Summations Only

Hi Straggler,What I was asking you to reconsider was your assertion that the definition is "just circular and silly." It's a definition, just like "The race goes to the swift" and "Those who are most fit survive" are definitions. They weren't analogies to an economy. They were examples showing the error of concluding circularity.The definition comes from Economics 101. Without it you are helpless in assigning value and tracing the origins of wealth. In your approach wealth becomes a subjective assessment with whatever value you care to give it. You reach conclusions as to the origins of wealth with no metrics to go by. If you think something is valuable and someone else doesn't, how are you going to figure out who is right? You could argue about it interminably, but the only true way to get the answer is to find out how much someone is willing to pay.--Percy

Hi Buz,If it helps you to think of value in terms of ounces of gold or silver instead of dollars then go right ahead, but this thread is not about whether currency should be backed by gold or silver.--Percy

Buz, seriously, this thread is not about whether our currency should be backed by gold or silver.--Percy

Hi Straggler,If sources of wealth aren't measurable, then how are you determining that the wealth accumulated by the rich was not created by them? Maintaining your view forces you to argue that graphs and tables containing actual numerical measures of wealth and income are somehow consistent with handwave arguments about wealth creation not being measurable and unsupported claims of who you think created the wealth.--Percy

You didn't really need to say anything else. You could have saved a lot of time and just posted this. It sure took you a lot of words to say, "I don't know."The chart upon which you based your arguments presented quantified numerical information, and when possible it is best to base conclusions upon numerical information, combined with an understanding of how an economy actually works. We can use simple math to understand with some confidence what is actually happening, but first we have to agree on a couple simple definitions:

• The value created by an employee of a company is equal to his total compensation.
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• The value created by a company is the value of goods and services it has sold minus its cost to produce those goods and services. This value is the property of the owners of the company, usually the shareholders.

We can use these simple definitions to calculate who has created the wealth and find out whether or not you are right that the rich have accumulated wealth that rightfully belongs to others. Or you can continue handwaving.--Percy

Listen to yourself. You're claiming that the wealth of the rich, which is quantifiable, comes from "unquantifiable factors". Yet every dollar as it entered their bank accounts was quantifiable and had an identifiable source.We all benefit from living in a modern technological nation with continual scientific advances and innovations, but your argument that the rich are somehow appropriating it to themselves and transforming it into wealth lacks all evidence.Yes, there is an incredible amount of wealth out there concentrated at the top, but it is measured in dollars and we can calculate with fair precision how it got there.--Percy

I forget whether or not you're in the computer industry, but I'm going to use this example anyway: The Free Software Foundation. They're a non-profit producing free software and promoting the ideals of freely available software.I use their software. A lot. Every day. Many in the computer industry would say the same.What is the value of their software to me? To my company? To the nation? To the world?I don't know, so let's just use your favorite word and say that the value is intangible. Now, how are you going to demonstrate that the rich are allocating an inappropriately large proportion of the benefit of this free resource to themselves?--Percy

But it isn't "We don't know." It's "You don't know." I keep telling you we can use a little math and figure it out, but you're so afraid that putting numbers to your claims will prove you wrong that you can't even accept a simple definition from Economics 101. As long as you maintain your refuge in intangibles you think you're safe. You didn't present any data so I can't validate that specific claim, but I certainly agree that wealth is concentrated at the top.I think you're confusing two different things. On the one hand there's the rich who have too much wealth and pay too little taxes. On this we agree.But on the other hand there's the claim that the rich have gotten their wealth by appropriating to themselves wealth that rightfully belongs to the employees who work for them. On this we disagree.That doesn't mean I think the rich gained their wealth fairly, but your own ideas of how they gained it are a fantasy. Just because the rich deserve condemnation doesn't mean anything you make up about them is true, and it certainly doesn't invalidate or supersede simple economic principles.--Percy

Hi Dr Adequate,Yes, you're correct, the economic value is the price paid, namely zero. I was trying to answer Straggler's question in the context of intangible value. I originally included a paragraph about the possibility of calculating a value based upon donations to the FSF and allocation to projects and the cost of equivalent commercially available software, but it seemed a distraction from the main point about intangible assets and forgetting you exist I deleted it.--Percy

Yes, I'm afraid so. Would you have value be a subjective matter of opinion about whether or not something was moral? Granted there's little variation in opinion on the morality of slavery, but most morality is not so unambiguous.Value added is just a way of toting things up. It's not for making moral judgments. If it helps you think about it, consider this. The slave produces a bale of cotton for $20 (there *are* expenses to keeping slaves) while the employee produces a bale of cotton for $50. The employer sells the bales of cotton for $100 each. He makes $80 on the bale produced by the slave and $50 on the bale produced by the employee. You can treat the amount made on each bale as a measure of the degree of exploitation. Feel better now?Toting up money paid within a nation to arrive at a GDP is full of contradictions. The hundreds of thousands of dollars spent keeping alive a patient who dies anyway contributes to GDP. Replacing and rebuilding what was originally there after a tornado contributes to GDP. I hope you don't mind if I only defend positions I actually hold.--Percy

It isn't economically worthless. It's just not part of the tally of GDP.As you add up these inestimable intangible assets, don't forget the ground, the air and the sky.--Percy

Hi Straggler,Turning to the issue of productivity (since you mentioned it), your example should go like this: Question: To whom do these increased profits belong?Answer: The shareholders.Now let's change just one little detail of the example: Question: To whom do these increased profits belong?Answer: The shareholders. The employee who made the suggestion is hopefully compensated with a bonus or a raise or a promotion or even all three, but he has no right to the increased profits.Now let's return to the original example where the impetus came from the chairman of the board, but change the outcome: Question: Who incurs the losses from the company's bankruptcy.Answer: The shareholders. They're wiped out.Now let's change back to the scenario where the suggestion came from an employee: Question: Who incurs the losses from the company's bankruptcy.Answer: The shareholders. They're wiped out.Now let's change just one more little detail. Let's pretend we're living in your fantasy world and that productivity changes are credited and debited to the employees.Question: Who incurs the losses from the company's bankruptcy.Answer: The employees. Each one is sent a bill for $10,127,329.--PercyEdited by Percy, : Typo.

There's nothing in that graph about accumulated wealth. It would make no sense to answer this question while you still do not understand how wealth is created. I just posted this information a message or three ago.--Percy

The kind I mentioned in the very next sentence, the one you didn't quote.But in an economic context, something is worth what someone is willing to pay.--Percy

Buz, I have no idea why you think you're on topic, but you're not. Dr Adequate's reply to you is not on topic, either, so please do not reply to it.--Percy