How Everyone Gets Richer

Free access to scriptures religious leaders try to censor

The rich get richer and the poor also get richer but to a smaller amount.

Why? Simple. Say we have 1 million workers. Say 1 genius invent a widget or software that improves the workers’ productivity by 100%. So those 1 million workers will have their productivity improve by 100%. Their salary?

Well, that 1 genius will say that anyone that uses my program will have to pay me to say 10% of the extra productivity. Let’s just say that intellectual property rights can be enforced without government’s involvement. So 1 million workers improve their salary by 90% but that 1 genius just hit jackpot and improve his salary by the salary of 1 million workers.

He earns 100k times the salary of normal workers. Bill Gates are billionaires and in the process, he creates tons of millionaires and in the process, he put PC on all of our homes.

In the past, this is heavily mitigated. That 1 genius will have to pay huge income taxes and will earn a more normal income instead. I remember how in Indonesia the government simply prohibit time-saving widget to “create job”.

So something that actually increases productivity is prohibited by the government. In US, income taxes can be as high as 90%. However, that can no longer be done. As more capitalistic countries get richer and richer other countries tend to be more capitalistic too.

Any attempt to “equalize” wealth will be answered by that 1 genius simply moving to another country. Those truly are productive to society will not just have companies competing for their service but also countries. No one country can prevent that 1 genius from earning too much.

And that’s how the rich got richer and richer and richer. In US, CEO earns more and more than normal workers because CEO are smarter. An American CEO can earn just as much money as in any country besides America.

In fact, many of those CEOs are most likely start up founders that are immensely productive for society. Think of people like Bill Gates or Steve Jobs or Zuckerberg. Most of their “income” isn’t even taxed at all.

Tax them, I dare you, and they’ll hit the hammock instead. There are fewer and fewer things any one government can do to make income more equal. When people can just leave they will earn their fair share and for some, those fair share can be huge.

And this is a good thing. As governments can no longer redistribute wealth and tax heavily, the best and brightest will have incentive to be even more productive bringing prosperity for all of us.

We have uber, bitcoins, decentralized market, and silk road. All are the manifestation of the power of the market to keep bringing good stuff despite governments’ best effort to stop.