It seems there is a lot of conversation about "wealth creators" and the idea that rich people to get richer by getting a bigger share of the pie, but by actually creating new wealth...that it is not a matter of getting rich by taking money from others, but by creating new wealth that wasn't there before.
I think we should start off by acknowledging that both processes happen. People get rich by creating new wealth, and people get rich by taking things from others. If you don't believe both processes are happening, I believe the burden of proof is on you. We have both Google and Enron as examples of each.
To discuss ideas about wealth creation, I want to make a series of thread regarding aspects of entrepreneurship.
Let's start with finance. What is it's value? Do people working in fields like insurance, loans, investment, trading, make their money by creating new wealth, or essentially bilking others out of their money?
We can think about insurance (for example). We can imagine two types of scenarios regarding how insurers make money (with many specific modifications and combinations that can be made for each):
1) They pool money from a lot of people's premiums when times are good and for when things go wrong. They create new wealth by investing in things that will reduce the risks, or the costs of things going wrong, and thereby reduce the costs of pay-outs in a manner that makes them money.
2) They take money in through people's premiums, and then find loopholes and excuses for not paying out, and thereby make money through "fine print" and fooling people into buying "protection" that has no value.
Which of these mindsets do you believe typifies the world of finance, right now?
Do people in finance more often create wealth or take the wealth of others?