The basic concepts of the economy are supply, demand and scarcity. Economics best describes how to divide these scarce resources among a growing population. Paul Pilzer takes a very different approach to economics. Believe in unlimited wealth and show examples of why technology and human ingenuity are the keys to unlocking that wealth.
Why is this important to me?
I am not doing this summary to waste your time. My vision is to provide concise action steps that you can take right now to improve your financial life. Paul Pilzer writes about creating unlimited wealth. Its twist is that alchemy is the creation of wealth, while economics is simply the method of moving it.
I am really intrigued by the concept of unlimited wealth creation. If you look at human progress in free societies, the real difference has been in creation. Raw materials and resources are in fact finite, but the way we use them is unlimited. The ideas are limitless. An acre of land today produces much more food than an acre a generation ago.
Unlimited Wealth looks at several important topics. For the sake of time, I will review the salient points outlined by Paul.
1. Supply-side alchemy – The Wealth Equation: W = PT ^ n – This equation means – W (Wealth) = P (Physical Resources) x T (Technology) raised to the nth power where n are the effects of technological advances. The expansion of physical resources depends on technological advances. Supply-side alchemy consists of three laws. The key to this equation is what Paul calls the third law of alchemy: the speed at which a society’s technology advances is determined by the relative level of its ability to process information. Let’s see how society has progressed based on the third law of alchemy. Humans discovered how to write, then the printing press was created, then the computer was created and bought by the average consumer. Now we have the Internet, social networks, search engines and everything else to share knowledge. The speed of information exchange is exponential, therefore, so is our level of wealth.
2. Demand-Side Alchemy: Demand-side alchemy consists of the fourth and fifth laws. The fourth law states: By providing us with new products and processes that change the way we live, technology determines what constitutes a need and therefore the nature of consumer demand. Simply put, demand can be created by creating and innovating new products. Apple is on track to be the first company to achieve a trillion dollar valuation. All of their products were created first and then the demand arose.
3. Sixth Law of Alchemy: The immediate economic potential of an individual, an industry, or a society can be explained by examining the technology gap, best practices possible with current knowledge, and practices in actual use. This is important today because China and India are far ahead of the United States in terms of science and mathematics. Technology lives off science and mathematics and societies that adapt it faster will create wealth faster. This is where the balance of power can change over time.
Unlimited Wealth is definitely a controversial study based on regular economic theory. Since I am in the field of technology, I agree with Paul that unlimited wealth can be created through technology and innovation. Products are being created right now that there is no market. Some of these products will deflate while others will explode. Take a look at Facebook. This company came out of nowhere and is now valued at more than $ 50 billion.
I hope this short summary has been helpful to you. The key to any new idea is to incorporate it into your daily routine until it becomes a habit. Habits are formed in just 21 days. One thing you can take away from this book is that scarcity is a negative mindset. I say this because if you believe in creating unlimited wealth, ideas will flourish.