A catalog of wealth-creation mechanisms (2009)
This is a great catalogue of wealth creation mechanisms at a societal or global level, but it misses the question of wealth acquisition: How does an individual gain personal wealth? There are, in my opinion, three fundamental categories:<p>1. Create value (this encompasses most of the catalog)<p>2. Deplete valuable resources<p>3. Extract value from a transaction stream<p>The idealized engineer creates utility out of chaos. This value creation, however, is limited in its ability to cause them to gain wealth: They typically sell their time during which they perform this activity for a salary. A company that employs an engineer and pays him $100,000&#x2F;year might make many times that amount with the products that he designs.<p>An oil company, coal mine, or non-sustainable farmer owns some land rights and takes out resources. The things they remove are valuable, but the profit does not come from the creation of the resource - they already existed. This category also applies to other activities which might not actually take a resource away but which harm the commons.<p>There are some activities which are useful, but where practitioners make far more money than the actual value they create. Someone who organizes and who employs many workers and sells the sum of their output is in a position to profit from the difference in that transaction.  Jeff Bezos might hypothetically be smarter, luckier, stronger, and overall able to pack more boxes than any of his warehouse workers, but he&#x27;s still human - he&#x27;s not gaining wealth to the tune of more than $13,000,000 dollars per hour while his employees are making $18 an hour because he&#x27;s creating about a million times more value. Instead, of the three categories, he (and anyone else who makes more than approximately a standard deviation above the median GDP) is primarily extracting more value.<p>My personal problem is that I take particular satisfaction in creating something valuable. I find resource extraction to be unsatisfying to the point of being demoralizing, and I find leveraging power to extract more value than I think I&#x27;m due to be shameful.