Thursday, 15 January 2009

Wealth creation re-visited

Aw man, there was some discussion on anorak years ago about wealth creation, and adding value, I think and at some point, having established that as a manufacturing engineer who takes cheap components, connects them together and sells them on for a price higher than the original parts, I am definitely in the business of wealth creation, I asked if anyone else on the messageboard worked in wealth creation. The the closest thing to it was someone who worked for a charity, getting donations from companies to pay for the retraining of the unemployed or homeless.

I don't see how moving money from one pile to another really counts as wealth creation. But there's a great spectrum and degrees of what is or isn't.

Since then I've changed my thinking a wee bit. Musicians are the ultimate wealth creators. Say you've got a pub with an acoustic guitar in the corner and people just chat amongst themselves, no one pays to go it. If you have a band playing, you can charge a fiver on the door, the musicians have made the pub experience more valuable by making music out of silence. And furthermore, if you have Leonard Cohen playing in this pub, you can charge £80 on the door and the place would be packed, Leonard Cohen is adding that much more value, and creating so much more wealth, with the same raw materials.

Anyhoo, the wealth creation debate has popped up on the blogsphere, starting on Coffeehouse covering Pete Osbourne pointing out that “not a single member of the Cabinet has ever occupied a wealth-creating job.”, Iain Dale wading in, and Tim Worstall correcting him and all manner of other blogs chipping in.

So, my take is that there's a whole spectrum, from lawyers and politicians who consume wealth, teachers and charities who kind of create wealth, manufacturers and rice farmers who add value and time to raw materials and at the pinnacle, musicians who conjure it out of thin air.

You need a mixed bag of talents in government and it would be nice if someone there had actually done it.

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