“How is wealth destroyed and where does wealth come from?”.
http://distributedresearch.net/blog/2008/10/11/how-is-wealth-destroyed-and-where-does-wealth-come-from
Author: Ignacio Couce
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There is one and only one way of increasing wealth. Wealth increases as production increases per unit of investment per capita, be that unit of investment time spent stumbling through a forest and picking berries, or engaging in arduous labor ,or investing in capital equipment.
For example, if I spend 24 hours fishing with a hook and line, and in that time period I catch X number of fish to feed Y number of people, we can calculate my return on my investment of time and energy, and the wealth in that society represented by the availability of fish per person. Conversely, if I use the same materials, but apply 23 hours to making a net, then spend one hour fishing with that net and now catch 2X fish, the standard of living has increased for that same Y number of people (they can now enjoy twice as many fish to eat), or the population can increase while maintaining the same standard of living enjoyed by the original X number of people.
The key is the production of goods and services people actually want and value.
The signals that determine what people actually want and value are price, profit and loss. In there absence, there is no way of determining what people actually want and value — socialist societies in which these signals are not allowed to operate have proved this fact over and over again; from the USSR and Cuba to Venezuela, Greece and China, there can be no doubt that these principles cannot be denied by government edict; that in fact these principles operate weather or not the economic system is based on “the private ownership of capital.”
Natural law applies to economics as surely as gravity applies to ripe apples.
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An excellent observation.
Economics is the dismal science. It’s all about scarcity. Capitalism, aka greed, is good. It satisfies human needs. Almost ruthless. Order from chaos. As everyone seeks their own best interest as they see it. Liberty!
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Reinke Faces Life 