A Facebook "Debate" on labor value and wealth creation - FEEDBACK requested
Posted by xthinker88 8 years, 11 months ago to Economics
Ok. So I've had this discussion regarding the photo included that was posted on a friend's FB timeline.
I'm interested in feedback. Am I missing some great argumentative point? Other than the obvious - which is not to even bother arguing with people like this (which I'm working on).
ME: Hard work is not the primary ingredient in wealth creation. Mind is. But nice straw man. Ironically by somebody that probably subscribes to the labor theory of value. Hard work, in and of itself, has no inherent value.
LIB1: Already having money is the primary ingredient in wealth creation. If you have to work really hard to feed yourself, then "mind" is of no use. . .you cannot take risks, and you do do not have time or energy for "wealth creation." If you already have money, you can "create wealth" without too much "mind" as well. . . .you can hire people to be your "minds."
ME: I didn't start with money. I'm not the wealthiest but I created a lot more wealth than my parents. And a lot of others disprove your point as well. Not to mention all of those that lose their fortunes due to foolish decisions. In fact, studies of those who inherit great wealth repeatedly show that it is usually dissipated a couple of generations later. Because those who inherited did not know how to create wealth themselves. They only knew how to spend it.
BTW, for the hated 1%, inherited wealth only accounts for 15% of their holdings. In fact, in one study of people with over $500K to invest, only 6% had it through inheritance while 69% got there with no inheritance.
LIB2: If you want to "create wealth" then be the Federal Reserve or get the government to allow you to "own" a hole in the ground with gold in it. Otherwise you're just taking other peoples' money.
ME: If you want to take my money, come armed. If you want to trade, then you are open to creating wealth. There is much more wealth in the world's economy than there was 100 years ago. It was not a matter of just putting gold in a hole in the ground. In fact, most wealth is created by mind. That's why a pencil costs more than a lump of lead and a stick. And your computer costs more than a few pints of oil and a container of sand and a handful of assorted metals.
I'm interested in feedback. Am I missing some great argumentative point? Other than the obvious - which is not to even bother arguing with people like this (which I'm working on).
ME: Hard work is not the primary ingredient in wealth creation. Mind is. But nice straw man. Ironically by somebody that probably subscribes to the labor theory of value. Hard work, in and of itself, has no inherent value.
LIB1: Already having money is the primary ingredient in wealth creation. If you have to work really hard to feed yourself, then "mind" is of no use. . .you cannot take risks, and you do do not have time or energy for "wealth creation." If you already have money, you can "create wealth" without too much "mind" as well. . . .you can hire people to be your "minds."
ME: I didn't start with money. I'm not the wealthiest but I created a lot more wealth than my parents. And a lot of others disprove your point as well. Not to mention all of those that lose their fortunes due to foolish decisions. In fact, studies of those who inherit great wealth repeatedly show that it is usually dissipated a couple of generations later. Because those who inherited did not know how to create wealth themselves. They only knew how to spend it.
BTW, for the hated 1%, inherited wealth only accounts for 15% of their holdings. In fact, in one study of people with over $500K to invest, only 6% had it through inheritance while 69% got there with no inheritance.
LIB2: If you want to "create wealth" then be the Federal Reserve or get the government to allow you to "own" a hole in the ground with gold in it. Otherwise you're just taking other peoples' money.
ME: If you want to take my money, come armed. If you want to trade, then you are open to creating wealth. There is much more wealth in the world's economy than there was 100 years ago. It was not a matter of just putting gold in a hole in the ground. In fact, most wealth is created by mind. That's why a pencil costs more than a lump of lead and a stick. And your computer costs more than a few pints of oil and a container of sand and a handful of assorted metals.
LIB2: I still don't see what you mean by the phrase "create wealth". I take other peoples' money in exchange for interesting gadgets that I design and build. But it's still taking other peoples' money. I add value to the materials that I buy, but any wealth that I obtain by selling my creations is obtained at others' expense. Which is to say, we don't both get richer.
ME: Of course you don't. That's pretty much the main problem with liberal economics. They don't see that the whole world of "things" right now has more value than it did 500 years ago. And it does because the mind of humans was applied to create value and add value to things that, in many cases (eg silica sand), were fairly worthless. Liberals/progressives view wealth as a zero sum game.
Of course you both get richer if you freely trade. The money that you make off the product that you sell contains profit. That is a measure of how much richer you got than you were before you sold your product. The other person also usually gets richer. The product makes their life better or provides some other value which, quite often, they would have paid even more to achieve than what they paid. That extra value that they received makes them richer.
A computer is more valuable than the minerals that make up its parts. A small part of that extra value was the labor but most was the mind - the innovation and creation of that object that made it more than a lump of minerals.
BTW, what interesting gadgets do you create? I'll gladly buy them from you for the cost of your materials. That way you won't be involved in creating wealth by your mind.
Why the heck not? If LIB2 creates cool gadgets that people want to buy the world has more value than it did before. As Rand says, that's why English has the phrase "to make money". You can both get richer. LIB2 can make a gadget, I can make a wireless module, and someone else can make a database system to tie them together and predict factory equipment failure, and we *all* make money.
Maybe this woman is actually "wealthy", as she is the one with the greatest bundle of large sticks, which may be the building materials for a shelter. Shelter has value. So that's actually a valuable commodity she is lugging on her back. I cannot stand it when someone assumes that because a person has the trappings of wealth they have nothing to have earned it! Like it magically appears out of thin air. The people I know who are successful didn't come from wealth. Actually, the exact opposite is true in every case. These people came from VERY moderate backgrounds. They have worked extremely hard all of their lives and have achieved a great deal of success, but none of it was just handed to them! Argh!!
That lib ass is so clueless, but that is the sort of thinking that has just about ruined all that was extraordinary about this country. The whole you didn't create that is actually right. Those parasites DIDN'T create anything! They just get paid and earn a living by those who had the guts and the MIND to CREATE something. And fail at it more than once I'm sure.
His big lie is “but any wealth that I obtain by selling my creations is obtained at others' expense. “
The answer is really quite simple once you clear the misunderstanding that wealth only exists in the form of money. Any asset is wealth!
A strong, competent body can create product, likewise a mind. Knowledge of data enables one to produce so a (useful for production) education or acquired skills is wealth.
Building wealth is the result of producing more than one consumes. The problem with impoverished cultures is that their economy is on a bare sustenance level.
If one wanted to bring then out of poverty one would then need to give them the knowledge, ability and OPORTUNITY to produce more than they consume.
Buying a man fish for life will not make him wealthy. But he also needs more than to know how to fish, he must be able to efficiently produce a catch and be able to sell or barter it for more than he consumes in his daily course of living.
Will that person ever remember your exchange and learn from it? I think the odds are slim.
Yes, many projects also require an investment - and the size of the project determines the size of the initial investment required. But simple investment doesn't automatically yield a return on that investment. See Solyndra. ;) The products and services resulting from that investment and their value to their _customers_ is what ultimately drives profit. Wealth is created because one is combining resources with labor - both physical AND mental. As long as there are people engaging in productive activities, wealth will continue to be created according to that gainful expenditure of labor!
Money, as the accepted form of exchange that is traded to me in return for the product of my labor or mind, is certainly mine. It's not yours or theirs, unless I trade it to you or them for something I value. As Rand wrote for Fransisco: "Money is a tool of exchange, which can't exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?"
Francisco D'Anconia
Government takes on to itself the right to create, inflate, deflate and tax money in order to control the activities of it's citizens. And it redistributes stolen by force money (taxation, inflation) in order to buy the loyalty of those they hand it out to. Certainly not for the 'better good.'
As to market being 'permitted', markets of all forms always exist; above ground, black, barter, illegal, smuggling. They will exist regardless of the control desires or efforts of government.
Once I take 'my money' and convert it to my needs of survival and improvements of my life and then into assets, it is converted into intrinsic value and it carries that intrinsic value in it's utility, not in it's form.
As to any argument about Marx and Austrian economics, I leave you to your thoughts, but I take strong exception of your description of Rand's work as 'mumbo-jumbo'.
I think the question arises from your comment, Why are you on an Objectivist site? Do you bring value to trade, or do you wish to convert or sow dissension?
A single legal tender is not necessary. In fact, the world economy operates fine without one.
Our government is not elected to control our purchasing power or control economic activity however much fascists like you would like it to be so. It has no constitutional authority to do either.
I elect people to uphold and defend the constitution. They swear to do the same. They do not do so in this case and many others.
Example: Bitcoin
Government as a nebulous entity, made up of bloviators in charge and the beaurocracies they spawn, does not care about their citizens beyond the minimum they have to do to ensure two things:
1 - They remain in power
2. - The citizenry pays their taxes like good little helots
Trust me, were I moved to threaten, I would not use subtle.