"Fertile Human Minds, Fertile Earth," by David A. Geracioti, Registered Rep, July 2007

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The Wellness Revolution:

How to make a fortune in the next trillion dollar industry-- preventative medicine and wellness.

Video Clip of an interview between Pat Robertson of the 700 Club and Paul Zane Pilzer about The Wellness Revolution.

Economist Paul Zane Pilzer considers himself to be an environmentalist.But he is not your average greenie. Indeed, Pilzer is something of an icononclast: There is no such thing as scarcity of natural resources, he argues.When humans were “running out” of, say, rubber during WWII, they invented synthetic rubber. A former college professor, an advisor to two White House administrations and a multimillionaire software entrepreneur, Pilzer was born in Brooklyn to immigrant Jewish parents who ran a small business. Pilzer says that experience—watching his family scratch out a better living, producing curtains and bedspreads— inspired him: It showed him how hard work can produce innovations. Eventually, he began to wrestle with the economic orthodoxy concerning scarcity. He came to realize that human ingenuity always comes up with a new “natural” resource.

The environment is an important issue, Pilzer says, but it’s not the biggest crisis facing Americans—that would be healthcare. Pilzer says the problem with the U.S. system of health care insurance is that it’s tied to employment. He should know: Pilzer’s family once lost their health insurance while his wife was pregnant. Pilzer is the founder of two companies that provide individualized health benefits. His goal, he says, is “helping every American family get permanent, affordable lifetime health insurance.” For more on the booming health industry, read The New Wellness Revolution (Wiley, 2007) and for Pilzer’s solutions to the health insurance problem, visit www.zanebenefits.com.

Registered Rep: How did you come upon the concept of unlimited wealth, the idea you describe in your book God Wants You To Be Rich?

Paul Zane Pilzer: I came of age in the 1970s. I graduated college in 1974, got an MBA from Wharton in 1976. And if you came of age in the 1970s,why that was the age when we were running out of gasoline, we were running out of oil, we were running out of natural resources. Whatever your parents had, halve it and you’ll be lucky to get that, that was the feeling then.

RR: Scarcity has long been a central tenant of human activity. You’re saying that’s wrong?

PZP: Economics is the study of scarcity.And,when I was studying economics at Wharton, I was thinking, “What’s scarce?” They told me land was scarce, and that there was only a limited amount of food.Yet every year food productivity went up—by a factor of 300 times per acre from 1930 to 1980, creating effectively 300 times more land.

RR: Back in the late 1700s and early 1800s,Malthus [the English economist and demographer] predicted that hordes of people were going to starve to death: too many people, not enough food.Who knew that fewer and fewer farmers could produce more and more food?

PZP: Yeah,Malthus looked at the amount of farmland, saw the population going up, and said the population would be controlled by the limited food supply. The worldwide population was almost one billion in 1800, when Malthus said it can’t get any bigger, because the farms can only produce so much food. And he was right at that time.What he didn’t have a way of seeing was productivity growth. The same farm 100 years ago was producing half as much food, and half as much before that. And he couldn’t foresee the real green revolution. Remember, that’s what it used to be called?

RR: He didn’t factor in technology.

PZP: Yes, Malthus was wrong. His mistake was that he held technology constant. He looked around at the farms and he didn’t have data that showed that farm productivity would far outstrip humans’ ability to reproduce—all the way to 6 and a half billion people today.

RR: There must be an investing lesson in there.

PZP: From an investment standpoint, the classic mistake made throughout history is holding technology constant. If you remember in the 1970s,we were running out of oil, running out of copper, we were running out of all these things. But the pessimists missed two things.One is that if we run out of a resource, we find cheaper ways to get it, because prices start going up.Or, secondly, we invent something completely new outside the industry that just completely displaces the “scarce” resource. Take vinyl records. In the 1980s, just to make the vinyl, which was an oil derivative, it cost $3.50; the record business was predicting that album prices would have to go up to $10 or $12.And what came along? The digital CD. It completely decimated the vinyl record industry. The whole industry disappeared in five years. So we see these radical changes the minute a commodity price goes up; people look around and ask,“How can I get this commodity cheaper?” And then if it keeps going up, somebody says,“Who cares about this commodity? Why are people using the commodity? How can I make a substitute so they don’t need it anymore?”And that’s the history of the world in metals, in rubber, almost really everything.

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