Wealth Disparity

How do we solve the problem of wealth disparity without destroying the incentives to create wealth?

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My thought.

It is fundamental to ask what represents an incentive to create and grow wealth for an individual/ corporation since that is what needs to be protected. An obvious incentive to create wealth is to have the wealth itself which means individuals who start a business are most likely to make money which represents a quantitative incentive for wealth creation and means of exchange of value.

Incentives to create wealth should span beyond the business owner to all areas of the business setup (employee, vendors, customers, etc…), however, humans been self-preservative by nature mostly tend to look toward self-first, and most individuals get trapped in that cycle and therefore find it difficult to look beyond themselves which then translates to how they see life and business.

Who can help bridge the above gap? The government of any country is the biggest regulator who can provide guidelines on how things should work.

HOW???????????

Regulators/ Government Participation:

People will naturally not want to do the right thing if the option not to do without consequence exist. Regulators are expected to enact laws to guide/regulate the conduct of individuals/corporations in society.

CAC through its CAMA regulates the business activities of company’s operating in Nigeria who are expected to make a minimum share capital payment to CAC alongside documentation of directors and other requirements of the law stipulated in the CAMA 2020. if human capital represents a company’s major asset as against the paid-up share capital paid to CAC as stipulated in CAMA, I believe an institution like NLC that looks into the human capital resources capability of a company should be given such authority which will assess the viability of the company to sustain the human capital required to generate the revenue or wealth the business intends to create in the future before approving such a company at CAC level which means collaboration between existing institutions is necessary to avoid employers of labor/ intending entrepreneurs and individuals who intend to create wealth do not use human capital resources as a means to an end in creating such wealth. This means the government needs to produce policies that will strengthen institutions like NLC which can regulate the HR activities of companies intending to start a business to ensure they comply with the rules of engagement. This also means the NLC would have a structure of its own that allows them to act in such a capacity. The government of a country is the authority of the country and thus its strongest regulator. If the government is serious about wealth creation and closing the gap in wealth disparity, the government has to be involved in how this business intends to create the wealth within its space by putting policies in place and institutions to check various critical aspects of starting and growing a business.

A business startup review unit can be set up under the operating arm of CAC. The unit’s job is to evaluate all start-ups intending to create wealth within the country. They can require documentation ranging from:

i.??????????????Business plan,

ii.?????????????Sustainability/ succession plan,

iii.???????????Human Capital Management and Development plan (this can be done in collaboration with NLC)

With the above information, the unit can take a stand on whether such a company should be granted a license to operate within the country or not have met certain defined criteria.

Incentive to Government

i.??????????????Potential to increase Tax revenue (PIT, CIT, VAT, etc.) from expanded tax net for infrastructure development

ii.?????????????Streamline ease of doing business which can encourage international participation and investment.

iii.???????????National GDP growth from a strengthened middle class actively creating and growing wealth from their employment.

iv.???????????Happy citizens

v.?????????????Helps the country with decision making during planning (budget, finance, infrastructure development, etc) through data gathered from such initiative and give more accurate assumptions to future decisions and outcome

Incentives to individual

i.??????????????Possibility to create and grow wealth

ii.?????????????Sense of care and inclusiveness

iii.???????????Possibility to address slave trade wrapped in employment

The incentive to Corporation

i.??????????????Potential to grow and create wealth in a sustainable business environment

ii.?????????????Business / Value proposition evaluation

Can help address the disparity in wealth distribution if the business and value proposition can translate beyond money as the primary incentive for wealth creation to human capital development. This may warrant a total business definition if the incentives to create wealth are just to create more wealth to no end.