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What Is Prosperity?

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posted on Feb, 10 2011 @ 12:55 PM
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If there are 1000 units of steel available in an economy and government orders a new aircraft carrier that uses 100 units of steel, has the government utilized the steel in a way that brings prosperity to the average American?

What is "prosperity?"

There are a few economic truths (laws) that give us the answer:

1. Economies can be considered "prosperous" when they produce an abundance of consumer goods that enrich the lives of consumers.

2. When a finished good is more abundant, the more people will be able to acquire it and enjoy it.

3. In order to produce an abundance of finished goods, there must first exist an abundance of capital resources (labor, machines, tools, natural resources) that can be utilized to produce those finished goods.

4. In order to have an abundance of capital resources, an economy must be allowed unfettered access to ore, energy, labor, and land.

5. The more finished goods an economy produces, the more goods it has to trade with other nations for their finished goods.

Is there ANYTHING the government does that improves upon any of those five points?

Let us look at this from the perspective of an entrepreneur.

Let's say I want to get rich by producing something that I think people will be willing to trade with me for. Let's say I want to make fish hooks from fish bones. In order to do this, first I must acquire fish bones, then I must spend time manufacturing those fish bones into hooks. Then I must find someone who is willing to trade with me for my fish hooks in order for me to improve my own life.

If I produce an epic pile of fish hooks, I now have lots of finished goods that have value to others. People are not interested in fish bones, but they are certainly interested in fish hooks. Knowing that my fish hooks have value to others, I will seek to trade my fish hooks for bread, clothes, shoes, shelter, etc… that make my life more enjoyable.

In order for me to do this though, I have to find someone that has something I want who also desires fish hooks. This is problematic. This problem is called the “double coincidence of wants.” In order to get around this problem I will trade my fish hooks for a good that I know everyone wants first, and then I will use that good to get what I want. This good that everyone wants is MONEY. In our society today, we use the dollar. But traditionally this role of a trade intermediary has been filled by gold.

Let’s say my fish hook business takes off and there is a huge market demand for more fish hooks. In order to expand my fish hook making operations, I will take some of the gold I acquired and buy a boat, a net, and perhaps even employ someone to do my fishing for me so I can focus entirely on producing more fish hooks from bones.

Can you see where this is going?

I’m now a capitalist creating jobs and producing “prosperity” by manufacturing finished goods that improve the lives of ordinary consumers. Not only are consumers happier because there are more fish hooks available (thus, they are cheaper and more abundant), but I am also happier because I am making more money.

How do I know that I’m improving the lives of consumers? Because they are voluntarily trading their gold for my fish hooks. If I was producing something that the market didn’t want, no one would buy it and I wouldn’t make any money to improve my own life.

How do I know how much to charge for my fish hooks? I will look at how much money I make and I adjust my price based on sales revenue. If I lower it too far, lots of people will buy them but it will not be worth my time to produce them. If I raise the price too high, very few people will buy them and it will not be worth my time to produce them. So I will naturally want to set my price at a point where I can make a profit, but people are still willing to buy them from me voluntarily because they feel they are getting a good deal.

I might make a huge amount of profits at first if there is a large demand, but others will see the huge amount of money I am making and will start producing fish hooks as well to compete with me. As more people compete with me, I will be forced to lower my price all the way down until my cost to produce them equals the price I charge for them. If I can’t compete with the others because my production costs are too high, then I will go out of business due to my own mismanagement of resources. Obviously I am not efficiently using my resources if someone can produce fish hooks at a lower cost than I can.

This “production arising to meet market needs” comes about naturally without any violent intervention from government at all. As an entrepreneur, I perceived a market need and created a business to meet that need.

Looking at the above scenario, would it be beneficial to my fish hook business if politicians decided to take half of my profits through taxation and then hand those profits to consumers as a welfare bribe to get elected?

How fast would I be able to grow my business, and what would happen to the price of my fish hooks?

Isn't it reasonable to assume that I will be forced to charge a higher price to make up for the money that was stolen from me? If all of the fish hook producers are stolen from equally, then we will all raise our prices by an equal amount. BUT – IF ONE OF THE FISH HOOK PRODUCERS GETS A POLITICIAN TO CUT THEIR PARTICULAR COMPANY A TAX BREAK, THEY WILL MONOPOLIZE THE MARKET, SINCE THEY CAN NOW PRODUCE HOOKS AT A LOWER COST THAN I CAN.

In taking my gold and redistributing it, has the government created any more “prosperity” in the economy? Remember, prosperity is defined as an abundance of cheap consumer goods that enrich the lives of consumers.

Of course, the answer to the questions is obvious. The government DESTROYS prosperity by taking money from people who produce and giving it to those who consume.

The worst thing government could do is take the money that was stolen from me and then spend it on useless make-work projects.

For example, if the government steals my gold and then spends that money building large wooden warships, what will happen to the cost of fishing boats? They will GO UP IN PRICE because the wood and ship yards that used to make fishing boats are now being diverted into the production of wooden warships.

What does this mean for my fish hook business?

Can you see the ripple effect?

Consumers are now not only harmed because I have to raise my prices to make up for the taxes, but they are harmed yet again because now my production costs have increased due to government hogging resources that otherwise would have gone to produce prosperity.

In the end, we can clearly see that violent theft destroys prosperity. It can NEVER increase it.

edit on 10-2-2011 by mnemeth1 because: (no reason given)




posted on Feb, 10 2011 @ 03:35 PM
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No arguments against voluntary free markets?

I figured the socialists would be in here pointing out how my fish hook business was exploiting the masses.



posted on Feb, 10 2011 @ 03:49 PM
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I've come to accept that after the USA recycles its steel and other metals they ship it over to Asia so they can reclaim the best before they export the cheapen version back to us. When was the last time you found a wood screw or metal screw that had the strength not to crack? More and more Lowes and Home Depot are importing the cheap hardware while I'm positive the good hardware never leaves China or Japan.

In other words what happen to the integrity of our prosperity?
edit on 11/03/2008 by Skydancer because: (no reason given)



posted on Feb, 10 2011 @ 03:54 PM
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Originally posted by Skydancer
I've come to accept that after the USA recycles its steel and other metals they ship it over to Asia so they can reclaim the best before they export the cheapen version back to us. When was the last time you found a wood screw or metal screw that had the strength not to crack? More and more Lowes and Home Depot are importing the cheap hardware while I'm positive the good hardware never leaves China or Japan.

In other words what happen to the integrity of our prosperity?
edit on 11/03/2008 by Skydancer because: (no reason given)


When you have a printing press, and other nations have agreed to accept your money, it makes no sense to actually produce anything yourself.

At a micro level, prior to the Federal Reserve system, when banks would expand their issue of private bank notes, industry in the surrounding area would leave and be replaced by services.

Inflation drives out the need to produce things since the printed "funny money" can be used to purchase the goods others make without you having to actually produce anything to trade yourself.


edit on 10-2-2011 by mnemeth1 because: (no reason given)



posted on Feb, 10 2011 @ 11:48 PM
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Originally posted by mnemeth1


4. In order to have an abundance of capital resources, an economy must be allowed unfettered access to ore, energy, labor, and land.




Let's look at this from the perspective of corporations... The government allow corporations to go overseas and exploit the raw materials and low labor costs of under developed countries. This exploitation of foreign countries gives corporations an abundance of resources, energy, labor, and land.

This exploitation of foreign countries is only possible because our government is able to enforce its will over other countries. Think of oil in Iraq... Saddam Hussein cuts off oil from us, and we go to war and get the oil pipelines back so our oil corporations can continue to have "unfettered access" to an "abundance of resources."

In order to pay for these wars to keep our economy prosperous, the government needs money from us, through taxes. Granted, the government's method for taxing the country is flawed, and the way the government spends most of the money is flawed. But the government does support your 4th point and it does do something to keep the economy prosperous.

So you see, the government is actually well-intentioned.

In fact, the government is always well-intentioned, but the government is also dumb.

Now you ask a good question, what is prosperity? I agree that prosperity includes the trading of cheap consumer goods, but I also think that it includes a high employement rate. The problem I see with our government is they are focusing on getting us cheap consumer goods, but at the expense of our workforce, because a lot of the work being done for our corporations are done overseas by laborers working under wages that are not allowed in the U.S. If our workers don't have jobs, they can't make money, and regardless of how cheap or how spectacular the incoming consumer goods are, they need a paycheck in order to buy them.



posted on Feb, 11 2011 @ 12:24 AM
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Originally posted by mnemeth1
No arguments against voluntary free markets?

I figured the socialists would be in here pointing out how my fish hook business was exploiting the masses.


Can you give us the definition of a Wage Slave?

How much do you pay your worker? If you pay them
30 cents an hour are they your slave? If you pay them 7 dollars an hour are they your slave? If you pay them 70 dollars an hour are they your slave?

Can a wage slave be prosperous?
Should prosperity be shared?



posted on Feb, 11 2011 @ 02:49 AM
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reply to post by RRokkyy
 


LOL

So what should we be instead?

Welfare slaves?

The free market pays what people are worth. If a company didn't pay what people were worth, they would take their talents to one that did.



posted on Feb, 11 2011 @ 01:09 PM
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Originally posted by mnemeth1
reply to post by RRokkyy
 


LOL

So what should we be instead?

Welfare slaves?

The free market pays what people are worth. If a company didn't pay what people were worth, they would take their talents to one that did.


What are unskilled people worth?
If a company doesnt pay what people are worth,
they form a union.

So the free market might be described as a state of war between the wage slave and wage slave hirer.
Is that prosperity?

What would the wage be for an unskilled worker
in the US without the minimum wage? 50 cents an
hour like Mexico? Thats prosperity for the wage slave hirer.
The minimum wage $7 is already considered poverty level.



posted on Feb, 11 2011 @ 02:39 PM
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Originally posted by RRokkyy
What are unskilled people worth?
If a company doesnt pay what people are worth,
they form a union.

So the free market might be described as a state of war between the wage slave and wage slave hirer.
Is that prosperity?

What would the wage be for an unskilled worker
in the US without the minimum wage? 50 cents an
hour like Mexico? Thats prosperity for the wage slave hirer.
The minimum wage $7 is already considered poverty level.


Unskilled people are worth less than skilled people.

If they want to make more they need to:

1. Learn a skilled trade

2. Start their own business

3. Get an education

4. Acquire more work experience

Most unskilled laborers are young people who don't have enough time in the work force and haven't completed an education or learned a trade skill.

Of course they are going to make less than someone who brings more skills and value to the table.

The market always sets the appropriate wage for the worker.

If a person is worth more, they will be paid more, or the company will lose their services because they will quit and find work some place else.

edit on 11-2-2011 by mnemeth1 because: (no reason given)



posted on Feb, 11 2011 @ 09:06 PM
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You mean like the way the U.S. government takes money from skilled workers in the U.S. and gives it to illegal immigrants in the form of welfare, so that the immigrants can be survive on low wages, learn the skills, and replace the skilled workers at a much lower labor rate?

All on the behalf of corporations who are more than happy to take advantage of the tyranny of our neighboring country to lower wages here in the U.S..

And of course uses our military to protect our corporations overseas assets, to where they export any jobs that they can export.



posted on Feb, 11 2011 @ 09:16 PM
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Prosperity is having no outstanding bills and all that you need to get by comfortably.

There are plenty of prosperous people that have a tiny home and piece of land that is paid for so all they pay is a few hundred a month to live. They do what they like because they don't need a lot of money and they are happier than most "successful" people with big pay, big homes, expensive belongings and no life beyond work.



So,
Live long and...you know.
edit on 11-2-2011 by badgerprints because: (no reason given)



posted on Feb, 11 2011 @ 09:32 PM
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Originally posted by mnemeth1

Originally posted by RRokkyy
What are unskilled people worth?
If a company doesnt pay what people are worth,
they form a union.

So the free market might be described as a state of war between the wage slave and wage slave hirer.
Is that prosperity?

What would the wage be for an unskilled worker
in the US without the minimum wage? 50 cents an
hour like Mexico? Thats prosperity for the wage slave hirer.
The minimum wage $7 is already considered poverty level.


Unskilled people are worth less than skilled people.

If they want to make more they need to:

1. Learn a skilled trade

2. Start their own business

3. Get an education

4. Acquire more work experience

Most unskilled laborers are young people who don't have enough time in the work force and haven't completed an education or learned a trade skill.

Of course they are going to make less than someone who brings more skills and value to the table.

The market always sets the appropriate wage for the worker.

If a person is worth more, they will be paid more, or the company will lose their services because they will quit and find work some place else.


You are living in Libertarian Land.
I think you get there from chutes and ladders.

People were making 20$ an hour before the Illegal
Alien Invasion. Now they are making 9$ an hour
if they have a job.
There is no free market in the US today.
Immigration is used to bust the worker.
Not all workers can be skilled.
Why wouldnt skilled workers still be exploited.

In the US commercial jet plane pilots are now being
paid 20 thousand a year. They are told Not to wear
their uniform when they apply for food stamps.
They fly for love, not love of money.
Are they more prosperous than the county ditch digger getting 40k a year?

What is prosperity is a interesting topic.
Tell us more. Is it a state of mind?



posted on Feb, 11 2011 @ 10:20 PM
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Originally posted by RRokkyy
There is no free market in the US today.


Well at least you got one thing right.

It surprises me that you freely admit that there is no free market, yet then feel the proper way to correct our current economic condition is to march down the road to Soviet Communism.

The current looting spree is going to end soon, then you will get your 10,000 dollar an hour wages that you so desire.



posted on Feb, 12 2011 @ 02:24 PM
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reply to post by mnemeth1
 


There is no free market anywhere.

The concept of the free market is an unrealistic ideology akin to communism.

Attempts to create a free market have resulted in the U.S. being completely taken over by the private corporation of the Fed Res.

At what point in time do people wake up and realize what a crock of sheit the whole free market concept is?



posted on Feb, 12 2011 @ 02:55 PM
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Originally posted by poet1b
reply to post by mnemeth1
 


There is no free market anywhere.

The concept of the free market is an unrealistic ideology akin to communism.

Attempts to create a free market have resulted in the U.S. being completely taken over by the private corporation of the Fed Res.

At what point in time do people wake up and realize what a crock of sheit the whole free market concept is?




You make me hate public schools.



posted on Feb, 12 2011 @ 03:01 PM
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reply to post by mnemeth1
 

The worst thing government could do is take the money that was stolen from me and then spend it on useless make-work projects.


Great thread.
The original post is spot on.
That is the way things should work.
Until gov't over steps their boundaries.
There should be no breaks for Big business because of lobbyists.
Ultimately, it will only get like that when people turn greedy.

In my opinion, when corruption runs into prosperity, destruction occurs.


 


Originally posted by RRokkyy
In the US commercial jet plane pilots are now being
paid 20 thousand a year. They are told Not to wear
their uniform when they apply for food stamps.
They fly for love, not love of money.


Can I get a source for that information?
I can't find it anywhere...
Seems alittle far fetched.






No offense.



posted on Feb, 12 2011 @ 03:19 PM
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People are not interested in fish bones, but they are certainly interested in fish hooks.


Well, you are, obviously, if you require fish bones to make fish hooks. And if there are other fishers out there, whether fish hook makers or not, then




For example, if the government steals my gold and then spends that money building large wooden warships, what will happen to the cost of fishing boats? They will GO UP IN PRICE because the wood and ship yards that used to make fishing boats are now being diverted into the production of wooden warships.


Do the wooden warships serve a purpose? Such as protecting your fishing boat, among others, from those dastardly pirate fleets that have been preying on fish boners as of late (or so I heard from the herald)? I agree with your argument, for the most part, but if the government is fulfilling a social need, then resources have to be taken from somewhere. I suppose the question in that case would be from where,whether the need really benefits society, or whether you'd be willing to take the risk that the "pirates" won't ever get you.

I like your post and I do agree that too much is wasted but the problem with these scenarios is that it's all too easy to speak of utopias lacking the real complexities and challenges of our world.
edit on 12-2-2011 by Boreas because: (no reason given)

edit on 12-2-2011 by Boreas because: (no reason given)



posted on Feb, 12 2011 @ 03:45 PM
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reply to post by mnemeth1
 


Seriously, why do you cling to this fantasy of a free market?

Name one nation which has a free market. I dare you!

Red pill or blue pill?



posted on Feb, 19 2011 @ 01:09 AM
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I like the fish bones sample, very well said. I couldn't agree more.



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