Key Concepts

• The Marxist /Socialist credo that calls for –”from each according to his ability and to each according to his needs” seems so right and utopian, till one considers the matter of who decides which abilities and to what extent the contributor has to be forced to contribute and to what level of ability the recipient has to perform, or not perform at all, and who decides the respective needs of each and how much he too needs to make such decisions. That’s why the corollary saying – “To not believe in the above credo, by those below 25 years age, indicates a lack of ‘Heart’ (of Empathy) in that person. To still believe it when older, evidences a lack of ‘Head’ (of Practicality). That is why Subsidies and Freebies are not the right answer to problems of growth and distribution of wealth, except in cases of dire distress or disasters and that too for a short time. There can be no concept of ‘Free Lunch’. Note what has happened even in a country as rich as Venezuela. If the entrepreneur is not allowed to keep, the rewards he may make by taking the risks of losing what he has, he may either not make the effort or even seek more friendly climes.

“Mice die in Mouse Traps because they do not understand why the Cheese is free. The same thing happens with Socialism.” – Anon

• The quantum of wealth, as it is conventionally recognized (Land, Minerals, Water etc.) is finite and hence, in view of the ever-increasing population, no equitable distribution methodology can be satisfactorily arrived at. It is a ‘Zero-Sum’ game wherein as one wins the other loses.
• New ways to grow wealth that are not linked to the conventional resource base and which can keep growing are to be recognized and developed, especially in these days of growing population and dwindling natural resources.
• People should be encouraged to view such ‘New’ wealth as being as effective, if not better, than that based on historic concepts of land and natural resources and, be incentivized to participate in its growth.
• We today, need to encourage people to invest in the equity markets through properly regulated Financial Institutions and even Venture Capital Funds that can then fund entrepreneurs and long-term infrastructure projects to generate better returns and hence, be a better option for investment compared to term deposits in Banks. Today greater wealth is being created through the use of non-tangible assets than the tangible assets, and generation and distribution of such wealth is not a zero-sum game as it is with tangible assets. Some of the top corporations and businesses of today do no hold any notable assets. (Airbnb, Ola, Google, etc.).

  Funding for such Infrastructure Projects, Equity and Venture Capital funds can itself come mainly from individual Investors encouraged to perceive ownership of such ever increasing investments as being equal to or better than the diminishing share of ownership of land and other finite resources. The larger the pool of Investors, the greater the opportunities to enable entrepreneurs to create new wealth. The more the options, the greater the chances of success, which more than compensate for those that are unsuccessful.

  Ofcourse, a proper regulatory and oversight authority will be required to encourage a transparent and equitable system offering the Investors such fair choice of risk and reward levels as they may be comfortable with, by ensuring that Equity and Venture Capital funds have a proper system of risk assessment and Capital allocation. Such ‘Entrepreneurial Market economy’ is what is required today, not just the old idea of Capitalism where Bankers loan funds to collateralized Industrialists. The efforts of such wealth creators should also, be duly recognized and they should be allowed to keep part of their rewards for themselves. Banks can also, be encouraged to become such funding Institutions, of course under proper regulations.

• Economists view everything from a ‘Scarcity’ mind-set and seek to manage existing resources accordingly. They may sound logical but their ways do not generate any additional wealth. The true wealth creators are those that see everything with an attitude of ‘Abundance’ and use technology, innovation and entrepreneurship to generate greater wealth from the same pool of resources and hence, should be encouraged and applauded.
• A business is not born of just the monies invested by the shareholders, as Capitalism claims, nor just by the willingness of workers to put in the labour, as Communism claims. It is born out of an idea of an entrepreneur, who gathers such investors and workers into an Enterprise which also integrates the other functions of the market place, the consumer, the regulator and the competition to generate wealth (measured as Profit, or as Time saved, for All involved.

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