September 11, 2015

Horse 1979 - Dear Dr Uppington, The One Who Reaps Where He Did Not Sow

Dear Dr Uppington,
I make reference our conversation on Wednesday just past; where you will recall that I thought that your opinion on a certain subject was and is bunk. Please note that I curbed this opinion and brought it to heel because what I actually thought, if aired, would fill the atmosphere with so many four letter expletives (deleted) that there would be so thick with the fug, that one could slice it clean with a bread knife and then place the cubes into discrete wrapped packets.
I think that your opinion is morally bankrupt and equally reprehensible. I shall not give your words the honour of repeating them here, other than to say that because they have not been recorded, the world shall remember them not and they have already dissipated and dissolved into nothingness.
As promised, I shall present the reasons for my outrage in the blog post below.

In the kosmos (that is, the world system in which we live), we have a coupon system for the allocation of good and services. This coupon system has various names upon this planet depending on the country in which those coupons are used but collectively they are together called "money". In our country we call our particular coupons Dollars because of a series of historical accidents and etymological corruptions; derived from a now insignificant village in the Czech Republic.
All money in the kosmos which has ever been generated, is the result of the production of goods and services and all money in the kosmos serves as a store of the wealth therein. It has at various stages in history been represented by tokens made precious metals, or written promises on paper and linen, that are made that a store of these precious metals exists somewhere in the kosmos but ultimately all money is fiduciary in nature and is current and future acceptance is based upon that fiduciary nature and the hope that it can be exchanged for goods and services. The store of precious metals is now largely irrelevant but the fiduciary nature of money still exists and is now based upon the promise that everyone else thinks that it has value.
Furthermore, all goods and services are generated at some point by people's work. Whether this work is performed by machinery, physical toil or is the result of brain power; this truth is inescapable.
People's income is derived from their ability to control the rewards which flow from the production of goods and services but because the coupon system is the same across the kosmos, people tend to forget that the money which flows to them is generated by someone's work at some point. This is our first point of contention.

All money in the hands of an individual is either spent or saved. If it is spent, it is done so to acquire some goods and/or services. If it is saved, unless it is buried in the ground or placed into a shoebox under one's bed, it is placed on deposit either with a financial institution or as direct investment in the capital of a firm. In either case, those saved monies derive benefits in the form of income which is derived from some other person's work. This might sound like a trifling point but this is quite important.

Consider an individual who does not already own their place of accommodation; then consider yourself who by your own admission inherited the impressively fine house in which you live.
A person who does not own their dwelling house must pay someone else for the privilege of keeping a roof over their head. If we think of the case of someone who lives in a mean dwelling and pays $385 per week for that privilege, in a year they will have expended $20,000. Usually someone who has to rent the place in which they live, also has to pay those monies which are derived from their work. Those monies by definition which have been spent, can not be saved and therefore can not go on to derive the benefits which flow as a result thereof. Someone who does not have to pay these monies for their dwelling place, can put those monies on deposit to derive the benefits which flow as a result thereof.
In the course of ten years (if we negate inflation) then the person who has spent those monies has saved precisely nil. The person who has not had to spend those monies, if they put those monies on deposit at a paltry 2% per year, will not only have saved ten lots of $20,000 but they will have derived an additional $23,347.30. The first person who had to generate their monies through real work has somewhere to live but the person who has done zero work, they may have spent the whole ten years watching television for all I know, has effectively picked up an extra year's worth of work for nothing.

I could have used any example where the income gained from invested capital is different to that gained from real world work really but the point is still instructive. Savings reaches a point where it is automatic and the people who derive the benefits thereof, do so without any work of their own. Assuming work itself is virtuous, then those benefits flow not to the virtuous but the invirtuous. If you multiply this across the kosmos and all sectors of the economy, then your theory that poorer people should work harder because that will generate money and that richer people obviously do work harder as evidenced by their incomes, instantly falls to pieces.
If a poorer person wishes to save, then they shall have to scrimp from other areas of their life. Their savings will need to either be derived from working even harder, or from diminishing some other aspect of their quality of life. Whereas the richer person who doesn't even need to work to derive the benefits which flow from other people's work, does not need to work even an iota harder; yet they will still win out in the long run.

I find your disdain of those who need to work harder (and indeed at all) irksome. I don't know if this is because your friends are Lord Puppington, Dame Juppington and Professor Huppington, and therefore you never come into contact with people who do real work but I reject your proposal outright that poorer people are poor precisely because they do not work hard enough. Such a belief assumes from out outset that all people are born into equal circumstances, when clearly this is not the case. Where one stands depends upon where one sits, and if one sits in the languid lap of luxury, one is not going to feel as though they are in a common country or kosmos as one who stands sweating in the service of simoners and so-and-sos.

I reject your fantasy and substitute it with reality. The real world is often grittier and uglier than a dream; please consider how the other half lives within the kosmos.

Yours begrudgingly,

If you entertain me a while, please allow me to entertain you as well. Some of my best work is done while the cruise control is set to a hundred miles an hour of crazy ranting. If you are driving the rant-bus down the highway of insanity, you don't even need to steer.

Can I just say this? If you are working in the financial sector, you aren't making or selling financial "products". A "product" is a thing that you can hold in your hands or something intangible that you have used skill to create. People working in factories making widgets, gadgets and doodads, sometimes in horrible conditions in developing nations, they're making "products". People in garment factories who sew clothes together are making "products". I'll even go so far as to say that people making incorporeal goods like music, radio programs, podcasts, television shows, videos on YouTube and the like are making "products". But you financial people, people working in banks, investment houses, finance corporations etc. are like me; we provide "services". The difference between most people who make products and provide services and you, oh financial sector, is that you don't even provide a service which generates anything of proper value.

When a bank lends out money, other people in the real world do actual work and repay the original money plus extra that was generated with extra work. You, financial sector, don't do that. You shift the giant pile of money from one place to another while other people do real work and extra work to make the pile bigger and all you do is cream the top off of the pile.
Don't talk to me about how hard you're working because you're not. Other people do the real work and you know it. You have no right to look down on the people who work as front line staff, or the people making widgets, gadgets and doodads, or the cleaners, or the people fixing the machinery of industry, or the people with their hands down in drains all day long because they're cleaning out the gunk and effluent from everybody else, because all of those people are making products and providing services which are more real than your entire sector.

A widget maker can at the end of the day, hold aloft their widget and say "I made this". A shop assistant can at the end of the day, say that they sold 15 of Product X, 3 of Product Y and 22 of Product Z. Even I can look back at the end of the day and say that I've generated a set of accounts, or someone's Income Tax Return. But you, financial sector, can only look at the portion of the pile money that you've shifted and say that you're income came from moving it about a bit.
That's not a widget, gadget or doodad and it's not really a service which produces incorporeal property either. Even the law firm of Dewey, Cheatem and Howe name provides navigation through the shoals of legislation.

The artist, the scientist, the labourer, the tradesperson, the manager, the entrepreneur, the factory worker etc. all expend human effort and human costs in the generation of goods and services. The landowner and the rentier expend no human effort when they rent out their property and you oh financial sector don't even lend out your own property or capital but other people's. You reap where you do not sow.
Oh financial sector, thou vast wen upon the economy, what dost thou do?

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