Wealth is not created: RANT
I hear this time and again: "The creation of wealth...."
Well, I say: wealth cannot be created. I think wealth is like energy and matter; it is conserved. You can move it around, you can concentrate it in a locale and you can even change it's form, but you cannot create it.
A factory owner accrues wealth largely by paying people to transform his raw materials into product. The difference between the cost of materials plus labor and the price he charges for his product is his profit. There's nothing wrong with this; the laborer expends his labor to obtain cash, which can buy him things that he cannot make for himself; he expends more energy than his labor is worth, but in return he gets money which can be used universally. The point of the thing is that wealth has not been created. It merely has been transformed from the form of raw materials and labor into a product, like a tennis shoe.
A mine owner experiences the same labor situation as the factory worker, but he has something else going on: he has figured out how to own a mining claim and so can extract materials from the earth. Unlike the factory owner, he does not pay per piece for his raw materials: he simply owns them. And then he sells them. This, also, is not the creation of wealth. This is the extraction and resale of wealth from the earth, which is a finite object.
The professional whose labor is negligible also does not create wealth. A physician, for example, spends several years mastering an information construct and then is paid to administer that construct to his patients. The consultant is paid to impose a construct on a person or an organization. This, still, is not the creation of wealth. It is merely the transformation of energy into an intellectual construct in the professional, and then the sale of the imposition of that construct on the client.
Again, wealth is NOT created. It is only transformed or transported.
How about the farmer who puts a seed worth fractions of a penny into the ground and then some months later pulls a plant worth a few dimes out? This, too, is not the creation of wealth. Forget, for a moment the enormous inputs of labor, fertilizers and pesticides that made that plant possible. The farmer takes those factors as business costs. So where does his profit really come from? Well, that field was not always a field. It once was a community of plants that had a lot of interactions, and that represented a high degree of energy, because it was a highly organized system. The farmer has traded this low-productivity, information-rich native system (by 'information-rich' I mean only that there's a high degree of organization and interactions in the system...this is not a value judgement) for his high-productivity, information-poor system (=simple system) in which his crop grows. In that sense, he's a miner. The farmer has tapped a resource (soil) on the planet.
The farmer's ability to move wealth around does not end there. Consider the Mississippi River. We've removed all of the complex plant communities from the banks of that river and farmed it all along its length. The result is that our agricultural runoff goes straight into the river and from there, straight into the gulf of Mexico, where it produces a 'dead zone' of about 100 square KM, as a direct result of the agricultural runoff. If this is not an example of to the transport of profits upstream, then I don't know what is, because that dead zone should have been fishing grounds for somebody.
ok I'm done.
Profit is not a bad thing. Wealth is not a bad thing. We all need agriculture so that we can eat.
My rant is about the idea that wealth can be created. It cannot. It is a zero-sum game. Wealth accumulating here means that wealth is diminishing there. Anybody who uses the phrase "the creation of wealth" is telling you lies. That is all.
Well, I say: wealth cannot be created. I think wealth is like energy and matter; it is conserved. You can move it around, you can concentrate it in a locale and you can even change it's form, but you cannot create it.
A factory owner accrues wealth largely by paying people to transform his raw materials into product. The difference between the cost of materials plus labor and the price he charges for his product is his profit. There's nothing wrong with this; the laborer expends his labor to obtain cash, which can buy him things that he cannot make for himself; he expends more energy than his labor is worth, but in return he gets money which can be used universally. The point of the thing is that wealth has not been created. It merely has been transformed from the form of raw materials and labor into a product, like a tennis shoe.
A mine owner experiences the same labor situation as the factory worker, but he has something else going on: he has figured out how to own a mining claim and so can extract materials from the earth. Unlike the factory owner, he does not pay per piece for his raw materials: he simply owns them. And then he sells them. This, also, is not the creation of wealth. This is the extraction and resale of wealth from the earth, which is a finite object.
The professional whose labor is negligible also does not create wealth. A physician, for example, spends several years mastering an information construct and then is paid to administer that construct to his patients. The consultant is paid to impose a construct on a person or an organization. This, still, is not the creation of wealth. It is merely the transformation of energy into an intellectual construct in the professional, and then the sale of the imposition of that construct on the client.
Again, wealth is NOT created. It is only transformed or transported.
How about the farmer who puts a seed worth fractions of a penny into the ground and then some months later pulls a plant worth a few dimes out? This, too, is not the creation of wealth. Forget, for a moment the enormous inputs of labor, fertilizers and pesticides that made that plant possible. The farmer takes those factors as business costs. So where does his profit really come from? Well, that field was not always a field. It once was a community of plants that had a lot of interactions, and that represented a high degree of energy, because it was a highly organized system. The farmer has traded this low-productivity, information-rich native system (by 'information-rich' I mean only that there's a high degree of organization and interactions in the system...this is not a value judgement) for his high-productivity, information-poor system (=simple system) in which his crop grows. In that sense, he's a miner. The farmer has tapped a resource (soil) on the planet.
The farmer's ability to move wealth around does not end there. Consider the Mississippi River. We've removed all of the complex plant communities from the banks of that river and farmed it all along its length. The result is that our agricultural runoff goes straight into the river and from there, straight into the gulf of Mexico, where it produces a 'dead zone' of about 100 square KM, as a direct result of the agricultural runoff. If this is not an example of to the transport of profits upstream, then I don't know what is, because that dead zone should have been fishing grounds for somebody.
ok I'm done.
Profit is not a bad thing. Wealth is not a bad thing. We all need agriculture so that we can eat.
My rant is about the idea that wealth can be created. It cannot. It is a zero-sum game. Wealth accumulating here means that wealth is diminishing there. Anybody who uses the phrase "the creation of wealth" is telling you lies. That is all.
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spurgemaster, your assertions are ridiculous, and nonsensical.
Good night.0 -
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quote:Originally posted by allen griggs
spurgemaster, your assertions are ridiculous, and nonsensical.
Good night.
so how do you really feel?0 -
According to your misguided assertions there would be no more wealth today than there was 1,000 years ago. That is patently untrue. 0 -
Inflation also creates wealth....the wealth holding our economy up right now is inflation.
Take for example...you bought your house in 1990 for the sick sum of $40,000. Wages went up...gas prices went up...home prices went up. 17 years later that $40,000 house is worth $250,000.
Inflation created wealth.
Everyone right now is hoping that this trend will continue...a $250,000 house purchased will be worth $500,000 in 10-20 years. Won't happen.
Life as we know it will end in 2012...December 21st.0 -
Well if you look at studies something like 75% of people that are wealthy, their parents were wealthy as well. A lot of people do not earn it. There are a lot of stories of rags to riches. My parents are good friends with some people, and here is their story. The guy was a regular old plummer. In the early 90's when the aids scare came out, he quit because of having to deal with others S***, he was scared of getting something. So they took their money and started a sod farm. From there they have a few other investments, but they are now multi-millionaires. 0
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