Jim Hlavac
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Economic Theory
| Economic Theory |
Money -- whether physical as in gold or currency, or electronic as in
credit cards and bank accounts -- is nothing more than a battery for
labor. Labor is that which all people must do to survive. They cannot
labor for everything they need or want, and thus people were
compelled to create a system of transferring their labor to someone
else, and for having someone else transfer their labor to them.
Look at this: you labor to make a product, meanwhile you want
another product which someone else's labor produced. Your labor
went into your product, and his labor went into his product. So you
exchange products -- thus you exchanged your individual labor to the
other for his labor.
But once an economy gets beyond barter -- or labor for labor
direclty -- people are forced to put labor into a "product" that can be
exchanged for any other product -- regardless of whether the person
who creates the product you want wants the product you created with
your labor. Money is this "product." Money acts like a battery -- it
stores labor. In the best example -- we grow food, and sell it -- but
because of the weather we can not grow food all year, and thus we
have nothing to produce with our labor. The labor we used to create
the food must be stored for times when we can't actually labor to
create more food. So we "bank" or labor, often literally in a bank. In
the form of money. And when we need some "labor" further into the
year, we can go to the bank and get that "labor," now in the form of
money.
Money itself can come in any form, and there have been hundreds
of variations, but all societies once beyond hunting and gathering have
created a form of money. You can go to museums and see all sorts of
ancient moneys. That paper became currency is merely a
convenience. That gold was a source of money was because there was
no printing prior to the 1400's outside of China. And even there
printed money was handmade -- not uniformly printed. Plus gold has
the endearing qualities of never decaying, like a block of iron will
keep getting smaller and damaged, thus the amount of money would
be forever decreasing. But with gold, and to a lesser extent, silver,
there is no diminishment of the quantity of a unit.
However you form money -- paper, metals, gems, stones, shells,
electronic bytes -- the reality is that the money you have represents
your labor. A salary is the clearest proof of this. We labor for money
-- so we can get products that we can't labor to create ourselves. Of
course in our modern world it has been brought almost to an
abstraction. And many a government hasn't grasped the reality of
money, as evident in their wholesale printing of it -- as if it was a
thing to itself.
Labor is of course a function of time. There are only 24 hours in a
day and thus at most you can only labor for that amount of time per
day. Obviously, it is always less, usually about 2/3rds of the day is at
labor -- and the rest at sleep. Even cooking and eating and playing and
relaxing is "labor" -- for it creates something of value. It is impossible
to live without laboring -- and even entertaining oneself involves
laboring. There is no rule or theory that says labor can't be enjoyed,
or that labor must result in money. Labor only requires a benefit to
the person who wants to perform the labor.
The labor in enjoyment is getting the things together, say the
ingredients for a barbecue -- there's cleaning, setting up tables and
chairs, inviting people, getting the foods, cooking them, serving them
-- all this is labor -- and everyone knows it. What is the profit in this
labor? It is the relaxation itself. Conforming to the basic economic
math: a person will put a certain amount of labor into the product
called entertainment -- and he wants the sum total of his experience
to be more than the labor put into the entertainment. That sum total,
greater than the effort, greater than his labor, is his "profit."
Not all labor is for money -- but all labor is for profit. Money is,
then, just a way we transfer our labor to be used later, it is the profit
from our labor.
credit cards and bank accounts -- is nothing more than a battery for
labor. Labor is that which all people must do to survive. They cannot
labor for everything they need or want, and thus people were
compelled to create a system of transferring their labor to someone
else, and for having someone else transfer their labor to them.
Look at this: you labor to make a product, meanwhile you want
another product which someone else's labor produced. Your labor
went into your product, and his labor went into his product. So you
exchange products -- thus you exchanged your individual labor to the
other for his labor.
But once an economy gets beyond barter -- or labor for labor
direclty -- people are forced to put labor into a "product" that can be
exchanged for any other product -- regardless of whether the person
who creates the product you want wants the product you created with
your labor. Money is this "product." Money acts like a battery -- it
stores labor. In the best example -- we grow food, and sell it -- but
because of the weather we can not grow food all year, and thus we
have nothing to produce with our labor. The labor we used to create
the food must be stored for times when we can't actually labor to
create more food. So we "bank" or labor, often literally in a bank. In
the form of money. And when we need some "labor" further into the
year, we can go to the bank and get that "labor," now in the form of
money.
Money itself can come in any form, and there have been hundreds
of variations, but all societies once beyond hunting and gathering have
created a form of money. You can go to museums and see all sorts of
ancient moneys. That paper became currency is merely a
convenience. That gold was a source of money was because there was
no printing prior to the 1400's outside of China. And even there
printed money was handmade -- not uniformly printed. Plus gold has
the endearing qualities of never decaying, like a block of iron will
keep getting smaller and damaged, thus the amount of money would
be forever decreasing. But with gold, and to a lesser extent, silver,
there is no diminishment of the quantity of a unit.
However you form money -- paper, metals, gems, stones, shells,
electronic bytes -- the reality is that the money you have represents
your labor. A salary is the clearest proof of this. We labor for money
-- so we can get products that we can't labor to create ourselves. Of
course in our modern world it has been brought almost to an
abstraction. And many a government hasn't grasped the reality of
money, as evident in their wholesale printing of it -- as if it was a
thing to itself.
Labor is of course a function of time. There are only 24 hours in a
day and thus at most you can only labor for that amount of time per
day. Obviously, it is always less, usually about 2/3rds of the day is at
labor -- and the rest at sleep. Even cooking and eating and playing and
relaxing is "labor" -- for it creates something of value. It is impossible
to live without laboring -- and even entertaining oneself involves
laboring. There is no rule or theory that says labor can't be enjoyed,
or that labor must result in money. Labor only requires a benefit to
the person who wants to perform the labor.
The labor in enjoyment is getting the things together, say the
ingredients for a barbecue -- there's cleaning, setting up tables and
chairs, inviting people, getting the foods, cooking them, serving them
-- all this is labor -- and everyone knows it. What is the profit in this
labor? It is the relaxation itself. Conforming to the basic economic
math: a person will put a certain amount of labor into the product
called entertainment -- and he wants the sum total of his experience
to be more than the labor put into the entertainment. That sum total,
greater than the effort, greater than his labor, is his "profit."
Not all labor is for money -- but all labor is for profit. Money is,
then, just a way we transfer our labor to be used later, it is the profit
from our labor.