The wealthy helping the poor.

The wealthy helping the poor.

I found this article somewhere – I do not know where (but the author's name does appear at the end). I am reproducing it here without explicit permission. It is mainly for the use of my learners at the Branson School for Entrepreneurship.

The wealthy have absolutely no obligation to "help" the poor, assuming that "help" in the context below means the handing over of part of their wealth to the poor without exchange of any comparable value from the poor to the wealthy i.e. economic exchange. The reason is that the wealthy are wealthy due to their past service to society - they have already given, and that is why they have received. Their wealth is the consequence of helping the poor... and middle-class and rich. They offered goods and services and received money in exchange. Voluntarily no less. Let me use an example:

I have a can of cola which I created by digging in the ground under my house for metals, growing sugar cane in my garden and collecting rain water that fell on my property. It cost me some effort and time, but did not take from anyone else to produce. You come along and offer me R5 for the can and I accept. This means that I value my can of cola at less than R5, because I would rather have the R5 than the cola. If I valued the can at more than R5, then I would rather keep the can. Let's say I value it at R4. You obviously value the can at more than R5, otherwise you would rather have kept your R5 - let's say you value it at R6.

Now, after our transaction, you have a can of cola which you value at R6 for which you paid R5 and I have R5 for which you paid for one cola valued at R4. So you and I are both better off than before. I have provided you with the ability to quench your thirst and in exchange you have given me potential to purchase something else to satisfy my needs. We have helped each other.

The problem comes the next day. You drank the drink, but I still have R5. Somehow, it is now assumed that I am rich and you are poor and therefore something is wrong. So would it make it right if I gave you R1 ? That would be the same as selling you the coke at R4 in the first place, in which case I would have gained nothing and you would have gained R2 during the exchange - hardly fair. Giving you more than R1 would make it entirely useless to produce and exchange and neither of us would have anything of value. Giving nothing is neither right nor wrong, since we both gave and received the previous day and are quits.

To summarise, let's invert the example. Let's say you did not drink the coke immediately, but kept it for a few days and I went out, spent my R5 on a loaf of bread and ate the whole thing. Now I have nothing and you have a coke. You are rich and I am poor. Do you have any obligation to share your coke with me ? I really can't see why. And if you did, would you expect me to make and sell you another can tomorrow or to come around asking for another sip ?

Stephen Van Jaarsveldt