W: LP: LG: VH: LM: part 3c

As Victor Hugo introduces us to the character of Javert, a narrative is given of how Jean Valjean, under the name Madeleine, had used his shorted back pay from the nineteen years servitude and the silver from the Bishop of Digne to capitalize a business venture in the town of Montreuil-sur-mer. I want to quote a few excerpts here because, though it is fiction, it illustrates perfectly what Adam Smith wrote about that if government does not interfere with true free enterprise, someone with a little capital and a good idea can create wealth (putting the lie to the idea that wealth is only a static pie that only so many slices can be cut from). Here is the passage from book five of the first of five parts of the book, Les Misérables:

From time immemorial the particular occupation of the inhabitants of Montreuil-sur-mer had been the imitation of English jet beads and German black glass trinkets. The industry had always been slow because of the high price of the raw material. At the time of Fantine’s return to Montreuil-sur-mer a complete transformation had been carried out in the production of these “black goods.” Toward the end of 1815, an unknown man had come to settle in the city and had conceived the idea of substituting shellac for resin in the manufacturing process; and for bracelets, in particular, he made the clasps by simply bending the ends of the metal together instead of soldering them.
This minor change had caused a revolution. It had in fact reduced the price of the raw material enormously, and this had made it possible, first, to raise wages of the workers—a benefit to the district; secondly, to improve the quality of the goods—an advantage for the consumer; and third, to sell them at a lower price even while making three times the profit—a gain for the manufacturer.
Thus we have three results from one idea.
In less than three years the inventor of this process had become rich, which was good, and had made all those around him rich, which was better. He was a stranger in the region. Nothing was known about where he came from and little about his early history.
The story went that he came to the city with very little money, a few hundred francs at most.
From this slender capital, under the inspiration of an ingenious idea, made productive by order and attention, he had extracted a fortune for himself and a fortune for the whole region.

Thanks to the rapid progress of this industry, which he had so successfully recast, Montreuil-sur-mer had become a good-sized business center. Huge purchases were made there every year for the Spanish markets, where there is a large demand for jet work, and Montreuil-sur-mer, in this branch of trade, almost competed with London and Berlin. The profits…were so great that by the end of the second year he was able to build a large factory, in which there were two immense workshops, one for men and the other for women: Anyone in need could go there and be sure of finding work and wages.

All in all his coming had been a blessing and his presence was a providence. [Before his arrival], the whole region was stagnant; now it was all alive with the healthy strength of labor. An active circulation stimulated everything and penetrated everywhere. Unemployment and misery were unknown. There was no pocket so dark that it did not contain a little money and no dwelling so poor that it did not contain some joy.

Jean Valjean goes on to use the profits he has earned from his successful business to endow some beds in a hospital and finance several charities. It was a win-win situation because the product was improved and made less expensive benefiting the consumer, the workers had jobs at reasonable rates of pay, and the entrepreneur gained profits from an investment of his capital (with the a long-term view about investing instead of the short-term profit motive of your typical American capitalist).