4 ms·

That's what I would call first-order wealth (i.e. basic goods or services). It's the equivalent of the fish you give (or perhaps sell) that allows someone to e

That's what I would call first-order wealth (i.e. basic goods or services). It's the equivalent of the fish you give (or perhaps sell) that allows someone to eat for a day. Getting rich that way is a matter of knowing how much to charge and how much to spend so that you accumulate a surplus. The problem with this kind of "wealth" is that it doesn't have much of a network effect. I admire second-order wealth creators more. This kind of wealth is the knowledge you give (or sell) when you teach someone to fish. This creates the possibility of more first-order wealth without significantly diminishing the seller's wealth (unless the value of the knowledge itself is directly related to its scarcity). The guy in the original article is clearly a first-order rich guy. While I applaud him for helping worthy causes, I'd admire him more if he were a creator of second-order wealth, perhaps by starting a YC-like company which would help start new companies in that industry.

curi 19y ago
Look at amazon, ebay, and walmart -- very useful things to have. Selling lots of 'first-order' goods, cheaply, helps a lot of people tremendously. It's not clear to me how to judge which is better, but it is clear to me that both are awesome.
- bayareaguy 19y ago
  While Walmart is basically a ruthlessly efficient first-order company, I'd say eBay is more of a second-order company since it sells a sales-enhancing service and Amazon is somewhere in between since it does both.
mhb 19y ago
Since money is fungible, the distinction you suggest is not meaningful. The money that a person saves by buying less expensive goods from a "first-order" business might very well be spent on training or other self-improvement. If a "first-order" business is better at its business than it would be at a "second-order" business, then, due to comparative advantage, everyone will be better off with the "first-order" business saving people money that they can spend on "second-order" businesses, your admiration for the latter notwithstanding.

curi 19y ago

Look at amazon, ebay, and walmart -- very useful things to have. Selling lots of 'first-order' goods, cheaply, helps a lot of people tremendously. It's not clear to me how to judge which is better, but it is clear to me that both are awesome.

bayareaguy 19y ago
While Walmart is basically a ruthlessly efficient first-order company, I'd say eBay is more of a second-order company since it sells a sales-enhancing service and Amazon is somewhere in between since it does both.

mhb 19y ago

Since money is fungible, the distinction you suggest is not meaningful. The money that a person saves by buying less expensive goods from a "first-order" business might very well be spent on training or other self-improvement. If a "first-order" business is better at its business than it would be at a "second-order" business, then, due to comparative advantage, everyone will be better off with the "first-order" business saving people money that they can spend on "second-order" businesses, your admiration for the latter notwithstanding.