There was an old woman who was nearing the end of her life. As she closed her eyes one night, she saw a bright light and was transported to another realm. She didn’t pass away just then. Instead, she returned to the living world to find her family gathered at her bedside. She smiled and whispered to her children, “I have seen the great hereafter.”
“The great whereafter?” her son asks.
“Heaven and hell. I have seen them both.”
The old woman goes on to explain, “I came upon a door, and behind it was hell. What I saw there confounded me. There was a dining hall filled with rows of tables, each table teaming with a magnificent feast. It looked and smelled delicious, yet the people seated around the tables were emaciated and sickly, moaning with hunger.”
“As I came closer, I realized that each person held different lengths of spoons, but each spoon was longer than normal. With each spoon, they could reach the feast, but each spoon was just too long. Though they tried and tried again, they couldn’t bring nourishment to their mouths. In spite of the abundance before them, they were starving.”
She continued, “I left this horrid place and opened a new door, one that led to heaven. Inside, I was surprised to see that very same scene before my eyes, a dining hall filled with rows and rows of tables, and on those tables, a marvelous feast. But instead of moaning with hunger, the people around the tables were sitting contentedly, talking with one another, sated from the abundance before them.”
“Like those in hell, these people were also holding different lengths of very long spoons. As I watched, a woman dipped her spoon into a bowl of stew before her, but rather than struggling to feed herself, she extended her spoon out and fed the man seated across from her. This person, now satisfied and no longer hungry, gave thanks and returned the favor, leaning across the table to feed the woman and others.”
“I suddenly understood the difference between heaven and hell,” the old woman said to her family. “It is neither the qualities of the place, nor of the abundance of resources, but the way people use their gifts and treat each other.”
“In hell, we are selfish. We would rather go hungry than give the people we don’t care for the pleasure of eating.”
“But in heaven, we feed each other. We put trust in those around us, and never go hungry.”
The economic lesson:
People differ in many ways—in their productive abilities, preferences, specialized skills, attitudes, and willingness to take risks. These differences influence people’s incomes because they affect the value of the goods and services that individuals are willing and able to provide to others.
In a market economy, people who earn high incomes do so because they provide others with things they value more than their cost. If these individuals did not provide valuable goods and services, consumers would not pay them so generously. There is a moral here: If you want to earn a high income, you had better figure out how to help others a great deal. On the other hand, if you are unable or unwilling to help others in ways they value, your income will be low.
This direct link between helping others and receiving income gives each of us a strong incentive to acquire skills, develop talents, and cultivate habits that will help us provide others with valuable goods and services. College students study for long hours, endure stress, and incur the financial cost of schooling in order to become doctors, lawyers, accountants, and engineers. Other people acquire training, certification, and experience that will help them become electricians, maintenance workers, or website designers. Still, others invest and start businesses. Why do people do these things?
In some cases, individuals may be motivated by a strong personal desire to improve the world. However—and this is the key point—even people who don’t care about improving the world, who are motivated mostly by the desire for income, will have a strong incentive to develop skills and take actions that are valuable to others. High earnings come from providing goods and services that others value. People seeking great wealth will have a strong incentive to pay close attention to what others want. And even those people who want to improve the world need information on the education and skills they can acquire, which will do the most to make the world a better place for others. This information is generally provided by the earning opportunities in different occupations.
Some people think that high-income individuals must be exploiting others. But, people who earn high incomes in the marketplace generally do so by providing others with things they value and for which they are willing to pay. Mark Zuckerberg, one of the founders of Facebook, earned billions of dollars because the social network provided an enhanced communication tool to billions of people worldwide. As of the second quarter of 2018, there were approximately 2.23-billion Facebook subscribers. Popular singers, movie stars, and athletes, each have huge earnings because millions enjoy what they do.
Business entrepreneurs, who succeed in a big way, do so by making or providing products that millions of consumers find attractive. Henry Sy, who founded SM, became one of the richest men in the Philippines because he figured out how to manage large inventories effectively and sell brand-name merchandise at low prices to every corner of the country. Bill Gates and Paul Allen, cofounders of Microsoft, became billionaires by developing a set of products that dramatically improved the efficiency and compatibility of desktop computers. Millions of consumers who never heard of Zuckerberg, Sy, Gates, or Allen benefited from their talents and products. They made a lot of money because they helped a lot of people and brought heaven closer to earth.
eric.jurado@gmail.com
