I concluded the previous part of this piece with the claim that “it is not possible to create wealth without also creating inequality. Inequality in a modern free society is a healthy sign, just as inequality in an un-free society signals disease.”
There are different ways of amassing wealth. In the past, most of what was produced was consumed. That’s because nearly everyone was almost uniformly poor in the past. There wasn’t much left over, and therefore there was not much accumulated wealth.
Still over hundreds of years, wealth in the form of precious metals and gems accumulated in certain parts of the world, which tempted barbarian invaders to do their killing and plundering. That’s the old way to acquire wealth: don’t bother producing any wealth, just take it from others by force.
Then around 250 years ago, some people figured out how to use energy sources (fossil fuels like coal) effectively and wealth production took off. That’s the first Industrial Revolution. That made it possible to produce a lot more wealth and gradually people started climbing out of extreme poverty. Continue reading “Billionaires are Different — Part 2”