In a previous post I gave two fundamental principles. Maybe I could have called them Basic Facts, because they are not “principles” in the sense of being doctrines or beliefs. But the word “fact” seems too final, and while I believe these principles to be true, I want to leave some room for modification in case someone convinces me I have erred. Other words come to my mind, like Basic Axioms and Basic Assumptions, but they sounded too mathematical or philosophical to me. So I’m sticking with the term Basic Principles.
Here I present two more Basic Principles.
Principle Three: Most people make decisions emotionally rather than rationally
This principle is so well-known it is hard to imagine anyone disagreeing with it. In fact, it is the basis of most of advertising, including political advertising. I will assume you agree that this is a Basic Principle.
Principle Four: Wealth must be created by someone in order to be enjoyed by anyone
This principle is different from the other three because it seems not to be about the psychology of people. But wealth is a basic concept that must be put on the table if I am going to write about creating more wealth for society, and I am sure there are many people who have not thought about what wealth really is.
Many people equate wealth with money, but in fact wealth is not money. If you were shipwrecked on a desert island with all of Bill Gates’s money but nothing to buy and no survival skills, you would not be wealthy, you’d be in serious do-do. So we need a working definition of wealth:
Wealth is the accumulation of goods and services that make life more enjoyable.
That means wealth includes TVs, cell phones, computers and iPods. But it also includes running hot water, a non-leaking roof, books to read, and a trustworthy mechanic to fix your automobile. I am sure that there is not a single person on the planet who can provide all of those products and services for himself, let alone the countless other products and services each of us relies on daily to make life more enjoyable. So when you look at wealth this way, Principle Four becomes obviously true.
That’s it! I am pretty sure I can get really far in my analysis of wealth creation for society using just these four principles. So, onward I go. Please feel free to comment on either my principles or how I apply them to life and business.