For much of history, profit-making typically meant profit-taking. Wars were fought for land and resources, while men grew rich from subjugating others. Money changed hands, but productivity barely budged. According to economic historian Joel Mokyr, whenever a society managed to raise its standard of living, rent seekers “came either from within the economy in the form of tax-collectors, exclusive coalitions, and thugs, or they came from outside as alien pillagers, mercenaries, and plunderers.”1
Of course, rent-seekers exist to this day, but since the Industrial Revolution, productivity has climbed drastically across the West due to the creative work of a new breed of proft-maker—the innovator. Rather than playing tug of war for limited resources, innovators circumvent those limits by applying their knowledge of the world to devise methods that combine resources more efficiently. Due in large part to their work, real U.S.