3 ms·
More or less your first point, the rate of growth is so low, that over short term it's effectively zero sum. Something else to consider is that in your example
by orclev 9y ago
More or less your first point, the rate of growth is so low, that over short term it's effectively zero sum.
Something else to consider is that in your example of "for free" wealth creation you're not actually getting any of that for free, that's a form of wealth transformation or transfer. Let me elaborate on that point using each of your examples. I'll start with mining as that's the simplest, in that case you're taking a natural resource (which is finite) and extracting it and refining it. You're having to pay your workers (and/or buy and maintain machines) in order to do so, so in part your redistributing the companies wealth to the workers and service providers your company does business with. In exchange you receive raw and/or processed minerals/metals. That might seem like wealth creation but it's really transformation, you've reduced the value of the land you extracted the material from and converted it into a transportable form. The value of that material might seem to be more, but that's only because you've invested value in extracting it, in other words you're passing on your cost of doing business. You haven't added value, the value was already there, you've simply converted it and invested some of your companies value into it, so when you sell it you're simply converting one form of wealth into another, you're converting the wealth of that processed material into cash wealth.
The situation with growing crops is similar, although part of what is being invested there is time. You might think, "well, time is infinite, there's always more time", but each persons time is finite and it has value, even if only to that person (opportunity cost), so once again you're doing a wealth transformation, you're transforming those workers time into money, and ground, seed, fertilizer, water, and sun into crops. When you sell those crops you're once again recouping your cost of doing business. Wealth hasn't been created from nothing, it was transferred and concentrated from a variety of sources. You might think, "well, what about the workers time, that's new wealth", only it isn't, there was a cost involved in those workers upbringing and living, so that's once again just a form of wealth transfer and transformation. Truly the only free wealth in the entire thing is the sun, although even that isn't infinite, even if it is free from the perspective of anyone on Earth (it might be more accurate to say it's wasted/destroyed if you don't use it). Ultimately there is no free lunch, entropy always wins.
Software is the most complicated one, as there's zero unit costs associated with it, but substantial development costs. Once again though, you're looking at wealth transformation/transfer. In the case of software you're transferring/transforming the developers, QA, and other workers personal knowledge and time into software. Similar to the workers in the previous example they've invested time and money into improving their knowledge and living, so you're really paying them for them to recoup their losses (wealth transfer) and then when you sell the software you're simply passing those expenses on to your customers.
Ultimately it's all about wealth transformation and transfer. There is finite natural wealth, it existed before humanity, and if humans vanished tomorrow it would continue to exist. Economies are mostly about taking the existing wealth and distributing, concentrating, and transforming it into forms that are more convenient for people. When you get down to it, the unit cost of a good is really it's intrinsic value, it's a form of wealth transformation. Profit margins on the other hand, are wealth transfer, you're transferring wealth from the purchaser to yourself. No value is actually being created. New wealth only comes from discovering new resources. Want to create wealth now? Do like Elon Musk and others are doing and take a look at asteroid mining.