Tuesday, May 27, 2008

Book Review: God Wants You to Be Rich by Paul Zane Pilzer

There is a call for much greater investment in infrastructure in the United States. This book doesn’t directly address that issue, but Pilzer argues that new technology is making greater resources available. In our effort to replace and maintain aging infrastructure and create the infrastructure of the future, we need to be creative and confident in our answers to the problems we discover.

Pilzer, Paul Zane. God Wants You to Be Rich. New York: Touchstone Faith, 1995.

Pilzer believes we can all have an abundance of what we need to live well. His belief is based on two concepts, one theological and the other technological.

The theological concept is that God is good. God is a generous creator who supplied all the materials we need and a wise parent who leads us to learn to use these resources.

The technological concept is that our inventiveness has and will continue to make more and better things available to us to meet our needs for less cost. We are able to use more of the resources we have and more efficiently use those resources that have long been available to us.

Based on these concepts, Pilzer imagines and economic theory based on abundance instead of scarcity. He calls this theory economic alchemy and lays out the principles and laws that define his viewpoint.

The principles of economic alchemy rest transformational quality of technology. Technology defines supply because it determines the resources available to us. Advancement in technology depends on our ability to process information, which has greatly increased in recent decades. Economic growth is possible in those areas where better technology is available, but not widely used.

While Pilzer deals largely with supply, and how the supply of almost everything we need is expanded greatly and rapidly by technology, he also deals with demand. Human demand of goods and services is similarly unlimited. Unlimited demand is not a bad thing because we don’t just want more and more of what we have. We want better. Much of what we want now didn’t exist 50 years ago, and new technology will similarly change the demands of future decades.

Pilzer doesn’t throw out the old theories. He sees himself as harkening back to theories as old as the Bible and updating more recent theories with something economist couldn’t have foreseen a century ago, the rapid development of new technologies.

This isn’t just an abstract book of theoretical and alchemical obscurities. Pilzer presents the economic trends of the last century in terms of how they are explained by economic alchemy and how they are generally better for societal wealth than politicians and the media may have represented them.

God Wants You to Be Rich: How and Why Everyone Can Enjoy Material and Spiritual Wealth in Our Abundant World

This review originally appeared here at Infra Consulting LC.

1 comment:

  1. I'm afraid I have to take issue with this polyanna-ish theory. You observe that Pilzer "... deals with demand. Human demand of goods and services is similarly unlimited."

    This is simply false. As human population density rises beyond an optimum level - a level that has been breached in many countries - per capita consumption begins to decline, even in wealthy countries. This occurs because, as people are forced to crowd together and conserve space, it becomes ever more impossible to use and store many products. Consider Japan, a wealthy nation but one that is ten times as densely populated as the U.S. Their per capita consumption of virtually every product imaginable is only a fraction of that in the U.S.

    Your web site is devoted to infrastructure. Few people think of infrastructure in per capita terms, but it is a product just as important to the economy as a home or an automobile. It is the per capita consumption of infrastructure that declines the most rapidly as population density increases.

    At this point, I should introduce myself. I am author of a book titled "Five Short Blasts: A New Economic Theory Exposes The Fatal Flaw in Globalization and Its Consequences for America." To make a long story short, as population density rises beyond some optimum level, per capita consumption begins to decline. Falling per capita consumption, in the face of rising productivity (per capita output, which always rises), inevitably yields rising unemployment and poverty.

    This theory has huge ramifications for U.S. policy toward population management (especially immigration policy) and trade. The implications for population policy may be obvious, but why trade? It's because these effects of an excessive population density - rising unemployment and poverty - are actually imported when we attempt to engage in free trade in manufactured goods with a nation that is much more densely populated. Our economies combine. The work of manufacturing is spread evenly across the combined labor force. But, while the more densely populated nation gets free access to a healthy market, all we get in return is access to a market emaciated by over-crowding and low per capita consumption. The result is an automatic, irreversible trade deficit and loss of jobs, tantamount to economic suicide.

    One need look no further than the U.S.'s trade data for proof of this effect. Using 2006 data, an in-depth analysis reveals that, of our top twenty per capita trade deficits in manufactured goods (the trade deficit divided by the population of the country in question), eighteen are with nations much more densely populated than our own. Even more revealing, if the nations of the world are divided equally around the median population density, the U.S. had a trade surplus in manufactured goods of $17 billion with the half of nations below the median population density. With the half above the median, we had a $480 billion deficit!

    Our trade deficit with China is getting all of the attention these days. But, when expressed in per capita terms, our deficit with China in manufactured goods is rather unremarkable - nineteenth on the list. Our per capita deficit with other nations such as Japan, Germany, Mexico, Korea and others (all much more densely populated than the U.S.) is worse. In fact, our largest per capita trade deficit in manufactured goods is with Ireland, a nation twice as densely populated as the U.S. Our per capita deficit with Ireland is twenty-five times worse than China's. My point is not that our deficit with China isn't a problem, but rather that it's exactly what we should have expected when we suddenly applied a trade policy that was a proven failure around the world to a country with one fifth of the world's population.

    If you‘re interested in learning more about this important new economic theory, then I invite you to visit my web site at OpenWindowPublishingCo.com where you can read the preface for free, join in the blog discussion and, of course, buy the book if you like. (It's also available at Amazon.com.)

    Pete Murphy
    Author, Five Short Blasts