When we reduced the height of the pyramid without changing its area, we also increased the width of the pyramid. Even after we increased the area of the pyramid overall (expanding it equally in all directions), the same proportional amount of increase in width was still there. The question is, what does this width represent?

Pressing the top down, making the pyramid wider, might seem like the lower sections, typically representing those of a poorer economic standing, are expanding. That’s actually not the case. Remember that the pyramid's size also increases, due to the pushing of the (wealth at the) top to the bottom, as explained below.

This increase in the overall size of the pyramid represents an overall increase in wealth, which, although idealistic, would realistically, eventually, mean that the lower sections would not depict poverty-stricken people at all, but actually wealth-stricken. In other words, the poorest of a wealthy economy can themselves be wealthy. The reason then, that they are represented in the bottom sections is simply because those above them are wealthier. It is an idealistic situation but one that can theoretically take place.

It is a central idea of Real Economics, that giving extra / unneeded profits (what we classify as real net-profit), would not just produce more quantity of wealth (represented by an increase in the pyramid's size, but would also produce an increase in the continuity of wealth (keeping the pyramid around longer), and an increase in its quality (better people and better stuff inside the pyramid).

Another effect that’s produced from widening the pyramid as we did above, is that the majority of the area of the pyramid is shifted more towards the bottom and middle. Meaning, the wealth of the pyramid (its area) is now more among the majority than the minority. One way to visualize this is by continuing to widen the pyramid and bring the top closer and closer to the bottom. The area of the pyramid becomes less about minority and majority (hierarchy) altogether, but about equality. Everyone is wealthy with few more than others. While this is a good visualization technique, it should by no means be the goal of an economy as many economists have pointed out: Death is a flat line.

Wealth inequality, the verticality of the pyramid, in the right amount, is highly productive. It produces positive benefits that actually grow the economy as a whole, which also means a reduction in poverty. Wealth inequality accomplishes this by producing wealth incentives (the incentive to be wealthier including to be wealthier than the next guy), which incentivizes hard work, competition, innovation, etc., producing more opportunity and betterment in all areas of life.

While wealth inequality can be, and generally is extremely productive, it is nevertheless the small reductions in wealth inequality that actually make it productive to begin with. Generally speaking, any movement of wealth down the pyramid (a reduction in wealth inequality) will increase the size of the pyramid, be it through charity or capital investment.

The essential difference between Real Economics and capitalism is that while capitalism uses capital investment to move wealth down the pyramid to produce more wealth, Real Economics also utilizes the extraordinary ability for charity to add to the equation.

The capitalist would immediately ask, "if Real Economics requires 100% of net-profit to be donated to charity, where's the money now for capital investment?" The answer, is that Real Economics does not include industry investments as net-profit. Real Economics particularly classifies net-profit (what we call real net-profit) as monies not needed by the profiteer for his or her wellbeing (their family's wellbeing included) regardless if such money came from a salary, or shareholder dividends.

Real Economics requires sacrificing what we want (if it doesn't provide wellbeing) so that people and the environment can get what they need. As you'll soon see, and as is written throughout our other pages on this site, this is necessary and an even desirable addition to capitalism, for its own sake, for its own continuity and growth.

As well, any wealth and the wealth inequality it produces, that isn't needed by those who have it, is by definition unproductive. As we said above, the purpose of Real Economics is to reduce unproductive wealth inequality and increase wealth. And it is exactly through the reduction of unproductive wealth inequality that production is increased, and therefore the increase of wealth thereafter.

Let's get into the gist of the mechanism at hand. How exactly does moving money down the economy / pyramid through charitable giving, actually increase the overall size of the economy / pyramid?

The economy / pyramid has a bottom line just like a business. In business terminology, the bottom line refers to the business's profit, which can be thought of as a business getting more out than it puts in. An economy, which is largely made of businesses, works the same way. Just like all businesses grow from the bottom line, so too does the economy. The bottom line of the economy however, is actually the earth itself (the environment), the foundation and source of the rest of the economy / pyramid (including all people and businesses) above it.

This idea can be expanded even further by saying that it is the bottom parts of the pyramid in general, which is the source of the wealth for the rest of the pyramid. The majority of humanity is at the middle and bottom parts of the pyramid, and in turn humanity utilizes the bottom line of the pyramid (the environment), to produce wealth for the rest of the pyramid.

The foundation of the pyramid, quite literally, is its bottom line, as well as the bottom sections above it. Just as any structure requires a strong foundation, our economy is no different. That foundation is the environment, and the majority of humanity.

As well, when wealth goes to the bottom, it doesn’t just grow from there, it grows into the rest of the system, reaching up and back to where it was contributed from, whether from the top, middle, or bottom.

As well, because of the network effects of wealth in an economy, whereby when one increases in wealth, generally others do as well, it can be said that the entire economy is growing when anyone grows.

The bottom line is where new growth happens, and is also where the continuity of existing growth occurs. It is where continuity of resources is achieved, and is therefore where real (continuous) wealth is produced.

On the contrary, when we don't grow the economy's ultimate bottom line, we're not really growing our own personal bottom line either. More so, there is no middle, and there is especially no top without the bottom. The wider the bottom is, the wider the middle and top are.

A wealthy economy that’s skinnier than it is wider (or unproductively skinny), means there’s less at the bottom and more at the top, a weak foundation, and therefore a basket case of unproductive wealth inequality, less wealth production, and a dismal future. If the bottom line is the environment, then the environment is the foundation and source of everything sitting above it, including its continuity, quantity, and quality.

Every single thing on earth, is a function of earth. As such, the pyramidal model gives us another interesting insight into the bottom-line: it's not just the bottom line. It surrounds the entire pyramid, and is even the pyramid itself, just as we, and everything else in this world, is surrounded by the world, and depend on it for literally everything.

Just remember, the name of this game is more so width than it is length. The wider the pyramid is, by pushing the top down, the larger its bottom line is as well.

Real Economics is derived from the Torah, a text written in Hebrew. In the Hebrew language, the word for profit is very similar to the word for width. Just as everything ultimately comes from G-d, so too, growing the bottom line comes from getting that Top closer to it.