Manhattan Prep started out as one lone tutor in a Starbucks coffee shop. Less than ten years later, it was a leading national education and publishin… - Andrew Yang

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Manhattan Prep started out as one lone tutor in a Starbucks coffee shop. Less than ten years later, it was a leading national education and publishing business that employed over one hundred people and was acquired by a public company for millions of dollars. How did that happen? We delivered a service that customers liked more than what was otherwise available. They sought us out and rewarded us with their business. We hired more people, grew, and kept improving. This process — a new company filling a need and flourishing as a result — is an example of value creation. It’s the fuel of economic growth, and what our country has been seeking a formula for. It’s the process that leads to new businesses and jobs. Value creation has a polar opposite: rent-seeking. In the 1980s, economists began noticing that countries with ample natural resources experienced lower economic growth rates than others. From 1965 to 1998 in the OPEC (oil-producing) countries, gross domestic product per capita decreased on average by 1.3 percent, while in the rest of the developed world, per capita growth increased by 2.2 percent (for an overall difference of 3.5 percent). This was a surprise — if you had lots of oil in the ground, wouldn’t that give you more wealth to invest and thus spur more rapid growth? Economists cited a number of factors to explain this “resource curse,” including internal and external conflict, corruption, lower monitoring of government, lack of diversification, and being subject to higher price volatility. One other possible explanation on offer was that a country’s smart people will wind up going to work in whatever industry is throwing off money (like the oil industry in Saudi Arabia). Thus fewer talented people are innovating in other industries, dragging down the growth rate over time. This makes sense — it’s a lot easier for a gifted Saudi to plug into the Ministry of Petroleum and Mineral Resources and extract economic value than to come up with a new business o