Listen up, because I’m about to explain one of the most important, most fundamental realities of economics. The simple truth that I’m about to explain changed the way I see everything, after I discovered it.

People in poor countries are often told that America became successful by stealing from them.

Political liberals usually look at the world as a pie that needs to be divided some different way. And although there may sometimes be truth to those ideas, the essential reality is that business is alchemy.

Remember the alchemists from the middle ages? They craved a formula that would turn lead into gold. They never found it, and of course the idea itself was flawed. If they could make all the gold they wanted, it would become worthless. Supply and demand.

But they were right about one thing: Wealth is all about the reinvention of existing resources.

It’s about transforming useless things into useful things.

Business, at its essence, is all about the conversion of lead into gold. Converting worthless things into items necessary and valuable. Moving resources from areas of low return to high return. Harnessing the natural forces of nature so they produce food and wealth for everyone. Politics may be about cutting the pie, and the endless argument about how it should be sliced – but entrepreneurship is about baking more pies, not cutting them up.

Take two massively influential and successful companies – Intel and Microsoft. Intel takes sand out of the desert – which is worth less than lead – and turns it into computer processors – which are worth more than Gold.

If that’s not alchemy, what is?

Microsoft literally creates software out of thin air. They create strings of 1’s and 0’s that make those Intel processors do amazing things for us. Nothing else has done so much to make the world smaller.

Does Intel have to steal anything from anyone to make those processors? No.

Does Microsoft have to steal anything from anyone to write software? No.

It’s alchemy. It’s literally the creation of something out of nothing.

100 years ago, we didn’t have airplanes, or TV’s, or computers, or skyscrapers. Now we have all of those things, and we didn’t steal them from some other country. All of those things were created by inventors and product developers and entrepreneurs.

I was first exposed to concept of economic alchemy about 10 years ago when I heard Paul Zane Pilzer speak about his book Unlimited Wealth. He nailed it. It was an idea that changed my life: Wealth is not distributed, it’s created. They’re not poor because we’re rich.

Abundance is the true reality. Scarcity is the great illusion – one that causes people to be envious of each other, to wage war, and to literally destroy the abundance that’s already there.

People start wars to get others’ wealth, but in fact nothing destroys wealth faster than a war.

Actually people in the third world are less poor because we’re rich, no doubt about it. Most of the clothes that kids wore in Mozambique were obviously hand-me-downs from Europeans and Americans. Two thirds of their government’s budget is foreign aid.

And in the end, whether you’re shopping for a get-rich-quick business opportunity or trying to assist the downtrodden on the other side of the world, there’s no way around it, no shortcut: We all have to be taught how to create wealth for ourselves.

We must learn the art of alchemy.

Alchemy is not an idea or a construct. It’s reality. A very liberating reality, once you truly understand it. It doesn’t relieve us of the responsibilities that come with having money. It doesn’t mean we can turn a blind eye to the woes of the world. It doesn’t excuse me from being my brothers’ keeper or answering the WWJD question.

But what it does mean is that there’s nothing wrong with having money. It means that all of us who operate in an innovative, competitive marketplace are making a positive contribution to the world around us in a very tangible and important way.

I was talking to a friend, Tom Perazella, who’s an IT manager and electronics hobbyist, and we were discussing “the good ol’ days.” He said, “The people who reminisce about the good ol’ days are out of their minds. They don’t make things the way they used to, they make them better.
The good ol’ days are right now.”

Indeed, you can talk all you want about the horrors of the 20th century and I won’t disagree with you. But there’s been no other century that’s seen more medical advances, more healthy people, more stomachs filled, or more problems solved. We’ve got a long, long way to go, but make no mistake: The innovations and improvements that are made by entrepreneurs and businesses everywhere are making the world a better, more livable place. And when under-resourced people around the world learn what you and I know, they’ll be liberated from their bonds of poverty too.

Don’t ever apologize for being an entrepreneur. The only people who should be apologizing are the bureaucrats standing in your way.

Photo by Mike Licht cc by-sa

About the Author

Perry Marshall has launched two revolutions in sales and marketing. In Pay-Per-Click advertising, he pioneered best practices and wrote the world's best selling book on Google advertising. And he's driven the 80/20 Principle deeper than any other author, creating a new movement in business.

He is referenced across the Internet and by Harvard Business Review, The New York Times, INC and Forbes Magazine.