City of London, the global capital for wealth creation

“However beautiful the strategy, you should occasionally look at the results”

Winston Churchill

The begetting of wealth by the production of goods and the provision of services that others purchase has freed multitudes from poverty. Wealth flows from the offering of goods and services that others consider more valuable than the price at which those goods and services are being offered .

Simply speaking, if one produces and sells say a million footballs for two pounds each to a million different people he would have generated two million pound in revenue. If all associated costs to the producer were broadly for a million pound or less then technically he would now be a millionaire. Subjectively, we can proceed with the assumption that each purchaser perceived the added benefit to be at least a pound. Hence, ordinarily he had set out willing to spend three pounds to purchase a similar football. Thus in conceptual terms the purchasers as a group may be said to have, on a subjective basis, gained a million pounds in wealth.

The free market is dependant upon the perception of value in goods and services. This is the basis of entrepreneurial wealth creation. The greater the perceived wealth (well being) gained by others in the marketplace the greater the wealth that will be earned by the entrepreneur.

It is undoubtedly, consciously or otherwise, a philanthropic act on the part of the entrepreneur who instigates this bilateral wealth gain. Equally, bilateral gain is evident in the exchange of labour and wages. It necessitates that the value of one’s labour is worth less than the labour to the employee, and more than the wages to the employer.

Creative entrepreneurialism is one of the highest forms of philanthropy. Through which has been unleashed the indomitable human spirit. And upon which is founded the meteoric rise of contemporary standards of living.

Democracy necessitates consumer sovereignty. Which means we need to redefine the capitalist notion of wealth exchange. At the time of a voluntary exchange, each party perceives the exchange as a gain. However, the capitalist system as is sees the consumer as a pawn to be moved around in the market chess game. Rather than as the hand of the chess player. To redress this imbalance we must focus on the gain of the buyer, albeit a non-monetary gain, rather than just the gain of the seller.

Money is not the only wealth. And we ought dare to quantify wealth as a form of subjective pleasure. Perhaps in ‘happiness units’ . In so doing we would
transcend the modern vision of the consumer as simply a marketing target for businesses and corporations. Into the the feeling, thinking individual he or she really is. So as to overcome the thought of the consumer as a purely economic animal, replacing it with the more evolved understanding of our spiritual content.

Even governments concentrate on the gain of the seller by reporting a negative balance of trade for the country that buys goods from a foreign country. And a positive balance of trade when it sells them. Yet, when we personally buy say a new car, laptop, dress or a holiday we are much more excited by the item purchased than the money we used for the transaction.Trade can never in the truest sense be a deficit. Both sides gain positively.

We need to de-mechanise our economic system in favour of re-humanising it. The casino economy which emerged globally prior to the ‘credit crunch’ was a result of the subtraction of the human element. Profit was not driven by a passion for the desires of consumers, but by the movement and manipulation of numbers on a computer screen. The end consumer being only peripheral to the process of wealth creation.

We are now satiating ourselves with grandeur designs of corporate responsibility and social enterprise. The instinct of the collective consciousness is to replenish capitalism with the human factor. So as to avert in future the miseries bestowed upon us by an epic financial crisis such as the last.

However, the much needed refinement of capitalism can only occur if we re-examine the notion of value and gain being acceded to by the buyer. And apply this even to depreciating goods and those goods which we physically extinguish by our consumption, such as food. We should measure consumption by value not only price. And value should be measured in the context of the happiness it generates not just its peculiarly value. Remembering that the peculiarly value of things is unstable, and akin to a mirror being reflected on the object from different positions. That mirror should be placed in the hands of the consumer, all of us.