WEALTH IS NOT A STATIC QUANTITY: IT CAN BE CREATED

In feudal times, the wealth of the nobility was nearly always unea
ed, and the poor had a negligible likelihood of ever improving their lot. It is often overlooked that the rise of capitalism was part of the Enlightenment's agenda of bringing prosperity and well-being to everyone. And although it is far from perfect, although it can certainly be abused by corporate greed, Ponzi schemes, and so forth, it is still far more promising than any other economic system so far devised.

Unlike in the feudal system, wealth can move from one person to another in a capitalist system. A successful business not only accumulates wealth in the hands of its owner, but also serves as a source of opportunity and prosperity for others: employees, vendors, even competitors and imitators. This is not just theory. I am by no means a 'supply-side economist', but I have had the experience of starting a small business, employing a couple of people, and dreaming of doing well and employing more. And I've had the experience of seeing the business fail, and having to lay people off instead. This is a fairly common experience in America. One can certainly, even unavoidably, extrapolate from these experiences that when such businesses do succeed they give employment and increased wealth to many people. Failing in business is of course disheartening, but business is to a great extent a matter of accepting risk. It is certainly true that if government policies have no safety factors built in (from corporate laws that allow people to separate their personal belongings from their company's assets, to regulations that protect novices from unfair business practices, to the right to file for bankruptcy if everything collapses) few people would be willing to take such risk. On the other hand, too much regulation -forcing business owners to spend all their time filling out endless forms, and all their money meeting the demands of countless well-intentioned administrative agencies -puts a chill on entrepreneurial activity since the scant remaining profits are simply not worth the effort.

Wealth is not a static quantity. If it were a static quantity, it would be true that the prosperity of one person can only come at the expense of someone else. But in a capitalist system, new wealth can be created and increased, through brilliance, innovation, and effort. This statement is proven by the negative: that is, in a capitalist system it must also be true that the total amount of wealth can decrease and evaporate as a result of stupidity, ravenousness, and short-sightedness. The economic catastrophe of the Fall of 2008 has given us a powerful and undeniable proof of the dynamic quality of wealth. And the dollars that Be
ie Madoff's clients lost are not hidden somewhere in a drawer. They simply do not exist.