This website is a work in
progress. I would like to add to
the narrative below with images, preferably stylized drawings/graphics, but I’m
willing to consider photography that captures the ideas. If you would like to submit a graphic
for consideration, please email it to elijahfang@yahoo.com with a written certification that
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charge.
Wealth
A Thought Experiment on
Wealth
The following is a short thought
experiment to determine what wealth is.
When most of us think of a
wealthy person we think of a person who has an abundance of money, property, and
other valuable, costly things.
[Picture of man on throne like chair with
stacks of money, gold and jewels around him.]
But are these things really
wealth?
What if we take this man and his
wealth and put him on an island with no other people, and no way to contact
anyone else?
[Picture of same man, on same chair, with
same money, gold and jewels surrounding him but on island.]
This island is a great piece of
land. It is arable, has a perfect
growing season, enough water and rains, mineral deposits that would suffice any
demand for mined materials, forests full of high trade timber trees, edible
plant and animals, and the coast is abundant in edible fish species.
[Picture icons of all these
characteristics.]
But, is this man still wealthy by
the standard definition of wealthy?
Because there are no other people
he will have to construct his own home, provide clean potable water, get rid of
his own sewage, harvest food and fuel, and provide transportation and
healthcare, all for himself.
[Picture icons of all these
chores/tasks.]
His day to day chores to complete
this work to sustain himself, even at a basic level of comfort, will be grueling
and require many more hours of work than the typical 40 to 50-hour work week we
expect to sustain our lifestyles with.
[Picture of people on way to/from work and
something iconic of a 40 hr work week (time stamp clock?)]
In addition to the work he will
be required to perform to meet daily needs for a simple, survivable life, if he
wants entertainment, art or any culture, he will have to put the work and effort
into creating it himself.
[Picture of man, now looking ragged, trying
to play homemade guitar, act out play etc.]
Clearly, this man, when isolated
from a population, even when the things most of us consider wealth are still in
his possession, has no way to live a wealthy life. This is because there are no people
around to provide the labor to provide the goods and services that we associate
with living a wealthy life.
[Picture of man looking ragged and desolate
still surrounded by jewels and gold.]
You could of course argue that
the man’s home (or homes) should also be transported with him to the island
because they are a part of his wealth.
[Picture of a couple of mansions on the
otherwise empty island. Man staring
happily out of window of one or looking comfortable on the
balcony.]
It is true that for a while he
would be comfortable having shelter and whatever stored food water and energy
the homes contain, but that would quickly run out and the homes would reach a
state of disrepair because of a lack of materials and labor to provide
upkeep.
[Picture of dilapidated mansions and man
looking miserable again.]
This thought experiment shows
there are two aspects of wealth.
One is having the amassed currency or other highly-valued things, and the
other is having people available to provide labor so there is something the
currency or valued things can be exchanged for. At minimum, to lead a comfortable life,
there must be sufficient people around to perform work to provide fundamental
goods and services such as food, clean water, shelter, energy, protection and
medical care for wealth to have any practical value.
[Picture of wealthy man back in society
handing keys of sports car over to valet at expensive restaurant with doorman
holding open restaurant door.]
How is Wealth Obtained?
There are several ways to obtain
the things we generally associate with wealth, i.e. money, financial securities
such as company stock, gold, jewels, property etc.
The simplest is to inherit the
wealth.
[Picture of person inheriting wealth (perhaps
lawyer reading from will?)]
Wealth can be stolen in a
criminal way, but carries the risk of being punished under the law.
[Picture of bank robber with police in
pursuit.]
The most common way most of us
acquire wealth is by work.
There are two common ways to
acquire wealth via work. The most
obvious and common is to do the work yourself and get paid in
return.
[Picture of factory worker, desk clerk,
garbage collector etc.]
The other way is to sell the
product of other people’s work at a higher price than you pay them to
work.
[Picture of factory owner getting paid for
truck load of goods as it’s being loaded on the factory bay.]
Selling others work at a higher
price than you pay them may sound like the working people are being taken
advantage of but this is not necessarily true. Someone for example who opens a factory
and organizes workers in an efficient manner and has the advantage of buying in
bulk can pay her employees more than they could earn as individuals making the
same product on their own and make a good profit for herself.
[Picture of several people on a production
line making lots of goods versus a single person making a few of the same goods
in an inefficient manner.]
A Living Wage
The point at which a problem
develops is when workers are paid so little that they cannot live a reasonably
secure and comfortable life working a 40 hour work week. When this occurs the workers must choose
whether to work more than 40 hours or to live in what most people would consider
substandard conditions during which life is mostly a miserable
chore.
[Picture of person clocking out of one job
and into another (perhaps taking off construction helmet and putting on evening
waiter uniform: two clothes hooks: one labeled “Day Job” with construction
clothes & helmet; and the other labeled “Night Job” with waiter’s uniform)
versus person/family living in a squalid apartment.]
In most developed nations there
are laws that dictate the minimum wage a person can be paid. The idea behind the laws is to ensure
that someone who works full time (40 hours per week) can live at a standard of
living that most would consider minimal but reasonable. Unfortunately in many nations the
minimum wage has not been increased to keep up with the cost of living and many
people are being paid far less for a 40 hour work week than any person could
live off of.
[Picture of employee in fast food restaurant
putting on uniform/apron to start work with handbag next to her from which is
protruding several overdue bill statements.]
The problem of people being paid
less than they can live off of for full time employment has become magnified by
a hyper-competitive business market and the stock market. Businesses are expected to generate as
much profit as they can to reward their share holders maximally without regard
to the pay of their workers.
[Picture depicting stock prices rising while
workers’ pay checks stagnate or decline.]
Upper management who make
decisions that bring in maximum profits are paid exceedingly high wages and
bonuses. Often the easiest way to
increase profits is to cut the wages of staff who have a skill set that can
easily be found amongst job seekers.
[Picture of executive doing presentation to
board of directors showing profit balance sheet and striking out the number for
the line item for employee pay and reentering a lower number. Board of directors are joyous and are
handing him a large bonus check.]
Another tactic, used more for
salaried employees especially when there is high unemployment, is to tell the
employees that they must produce more work for the same pay thereby allowing
management to cut some positions.
[Picture of manager looming over desk
employee as employee frantically tries to take on additional work of co-worker
who is in the background leaving his desk with a box of personal items having
been laid off.]
Contribution of Low Wage Earners to Work of
High Wage Earners
Very wealthy working people are
paid very high sums of money for their working time, whereas impoverished people
are paid very little sums of money for their working time. The widespread belief is that those who
are paid large sums of money deserve such payment because their skill is in high
demand, rare and therefore commands a high market value. Likewise, those paid
low wages receive the market value of their work which is low skilled or in low
demand and often is centered around providing the fundamental goods and services
we consider as the baseline of a reasonably comfortable and secure
existence. Unfortunately these
lower wages are often less than can support a single person or family to live
what most would consider a reasonably comfortable life in return for 40 hours of
work per week. Such people must
work much more than 40 hours per week and/or their wages must be supplemented by
social welfare programs such as food stamps.
[Picture of CEO in chauffeured car versus low
paid worker clocking out of one job but putting on a uniform to go to their
second job.]
A point of view seldom considered
is that each hour the high earner is not obliged to work at producing the
fundamental goods and services they require is an hour the high earner can put
towards their high earning activity.
So, isn’t the work of lower paid individuals who work to produce the
fundamental goods and services required by the wealthy also a contribution
towards the work output of the high earner?
[Picture of CEO walking down business
corridor with many people bustling in background performing other
work.]
When one person gets paid $8/hr
for doing menial work that most people could learn to do effectively with a few
days or weeks of training, for example janitorial work, and another person gets
paid several million dollars per year for doing highly specialized work that
most people would not be able to do even if given the opportunity and unlimited
training, for example a CEO of a high technology company, we say that is the
result of a free-market. The person with the talent and skills gets paid what
employers are willing to pay for them.
Of course the employer is paying such high amounts because they expect to
make more profit from the good decision making ability of the highly
talented/skilled person. Most
reasonable people would agree that the very talented and skilled, whose
abilities are rare, should be rewarded (be made wealthy) to encourage others
with similar talent to excel and make innovations in work methods that make us
all a more productive, efficient society.
However, if we look back at the person making $8/hr who works 40/hrs per
week and still cannot make enough money to support themselves with the basic
fundamental goods and services, can we say that the system is fair? If someone works a full work week (and
let’s assume that most people consider 40 hrs/week a full work week) in an
occupation, that is needed as proved by its existence, then shouldn’t they be
able to earn sufficient money to support themselves and their family to a
minimal level of comfort and security that most people would consider
reasonable? In fact is it not true
that the person doing the janitorial work at $8/hr at the high-technology
company is assisting the CEO making several million dollars per year by
eliminating the necessity of the CEO and other highly talented/skilled people
from having to do the janitorial duties themselves? If, at the end of her long day of making
executive decisions, the CEO had to get the mop and bucket out and clean the
executive restrooms there would be a significant loss of valuable CEO time that
could be put to improving the company’s business. The same applies to all the other
workers below the CEO that perform work which, if they did not do it, the CEO
would not be able to do her job.
This concept also applies to others who do not work for the CEO’s
company. Without the construction
crew repairing roads the CEO would not be able to drive to work. Without teachers in schools or private
tutors the CEO would need to take time to teach her children at home. Without people harvesting in fields and
raising livestock, the CEO would need to perform subsistence farming like our
ancestors in addition to showing up to the office. This concept may seem overstretched, but
in fact it is absolute truth; without other people, the individual could not
achieve anything resembling what we consider a wealthy lifestyle. Despite enormous natural talent the CEO
would be forced to live a minimal existence, struggling each day for mere
survival.
[Picture of CEO trying to do all the things
mentioned and also work at her job.]
How Wealthy Nations’ Benefit from Low Labor
Costs of Poor Nations
Those in developed, wealthy
nations profit and live lives of relative comfort because of the cheap labor of
people of other countries with impoverished populations. Simultaneously, this availability of low
cost labor keeps the wages of the less wealthy populations within the wealthy
nations low by increasing the pressure for companies who employ their country’s
workers to reduce wages to compete.
It is also true that without this
cheap labor most of the population of wealthy nations would not be able to
afford non-essential goods such as electronics and durable goods such as washing
machines, dishwashers and automobiles.
The cheap labor takes advantage of people who, due to various repressive
circumstances, live in what would be considered dire poverty in the developed
nations. These people and families
live in slum accommodations with multiple families sharing what would be
considered a single family residence in wealthy nations.
[Picture of factory with impoverished workers
making electronics etc. to be shipped to wealthy nations.]
The Fallacy of Freedom to Choose Not to
Work
Some justify impoverished labor
forces by arguing that the labor force is comprised of individuals who have the
freedom to work or not to work, and they can choose not to work if they believe
the wage is not fair compensation.
This however is false. A
worker in a society where circumstances have brought about low wages for labor
has little choice but to work for unfair wages and working conditions or
starve. While this is a “choice” it
is not what most people would consider to be freedom and the right to pursue
happiness. [Picture depicting someone
considering choice of working for less than living wage or not working and
starving.]
Many people also argue that the
populations of wealthier democratic nations, as free citizens, have a choice to
leave poor paying jobs. This is not
true. Many people have to stay in
jobs that do not pay a fair, living wage because there is no alternative. Many have to stay in jobs because they
are dependent on the healthcare benefits for themselves or another member of
their family who are sick. Not only
are there no other jobs available that would pay a fair, living wage with
healthcare, the ultimate alternative, that of opting out of the workforce and
earning a living off of the land is not a viable alternative either. In developed nations there is no arable
land a person or family can start to work and farm to live via subsistence
farming. Arable land is either
owned, private property, or is designated as government controlled lands.
As an animal that is born onto
the earth, our natural mode of survival is to work the land and hunt to survive,
or be hunter gatherers. Neither of
these options are available in most developed countries in the world, and for
good reason. If lands were not
controlled, they would be exploited and ruined by the masses and those seeking
to reap a quick profit with no responsibility for sustainability or preservation
of the land.
[Picture of someone or family setting out
into “uncontrolled free lands” with bow and arrow and basic farming implements,
but on arrival finding the land is desolate and barren and has been ruined by
trash, unregulated waste disposal, mining and deforestation and polluted
rivers/streams]
Given there is no alternative but
to take part in the commerce of capitalism, the population must insist that the
deal include a fair, living wage, healthcare for the workforce, and the wealth
from the labor force be fairly distributed in a way that permits a dignified and
secure existence for the workers.
Simultaneously it must provide enough incentive for entrepreneurs to work
harder, be smarter and evolve the working methods so we, as a workforce, produce
more efficiently. It is a fine
balance between the two. There has
to be adequate incentive and rewards for having unique talent and skills, but
also the rewards to those few, rare individuals cannot be so great that the vast
majority are left in miserable circumstances because too large of a portion of
the wealth of the workforce is being kept by the top, elite few.
[Picture of scales or other symbol
demonstrating the balance between social stability/safety nets and opportunities
for businesses entrepreneurs]
Exploited Workforces
Policies that discourage
importation of goods manufactured by exploited workforces should be insisted
upon. Companies that use exploited
workforces should be called out for their part in this immoral practice.
Saying that if XYZ Corporation
didn’t provide work at low labor rates the population would be in a worse
situation is not a valid argument.
This argument is used by employers as an excuse to increase their profits
by avoiding paying laborers in developed nations with minimum wage
requirements. Increasing a
population’s quality of life from rural squalor to industrial squalor is not a
success story. It occurs when
employers see an opportunity to exploit a population in dire circumstance. If a company is going to profit from the
work of a workforce, it must be responsible for providing reasonable working
conditions and a living wage for them.
Companies that do not abide by these conditions should be excluded from
selling within our society.
We should insist that the goods
we purchase have been produced by manufacturers that pay a reasonable wage, even
if those goods are produced in another country.
[Picture showing goods with certificates
stamped on them verifying they were produced by workers working paid a living
wage.]
Inheritance of Wealth and the Perpetuation
of Concentrating Wealth:
We all like to try to provide our
offspring and future generations of our families with better opportunities to
live better and more fulfilling lives than we ourselves did. However, amongst the very wealthy, this
can also lead to the concentration and stagnation of wealth in just a few top,
elite families. There must be a
limitation of the amount of stored wealth that can be passed from generation to
generation without it being applied to expanding the economy and circulating
back amongst the population.
Like a battery stores energy,
wealth is a storage of the value of work by the labor force. A small group of people having control
of a large portion of that stored wealth leads to stagnation of the
economy. Eventually this stagnation
is harmful even to the privileged who have control of the wealth as the
infrastructure of the nation around them degrades due to the stagnation. In extreme circumstances this can lead
to an abundance of crime or even civil rebellion.
[Picture of violent social
rebellion.]
Interest on Loans: Keeping Generations in a
Cycle of Poverty
Interest on money is a primary
reason the vast majority of people work a lifetime and yet have little or no
property or valuables to pass on to their offspring.
A hope for many is to provide
their children with either a fully paid off home or a good portion of the cost
of a home so that they will not have to pay interest on their homes which uses a
large portion of most people’s earnings.
Unfortunately many people today
must finance their retirement years by selling off their property and valuables,
or using a reverse mortgage. This
means their children will, like them, have to start with nothing, have to work a
lifetime just to make ends meet, and like their parents finance their old age by
selling off their property. This
cycle ensures generation after generation of cheap, desperate
labor.
[Picture of older couple selling off their
home and possessions to fund retirement with their children sometime in the
future being shown a will with a zero balance]
Stock Market Rapid Sales and Complex
Investments
The idea behind the stock markets
of the world is to provide a place where people can invest in companies to
promote growth of companies that have useful products. Ideally this should be good for the
company – providing usable funds to expand, and good for the investor as they
see their investments grow.
However, today we have such practices as day-trading and even buying and
selling within a matter of seconds using computers. Complex investments are created that are
more of a gambling tool than an investment in a company.
[Picture showing market traders at a
roulette wheel or similar analogy]
For many middle-income people
stock shares are the only viable option for their retirement funds. Rapid trading and complex gambling
investments make the market volatile and risks the life savings of many middle
income people.
Regulations should be considered
to limit or ban rapid trading and complex investments that serve more as
gambling tools than to promote the growth of companies. If a stock buying practice only serves
to make those whose business it is to buy and sell the shares a profit, and does
not help the actual company the shares are a part of, the practice should be
banned.
The benefit to companies and
shareholders of not allowing shares to be sold for some minimum time (one day,
one week, perhaps even one month) after they are purchased should be
considered.
Future of Too Little Work, Too Many
People
As technology advances producing
more machines that can perform the work of people, less workers are needed.
A large development that is just
on the horizon as of the early 21st century is the self-driving
vehicle. Once perfected these
vehicles will put many people out of work.
Truck drivers, bus drivers, taxi drivers will all be unnecessary. These jobs today are moderately well
paying and are the primary income of many households.
As more occupations are replaced
by machine labor we will have a large portion of the population that is not
needed to work. Eventually we will
need to consider a base living wage that is not dependent on work, but is given
as a right of existence. This will
be a difficult transition for our societies where the concept of a capable, able
bodied person receiving pay without working is considered immoral by many. However, the alternative to a base
living wage without a requirement to work will be to have a large segment of the
population who have no legal way to make a living. When legal options are not available to
people to survive they will certainly pursue illegal options. It is no coincidence that criminal gangs
rise up in impoverished communities where there are few alternatives to lead a
life of reasonable comfort and security other than crime.
[Picture of dystopian future with few very
wealthy people cautiously walking down street full of people begging,
scamming/hustling, prostituting themselves or lurking to commit
crime]
How Can We Change the Situation of So Few
Having so Much and So Many So Little?
The first step is to understand
that wealth is not created by the individual and it is dependent on having a
population of workers to provide labor to create wealth. The second step is to spread this
knowledge to others. Once many
people understand this concept we can change the system by voting on policies
that promote more of the wealth we create being more fairly divided. Voting for policies such as minimum
wages that are frequently revised to keep up with the true cost of living, and
policies that promote workers receiving a fair share of the wealth they
create. A fair taxation system that
taxes the very wealthy in a manner that allows and encourages entrepreneurship,
but also funds public works and infrastructure, our military, and social
programs that ensure a reliable safety net for the workforce and population must
be prioritized.
[Picture of handshake between obviously
wealthy individual (owner of industry) with a worker and some icon of a fair
deal . . . contract or similar?]
If you found this website
interesting here are some other websites you may be interested
in:
http://www.msnbc.com/rachel-maddow-show
http://www.tolerance.org/immigration-myths
http://www.huffingtonpost.com/