Originally published at: https://blog.12min.com/a-world-of-wealth-summary/
How Capitalism Turns Proﬁts into Progress
You may think capitalism is wrong; you may feel capitalism is good.
And we are here to tell you that along with free markets; capitalism can solve a wide range of issues that you never considered as economic.
In this summary, we present the basis of such claims, as well as a few short examples of how it can benefit the world.
Who Should Read “A World of Wealth”? and Why?Author and journalist Thomas G. Donlan are one of the most influential defenders of capitalism.
He advocates for free markets, free trade, investment, and deregulation. He presents his ideas in “A World of Wealth” where he will convince you to stop thinking that capitalism is bad for the world.
He writes in a clear and concise manner and explains subjects in a way everyone can understand.
We recommend this book to advocates of capitalism, who will undoubtedly respect his defense of the doctrine and his large number of well-argued points.
About Thomas G. DonlanThomas G. Donlan is an editorial page editor of Barron’s, and writes on politics, the economy, and investing.
"A World of Wealth Summary"Markets work. And the answer to “why” - is freedom.
Capitalistic free markets have the best answers for environmental issues, poverty, migration, energy costs, health care et cetera.
These issues’ roots are economic.
To start with, poverty is an economic problem concerning the distribution of riches. Moreover, as you know, private enterprises make wealth so that it can take care of this issue.
Next, environmental ruin is also a monetary issue that includes property rights. In other words, individuals protect their properties, yet destroy and pollute what they do not possess. Again, capitalism can support preservation by saddling the power of property rights.
Economics is not about what individuals ought to do, but about what they do. Economic theory relies upon empirical perception.
The most significant objects of observation are free market activity: the forces of supply and demand.
Prices are the instrument through which capitalism assigns limited assets. Value is not intrinsic. Instead, it is dependent upon free market activity.
Another thing worth explaining is Pareto’s Law. Does it ring any bells?
Do not worry, even if you do not know its name, you have probably encountered this law numerous times. It has various applications and communicates the 80:20 rule.
- a business gets 80% of its income from 20% of its clients
- 20% of patients represent 80% of human services costs
- 20% of a country's populace acquires 80% of its income.
However, 80% of the voters in democratic nations are frequently disposed to take away riches from the wealthy 20%.
When they do, they meddle with the working of markets and decrease the overall society’s prosperity.
Key Lessons from “A World of Wealth”:1. Capitalism Can Address Environmental Issues 2. How Free Trade and Immigration Beneﬁt Almost Everyone 3. Capitalism Creates
Capitalism Can Address Environmental IssuesA significant amount of worry over pollution and global warming consumes people.
However, global warming, just like any other thing in this world, has both negatives sides as well as benefits.
Assume that industry’s utilization of non-renewable energy sources is adding to a dangerous global warming. The more production there is, the more petroleum derivatives it consumes and the hotter the globe becomes.
However, more industry implies more economic development and hence, less poverty.
The same logic can be applied to most (if not all) of the worries that consume us.
How Free Trade and Immigration Beneﬁt Almost Everyone
- Efﬁcient specialization as countries focuses on doing what they do best.
- Scaleable economies as successful industries expand where climate, logistics, and resources justify it.
- Technological development as competitors vie in open markets.
- Low prices for consumers as efﬁcient foreign producers help push costs down.
Capitalism CreatesInvention and innovation gave rise to the contemporary industrial economy, but not in a vacuum. Financial innovations such as investment trusts made it possible for people of moderate means to aggregate savings and invest them in diversiﬁed portfolios.
That helped give entrepreneurs and inventors access to capital as it gave investors the economic beneﬁt of innovation. Capitalism is a creative force, in that investment responds to the opportunity for proﬁt. The rich spend and invest, creating markets and opportunities for the less prosperous.
Invention and advancement ascended the contemporary industrial economy. However, they did not do that in a vacuum.
Budgetary innovations, like, for instance, venture trusts made it possible for individuals to aggregate funds and invest them in diversiﬁed portfolios.
That helped business visionaries and innovators by giving them access to capital as it gave investors the monetary beneﬁt of advancement.
Think of capitalism as a creative power, where investment reacts to the opportunity for proﬁt.
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“A World of Wealth” Quotes[bctt tweet="There are two kinds of economists: those who think the free market always works, except when the results don’t suit them; and those who think the free market never works, except when the results to suit them." username="get12min"]
[bctt tweet=“Democratic government has this fundamental problem: In broad terms, 20% of the people do most of the productive work and create most of the nation’s wealth, but the other 80% command a heavy majority of votes.” username=“get12min”]
[bctt tweet=“The natural result of the Social Security-Medicare mess is a brewing political rebellion, still mufﬂed for the time being but growing more potent with every year that passes without fundamental reform.” username=“get12min”]
[bctt tweet=" Pumped-up growth gives us enormous deﬁcits and makes us dependent on somebody else’s capital accumulations, instead of pushing us to create our own capital out of our own proﬁts." username=“get12min”]
[bctt tweet=“The government’s job is to stay out of the way of natural economic cycles and let markets work. When governments ﬁght economic cycles, they usually make them worse.” username=“get12min”]