Wealth and Its Real Worth

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A few years ago, as I was having dinner with a group of visiting Japanese, the Japanese started asking pointed questions about America. Why hasn’t America solved its federal budget and foreign trade deficits? they asked. Why couldn’t American manufacturers improve faster?


As the only American at the large table, I found myself debating on several fronts at once. I was besieged.


Finally, one Japanese man looked out the window at all the new cars whizzing by, and he mused, “You know, everyone here seems so prosperous. America has an amazing way of creating wealth.”


Silence followed. His colleagues looked at him and nodded slowly. The debate was finished.


Sometimes it takes an outsider to see clearly what insiders take for granted.


America, for all its ills real and imagined, for all its deficits and deficiencies, is unexcelled in the area that matters most: its economy. And her strong economy is rooted in the ability of its people to create wealth. Virtually any visitor to this country sees that immediately, and most are impressed by it.


America has perfected the formula that allows actually encourages people to tap into their entrepreneurial impulses. The country wants inventive, driven people to start companies that make better widgets. The system is designed to reward them as well as other creative types, such as financial whizzes who employ money in innovative ways and artists who create work that moves us or at least amuses us.


These people can become wealthy. Some enormously so. Is this a good thing? For the most part, yes, absolutely.


Unfortunately, there’s a vein, and a strong one, that runs through popular culture today that holds that it is bad for some to get wealthy. That school of thought believes that as one entrepreneur gains a dollar, others lose a dollar. In other words, the rich get richer on the backs of the poor.


Those people apparently have forgotten, or perhaps never learned, how money is created, and they appear to be unaware that money is constantly being created and destroyed. Entrepreneurs, artists and the like generally create wealth. It’s new. It didn’t exist before and wouldn’t have existed without them.


Say what you will about Microsoft Corp., but just think of its standing in economic terms. Its stock is worth $240 billion which is wealth that did not exist before Microsoft was created and the company employs 61,000 and has made businesses and homes and governments around the world vastly more efficient. The fact that Bill Gates personally has $50 billion of money he created seems a small matter.


Indeed, most people who create wealth can’t help but share it. Others can enjoy the wealth by buying stock or even by working for the wealth creator.


And there’s a bonus. Those who become very wealthy often create foundations or at least give away a good deal of their money. Think of where our universities, hospitals, homeless shelters and arts facilities would be if not for the sustained philanthropy of the super wealthy.


This issue, about L.A.’s wealthiest, is a way for us to keep track of the wealthy around us. But it is also a way to remember that it is they who create jobs and who create wealth for those of us around them. We may forget or overlook the impact that they have on us, but it is notable to most any visitor.



Charles Crumpley is editor of the Business Journal. He can be reached at

[email protected]

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