Review of Unlimited Wealth: The Theory and Practice of Economic Alchemy by Paul Zane Pilzer
I’ve been recently reading a book called Unlimited Wealth, which discusses economic alchemy.
Alchemy is that science that was working on turning lead into gold, remember?
Well this book states that the old economic theory that goods are scarce is actually wrong, and that we live in an economy where we can actually create new goods and create demand for them where none existed before.
Take for instance the cell phone.
Before the cell phone, we lived just fine (we did…really).
Now that we have it, it’s as if we NEED it.
And with the cell phone we now have Uber and Lyft, apps that thrive on mobile technology.
So with technology comes new supply and new demand.
We grow our wealth in an unlimited fashion by inventing new technology.
Let’s dive into the 6 laws of alchemy / unlimited wealth:
#1 Law of Alchemy / Unlimited Wealth
Technology defines a physical resource.
For example, land was not a physical resource until people learned how to cultivate it.
Another example is palm fronds, and the technology needed to build roofs and huts with them. Once we implemented better house building technology, palm fronds no longer was an important physical resource.
Look at how the invention of automobiles and the engine made oil a valuable physical resource.
When you think about it, all of our valuable resources are valuable because we have the technology to use them to our benefit.
#2 Law of Alchemy / Unlimited Wealth
The supply of physical resources is also determined by technology, because:
(1) technology determines the efficiency with which we use our physical resources – for example, the fuel injector effectively doubled the supply of oil by doubling automobile gas mileage; and
(2) technology determines our ability to find, obtain, distribute, and store physical resources – for example, the Alaska pipeline doubled the U.S. supply of oil.
#3 Law of Alchemy / Unlimited Wealth
The advance of technology is determined by the speed with which the members of a society exchange and process information. Each new advance in technology is the product of one or more other technological advances, and thus the speed with which people exchange and process information about their technological advances is the throttle controlling the overall advance of technology.
Moreover, technology has an exponential relationship upon itself – that is, advances in technology multiply upon each other as each technological advance leads directly to new technological advances.
W=PTn
(W)ealth equals (P)hysical resources multiplied by (T)echnology, and technology has an exponential relationship upon itself (n).
#4 Law of Alchemy / Unlimited Wealth
There is an unlimited demand for products and services because technology determines what constitutes a need. This law is entirely analogous to the role of technology on the supply side.
Automobiles, better clothing, electronics, and virtually 95 percent of the things we “need” today are items whose demand was created by technology.
#5 Law of Alchemy / Unlimited Wealth
Technology determines the level of demand for existing goods and services by determining the price at which they can be sold. As the price goes down, the demand goes up, and in the alchemic world demand is unlimited because of the shift from quantity demand to quality demand.
For example, as the price of a suit goes down, a person will purchase an increased quantity of suits, along with more ties, shirts and shoes to match.
And when when he has all the suits he wants, he will probably switch to a better quality suit, along with better quality ties, shirts and shoes, starting the process all over again.
#6 Law of Alchemy / Unlimited Wealth
The technology gap – the difference between the best practices possible with current knowledge and the practices actually in use. The technology gap is the sum of the Ready-to-be-Implemented Technological advances (R-I-Ts) that we haven’t yet utilized.
In order for an R-I-T to be literally “ready to be implemented,” it must be user transparent – that is, it must not require any more skills from the user that the product it is meant to replace.
Examples of R-I-Ts include radial tires that haven’t yet replaced standard bias-ply models.
Conclusion
When you look at economics in terms of Unlimited Wealth, and the 6 laws of Alchemy above, it seems obvious that we create the wealth that we have.
In addition, there is no limit to what we can create and sell.
In order to keep building wealth, then we must always be up to date with the current technology. We must be ready to change.
Finally, it also shows us that we actually NEED very little to survive. Our lifestyles have become so advanced that now we confuse our WANTS with our NEEDS.
If we really do want to enhance our wealth, we would benefit by first understanding that we already are INCREDIBLY wealthy.
In the book, Pilzer even goes as far to say that to survive, man only need a few dollars a day, to get enough food and water. He can get by with 1 pair of clothes. What do we REALLY NEED to survive?
Our whole economy is not based on Needs, it’s really based on bigger and better wants.
Understanding the true nature of our economy, of wealth, and how technology creates unlimited wealth is the first step in being able to understand our own level of wealth…and our society’s.
About Mey Duldulao
Back in 2011 I had over $30,000 in credit card and line of credit debt, was living paycheck to paycheck and was stressed out over my lack of success in my financial life.
In April of 2016, I became debt free and had a monthly passive income stream. I quit my job on December 23, 2016, and started doing my dream work of mentoring others on what I did to create the freedom to quit my job.
In 2017 we bought our first condo in Waikiki, and we went on 5 weeks of vacation (including a 7 day cruise to the Mexican Riviera)!!!
I spend most of my time doing what I dreamed of for years, spending my days with my son Jordan and my husband Jomel, enjoying motherhood and being a wife. I also enjoy researching Financial Freedom and sharing what I learn with my clients and on my blog.
If you want to learn more about how I can help take back control of your money and your time, then CLICK HERE, watch the free video and get started!