Like many of my diaries, some comment some where sparks what I think might stand alone as an interesting read.
In an earlier diary I defined wealth in basic people terms. Wealth is a measure of how much of your time you have to do whatever you want to with, that is not time spent meeting your basic needs.
Those needs are food, shelter, protection, entertainment, clothing, etc...
(yes, entertainment is a basic need)
These needs and their relationship to time is where value comes from.
UPDATE: The point of this diary is to put wealth and value into very basic terms for discussion to come. Factor out money and all the complications that come with that, and just reason with the value of things.
Value = product of labor that saves time on future labor
Wealth = Having low amounts of our time required to survive. (in possession of lots of value, in other words --does not have to be money)
Imagine a time where there is only the natural world, you and some other people and the animals. That's it.
How much of your time would be spent just staying alive? The answer is damn near all of it!
Now imagine you are all alone in that same scenario! Even more of your time would be spent dealing with your basic needs.
Where wealth is concerned, the single person is very, very poor. Living among a group of people makes the group more wealthy as a whole, given everybody contributes something. Instead of having to do every single thing yourself, the work can be split up, freeing time! This time can be used for entertainment, to learn, explore, etc...
So, we have value just in simple numbers. The more of us there are, the more value we have among ourselves.
Next comes the tool and rarity. Imagine you back in this time dropping a rock, it hits another rock and you find the other rock is glass like --sharp! Not every rock is like this, only some of them are.
There is value here:
- Knowing the glass like rocks exist is valuable information.
- The properties of the glass like rock are more useful than other materials.
- The rarity of the glass like rock gives it value above and beyond it's useful nature.
Why is this valuable?
The glass like rock can be chipped to make cutters and cutters can shape wood, or clean animals for cooking, or kill, or any number of things that are either not very possible, or that take a really long time to accomplish without that sliver of rock.
The value then is in the time savings possible. This is an enabling technology --a tool.
Tools have value because we can do stuff with them quicker, or do things not possible otherwise.
Now take your discovery back to the group, and everybody collects rocks, but there are not enough! Only so many exist, or they are just really hard to find. Rarity has value, and suddenly you have a need for trading value, currency, etc...
More importantly, the group now saves a lot of time. That means having free time for entertainment, study of the natural world, love, etc...
Over time other enabling technologies contribute to the capabilities of the group in the form of more and more advanced tools, the free time permits innovation == and that is the key statement of wealth right there.
If one group frees enough of it's time to innovate, and it has to compete with another group that does not do this, eventually the innovators will be clearly superior to those that didn't innovate for whatever reason.
Don't ever let anybody tell you that knowledge isn't power. It is, and it's also a great source of wealth for the reasons I just gave.
Over time these differences mean larger groups of people form, they educate themselves, find ways to pass along what they know, build better and better enabling technology until we end up with a civilization.
That's where we live today.
As people, we are very, very wealthy by virtue of the enabling technology our forefathers built for us, and by the knowledge they discovered and thought for us. We are also wealthy for our numbers.
New discoveries, new theories, new understanding is just as valuable as a new tool, new material, etc...
In the end, all the value we have today is either a function of rarity and how much time we can save.
And really rarity is just a function of time as well. When something is hard to find, it's very, very expensive because somebody else has to spend their time looking for it.
To sum up, we build wealth --value through simple innovation (thought) applied to labor (on materials, which can be information too), over time. We do that so that those efforts save us time meeting our basic needs. That is happening all over the globe, everywhere all the time.
Those that innovate more successfully than others, have economic leverage over the others and are more "wealthy" because they can turn that leverage into time savings. They literally don't work as hard as the disadvantaged group does, for the same "value".
The implications on our nation under it's current economic policy should now cooking in your mind. Believe me, they are up, front and center in mine!
UPDATE: I'm defining these things in terms of time and labor, which are common to all. The reason for that is to avoid complexity and build toward some arguments, without having to soak people in a ton of complex and highly debatable information.
And, sometimes the very simple is ignored or difficult to grasp, particularly when people have been taught to think in highly specific terms.
***In the next diary, I'll put these two very basic ideas into the context of why universal health care makes sense from an economic standpoint. It's the moral thing to do, but I can prove it's the economic thing to do.