I cared little about this thread until a few days ago. But now it's back to reiterating that the only reason people still believe in the various flavors of socialism/marxism/communism/anarchism is because they don't understand how/why economics works. Ie:
alexandra said:
Wealth is created out of thin air? Do people really believe this myth? While I agree with you that wealth is not (necessarily) made by directly stealing others' wealth ... it is definitely made by exploiting the labour of workers.
Smurf said:
Wealth is not created out of nothing. In your illustrated example your wealth was created out of nuts and bolts which you bought with your own money. Or maybe you didn't, maybe you sold your house and used the funds to start your business. Maybe you took out a loan on your car, or you were given the money from a rich relative. You still created it out of your existing wealth - and, most importantly, out of your labour.
Why has the amount of material possessions we have gone up throughout history? Collective labour has pulled resources from the Earth and turned them into other products. As Marx said, Labour is all the wealth the working class has. The wealthy already have material possessions from which they can turn into more wealth (hence: "Power leads to power"). The lower classes do not. So, they have to sell their labour. That is what wealth is created out of, not thin air. And labour has a price, and a demand and a supply - it is a commodity in a free market, and it is traded like one; Thus, most of it's value goes to the upper class, just like any other commodity, as illustrated above.
These statements reflect a misunderstanding of economics at the most basic level: the law of supply and demand. You cited it, Smurf, but you misused it. Let me give an example:
Prior to Katrina, gas was about $2 a gallon (guestimate) in the US. Within days, it was up above $3 a gallon. That's gas that was, for the most part, already on trucks to be delivered to gas stations. Suddenly, one day, it was worth 50% more than the day before? Where did that value come from? It
literally came from nothing, as a result of supply and demand. It didn't exist the day before and it did exist the next day. No worker did any work to add this wealth to the economy.
Every commodity (including money itself) works fundamentally the same way.
Next, there is a little bit of hairsplitting going on there: Smurf, you cited labor, well what, precisely, is labor? Its your time and your effort. And yes, it has value. But where is
today's value for the work I do
tomorrow? Well quite obviously, it doesn't exist yet, does it? If I skip work tomorrow, the wealth I would have added to the economy that day would never exist. If you prefer not to think about it in those terms, fine - its not worth splitting the hair - but understand where that wealth really comes from. Other statements from you, however
do imply that you take this idea all the way (discussed below).
Also, one of the things that all those isms above are apparently based on is an
intrinsic value to labor. Well just like other resources, the value of labor is not fixed, it depends on supply and demand, from the market, and education, ability, work ethic, etc., from the worker.
And last, this:
A person becoming rich will take money from someone else - this is because his resources are limited and so he cannot merely create wealth out of thin air.
This statement implies that you believe the quantity of wealth available is
fixed - you said "limited", but in order for the first part of your quote to be true, the limit has to be precisely in line with population growth. Regardless, this is a trivially obvious falsehood because it is an obvious
fact that while
specific resources are limited, the
total quantity of resources (wealth) available is, for all intents and purposes,
infinite. One only has to look to
The Sun to see that: the sun will provide us with as much energy as we care to utilize for the next several billion years and that energy is a resource - a commodity - available wealth - that for our purposes is limitless. But there are other examples: labor is a limitless resource as well. It doesn't just depend on the population, but as I showed above, the
value of any individual's labor is not a fixed quantity either. With technology, education, and supply and demand itself, there is no limit to the value of one person's labor.
Even taking that back a step - even assuming we were limited to resources available on Earth - you'd
still be wrong to say one person's wealth must be taken from someone else. Obvioiusly, that would not be true until all available resources were already in circulation. Ie, I don't have to take money from you to get rich: I can still simply dig it out of the ground.