Infinity from Zero

February 1, 2002
Wayne Koberstein
Wayne Koberstein

Wayne Koberstein, a 25-year veteran of the publishing industry, is editor-in-chief of Pharmaceutical Executive magazine. In 14 years as PE's Editor, he has overseen the emergence of the magazine as the leading business and marketing publication for the global pharma industry. He has interviewed and profiled more than 150 top executives in pharmaceutical companies, as well as major regulatory and healthcare leaders, around the world. Wayne has also directed the launch of numerous supplements and other ancillary business for the publication.

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Who, or what, creates wealth? Answering that question has become as much political football as economic theory. Last month, the US president reminded us that government does not make wealth but, at best, fosters a climate conducive to it. The old-left idea that workers create and should share equally in the fruits of production has long since died of exhaustion. By process of elimination, the only apparent answer remaining belongs to idealistic capitalists, who herald the enterprising companies from which all wealth "obviously" flows-for most of us, as paychecks.

Who, or what, creates wealth? Answering that question has become as much political football as economic theory. Last month, the US president reminded us that government does not make wealth but, at best, fosters a climate conducive to it. The old-left idea that workers create and should share equally in the fruits of production has long since died of exhaustion. By process of elimination, the only apparent answer remaining belongs to idealistic capitalists, who herald the enterprising companies from which all wealth "obviously" flows-for most of us, as paychecks.

Without citing a single sentence from an economics textbook, I venture to propose a seldom-mentioned alternative: Not one alone, but all of the contenders together should claim the credit. They, and the very ground on which they stand.

None of the supposed wealth creators works in a vacuum-except, you might say, Earth itself. From the raw materials this planet gives forth, humans fashion every fuel, tool, and molecule necessary for the advance of civilization. Each industry extracts a specialized set. For pharmaceuticals, the palette includes plants, animals, and minerals, and now various forms of engineered biomass. It is a risky, yet rewarding, business. Navigating through a maze of often toxic hazards, industry companies produce valuable agents of healing.

From that process, a form of wealth arises. But for that to translate into currency and capital, companies will always be dependent on other parties to buy their products, police their markets, and cushion their risks. A close look at any of those parties quickly dissolves into a myriad of constituents with overlapping identities. Among buyers, this industry takes in prescribers of all varieties; payers in insurance, managed care, and government; and patients, caregivers, and close relations. In one context, we may refer to most people in the last set as consumers; in another, as workers. Henry Ford, for all his faults, understood that point well when he chose to pay his factory force at least five times the going rate. If his own employees couldn't afford to buy a Model T, who could? Too few to drive the business.

In still another context, consumers become investors, even if unconscious ones. Massive retirement funds carry the collective muscle of the masses to the stock-market floor. Meanwhile, individual, risk-heavy investors make sudden moves with top-heavy market effects-bringing quick wealth to some and equally swift loss to others.

Government tempers this tempest in a teapot. Ideally, it regulates away the bullies and scoundrels that would otherwise rule the roost. It sets the standards of engagement for the field of competitors. In modern times, it erects the infrastructure beneath all industry, from highways to high-risk research.

Out of all those ingredients, we cook a stew of virtually infinite value-bringing life verily out of ground zero. That is why I cannot join the partisans for any one party over the others. It just seems common sense that, to the extent that anyone creates wealth, we all do. Perhaps if everyone held that thought in mind, it would bring us all back down to earth.

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