THE CREATION OF WEALTH

You need both Enterprise and Increasing Returns to Scale to create wealth. Enterprise is setting up the firm. Increasing Returns to Scale is a process of operating the firm. Enterprise alone won't make it as you also need something to sell produced at a steadily falling cost. In other words your firm needs to become large enough to operate under increasing returns to scale to make substantial profits. If your firm is too small you don't create new wealth. Also once you achieve increasing returns to scale sales prices and marketing are a secondary consideration. Many thousands of books have been written about how to get rich. They say basically the same thing. Save and then invest wisely. In property shares etc. Some authors add additional precepts. Use other peoples' money. It all sounds very clever. Yes if a person saves and invests wisely and if they borrow wisely they can become moderately well off. But investing in shares means that you only get a small fraction of the profits. The rest gets swept elsewhere to the managers and the inside crowd. Unless you run a successful investment fund. And then again that is running your own business.This book is about creating new wealth not obtaining wealth. Yes Atilla the Hun obtained great wealth. You can obtain wealth by robbery extortion theft violence piracy speculation gambling. But experience shows that the chance of successfully achieving this despite fictional accounts is small. So how do the rich become rich and the poor remain poor? I mean rich as Rockefeller or Bill Gates? Exploitation? Hard work? Luck? Being in the right place at the right time? Is there some secret that allows you without capital excessive effort or luck become very rich?Yes there is. And this secret is described by the dual concepts - Enterprise combined with Increasing Returns to Scale. If you combine Enterprise which is starting and owning a firm that firm must produce goods or services for sale under Increasing Returns to Scale. And together with the necessary hard work leadership and good management - yes the usual stuff you will become depending on the size of the market rich. If it is a large market you could become very rich. If it is a global market with a major demand for your product very very rich.