The Occupy Wall Street movement and class warfare politics we are experiencing is no less abhorrent than racism. We should call this behavior a more proper name, "Wealthism." Just as racists believe in superiority by division and discrimination, "Wealthists" seek superiority by division and discrimination of wealth creators. There is just one problem; the so called villains being demonized are the very people that enhance and save lives.
Basic economics teaches that wealth is created by the actions of man in altering and adding value to scarce raw materials and resources to make them more useful in meeting demand. This additional value is considered capital, which economist Hernando DeSoto explains originally came from the word "cattle":
Because cattle have always been important sources of wealth beyond the basic meat they provide. Livestock are low maintenance possessions; they are mobile and can be moved away from danger; they are also easy to count and measure. But most important, from livestock you can obtain additional wealth, or surplus value, by setting in motion other industries, including milk, hides, wool, meat, and fuel. Livestock also have the useful attribute of being able to reproduce themselves. Thus the term "capital" begins to do two jobs simultaneously, capturing the physical dimensions of assets (livestock) as well as their potential to generate surplus value. From the barnyard it was only a short step to the desks of the inventors of economics, who generally defined "capital" as that part of a country's assets that initiates surplus production and increases productivity.
Because we do not live with unlimited abundance like the Garden of Eden, scarcity places value on resources that are directly or indirectly owned based on human demand. When capital in the form of goods and services is exchanged, wealth is created.
Wealth is often defined in terms of a tangible currency. But money only acts as a certificate of performance in meeting the needs and demand of others. Capitalists must first serve before they can earn in a free market of voluntary exchange.
In a market economy, human nature and incentives allow scarce resources to efficiently flow from those who have to those who need. Greater wealth comes from increased economic efficiency in meeting needs while answering the fundamental scarcity question. In turn, wealth creation means more of man's unlimited desires including food, clothing, shelter, and medical care, are being met. As a beautiful result, the standard of living rises which equates to a greater quality and quantity of life.
Dean Kalahar teaches economics and psychology, and has authored three books, including Practical Economics.
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