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Wealth Creators

There is a lot of misleading talk about so-called wealth creators. The phrase is used to imply that the activities of the state are parasitic upon the private sector. It is suggested that the public sector depends on drawing on taxes that are a portion of the wealth created by the private sector. Without the private sector, the claim goes, none of the services provided by the state would be possible.

Sometimes these claims are specifically asserted, rather than just implied by the frequent use of the phrase "wealth creators" to refer solely to the private sector.

This is, of course, complete nonsense. People are constantly creating goods and services, most of which are desired by other people. Not only in their working lives, but in many of their spare time pursuits, people create benefits for others.

Creating valuable goods or services is by no means confined to the private sector. Are we to suppose that doctors in the NHS do not create any value? Or teachers in state schools? This would be absurd.

Or are we instead to suppose that these people could not do what they do unless money was being made in the private sector? This is an equally nonsensical claim. We need health and education services, and if they were to be transferred to the private sector, we would still need doctors and teachers. Would they magically become wealth creators if they were in the public sector? Obviously this suggestion is absurd and based on treating economic categories as fetishes.

There is plenty of room for debate about what activities are worth doing and what are not. But pointless or wasteful activities are not confined to the public sector, nor is there universal agreement on what counts as valuable.

We can also debate exactly how valuable particular services are. Some might suppose that lawyers and accountants are nothing but an overhead, and refuse to count them as wealth creators, even though they practise in the private sector. But it is surely obvious that we need to be careful about jumping to conclusions. In their defence, professionals might well argue that smooth running "wealth creation" requires their services, which are therefore of real value.

#128001 • 14 May 2009 10:48am by Martin Brampton • Vote: Agree (202) Disagree (198)

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