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> the money used to buy that yacht paid the salaries and income of all the craftsmen and laborers that built it for you, compensating them for the value they pr
by yholio 8y ago
> the money used to buy that yacht paid the salaries and income of all the craftsmen and laborers that built it for you, compensating them for the value they provide to society.
The point he is making is that they are compensated but no net value is returned to society as a result of their labor and resource expenditure. The yacht "disappears" in your private marina where it will rot away providing you with a purely private satisfaction, whereby the same labor could create houses, a public parc or some other widely shared goods, whilst still compensating the workers the same and having the same overall economic effects.
Symbolic, money wealth, thus becomes a force that diverts social physical resources away from social needs and towards private needs of wealthy individuals, making everybody else worse off compared to an alternate more egalitarian social arrangement.
I would interpret it that as long as billionaires don't sink their fortunes into megalomaniac wasteful personal consumption, like say building pyramids, the results of capitalism and inequality are not very different from a more egalitarian society, the vast majority of resources are still employed to make most people better off. What's unequal is just the representation of wealth, who owns what and who works for whom.
For example, if Warren Buffet would start to liquidate his symbolic wealth to build a giant Warren Buffet statue, this would have a net negative effect on the wealth of the average citizen. Yes, it would provide jobs, but it would also extract available capital from the market that could be invested to create other jobs, so over all it's a wash. No saleable products are generated and a massive amount of resources is required, bidding the prices of these up without putting anything back. The consumption of everybody else would diminish to accommodate for the higher prices and lower overall quantity of products now available. Society has "decided" to shift production from cars and houses towards a giant statue that nobody really needs.
- illumin8 8y agoI'm not sure I agree with this. The yacht could get very little use, but so could a house that you build for someone. If the argument is that we should only build public goods that will be widely used like parks, I disagree, because the concept of private property is very entrenched in our society, even in socialist countries. I also disagree that the Warren Buffet statue would have a negative effect on the wealth of the average citizen. Warren Buffet would be taking capital that is locked up inside assets and spending it to build something, directly contributing significant income to the middle class (laborers) in the economy. This would have a positive beneficial effect on the economy in general. Imagine a wealthy billionaire with all of his assets locked up in gold bars in a swiss vault. Outside of a few hired guards that protect the gold, nobody benefits. If he liquidated that gold and used the proceeds to build statues, quite a lot of people would benefit from the income generated.
- yholio 8y agoBuffet owns stocks in productive companies. If he starts selling this stock and gets enough money for his statue, by definition he's absorbing market capital that would otherwise be invested in productive companies. So he's effectively shifting investment from jobs in companies to jobs in giant statue production. The effect on the middle class jobs is largely nil. If a billionaire is entombed in a safe with his symbols of wealth forever, it's as if his symbolic wealth ceases to exist. Effectively, the symbols of everybody else become more valuable to reflect the total quantity of products and services available. It's just like burning money, no wealth is destroyed, just redistributed to everybody else who holds the same currency.
- Matumio 8y agoThe argument works even if no public parks are built. The point is that a higher number of people ("society") profits. They can hire more workers for the same money because workers are not busy building the statue. More people are getting their own needs met, versus a single person getting a very expensive need met. Intrinsic value is not created by spending money, it's created by people doing work for that money. The right question to ask is "whom are they creating value for", not "how many papers did they get for it".
- tristor 8y agoThanks, that's a very interesting way to interpret it and seems to make sense to me. I was wondering if that was the objective of the yacht representation, since that seemed an otherwise contrived example. I think it's fair to say that some consumptive activities are value positive, some are value neutral, and some are value negative for society as a whole. A yacht may in fact be value negative, but it doesn't mean every action where a person who holds some wealth purchases a thing to consume it is value negative.
- ivalm 8y agoPerhaps "labor value" would disappear but it grants workers "spending choice" which generates "happiness" (workers can spend money on luxuries), "influence" (middle class is more capable of political action that subsistence farmers), allows for further downstream effect to increase production capacity (additional capital investment into yacht building business). Basically, there is much more to life than labor value and exchange media have effects other than shifting around labor value. At any rate, there is something fundamentally wrong suggesting that either party in exchange is more moral than other since for every buyer there is a seller, and i don't buy that someone can say "i am moral because i exchange with someone who is immoral."