Wealth Creation

[Injin]

Do you have access to that farmer's field of wheat. Do you have access to that field of oil 3 miles down? Do you have access to my television?

yes I do.

The question is whether I should use my access, not whether I have it.

Your definition is cobblers...

And, as ever, I note you have not addressed the central question posed in the post...

Oh, and as an aside, if wealth is not distributed injin, what is money?

Fiat or free?

[Guest Steve Cook]

When you ocerce others, it's wrong, right?

I believe it's wrong injin. But then such matters happen to be of particular concern to me.

What has that got to do with what some other humans may choose to believe and act upon? And, more importantly, if other humans do not believe that coercion is wrong, or even worse, don't even think in such terms, but rather simply do things that improve their material wealth irrespective of any moral consideration, what should i do about it injin. Should I stop their coercive behaviour? If so, how? If not, then what is to stop them grabbing hold of everything even if that everything is less everything than would have been the case if they has chosen to trade instead?

Edited June 1, 2010 by Steve Cook

[JustYield]

This blog essay may give food for thought:

wealth creation and the zero sum fallacy

Here's a question:

When the owner of a business increases profits by cutting back on labour costs, has he created wealth?

[sleepwello'nights]

If you create costs for others you are removing wealth from them

I don't follow this train of thought.

In trying to define wealth I've considered a few individuals who have, in my opinion created wealth: Religious leaders, philosophers, scientists, inventors, businessmen. Some were financed by themselves, from accumulated or inherited resources, some by voluntary contributions and others by the state.

Religious leaders - Jesus Christ. Created wealth by outlining a moral code by example for others to follow. Same can be said of Bhudda, Mohammed and many others. The wealth they created is a state of mind not necessarily material resources.

Philosophers and Scientists - Newton. Defined and expounded the theory of gravity. The wealth he created was a better understanding of the laws of physics.

Inventors - Franklin. Invented the lightning rod. Wealth created was the ability to protect ships and buildings from lightning strikes.

Businessmen - Henry Ford. Developed a form of organisation that enabled large scale manufacturing. Wealth created ??

Bill Gates. Developed a software code that enabled the widespread use of computers. Wealth created ??

I'm struggling to define wealth as there are different forms. But certainly in the case of businessmen they've created some sort of wealth not only for themselves but for others. They have also created costs for others. But how can you say that by creating costs for others they've reduced the wealth of others?

[Stars]

Here's a question:

When the owner of a business increases profits by cutting back on labour costs, has he created wealth?

Yes

He has created wealth by increasing production efficiency. At first, he gets a large part of the gain and then later others compete that away if they do the same.

[Stars]

I don't follow this train of thought.

In trying to define wealth I've considered a few individuals who have, in my opinion created wealth: Religious leaders, philosophers, scientists, inventors, businessmen. Some were financed by themselves, from accumulated or inherited resources, some by voluntary contributions and others by the state.

Religious leaders - Jesus Christ. Created wealth by outlining a moral code by example for others to follow. Same can be said of Bhudda, Mohammed and many others. The wealth they created is a state of mind not necessarily material resources.

Philosophers and Scientists - Newton. Defined and expounded the theory of gravity. The wealth he created was a better understanding of the laws of physics.

Inventors - Franklin. Invented the lightning rod. Wealth created was the ability to protect ships and buildings from lightning strikes.

Businessmen - Henry Ford. Developed a form of organisation that enabled large scale manufacturing. Wealth created ??

Bill Gates. Developed a software code that enabled the widespread use of computers. Wealth created ??

Ok....where's the problem?

I'm struggling to define wealth as there are different forms. But certainly in the case of businessmen they've created some sort of wealth not only for themselves but for others. They have also created costs for others.

Can you outline a glass case example? If i build a car, in what way does this cost others?

But how can you say that by creating costs for others they've reduced the wealth of others?

I can't see how you could imagine it any other way

If i build a statue that might be x amount of wealth to a potential buyer. but if i destroy your car or restrict you in order to do it, that's less wealth you have. Wealth has transfered from you to me.

This is an example that is unfortunately common in real life: If i either imprison or restrict you, you now have less than you would have without me. I can realise that as a financial gain if i charge you to remove all or some of this restriction. No wealth was created by me, wealth transfered from you to me.

Edited June 1, 2010 by Stars

[Riedquat]

Can you outline a glass case example? If i build a car, in what way does this cost others?

Increased traffic / pollution / accident risk / use of resources that could've been used for something else. Your car creation may well be of net wealth creation but it'll certainly have some cost for some people.

[babesagainstmachines]

Increased traffic / pollution / accident risk / use of resources that could've been used for something else. Your car creation may well be of net wealth creation but it'll certainly have some cost for some people.

What are you, some kind of socialist?

[Stars]

Increased traffic / pollution / accident risk /

Accident risk and increased traffic is a cost of driving, not building

use of resources that could've been used for something else. Your car creation may well be of net wealth creation but it'll certainly have some cost for some people.

It depends on the precise details of how the car is built . It might place these external costs on others or it might not.

Tp put it another way - there is nothing definitional about adding a new car that means wealth is transfered or destroyed. People do not pay these costs simply because cars are added.

Edited June 1, 2010 by Stars

[Pick It Down]

This blog essay may give food for thought:

wealth creation and the zero sum fallacy

Here's a question:

When the owner of a business increases profits by cutting back on labour costs, has he created wealth?

Yes because he has created something someone else values - more leisure time.

[Riedquat]

Yes because he has created something someone else values - more leisure time.

If they valued that more than employment those people involved wouldn't be doing a job in the first place, so stupid answer that I hope was sarcasm.

[Riedquat]

Accident risk and increased traffic is a cost of driving, not building

Which all come from building cars. No cars, no accident risk and traffic from them (also see point below).

It depends on the precise details of how the car is built . It might place these external costs on others or it might not.

Tp put it another way - there is nothing definitional about adding a new car that means wealth is transfered or destroyed. People do not pay these costs simply because cars are added.

Not directly, but those non-direct results are what ultimately drives the fact that the creation of a car might create wealth - the final use to which the car is put. The car only has value to someone, value for which they are willing to pay, in order to drive. Hence if you're trying to assess the overall impact of the car's creation you need to consider wether having another car driving around costs more for everyone else than it benefits the driver. Creating something that imposes massive costs on everyone else isn't wealth creation, at least outside the small view of its manufacturer. When it comes to cars the benefits generally outweigh the costs, so building a car is wealth creation.

[Riedquat]

What are you, some kind of socialist?

You're asking that just because I'm saying "Look at the bigger picture in order to assess whether something or not is wealth creation"? That's just plain daft. Narrow it down to a small enough field and the activity of the bankers certainly was wealth creation - they did very well from it personally, and even if they hadn't been bailed out they would've stayed rich as a result if they'd left in time. If socialism is looking at the big picture and not ignoring consequences then I am one.

[Pick It Down]

If they valued that more than employment those people involved wouldn't be doing a job in the first place, so stupid answer that I hope was sarcasm.

So it's better to have 20 people digging a hole with bare hands than 1 person digging it with machinery?

[Stars]

Which all come from building cars. No cars, no accident risk and traffic from them (also see point below).

These costs don't exist if the cars are built but not driven - ergo, the cost are caused by driving rather than building

Not directly, but those non-direct results are what ultimately drives the fact that the creation of a car might create wealth - the final use to which the car is put. The car only has value to someone, value for which they are willing to pay, in order to drive.

But i'm talking about the act of manufacturing a car, not the act of manufacturing a car + enclosing usefull land into roads + having millions of people drive back and forth at 125 miles an hour 24 hours a day. Similarly, if a driver uses a car to mount a pavement into a bus queue and kills twenty people, that cost isn't caused by the manufacture of the car.

Hence if you're trying to assess the overall impact of the car's creation you need to consider wether having another car driving around costs more for everyone else than it benefits the driver.

That's a cost of a particular use of the car, not a cost of its creation.

Creating something that imposes massive costs on everyone else isn't wealth creation, at least outside the small view of its manufacturer. When it comes to cars the benefits generally outweigh the costs, so building a car is wealth creation.

The thing itself doesn't impose any cost , its use imposes a cost

[Guest Steve Cook]

Accident risk and increased traffic is a cost of driving, not building

It depends on the precise details of how the car is built . It might place these external costs on others or it might not.

Tp put it another way - there is nothing definitional about adding a new car that means wealth is transfered or destroyed. People do not pay these costs simply because cars are added.

Tell me stars, do you consider that costs should only be counted after-the-fact of occurrence or do you consider that they may also be legitimately counted in terms of their potential to occur?

Edited June 1, 2010 by Steve Cook

[babesagainstmachines]

You're asking that just because I'm saying "Look at the bigger picture in order to assess whether something or not is wealth creation"? That's just plain daft. Narrow it down to a small enough field and the activity of the bankers certainly was wealth creation - they did very well from it personally, and even if they hadn't been bailed out they would've stayed rich as a result if they'd left in time. If socialism is looking at the big picture and not ignoring consequences then I am one.

No, I was joking. However, part of the capitalists job is to force as many costs of their enterprise onto others as possible. It's called maximising profit.

[Guest Steve Cook]

It's also a logical inconsistency, but I agree.

Some people care about truth, others don't

You say it is a logical inconsistency. However, this is based on your own conception of what a given individual's "correct" goals should be. In other words, logic is merely a tool for reliably enacting and analysing phenomena within a given set of assumptions. Nothing more. It is not the truth revealed in and of itself. Though, of course it may help in determining the truth. But, it only helps if your initial assumptions are valid. Validity is not arrived at by abstract logic, it is arrived at by reference to the real world.

If a given person's goals and assumptions are that they wish to maximise their own personal gain and minimise their own personal loss right here and right now, it then becomes completely "logical" for them to behave in ways that service those goals and assumptions even though you might well consider such behaviour "illogical" from the perspective of your own goals and assumptions.

It is this fundamental disconnect between the "logic" of your ideology and the real world in which real human agents behave that renders your ideological beliefs no more or less useful or "real" than the beliefs of any other ideology.

Edited June 1, 2010 by Steve Cook

[Guest Steve Cook]

Tell me stars, do you consider that costs should only be counted after-the-fact of occurrence or do you consider that they may also be legitimately counted in terms of their potential to occur?

I take it you've spotted the problem with the answer you'd like to give here stars.

Hence, the length of your answer...

Edited June 1, 2010 by Steve Cook

[Riedquat]

The thing itself doesn't impose any cost , its use imposes a cost

The same is true of its value, and hence any wealth created by making it, otherwise all you've done is change one pile of bits of metal and plastic into a differently-shaped pile of bits of metal and plastic. Wether or not that creates any wealth or is just a waste of everyone's time and resources all ultimately depends on what you can do with that resulting pile.

[scepticus]

But he is right that the net effect of this is wealth destruction. Wealth is taken from some and given to others and the transfer reduces the total amount of wealth even though some are now more wealthy than they were before.

not if the absolute numbers of slaves increase. With wealth defined this way the aggregate wealth is increased each time a slave is added to the population, assuming that the slave can be kept alive and doing useful work with something left over to be appropriated.

This is why population growth is so very important with regard to overall so called wealth creation.

It is quite possible that the increases in the total number of slaves can outweigh the dissiapative effects of forced wealth transfer from bottom to top. In essence all hegemonising civilisations have been based on this concept, and collapse when the natural or social environment makes adding a new slave a cost rather than a benefit.

[Stars]

Tell me stars, do you consider that costs should only be counted after-the-fact of occurrence or do you consider that they may also be legitimately counted in terms of their potential to occur?

Counted in what sense?

You can count anything you want

[Injin]

not if the absolute numbers of slaves increase. With wealth defined this way the aggregate wealth is increased each time a slave is added to the population, assuming that the slave can be kept alive and doing useful work with something left over to be appropriated.

This is why population growth is so very important with regard to overall so called wealth creation.

It is quite possible that the increases in the total number of slaves can outweigh the dissiapative effects of forced wealth transfer from bottom to top. In essence all hegemonising civilisations have been based on this concept, and collapse when the natural or social environment makes adding a new slave a cost rather than a benefit.

That implies that slaves aren't part of the human race.

Empirically not the case.

For a slave to lose, a human being must lose and therefore slavery destrpys wealth at a macro level.

There are no special flowers.

[Stars]

The same is true of its value, and hence any wealth created by making it, otherwise all you've done is change one pile of bits of metal and plastic into a differently-shaped pile of bits of metal and plastic.

That's exactly what the manufacturer has done

Wether or not that creates any wealth or is just a waste of everyone's time and resources all ultimately depends on what you can do with that resulting pile.

Yes, whether it is valuable or not entirely depends on the intentions and wishes of the user / buyer

[Injin]

You say it is a logical inconsistency. However, this is based on your own conception of what a given individual's "correct" goals should be. In other words, logic is merely a tool for reliably enacting and analysing phenomena within a given set of assumptions. Nothing more. It is not the truth revealed in and of itself. Though, of course it may help in determining the truth. But, it only helps if your initial assumptions are valid. Validity is not arrived at by abstract logic, it is arrived at by reference to the real world.

If a given person's goals and assumptions are that they wish to maximise their own personal gain and minimise their own personal loss right here and right now, it then becomes completely "logical" for them to behave in ways that service those goals and assumptions even though you might well consider such behaviour "illogical" from the perspective of your own goals and assumptions.

It is this fundamental disconnect between the "logic" of your ideology and the real world in which real human agents behave that renders your ideological beliefs no more or less useful or "real" than the beliefs of any other ideology.

Sadly Steve, as you've made a logical case you have proved the appliciability of logic.