Saturday, February 5, 2011

Value vs. Money

Again, this assumes that government can create jobs. Government cannot create jobs. It can create a climate conducive to job creation or it can do the opposite. The jobs government creates are not ‘real’ jobs. They are jobs dependent on political patronage.

Government can insert itself and re-distribute the wealth created by real jobs in the private sector, but it cannot create or re-distribute ‘value‘. The honest money poured into unproductive sectors is money wasted. The tipping point is reached when too much wastage starves the private sector (where value is created) out of existence.

With the rise of autocratic dictatorial regimes at the expense of democracies, it is inevitable that job creation suffers. This political trend has now also taken root in Washington.

America was well known throughout the world as a place where it was still possible to come and make something of oneself. The business climate was considered to be ‘friendly‘. This is changing. High taxes and regulations have virtually ground business in America to a halt. In order to stay in business these days you have to first ingratiate yourself to the party in power and then wait for them to give you your arbitrary allotment of wavers and handouts. It’s called crony capitalism and it never works well.

There’s no mystery as to how capitalism functions and how ‘real’ value is generated. A man goes to work for a firm and receives a salary. His salary is predicated on how much he can be expected to contribute to the firm’s bottom line. If his skills are independent of the firm’s structure, he can eventually go out and start his own business. He will then begin to hire people keeping the same principle in mind: he will pay them a percentage of what they can be expected to contribute to the new firm’s success.

An athlete is paid according to how many people his presence can bring into the stadium. An actor is paid according to how many people his talent can attract to movie theaters. It is their talent that is valuable. The money generated by any such transactions can go up in smoke in an instant. The value of individual talent, skill and perseverance remains. A good actor will always eat.

Not many of us are blessed with outstanding attributes such as John Batchelor’s golden-throated voice and keen wit; or even with the ability to think effectively on our feet. Yet, we too can be a part of the system. We have other, perhaps less spectacular, attributes to deal. And we too, if we apply ourselves, can earn a modest, but secure, living.

Enter big government that blocks all normal processes and throws the whole system into confusion. Now nobody can be secure. The rules change with the political winds. It’s difficult to plan and even harder to trust - and the whole thing breaks down to be replaced by … what?

At this point, it could be anything - a new currency, gold, indentured servitude, work camps. With capitalism discredited, one’s work can no longer save one. Things are apt to become a whole lot more arbitrary and complicated. For one thing, America may soon not have to worry about its immigration problem as opportunity continues to fade; and there won’t be much left to bother blowing up anymore.
A note about education: Education no longer teaches discipline and skills. Education has become so devalued in America (and elsewhere) that it represents little more than a (hall) pass for entrance into the entrenched elite classes‘ washrooms. Additionally, education nowadays consists primarily of learning to spout political propaganda points.

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