Summations Only

So which definition would work and how do you measure and quantify it? How do you account for the things that aren't quantifyable? In the other thread, you were saying that the rich weren't contributing enough to the wealth creation, but you don't have any way of measuring that contribution. Too, your using Economic charts that use the definition that Percy does to evidence your position. It just doesn't add up. You were already going to invest in the infrastructure regardless of this idea. And there's no way to quanitfy how much value your investment has. How can you actually count that investment towards the contribution to the value of the idea?If the guy loaned you $100 to make your idea, and then you sold it for $200 and payed him back $110 dollars. The value of your idea was $90 to you. He contributed $100 to it, and it was worth $10 to him. It was worth $200 to the one that bought it from you. So how much value does the contribution of the society to the infrastructure have? But you have no way of measuring that, so how do you know? And how much of the wealth from the idea above was the guy who loaned the money responsible for creating? Without him, it would have been worth nothing because you couldn't realize it.Too the wealth that was created was measured using Percy's definition, so how can you use a different definition of wealth to determine the contribution to that definition?

It is the difference between the wealth that would exist without the unquantifiable in question (e.g. the development of a particular technology or idea) and the wealth that exists with it. In order to accurately quantify this we need duplicate identical economies on which we can run randomised double blind trials in order to eliminate other factors to find out the exact extent to which the thing in question has contributed to wealth creation.Which is obviously impossible in practise. You can accept that something (e.g the development of a particular technology or idea) has contributed significantly to wealth creation without being able to quantify exactly how much can't you? The charts in question show that nearly all of the wealth gains over the last 30 years have gone to the richest 5% of the population in a way that they didn't before certain so called "trickle-down" policies were implemented.The only way to reconcile the idea that this 5% have not received more wealth than they have created over the last 30 years is to conclude that the ideas, innovation and share of national infrastructure that we attribute to the other 95% of the population is worth very little.Is that realistic? I say not. The infrastructure in question is what makes the US (or UK) a first world country as opposed to a developing nation. There is a reason new technological developments and investments take place in developed nations. It is the shared legacy of wealth of the nation that developing nations lack. It is the infrastructure of the nation.It is the existence of this collective infrastructure that makes the successful origin, development and investment of an idea even possible. Educated, healthy workforce. People willing able to take the sort of risks that are essential to capitalistic entrepreneurism because there is a welfare system safety net which means failure doesn't result in destitution. The rule of law as a result of a functional justice system. Energy infrastructure. Communications infrastructure. Water infrastructure. Transport infrastructure. All these things are essential to wealth creation. And they are not the exclusive right of the top 5%.How can we quantify what contribution this past investment and infrastructure makes to the wealth creation of a nation? I have absolutely no idea. But I would estimate it as absolutely immense.. Wouldn't you? To quantify it we would have to remove all of the past public investment in such infrastructure in one of our hypothetical duplicate economies and see whether the idea and investor combination was still able to flourish and create the same amount of wealth.Obviously we can't do this. But I put it to you that most ideas wouldn't even see the light of day without such past investment. Never mind be equally as successful at creating wealth as they have been with this infrastructure in place.I don't see how this immense contribution can just be ignored so that the top 5% currently investing can lay claim to nearly all wealth creation. It is impossible to quantify. But a lot.More than enough to dispute the idea that the top 5% alone can lay claim to nearly all wealth creation in the US over the last 30 years.

Because the top 5% wealthiest cannot realistically lay claim to all of the other unquantifiable factors that contribute to wealth creation.Previously we have had the following exchange: Unless you now consider these publicly funded but unquantifiable factors in wealth creation to be all but irrelevant you cannot attribute virtually all new wealth to the the top 5% can you?Edited by Straggler, : No reason given.

Can publicly funded scientific research contribute to wealth creation?Is it possible to quantify how much wealth creation a specific research project results in?

Dear Straggler:In the future, I should thank you for crediting my previous posts with a byline. Message 363

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

Just to be clear:Do you agree that the wealthiest have accumulated nearly all of the increased wealth over the last 30 years? The data clearly shows this doesn't it?Do you think that the wealthiest are responsible for creating nearly all of this increased wealth?If they are receiving more wealth than they are creating then wealth is trickling up, not down. Well if we "don't know" you can't claim that wealth is trickling down.

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

Could it have got there at all without the legacy of publicly funded infrastructure that we collectively own?If not it is difficult to see how one can justify the idea that the wealthiest 5% can lay claim to having created all this wealth to anything like the proportion of it that they have received.The legacy of national infrastructure is a key component of wealth creation. It isn't economically worthless in the way that your price=worth view dictates.

Well, good luck with that. From which it follows that the value created when a slave produces one bale of cotton is less than the value created when a paid worker produces exactly the same thing. So corporations could create even more value by entering into secret illegal trusts to jack up the price. Why do we stop them doing that? After all, creating value is good, right? No.Your definitions equate creating value with getting one's hands on the money. Indeed, it would seem that the quickest and most effective way to create value would be to rob a bank. The profits are high, the costs are low, and you can do it in an afternoon. No we can't. You're simply equating the money one grabs with the value one has created, and so you have defined the concept of ill-gotten gains out of existence, since the value one creates is always exactly proportional to the compensation one receives, since they're the same thing. No gains are ill-gotten. The originator of a Ponzi scheme, for example, has created value. We know this because he ends up sitting on a big pile of money. He has produced no goods, and the "service" he has provided is a dubious one but he has enriched himself, and therefore deserves the money, which is the value that he created.

Surely you must find that question very easy to answer. The value of free software must be zero, the same as its price.I myself would find it more difficult to put a figure on it, but I don't see why you would have any difficulty.

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

I asked: To which you asked about a free software example of your own. So I am going to mix our examples and use your example of free software but I am going to make this free software the result of publicly funded research as per my example. SCENARIO
So we have this freely available software that is the result of publicly funded research. It's very clever software and soon becomes very widespread. Everyone agrees that despite being strictly unquantifiable it has had an immense effect on the productivity of the workforce.Yet when the data on incomes becomes available it becomes clear that whilst productivity has increased 100% since the release of this software the average worker has received barely any increase in income at all.Meanwhile the incomes of the top 1% have shot through the roof since the release of this software.Given this scenario I would conclude that the wealthiest have received more wealth than they can claim responsibility for having created and that wealth has therefore trickled up.What would you conclude?Edited by Straggler, : No reason given.

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