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Lecture 5
Macroeconomics
I was born with the same gift from God
we are all born with — the impulse to
reach out and lessen the suffering of
another human being. 
It was a gift, and we each had a choice
whether to use this gift or not.”
Production
Innovation
Continuous Innovation
20161
AD
$2
$100
$30 World
15x
Northern Europe
North America
50x
1820
Income
Per
Day
Shanghai 1990
Shanghai 2013
$10.95. Blue-collar compensation was around
$3.72 per hour. It took 2.94 hours to earn the
money to buy your own tool that would let you
do about one calculation per second.
Today you can have an Xbox One X for $299
dollars. Blue-collar compensation is now
around $33.00 per hour. It will take you around
9 hours to earn the money to buy your console.
The graphical processing unit (GPU) in this
device runs at 6 teraflops. A teraflop a trillion
operations per second.
Christmas 2020 - 12 teraflops per second.
1 per second
12 trillion per second
For the time it took to work to buy a device in
1975 that could do one calculation you will get
3,898,478,800,302 calculations for Christmas.
21,000 TEU
80 miles
$5.85 to $0.16
New York to London
1955 $27,000 2019 $200 135x
$400
10 days
1861
What is Wealth?
Anything we value
What is Capital?
Anything we can use
to create value
We create wealth by
innovating our capitals
Human Innovation
is how we escape
poverty and create
wealth
Innovation always
comes as a surprise
George Gilder
Human Innovation
Model
11 Elements
Human Beings
Human Beings
Creators created in
the image of our
Creator
Human Beings
Reason and Speak
Cultural Capital
Human Beings
Cultutal Capital
How people treat
each other
1978
China Changed Worldview
Deng XiaopingMao Zedong
1976
Dies
Worldview
Truth
Good
Beautiful
Worldview
Political
Legal
Economic
Cultural Capital
Ideas
Inventions
Innovation
Human Beings
Idea
A thought about a new
way to potentially create
value
Invention
Proof of an Idea
Thought to reality
Innovation
Market-Successful
Invention
ideas
inventions
innovations
3%
Capitals
Anything we use to
create value
“Capital will go where it
is wanted, and it will stay
where it is well treated.
It cannot be driven; it
can only be attracted.”
Walter
Wriston
Cultural Capital
Ideas
Physical
Inventions
Innovation
Human Beings
Physical Capital
atoms and energy
natural resources
time
buildings
equipment
things than make things
natural resources
renewable
non-renewable
Physical Capital
Make me an
iPhone.
Sorry, I have the
atoms but not the
knowledge.
We need
innovation
Intelligizing Atoms
Adding knowledge to atoms
Unorganized Matter
“Creation brings deep
satisfaction and
fulfillment. We develop
ourselves and others
when we take
unorganized matter
into our hands and
mold it into something
of beauty.
Cultural Capital
Ideas
HumanPhysical
Inventions
Innovation
Human Beings
Human Capital
trust
health
trust
skills
knowledge
personality
relationships
Trust
Integrity
Competence
I look for three things in hiring
people.
The first is personal integrity, the
second is intelligence, and the
third is a high energy level.
But if you don’t have the first, the
other two will kill you
Warren Buffett, CEO
Berkshire Hathaway
Cheating on an Exam
Lying about your
Competence

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