A Philosopher's Blog

Wealth

Posted in Business, Philosophy, Politics by Michael LaBossiere on October 19, 2011
2006-01-28 Pu money

Pu Money

WTP made the following comment:

Mike, I will ask again…If, as you assert, the amount of wealth is constant and we are all fighting over the pieces of a finite pie…There are more people alive today than ever before and they are all wealthier than those in the relative hierarchic economic layers of the past. Where did this extra wealth come from? Once we get through that perhaps we can discuss: Where does wealth come from? How is it created?

I assured him that I would answer these questions, so here it goes.

One rather important matter is what is meant by “wealth.” After all, this is a normative (value) term and tends to be a matter of considerable dispute. For example, does wealth include only physical and economic property in the strictest sense, or should it also include other things of value, such as knowledge? However, to keep it simple I will go with a fairly stock account of wealth and take it to refer to items of economic value in a fairly limited sense. As such, wealth would consist of such things as valuable natural resources (oil, gold, silver, wood, water, land, and so on), capital resources, money, and physical possessions (such as guns, cars, works of art, computers, books, and such).

The amount of wealth is not constant and I do not believe that I ever claimed it was constant. Rather, my point has been that wealth seems to be a zero-sum game. That is, at any given moment, there is a finite amount of wealth and any increase in my wealth would entail a decrease in the wealth available to or possessed by another. For example, the land I own is land others do not own, thus reducing the wealth available to others (if only by a miniscule amount).

The sum total of wealth can, obviously increase. To use an obvious example, there are far more houses now than ever before. As far as where they came from, they were obviously built by people using material resources that have presumably been around since the beginning (matter & energy after all, change form but cannot be created nor destroyed-at least on some accounts).

You are right that people alive today are, in general, more wealthy than their counterparts in the past. It is also true that poorer people today are relatively wealthier than people who would have been considered wealthy in the past. One factor in this change is that advances in technology and the rise of a consumer economy mean that people have access to far more things and, of course, there is a significant motivation to sell people said things.

In terms of where the extra wealth has come from,  giving a complete picture would require several books. However, I can briefly discuss some major causes.

First, there is the development of new technology. As noted above, one impact of this is that it provides more stuff to own (and hence more wealth relative to the past). Today, for example, I have a plethora of things my ancestors did not, such as a phone, a truck, lights, a Kindle, a modem, a router, a laptop, a flashlight, a fridge and so on. Another impact is that workers become more efficient (or can be replaced). So, instead of having to make things like a bow, spear, and clothing with great personal labor, weapons and other items can be mass produced by machinery-hence there will be more stuff for less effort, thus allowing an increase in wealth.

Second, there was the development of new financial systems which allow the “creation” of wealth by various means (some of which seem to be rather destabilizing to the general economy) such as investing, credit default swapping, junk bonds, corporate raiding and so on. A more complicated and larger economic system allows for there to be more monetary wealth-although this sometimes seems to be “creating” wealth out of nothing.

As far as where wealth itself comes from, that depends on the specific sort of wealth you are talking about.

Material wealth obviously originated in the creation/origin of the universe (that is where the stuff comes from). Once we had the earth and people, people could start acquiring material goods like land and resources. These resources can be made more valuable by the addition of labor, thus creating wealth. They can also be made more valuable by other means, such as creating scarcity and controlling pricing. These material goods can be acquired in various ways, fair and foul. The classic method is, of course, conquest.

Given that the earth is finite, the material wealth is also finite, thus creating a zero-sum game. To use an obvious example, any land I own is less land that other people can own. Everyone could, of course, be fairly well off. After all, a finite amount of wealth divided among a finite number of people could still allow for people to have a fairly robust amount of stuff. Obviously, however, this is not the sort of world we live in: very few people have most of the stuff.

Monetary wealth is obviously a social construct: we made up the financial game and the “creation” of wealth depends on the sort of game being played at any given time. For example, some folks “created” wealth by clever repackaging of toxic assets. Other people “create” wealth by working and investing their money (which is supposed to give them more money). In many ways, this is “fictional” wealth in that we are literally just making this stuff up and its value depends entirely on how far we are willing to all play make-believe. Yes, I play the game-it is a convenient way to handle exchanges in some ways. But, I always remember that it is just a game we are playing (I work, I get some paper, I hand the paper to someone and they give me an apple).

In theory, there could be an infinite amount of money (not physical currency, of course). However, simply creating more money will not actually create more wealth-it would mainly just result in inflation. As such, money is also effectively a finite resource and the more I have, the less there is available for others (in a practical sense).

Thus, wealth is effectively finite and we are in a zero sum game.

 

 

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53 Responses

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  1. T. J. Babson said, on October 19, 2011 at 6:58 am

    The amount of wealth isn’t even close to being constant: it has increased dramatically in our lifetime.

    • Michael LaBossiere said, on October 19, 2011 at 11:42 am

      I never claimed that it has not expanded. My point is that even though there is more now than before it does not follow that it is not a zero sum system. To use an analogy, if someone bakes more pies today than yesterday, there is still a limited number of pies. So, every pie I have is one less pie for someone else. If someone says “we can bake more pies!”, that is fine-but that just means there is more pie, not that the situation is no longer zero sum (unless we can produce a limitless supply of pie).

      Now, we could bake enough pies and see to it they are distributed so everyone has more than enough pie. However, it is still a zero sum pie game.

  2. magus71 said, on October 19, 2011 at 8:39 am

    Our economic system is too complex to be considered zero sum, with redundant features that allow people to move between jobs and move across the country to find work, get educated and grow opportunities.

    My hypothesis is that in primitive societies, people are too reliant on singular products, usually agricultural, and so are vulnerable.

    Article I wrote on a similar subject, on my blog:

    A couple of months ago, I wrote an intelligence paper here at Bagram which talked about the idea of Cascading Failure and Nodal Failure. Cascading Failure is when a “node”, such as a computer node fails, and thus other nodes have to pick up the traffic within the network, which in some cases overstresses that following node, which collapses and so on. Soon, the whole system collapses. I used this model to show that a complex network can appear fine one day, but can quickly disintegrate if the proper nodes are destroyed. As such, if certain nodes within a terrorist or insurgent network are destroyed, the entire opposition force can be rendered relatively ineffective in quick order.

    More recently, I began reading a book called: Washington’s General. It’s about Washington’s right hand man, Nathanael Greene. It goes into detail about how England’s tax increases on molasses–The Sugar Act– hurt the economy and really riled up the folks of Rhode Island. A similar thing had happened in Boston, with tea of course, and there was also the Stamp Act.

    In exploring how networks and “nodes” contribute to the makeup of modern society, I came up with a hypothesis concerning a government’s ability to levy taxes in primitive and modern cultures. Primitive cultures, since they do not have as much access to modern communication and transportation, are not as networked as first world cultures. So they tend to rely on a very few, locally produced commodities to generate revenue and jobs. More networked areas can take advantage of commodities produced in other areas by trading and buying and selling in a much more efficient manner than non-networked areas. The networking acts as a safety net: If one industry collapses, networked areas can still buy things of value from other areas, and than sell them for profit to other areas of the world that need those products that they can’t produce enough of on their own.

    So, when Britain enacted the Sugar Act, it really hurt Rhode Island, which drew almost all of its industry from molasses and Sugar for Rum. Had the Rhode Island “node” collapsed, it would have put more strain on other colonies, since they could not trade for molasses and sugar. And so on.

    In our modern day America, goods and services are almost universally available via technological networking, but there are areas that suffer greatly, such as when paper mills shut down in the north-east, or when the auto industry took a dive in Detroit. But mostly, tax hardship on goods is spread evenly across the nation, kind of like a mutual fund which protects against the failure of a single company. This allows the government to collect more taxes without destroying the system.

    The point of my hypothesis is that while we are trying to build a stable government in Afghanistan, we must realize that one of the crucial things a government must do is to collect taxes. But Afghanistan is not very networked. So taxes on local commodities may result in great hardship on the places that produce those commodities. Until Afghanistan is more networked, it will the government will continue to struggle in collecting revenue, and risks driving people to the insurgency if they up taxes on certain products without considering results.

    • Michael LaBossiere said, on October 19, 2011 at 11:39 am

      Logically, it must be zero sum. The earth is a finite system (and, for now, a closed system). Hence, the more stuff I have, the less stuff is available for others. Even if the pie keeps getting bigger, the pie is ultimately still a finite pie-so each slice takes away from the whole.

      • magus71 said, on October 19, 2011 at 5:27 pm

        OK, but again–does it matter? Are you suffocation anyone by breathing their oxygen? Please give me an example of someone being poor because someone is rich.

      • T. J. Babson said, on October 19, 2011 at 7:06 pm

        “The earth is a finite system (and, for now, a closed system).”

        This is patently untrue as we are bathed in the sun’s radiation, which is responsible for life on earth as we know it.

      • T. J. Babson said, on October 19, 2011 at 7:08 pm

        “Hence, the more stuff I have, the less stuff is available for others.”

        You could have $1B in a bank account and not have any stuff whatsoever, and yet you would still be fantastically wealthy.

  3. WTP said, on October 19, 2011 at 8:55 am

    “But then you say the sum total of wealth can, obviously increase”…” matter & energy after all, change form but cannot be created nor destroyed-at least on some accounts” Are not some forms of matter more valuable than others? If matter can change form, can it not move from a less valuable state to a more valuable state?
    “As noted above, one impact of this is that it provides more stuff to own” – Again, see my point on software. Also, if one comes up with a more efficient way of doing things thus enabling people to have more free time while using the same stuff, there is no net increase in stuff. There can even be a net decrease in stuff.
    “These resources can be made more valuable by the addition of labor, thus creating wealth.” – If I own a piece of land and I dig a hole at one corner, move the dirt to the other corner, dig a hole there, basically swapping the dirt around, I do much labor without increasing the wealth. This may seem silly, but keep it in mind. Depending on where this goes, I might refer back to it later.
    “Given that the earth is finite, the material wealth is also finite, thus creating a zero-sum game” – again see my point above regarding the relative value of forms of matter.
    The rest of this post goes into issues that are based on much of the flawed logic that I point out above, so it’s not worth going there until we resolve our differences above.

  4. WTP said, on October 19, 2011 at 9:09 am

    Cut & Paste fail again…The front end of my post above is missing…

    Capital resources? What exactly is that? Does it include software? Because I don’t see any place in your list where software would otherwise fit.

    “The amount of wealth is not constant and I do not believe that I ever claimed it was constant. Rather, my point has been that wealth seems to be a zero-sum game.” – These sentences contradict each other. If wealth is a zero sum game, you are saying that in order for one person to be wealthier, another must become poorer, thus no new wealth can enter the equation. As for your “given moment in time” argument, that’s ridiculous. A “given moment in time” is a static state. A static state cannot change. This is simple sophistry.

    • Michael LaBossiere said, on October 19, 2011 at 11:59 am

      You seem to have a different view of zero sum than I.

      Classic zero-sum games are like cutting a cake: if we divide the cake, if I get a bigger slice, then everyone else has less. What you seem to be saying is “what if we bake another cake?” My reply is that we still have a zero sum game, just with more cake in play.

      No, a given moment in time seems fine. For example, when talking about cake division after dinner, we talk about dividing the cake we have at the time rather than speculating about future cakes that might be baked.

      • WTP said, on October 19, 2011 at 12:18 pm

        You seem to be trying to confusing the issue. This is rather simple. I agree with you that a zero-sum game is like cutting a cake. You are the one introducing another cake into this equation. Where did I say that in the context of my criticism that your two statements are contradictory? You state “The amount of wealth is not constant” yet you then say it’s a zero-sum game. If the amount of wealth is not constant, then you can’t have a zero-sum game. If the size of the cake can vary (wealth is not constant) then the amount of cake each person recieves is a factor of the cake at that instant AND the size of the slice each person gets.

        Just curious…how far did you get in mathematics? Did you ever study caluculus and related-rates problems? I don’t mean to be condescending, I’m just not sure where you are coming from in your reasoning.

        • WTP said, on October 19, 2011 at 12:19 pm

          should be “size of the cake at that instant”…don’t want to leave anything open to misinterpretation.

        • Michael LaBossiere said, on October 20, 2011 at 11:46 am

          Perhaps we are talking at cross purposes. Allow me to try to de-muddle things a bit.

          1. Basic physical resources are clearly zero sum-we can think of the world as a big cake. If I get a slice of land which happens to have oil and gold under it, that means less for everyone else. So, physical property would always seem to be ultimately a zero sum game, at least in a finite system. Of course, the sum could be very large such that everyone could have an abundance (in theory).
          2. Value can, as you correctly noted, be added to the game. For example, I could convert the oil to petroleum products, improve the land and make the gold into artistic works. In this case, as per what I take to be your view, my slice of the cake would grow relative to other slices, but their slices would be the same size (assuming they did nothing). So, on one hand the game is non-zero sum (I can add more to my slice without taking from other slices). On the other hand, the whole economic system is still like the cake: whatever I have, you do not have. However, I should use better terms here-perhaps distinguishing between exclusive goods and non-exclusive goods. Exclusive goods would be such that if I have them, then other people do not. Such goods, of course, do not necessitate taking away from others (if I have them, you don’t-but I need not take them from you). Intellectual property would be one example of this. Non-exclusive goods would be such that my having them does not exclude others from possessing them. For example, we can all possess the same knowledge (such as how to post comments) and we could all be healthy.

          I got up to finite mathematics as an undergrad and graduate level symbolic logic, plus some math theory.

          • WTP said, on October 20, 2011 at 9:27 pm

            “Intellectual property would be one example of this. Non-exclusive goods would be such that my having them does not exclude others from possessing them. ” – Mike, this is the crux of the matter. The intangible knowledge. The knowledge of how to do things more efficiently, using fewer resources, or using resources others have little use for. Example:

            Let’s say I have some item that I consider to be worthless. You see that item and think of a use for it. Let’s even say you suggest to me how I might make the item useful. I still think it’s a worthless piece of crap taking up space in my house. I’m thinking of throwing it out. You offer me $10 for it. FBM, here’s your $10. You take that piece of crap, modify it a little, and find a way to make, say $500 off of it. Who won, who lost? If you hadn’t come along, that piece of crap would have gone into a junk pile and ground to useless bits, expenses incurred by society involved in transporting it, grinding it up, finding a place to dispose of it. My wealth would have been no better or worse without it. But you came along and offered me $10, thus my wealth increased. Society’s wealth increased by not having to dispose of it, your wealth increased by making something useful and marketable out of it. Whoever paid you the $500 got some utility out of it. Who lost? Are not all parties better off?

            • T. J. Babson said, on October 20, 2011 at 10:12 pm

              Mike’s theory can’t account for wealth creation, since at any given moment it is a zero sum game. It is like Zeno not being able to understand how the arrow hits the target.

  5. magus71 said, on October 19, 2011 at 9:40 am

    “:Given that the earth is finite, the material wealth is also finite, thus creating a zero-sum game.”

    This statement assumes a number of erroneous ideas. First, it assumes that everything is owned by someone. All of the minerals, all of the oil, etc. Much of that stuff is not owned by anyone because it has not been found yet. Secondly, it also assumes that all the *potential* is owned by someone. What did Steve Jobs take away from anyone when he created his operating system? In this case it *would* be zero sum: The amount of money for Jobs and all his employees would be zero. He’d have had to have gone to work for Best Buy or something. How many people would be employed by his company if he never created that system? According to your theory, someone lost out when Jobs created his company.

    In a mathematical sense, all the matter on earth may be zero sum–but there’s enough matter on earth for all the people living and much, much more. We have not touched close to all the potential that we have here. It’s like arguing about a ton of M+Ms in the middle of a gymnasium, and how you’re going to distribute them between two people. A ton of M+Ms is more than enough for two people, and many more. The question is, not about resources. It’s about what someone will do to get them. What service will someone provide so that they can get their share of M+Ms? Someone made the M+Ms with their own resources–they didn’t just appear. And if you want there to be M+Ms in the future, you better pay the person who made them so he can make more.

    Thirdly–so what if you’re right? So what if wealth is zero sum? Does Marxism provide us with a system that makes matter in the universe *not* zero sum? How are you going to determine the value of a person’s skills? Are you going to centrally allocate what a person can make? How will you decide what that amount is? Will you have everyone make the same amount of money regardless of job?

    You said you like your job better than minimum wage jobs. Would you take more money if someone offered it to you to do the job you’re doing now? I know you would. There are rich people in the academic world. Did they game the system to get their money? If you’re offered a position as dean someday, would you turn it down? The average person working an average job who invests in a 401k and a

    I’d really like to know what your better system is. All those technologies you speak of are created (99%) in capitalist economies. You can keep messing with the system and still succeed because it’s powerful–and that’s good. It’s like the US military can make foolish attempts to build entire backwater nations and still come out somewhat ok because the US has so much money. Even you–in all your glory Mike–need competition to keep you sharp. We can’t all be adoring undergrads who never question the professor’s liberal dogma…. Competition improves everything.

    My biggest problem with liberals (post 1960s liberals) is they don’t know a good thing when they have it. Things are better now than ever, but we’re seeing cracks. Those cracks are mostly due to liberal spending habits and liberal-induced multiculturalism which in part is responsible for the spending habits.

    • Anonymous said, on October 19, 2011 at 10:10 am

      How is multiculturalism responsible for spending habits? You seem to like to blame “liberals” for things that everybody is responsible for doing. Post 1960’s “non-liberals” were responsible for a large amount of spending and multiculturalism as well.

      • magus71 said, on October 19, 2011 at 11:20 am

        Well, multiculturalism is definitely NOT the result of the type of conservatism I prefer. I guess that would be labeled Paleoconservatism if someone wants to Google that.

        Of course both party’s have done their bit; but one party has done more of its bit than the other. Guess which party that is.

        Let’s start with Johnson’s Great Society. Much of the existing welfare state and the idea that the central government has to save people from themselves branches off from race issues, that we have to pour tons of money into failing cultures and that any failure of the culture is the result of the zero sum game that Mike speaks of. In their minds, white people had too much stuff and they stole it all. The multiculturalist finds it odious to say that any culture is actually doing something that keeps it behind, and so the answer he turns to is to provide artificial legal advantages and lots of money to lagging cultures. That spending has bled out to all people who may be keeping themselves back by not doing the right things.

        And guess which message it’s easier to run a political campaign on: “I’ll give you stuff” or “I’ll stop giving stuff”, even if the latter would in the long run benefit everyone.

      • T. J. Babson said, on October 19, 2011 at 11:21 am

        This harks back to my refrain that neither party is good, but the Republicans will inflict less harm than the Democrats.

        Why has the Senate not produced a budget in 900 days, even though they are required by law to produce one every April? This total lack of fiscal responsibility is, sadly, characteristic of our current crop of Democrats. The Democrats are unable to confront the fact that entitlement spending must be reformed to prevent a financial disaster. The House has produced and passed a budget. Where is the Senate budget?

  6. T. J. Babson said, on October 19, 2011 at 11:13 am

    Mike completely misses the point that wealth is increasingly tied to intellectual property, and has nothing to do with the fact that the earth’s material resources are finite. For example, 100 years ago you could have all the wealth in the world and yet you could not buy a heart bypass operation.

    • magus71 said, on October 19, 2011 at 11:21 am

      Exactly the point I was making with Steve Jobs. No one lost when Jobs invented stuff because no one had what he invented.

      • Michael LaBossiere said, on October 19, 2011 at 11:53 am

        Well, it is true that inventions typically add rather than take away. However, that is a totally different matter from whether or not wealth is a zero sum situation. When Apple invents more stuff, that means there is more stuff to buy. However, that stuff is still limited so that every iPad or Mac I own is one less for someone else to possess. Unless we can make enough of everything to go around and unless people agree to not take more than they need or have a right to, then some folks will have to do without.

        As I have noted before, if we can make enough for everyone, then everyone can have enough. However, that still does not change the fact that resources in a finite system are inherently, well, finite.

        • magus71 said, on October 19, 2011 at 5:21 pm

          “However, that stuff is still limited so that every iPad or Mac I own is one less for someone else to possess. Unless we can make enough of everything to go around and unless people agree to not take more than they need or have a right to, then some folks will have to do without.”

          Mike, people aren’t doing without because you bought a Mac. They’re doing without because they didn’t buy one; if everyone wanted a Mac I’m sure the company would love that and would make billions of them. Is there something about that computer that’s rare that would not allow the company to make many more should the demand grow?

          Are you depriving someone of a vehicle by owning your vehicle? Read my M+M analogy. There’s more than enough stuff in America at least.

    • Michael LaBossiere said, on October 19, 2011 at 11:55 am

      What do you mean by “tied to it”?

      If you mean that people can own nonphysical things like ideas or stories, then this ownership is still finite. After all, if I own the rights to a story, you do not.

      • WTP said, on October 19, 2011 at 12:09 pm

        The creation of new wealth, in many domains, depends upon the intellectual effort that went into generating that wealth. Patents, copyrights, and such. You know, the philosophy of how something could/should be made. The brains behind the operation. I would think that this is something a philsopher should understand intuitively.

      • T. J. Babson said, on October 19, 2011 at 1:13 pm

        The point is that useful knowledge is a form of wealth that is not directly tied to the earth’s resources.

        • dhammett said, on October 19, 2011 at 1:50 pm

          Is it directly tied to man’s intellectual resources? Are they infinite?

          • T. J. Babson said, on October 19, 2011 at 2:44 pm

            “Are they infinite?”

            We are doing the experiment now.

            • WTP said, on October 19, 2011 at 2:54 pm

              Oh, snap.

          • dhammett said, on October 19, 2011 at 4:10 pm

            Well, is it?

            • T. J. Babson said, on October 19, 2011 at 7:02 pm

              I am confident that we will continue to advance our collective knowledge until we no longer exist as a species.

            • dhammett said, on October 19, 2011 at 7:21 pm

              So, if I’m interpreting your response correctly, the wealth connected to man’s intellect and intellectual power will end when man “no longer exist[s] as a species”? So it’s finite. It only exists as a human construct.

              I’m equally as confident that man’s intellect and intellectual power is capable of bringing about the end of our species.

            • T. J. Babson said, on October 19, 2011 at 7:47 pm

              Infinity is a mathematical abstraction. It doesn’t make much sense to talk about anything in the real world as being truly infinite. Really big, yes. Infinite, no.

            • dhammett said, on October 19, 2011 at 8:22 pm

              So what you’re saying is that wealth (“anything in the real world”?)cannot be infinite because it is a mathematical abstraction (a creation of man’s intellect). It must be finite. Right?
              Mike writes above that “The amount of wealth is not constant and I do not believe that I ever claimed it was.constant.” Can someone prove that he made such a claim?

              Don’t let me get too far off track here. As I understand this, wealth is not constant, but, though there can be a lot of it, wealth is finite at both the material and intellectual levels.

        • Michael LaBossiere said, on October 20, 2011 at 11:49 am

          If we consider knowledge a form of wealth, then this sort of wealth would be non zero sum. After all, my knowledge does not diminish that of anyone else.

          • dhammett said, on October 21, 2011 at 8:43 am

            If your knowledge or their knowledge contributes to the destruction of all life on earth, does that diminish anyone’s wealth?

            • Michael LaBossiere said, on October 21, 2011 at 2:09 pm

              Not as long as the banking computers survive.

            • dhammett said, on October 21, 2011 at 5:35 pm

              You probably should have followed that with a big🙂 or two.
              Surely our infinite (or nearly infinite) intellectual capacities should enable us to envision circumstances whereby those computers would be destroyed.

  7. dhammett said, on October 19, 2011 at 12:43 pm

    Is man’s intellect infinite? Does it know no bounds? Does man’s intellectual potential know no bounds? At what point will man know the answers to these questions?

  8. T. J. Babson said, on October 19, 2011 at 1:07 pm

    Let’s say Peter, Paul, and Mary are playing a card game, and each starts with 10 chips. A the end of the game the score is as follows:

    Peter: +3 chips
    Paul: -5 chips
    Mary: +2 chips

    Total: 0 chips

    This is a zero sum game. If the sum is not zero, it is not a zero sum game.

  9. WTP said, on October 19, 2011 at 2:28 pm

    Re knowledge, perhaps to better illustrate (or maybe not) there’s an old engineering joke that goes like this:

    There was an engineer who had an exceptional gift for fixing all mechanical things. After serving his company loyally for over 30 years, he happily retired. Several years later his company contacted him regarding a seemingly impossible problem they were having with one of their multi-million dollar machines. They had tried everything and everyone else to get the machine fixed, but to no avail. In desperation, they called on the retired engineer who had solved so many of their problems in the past. The engineer reluctantly took the challenge. He spent a day studying the huge machine. At the end of the day he marked a small X in chalk on a particular component of the machine and proudly stated, ‘This is where your problem is!’ The part was replaced and the machine worked perfectly again. The company received a bill for $50,000 from the engineer for his services. They demanded an itemized accounting of his charges. The engineer responded briefly: One chalk mark .. ….. ….. $1 Knowing where to put it ….. $49,999

  10. magus71 said, on October 20, 2011 at 2:35 am

    Another example:

    Mike, suppose you find a small deposit of gold in the ground in your backyard. You hire some people to mine the gold, then you sell the gold to another person or small firm for a profit. That firm then sells the gold to various companies that can use the gold; some make fillings, some make jewelry, some make electronics. People can now use the gold. You helped a lot of people, not just yourself. I also didn’t mention that the companies who make specialized mining and smelting equipment come in to play here.

    Can someone point out here where the negative-chips that TJ spoke of occurs? Where does anyone have to balance the benefit with loss? Since Mike already owned the gold, he only needed to discover it and he couldn’t deny anyone the gold that he already owned. Every entity I named in the above scenario benefited.

  11. magus71 said, on October 20, 2011 at 5:17 am

    Excellent article by Ron Paul:

    http://online.wsj.com/article/SB10001424052970204346104576637290931614006.html

    I remember a long time ago, when I knew even less about economics than I do now, telling someone that despite the fact a Mickey Mantle rookie card was at the time priced at $10,000, it did not mean it had that value to everyone. I would not pay that amount of money for a baseball card, even though I like baseball. When the government attempts to control interest rates it attempts to control value. But what is valuable to me is not valuable to others. The government needs to stop messing with prices and let the economy heal.

    • WTP said, on October 20, 2011 at 9:32 am

      Well something appears to be messed up with the Thumbs Up/Down functionality, but I’d like to register a big thumbs up on this one. This speaks not just to interest rates, but other attempts to control the markets.

      • magus71 said, on October 20, 2011 at 11:47 pm

        Seems the trolls got the thumbs to work. I think they found them in their asses.

  12. T. J. Babson said, on October 21, 2011 at 5:15 am

    Ha!

    Jobs’ Meeting With Obama

    Jobs, who was known for his prickly, stubborn personality, almost missed meeting President Obama in the fall of 2010 because he insisted that the president personally ask him for a meeting. Though his wife told him that Obama “was really psyched to meet with you,” Jobs insisted on the personal invitation, and the standoff lasted for five days. When he finally relented and they met at the Westin San Francisco Airport, Jobs was characteristically blunt. He seemed to have transformed from a liberal into a conservative.

    “You’re headed for a one-term presidency,” he told Obama at the start of their meeting, insisting that the administration needed to be more business-friendly. As an example, Jobs described the ease with which companies can build factories in China compared to the United States, where “regulations and unnecessary costs” make it difficult for them.

    Jobs also criticized America’s education system, saying it was “crippled by union work rules,” noted Isaacson. “Until the teachers’ unions were broken, there was almost no hope for education reform.” Jobs proposed allowing principals to hire and fire teachers based on merit, that schools stay open until 6 p.m. and that they be open 11 months a year.

    http://www.huffingtonpost.com/2011/10/20/steve-jobs-biography-obama_n_1022786.html?1319148475

    • Michael LaBossiere said, on October 21, 2011 at 1:54 pm

      “Everyone is conservative when it comes to their money.”
      -Anonymous guy with money.

        • T. J. Babson said, on October 21, 2011 at 10:16 pm

          Facts are stubborn things. I notice that Mike has never used actual data (numbers) in any of his arguments.

          The facts indicate that conservatives care more than liberals, since they give more of their own money. Liberals “care” by forcing others to give.

          • dhammett said, on October 22, 2011 at 10:06 am

            Source(s)?

            Without seeing sources, I’m inclined to ask a few questions. Perhaps I’ll have a few more Qs once I see the source.
            First and foremost, are distinctions made between money given in church that goes to real people and money that goes to evangelism and building bigger parking lots?
            If a community food bank is run by a conservative church organization how are liberal contributions (food and money)accounted for in your source?

  13. magus71 said, on October 21, 2011 at 7:40 am

    Antisemitism has it s roots in the fact that Jews have more money than non-jews. Antisemites will have you believe that Jews steal and lie to get their money.

    Really? How about graduating from college?

    “But the number one way to get rich is to get educated.”

    http://www.terrylevine.com/2011/05/the-secret-to-why-jews-have-money-and-hindus-too.html

    • Michael LaBossiere said, on October 21, 2011 at 2:03 pm

      Education increases earning potential, which is why it is so odd that education has been a prime target for attack. Reforms are one thing, but budgets are being severely cut-so much so that my university, for example, has had to fire staff and faculty. Even though enrollment is high, summer classes have been cut and there is even not enough money to print tests and quizzes. The same is true at many public universities. Public schools K-12 are also facing budget cuts that will be detrimental to education.


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