Corruption and Monopolies

I am busy reading a very interesting book by Paul Graham from Y Combinator. It is a collection of essay’s that he combined into a book titled: Hackers and Painters. Two of the chapters has inevitability forced me to think about my own and the general thinking in South Africa (and most of the third world) around creating wealth.

He write specifically on ‘How to Make Wealth’ which is aimed at showing that startups create wealth through significant increase in productivity and solving hard problems. This is more aimed at individuals. But in the next essay ‘Mind the Gap’ he discusses the impact for society at large. He makes some very interesting points.

He gives three reasons people tend to treat the skill of making money differently to other skills:

1)      A misleading model of Wealth that most of us learned as children. Of which the basic premise is that the ‘PIE’ is limited and the more somebody else gets the less I get.

2)      The ‘dishonest’ or rather ‘disreputable’ way most wealth, until recently (as in a 100-200 years ago) has been accumulated. Before the rise of a middle class in Europe and the industrial revolutions most wealth was attained by inheritance or force.

3)      The idea that great variation in income is bad for society

Now we have many complex problems in South Africa. Could it be a start to examine the way we see the gap between rich and poor?  There are many arguments on both sides of the Rich and Poor gap that hold water.  For instance: how some of the wealth was accumulated through the consequences of Apartheid.

This seems to go back to his second premise above. That wealth that has or appears to have been obtained through dishonest or disreputable means leads to problems.  Therefore corruption and monopolies have no place in our society.  The better our society gets at ridding itself of them the better.