become rich by helping others

Recently I’ve been thinking about where wealth comes from and who deserves it. I’m trying to rationalize why and how I can my hands on some more of it! My thoughts go something like this:

If you live completely on your own in the forest like an animal, or the first humans, then we can probably all agree that this is poverty. You have nothing. Any shelter was built by your own hands with tools you also built from nothing. Any food was caught or harvested by you. I consider this the base amount of wealth that an individual has. Really no matter how smart anyone is, they’re going to have at maximum some variation of a hut, a fire, and some skins for clothes. Nobody is going to have a Ferrari and a townhouse.

There are at least two ways to create wealth. Both of these ways create wealth out of “nothing”. Nobody has to lose wealth for these to work.

Very obviously, one way in which individuals are going to make their own lives easier is through ingenuity. The person who invents a rabbit snare will probably spend less time catching rabbits than the person who merely chases them down. Ingenuity is one of the big engines of the economy and it’s plain to see that our lives are much easier because of the invented machines doing the work we would normally do.

The other big opportunity to create wealth from nothing is cooperation. Two examples of cooperation building wealth:

• Share duties so that in the end all of the people either save time or get more resources. For example, it takes practically the same time to cook dinner for four people as for one. It saves time to give that job to a single person rather than repeat it four times.
• People together can do more than alone. For example suppose you want to move logs for a dwelling. One person may not ever be able to move a heavy log, but five people together can move the log. Therefore the only way you’re going to build log cabins for five individuals is to team up and move those logs together.

The key point to notice is that the individuals got wealthier by helping the group, not by taking from the group. In your family you are better off by making dinner for your family than by making dinner only for yourself.

Combine many people with ingenuity now. Pretend you are the only one in a village of 20 who knows how to make a rabbit snare. Clearly you are going to be the rabbit hunter because you can catch enough rabbits in a couple of hours to make all the rabbit stew for the village. Someone else is the cook, someone else fixes the houses, someone else takes care of the kids, etc. Now we have a situation where everyone only works a few hours per day to have comfortable lives instead of working all day as individuals for minimalist lives.

You, the rabbit hunter, could not have achieved such a level of wealth without the rest of the group even though you would have still had the same skills. You can catch rabbits enough for 10 or 20 people, but an individual can only eat enough for 1.

I call it cooperation while economists call it trade. For me trade doesn’t carry the same benevolence.

This, by the way, is where most of the gurus gets it right. To transcend the standard advice we need to know why. Is this an edict from God? Is it building good karma? No, it is the very source of all wealth. You become wealthy by making other people wealthy. That this isn’t just a feel-good statement, it is critical. It is the way things work.

Lots of the business advice is focused around capturing value for yourself. Negotiating. Advertising. Locking customers into your products. Protecting intellectual property. Loss control. Accounting. Price optimization. All of these topics are absolutely secondary to being able to make a better world for someone.

You will fail to be happy and you will likely fail to be rich if you spend your time thinking about how to get money. Every day will be a grumble-fest about how under-appreciated you are or how you make slightly too little money. Or maybe you’ll be a parasite, one of the few successful rich who swindle and extort from the rest.

It is far better to change your thinking to figuring out ways to make as many people better off in as dramatic a way as possible. Strangers are not to be guarded against; they are to be partnered with; they are to be enticed into causes; their lives are to be improved.