My late father always told me that wealth comes from people making things and selling them; bankers, stockbrokers, and realtors move money around, he said, but they don't create wealth. It was only years later that I realized that he was channeling what 18th-century philosopher and economist Adam Smith had written in his The Wealth of Nations (1776): "Labour was the first price, the original purchase—money that was paid for all things. It was not by gold or by silver, but by labour, that all wealth of the world was originally purchased."
But it was also Adam Smith, called "the Father of Modern Economics," who first defined the concept of the free market. Smith proposed the theory of how the invisible hand of self-interest allows a free market to operate. (It is often overlooked that for the invisible hand to operate efficiently, customers need access to all relevant information, and that a free market mandates freedom of information.) In a global marketplace, the efficient operation of the free market demands that manufacturing be done where it costs least—which you see in today's migration to China of the manufacturing of audio products.
It remains to be seen if, in China, the rise of a prosperous middle class and the growth of stricter environmental laws in that pollution-ridden country will increase the cost of manufacturing there. Some US audio manufacturers are already talking about moving production back to North America. But if manufacturing continues to leave North America, while some of us may still have money, we might not necessarily have wealth. As Adam Smith also wrote in The Wealth of Nations, "No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable." And no matter where it is made, poor and miserable people don't buy high-end audio equipment.
The link to this is from STEREOPHILE.
