by Paul Zane Pilzer
“I began my studies at Wharton Graduate Business School in 1975 with this belief: that human suffering and social injustice reflected nothing more than our failure to use the tools that God had given us.”
Excerpt from Unlimited Wealth — Introduction
For the past four hundred years, virtually all practitioners of the dismal science we call economics have agreed on one basic premise: namely that a society’s wealth is determined by its supply of physical resources–its land, labor, minerals, water, and so on. And underlying this premise has been another, even more profound, assumption–one supposedly so obvious that it is rarely mentioned: namely, that the entire world contains a limited amount of these physical resources.
This means, from an economic point of view, that life is what the mathematicians call a zero-sum game. After all, if there are only limited resources, one person’s gain must be another person’s loss; the richer one person is, the poorer his neighbors must be.
Over the centuries, this view of the world has been responsible for innumerable wars, revolutions, political movements, government policies, business strategies, and possibly a religion or two.
Once upon a time, it may even have been true. But not anymore.
Whether or not we ever did, today we do not live in a resource-scarce environment. That may seem hard to believe, but the businessperson and the
politician–as well as the butcher, the baker, and the candlestick maker–who
continue to behave as if they were operating in the old zero-sum world will soon find themselves eclipsed by those who recognize the new realities and
What are these new realities? To put it simply, we live today in a world of
effectively unlimited resources–a world of unlimited wealth. In short, we live in what one might call a new Alchemic world.
The ancient alchemists sought to discover the secret of turning base metals into gold; they tried to create great value where little existed before. But an analysis of their writings shows that they were on a spiritual as well as a monetary quest. They believed that by discovering how to make gold they could offer unlimited prosperity to all of God’s children. And, although in our era the term alchemy is often equated with “false science” and fraud, the ancient alchemists were successful in their quest in a manner that they could not have anticipated.
Consider this: if the ancient alchemists had succeeded in fabricating gold, gold would have become worthless and their efforts would have been for naught. Yet, through their attempts to make gold, they laid the foundation for modern science, which today has accomplished exactly what the alchemists hoped to achieve: the ability to create great value where little existed before. We have achieved this ability through the most common, the most powerful, and the most consistently underestimated force in our lives today–technology.
In the alchemic world in which we now live, a society’s wealth is still a function of its physical resources, as traditional economics has long maintained. But unlike the outdated economist, the alchemist of today recognizes that technology controls both the definition and the supply of physical resources. In fact, for the past few decades, it has been the backlog of unimplemented technological advances, rather than unused physical resources, that has been the determinant of real growth.
“Elias!” I only called my father by his first name when I was angry with him.
“How could you give Tony another raise?” Tony, a Puerto Rican cutter whom we had trained and promoted from a floor sweeper, had missed two days last week, and we had to pay the guaranteed minimum, $1.65 per hour, to two piece-workers who had no work to sew.
“I had to,” he shrugged. “His wife had another baby. A boy this time. That’s
why he forgot to call in.”
I was unimpressed. I felt that Tony, at 24 (only four years older than myself), shouldn’t have any kids, let alone four already, and all living with him in the Bronx on only $200 a week.
“But Dad,” I objected, “he cost us $75 last week just by not calling in, let
alone what the buyer at Macy’s is going to do to us when he finds out we didn’t ship his order. Listen to me! Please! We’re going broke and you’re going
around giving raises to people we should be firing. You just don’t understand!”
“Don’t speak like that,” he said sympathetically. “You can’t fire Tony…where would he go? He barely speaks English. He’d end up as a floor sweeper somewhere at minimum wage.
“But Dad, we can’t make it anymore. You just don’t understand, do you?”
“No son,” he said, “you don’t understand. It’s not worth being in business if you can’t extend a hand to people who haven’t had all of your advantages. Go
to Wharton next year. Study hard. Figure out how you can make your million bucks and how we can stay in business to make jobs for the Tonys of this world. Then you’ll understand.”
* * *
My father was a religious man. He firmly believed in a true and just God who had a reason for everything. To him, an Eastern European immigrant who had seen his homeland destroyed during the Holocaust, the tragedies and misfortunes of human existence were simply the parts of God’s plan that we could not yet understand. His philosophy was perhaps best summed up in the Kaddish, the Hebrew prayer for the dead–the prayer that, as the son of a religious Jew, I recited every morning for a year following his death in 1979.
The Kaddish is recited in Aramaic, the spoken language of the Jewish people in ancient times; it was originally written in Aramaic so that every member of the community would understand it. Yet even more significant than the fact that the Hebrew prayer for the dead is not recited in Hebrew is the fact that this prayer for the dead contains no mention whatsoever of death. Rather, in the midst of sorrow the Kaddish affirms our belief in the meaningfulness of life itself and our faith in a just and true God…even if He moves in what may seem to us to be mysterious ways.
My father, who spent virtually his whole life working to support his family, viewed his own business shortcomings and society’s economic problems as one and the same: both were the result of our failure to understand and utilize the tools that God had given us. Even while he was dying of cancer in 1979, he never wavered for a moment in his belief that God was just and that human suffering was part of a divine plan that we did not yet understand. He firmly believed, as Albert Einstein once said, that God does not play dice with the
To a man like my father, it was inconceivable that God would allow people to multiply in the billions and yet deny them the ability to feed and shelter themselves. Yet, like a loving father, God would not simply hand over to his children everything they needed. Rather, He would give them the necessary tools and allow them to discover how to use the tools to take care of themselves.
I began my studies at Wharton Graduate Business School in 1975 with this belief: that human suffering and social injustice reflected nothing more than our failure to use the tools that God had given us. I remember my shock upon learning in my first class that the entire field of economics is based on the concept of scarcity–that is, that there is a finite amount of resources in the world–and that the best we can hope for is to figure out a better way of dividing them. Not only did this contradict everything I had seen as the upwardly mobile child of an immigrant, but it contradicted my entire belief in a true and just God, for such a God would not have created a world of limited resources in which one person’s gain would have to be another person’s loss.
At Wharton, it seemed to me that the science of economics had advanced only to where the science of medicine was at the beginning of the 19th century. Before we discovered the underlying theories that explained bacterial infections, and thus inoculations and antibiotics, we knew from experience what few medicines and treatments worked–applications. However, without an underlying theory explaining why, we were unable to learn and grow from our experiences, and, more significantly, only a select few could afford what little medical care existed. Similarly, my professors were able to teach me what worked–in applications courses such as marketing, finance, and management–but were unable to teach me why–in theoretical courses such as micro- and macroeconomics.
I felt then that the underlying theories behind business, which are based on the classical economic concept of scarcity, were wrong. But I did not have a theory to substitute in their place. This began my 15-year quest for a business theory that could better explain the past and predict the future. And, more important, the business theory consonant with a just and true God, which would allow everyone, not just a select few, to share in a better and better world.
Paul Zane Pilzer
Park City, Utah