is learning, manifested in ‘learning curves’ of collapsing costs driven by markets.” Yet these learning curves get waved away by economists. Mr. Gilder says information, not materials, drives growth: “Crash a car and all its value disappears, though every molecule remains.”"

"“Capitalism is not chiefly an incentive system, where entrepreneurs act in rote response to rewards and punishments like in a Skinner Box. It’s an information system governed by the unveiling of surprising truths, innovation. If the creativity of entrepreneurs wasn’t a surprise, socialist planning would work.” Karl Marx didn’t—and Bernie Sanders doesn’t—understand productivity! Some recent surprising truths: mRNA, neural networks, Crispr, quantum computing."

"“You can keep your wealth only if you are willing to give it to others.” Think about that. If you have knowledge and capital, the only way to produce wealth is to invest in things that lower costs to consumers and slide down new learning curves. In effect, by providing something they will find productive—the iPhone, artificial-intelligence software—entrepreneurs expand their customers’ wealth. This is what I call societal wealth. Capitalism isn’t greedy, it is the sincerest form of charity. Sadly, too much capital gets redistributed before it can be invested and provided to others in wealth-enhancing form."