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The Purpose of Economic Activity
By John | August 22, 2010
The purpose of economic activity is to create wealth. It is not to create “jobs”. It is not to redistribute wealth. It is not to pad statistics, such as GDP. It is not to create winners and losers. It is to create only winners.
Bringing manufacturing back to the United States from other, lower labor cost countries may create U.S. jobs. But, does it create more, or less, U.S. wealth?
When you drain capital from the private sector to support public sector jobs, are you creating more, or less, wealth?
When you allocate scarce resources to failing enterprises, are you creating more, or less, wealth?
In an economy in which economic success is based more on political connections than on service to the customer, will that economy produce more, or less, wealth than a customer-driven economy?
Or, am I mistaken? Is the purpose of economic activity something other than wealth creation? If so, what is it?
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