Is it possible for everbody to make money?
Discussion
Well is it, where would the extra money come from? Is it possible to have a situation where everybody works, everybody earns a wage or makes money from their own company (some more than others as I am not talking about communism). If everybody makes money where would the extra money come from?
Is it inevitable that to have success others must fail?
Is it inevitable that to have success others must fail?
Edited by skilly1 on Friday 25th September 17:15
Yes it is, but only if they spend it. If people are making more money then they spend more money, which goes to others who make more money etc, and the goverenment wins everytime as people are making more and so pay more taxes.
However this bunch of shambles don't understand this and believe to increase their income they must tax more, which leaves less money for people to spend, so people spend & earn less and pay less in taxes.
However this bunch of shambles don't understand this and believe to increase their income they must tax more, which leaves less money for people to spend, so people spend & earn less and pay less in taxes.
tim2100 said:
Yes it is, but only if they spend it. If people are making more money then they spend more money, which goes to others who make more money etc, and the goverenment wins everytime as people are making more and so pay more taxes.
However this bunch of shambles don't understand this and believe to increase their income they must tax more, which leaves less money for people to spend, so people spend & earn less and pay less in taxes.
But you would need more and more money to sustain the above - where would it come from?However this bunch of shambles don't understand this and believe to increase their income they must tax more, which leaves less money for people to spend, so people spend & earn less and pay less in taxes.
I too have pondered this.
Apart from Governments printing more money, I think there can only be so much money in the world. If I take £1,000 from a customer, they have £1,000 less. If I invest it and get some interest, that money comes from the bank which got it from somebody else's loan.
Perhaps I just discovered why the rich get richer and the poor get poorer... the rich people are better at making/earning money.
Apart from Governments printing more money, I think there can only be so much money in the world. If I take £1,000 from a customer, they have £1,000 less. If I invest it and get some interest, that money comes from the bank which got it from somebody else's loan.
Perhaps I just discovered why the rich get richer and the poor get poorer... the rich people are better at making/earning money.
I am on sort of above average wages, my partner earns more than average part time wages.
It's still a bit hand to mouth so we've got a side line t shirt design and print business. A bit of arse pocket cash and it gives us a decent lifestyle.
If push came to shove I'd deliver the local rag for £30 as well as long as I could pay my way and enjoy my life.
It's still a bit hand to mouth so we've got a side line t shirt design and print business. A bit of arse pocket cash and it gives us a decent lifestyle.
If push came to shove I'd deliver the local rag for £30 as well as long as I could pay my way and enjoy my life.
Money, at its core, is a measure of labour. There is an effectively infinite amount of labour available (lots of people x lots of time before the asteroid hits). So yes everyone can make money.
(Money was originally invented as a way of making bartered services more efficient - so if the baker making three loaves equalled getting one horse re-shoed, a coin could be created to represent that unit of labour and allow the transactions to be separated or every now and again to be used to compensate the roofer for replacing some tiles)
(Money was originally invented as a way of making bartered services more efficient - so if the baker making three loaves equalled getting one horse re-shoed, a coin could be created to represent that unit of labour and allow the transactions to be separated or every now and again to be used to compensate the roofer for replacing some tiles)
skilly1 said:
tim2100 said:
Yes it is, but only if they spend it. If people are making more money then they spend more money, which goes to others who make more money etc, and the goverenment wins everytime as people are making more and so pay more taxes.
However this bunch of shambles don't understand this and believe to increase their income they must tax more, which leaves less money for people to spend, so people spend & earn less and pay less in taxes.
But you would need more and more money to sustain the above - where would it come from?However this bunch of shambles don't understand this and believe to increase their income they must tax more, which leaves less money for people to spend, so people spend & earn less and pay less in taxes.
I can understand how everyone could create extra value, but not where the money comes from to pay for that extra value. Under the barter system it was simple, but now it's confusing.
Let's say we have a farmer and a wood grower / carpenter (I'm collapsing the supply chain for ease of illustration).
The farmer puts his time into rearing some cows. This is all well and good, but he also needs some fences to keep his cows safe.
The carpenter grows some trees, chops them down, and uses them to make the farmer's fences. He has therefore added value to the wood.
The farmer pays for his fences with beef. By putting the time into raising the calves, he's added value to them, and traded some of that value for the fences.
So, all of this I understand, and if we need more beef, or more fences, then we grow more cows, or more trees, and find other people to barter with for other stuff.
I also understand how money replaces bartering, but I too am confused by where the actual money comes from. What happens if one day there's more cows and fences than there is money, because the farmer and the carpenter have created more added value than there is money to pay for? Would people just have to start bartering with what's left over once all the money is being used?
I was looking into this concept.
I used to think in America people who worked in retail or at super markets were worse off than in the UK, but professions like lawyers, engineers and doctors were better off. I then realised this wasnt the case- nearly everyone was better off.
A Legal secretary or para legal over here will easily earn about 28-35K ($) much more than over there. Those who work in grocery stores will have a much cheaper cost of living in the USA.
Engineers are INFINITELY better off than that Football craved island.
So where does the money come from exactly?
I think there are less benefits- for those who dont work or cant, or choose not to. Conversely however, if you lose your job and are reasonably well off and have savings- you CAN claim- unlike the UK- just until you get another job.
There isnt the bureacracy of the UK (although this may change with Obamma and his Czars)- so you don't have every other person who is a Civil servant or that works for the council.Much smaller government.
There isn't a state wide pension system and the same for NHS.
Such is the cost of living here in most places- it literally is dollars for pounds. My mate is a mechanic on $45,000 (which is low for here- he should really be on $60-70K)-in the UK his equivalent may be on £25-£35K, but this ISNT equivalent to being on $55K because of the cost of living in the UK.
I used to think in America people who worked in retail or at super markets were worse off than in the UK, but professions like lawyers, engineers and doctors were better off. I then realised this wasnt the case- nearly everyone was better off.
A Legal secretary or para legal over here will easily earn about 28-35K ($) much more than over there. Those who work in grocery stores will have a much cheaper cost of living in the USA.
Engineers are INFINITELY better off than that Football craved island.
So where does the money come from exactly?
I think there are less benefits- for those who dont work or cant, or choose not to. Conversely however, if you lose your job and are reasonably well off and have savings- you CAN claim- unlike the UK- just until you get another job.
There isnt the bureacracy of the UK (although this may change with Obamma and his Czars)- so you don't have every other person who is a Civil servant or that works for the council.Much smaller government.
There isn't a state wide pension system and the same for NHS.
Such is the cost of living here in most places- it literally is dollars for pounds. My mate is a mechanic on $45,000 (which is low for here- he should really be on $60-70K)-in the UK his equivalent may be on £25-£35K, but this ISNT equivalent to being on $55K because of the cost of living in the UK.
Remember that most "money" is in the form of bank records, and not foldy notes.
Also, money is a store of values, not a means of measuring labour (unless you are a Marxist).
So, money kind of creates itself as people trade and deposit money in the banking system.
Once an economy reaches some minimum size, it is possible for everybody to make money. The whole foundation of economic interaction is that both parties are better off as a result of trade.
Also, money is a store of values, not a means of measuring labour (unless you are a Marxist).
So, money kind of creates itself as people trade and deposit money in the banking system.
Once an economy reaches some minimum size, it is possible for everybody to make money. The whole foundation of economic interaction is that both parties are better off as a result of trade.
Please all watch this series which explains Fractional Reserve Banking.
http://www.youtube.com/watch?v=vVkFb26u9g8
http://www.youtube.com/watch?v=vVkFb26u9g8
f-fuxake said:
I am on sort of above average wages, my partner earns more than average part time wages.
It's still a bit hand to mouth so we've got a side line t shirt design and print business. A bit of arse pocket cash and it gives us a decent lifestyle.
If push came to shove I'd deliver the local rag for £30 as well as long as I could pay my way and enjoy my life.
thanks. The response MX5 would have been just as relevant.It's still a bit hand to mouth so we've got a side line t shirt design and print business. A bit of arse pocket cash and it gives us a decent lifestyle.
If push came to shove I'd deliver the local rag for £30 as well as long as I could pay my way and enjoy my life.
Interesting thread, I have got nothing really to add but have often thought about it the question. Perceived value of things plays a part I am sure in the inflation or deflation of the amount of money around but is it all an illusion.
Edited by limpsfield on Saturday 26th September 22:16
No.
Imagine the world as a single factory on an island. Nothing can be imported or exported (just like planet Earth). Everybody works in the factory and everybody buys the output. A global capital system is the same.
The problem is that all production involves costs of both labour and other costs. The product must be sold at a price above the total cost of production to produce a profit. You can never pay the workers 100% of the sale price. There are always losses in the system, so some of the value is lost.
However, the only purchasers of production are ultimately the workers themselves. Since you cannot pay the workers enough to buy all the output, either some must go unsold, or be purchased using debt.
Ultimately the total debt increases until it becomes unsustainable. You end up having to lend to subprime borrowers who cannot repay and the system crashes.
If you have a source of wealth external to the system you can expand the system to incorporate the value of what was outside without paying for it. Once there is nothing of value outside the system it has to fail. Wealth is then only able be redistributed, but there are always losses which ultimately become unsustainable.
Capitalism is a fantastic system as long as it is expanding. Once it cannot expand it must be replaced with an alternative. Unfortunately nobody has thought of anything better yet.
Imagine the world as a single factory on an island. Nothing can be imported or exported (just like planet Earth). Everybody works in the factory and everybody buys the output. A global capital system is the same.
The problem is that all production involves costs of both labour and other costs. The product must be sold at a price above the total cost of production to produce a profit. You can never pay the workers 100% of the sale price. There are always losses in the system, so some of the value is lost.
However, the only purchasers of production are ultimately the workers themselves. Since you cannot pay the workers enough to buy all the output, either some must go unsold, or be purchased using debt.
Ultimately the total debt increases until it becomes unsustainable. You end up having to lend to subprime borrowers who cannot repay and the system crashes.
If you have a source of wealth external to the system you can expand the system to incorporate the value of what was outside without paying for it. Once there is nothing of value outside the system it has to fail. Wealth is then only able be redistributed, but there are always losses which ultimately become unsustainable.
Capitalism is a fantastic system as long as it is expanding. Once it cannot expand it must be replaced with an alternative. Unfortunately nobody has thought of anything better yet.
The question should be "what is money".
Money is a human invention, a store of wealth, a medium of exchange and a measure of value. The system only works because everyone has confidence in bits of paper and figures in a bank.
Yes, everyone can make money as humans constantly find better/cheaper ways to make or do things - the amount of money available or created (banks and governments create money) must be carefully controlled otherwise you have inflation (or deflation). -
The system all works on confidence - without it we would have to go back to the gold standard (or similar) - and then you have a problem with not enough gold for an economy to work. (not to mention the problem of physically paying for say a car from Japan).
There have been a number of countries which have ended up with worthless money after hyper inflation (worse than Zimbabwe) - the culprit has always been governments resorting to the printing press.
Thanks to some shocking governments in the UK since WW2, (Conservatives not much better than Labour), inflation hit over 20% around 1979. Thanks to Maggie it was sorted - in the long run you can't have a decent economy with significant inflation.
Money is a human invention, a store of wealth, a medium of exchange and a measure of value. The system only works because everyone has confidence in bits of paper and figures in a bank.
Yes, everyone can make money as humans constantly find better/cheaper ways to make or do things - the amount of money available or created (banks and governments create money) must be carefully controlled otherwise you have inflation (or deflation). -
The system all works on confidence - without it we would have to go back to the gold standard (or similar) - and then you have a problem with not enough gold for an economy to work. (not to mention the problem of physically paying for say a car from Japan).
There have been a number of countries which have ended up with worthless money after hyper inflation (worse than Zimbabwe) - the culprit has always been governments resorting to the printing press.
Thanks to some shocking governments in the UK since WW2, (Conservatives not much better than Labour), inflation hit over 20% around 1979. Thanks to Maggie it was sorted - in the long run you can't have a decent economy with significant inflation.
Kermit power said:
I also understand how money replaces bartering, but I too am confused by where the actual money comes from. What happens if one day there's more cows and fences than there is money, because the farmer and the carpenter have created more added value than there is money to pay for? Would people just have to start bartering with what's left over once all the money is being used?
Cows and fences become cheaper as supply has exceeded demand, if your example is taken literally? If you're talking about the whole system then I guess you've reached Uncle Fester's "end point of capitalism" and we'll need a new system.I guess from there we'll need to find new markets which will mean looking to space, at least for raw materials and hopefully colonisation as the earth will be quite crowded by that stage
Money is just a convenient way of trading good and services. Why would it be necessary that some people fail (I assume you mean in terms of the consumption of goods and services) for others to be well off?
I think the story of industrial development over the last 200 years or so shows that people being better off means other people are better off as well. It's not very fashionable to say, but the trickle down effect is real.
In some sense it might be true that the finite qualities of natural resources provide an upper limit on total consumption, thus consuming more than our average allotment means someone else must consume less. Personally, I don't believe we are anywhere near these limits yet.
I think the story of industrial development over the last 200 years or so shows that people being better off means other people are better off as well. It's not very fashionable to say, but the trickle down effect is real.
In some sense it might be true that the finite qualities of natural resources provide an upper limit on total consumption, thus consuming more than our average allotment means someone else must consume less. Personally, I don't believe we are anywhere near these limits yet.
According to economists it is possible to have an exchange of goods / services for cash where both parties benefit. So extrapoloating these 'perfect' transactions, the answer to your question is yes.
Unfortunately, I can't remember the term that they use to desrcribe this, but I'm sure I read about it in 'The undercover economist' by Tim Harford: http://www.amazon.co.uk/Undercover-Economist-Tim-H...
Unfortunately, I can't remember the term that they use to desrcribe this, but I'm sure I read about it in 'The undercover economist' by Tim Harford: http://www.amazon.co.uk/Undercover-Economist-Tim-H...
I fear that this is going to be another aeroplane one a conveyor belt but WTF.
1 - Fractional reserve banking - as mentioned above - explains why the government does not need to print more money to cater for increased wealth.
2 - Economics is not a zero sum game. The heart of all economic transactions is that both parties of an exchange are made better off. Otherwise why would the transaction take place in the first place?
3 - For both of the above factors to kick in, value needs to be added, usually in the form of some combination of raw materials.
For all other questions, get an MX5, but realise that it will never be as quick as a BMW 335d (mapped).
1 - Fractional reserve banking - as mentioned above - explains why the government does not need to print more money to cater for increased wealth.
2 - Economics is not a zero sum game. The heart of all economic transactions is that both parties of an exchange are made better off. Otherwise why would the transaction take place in the first place?
3 - For both of the above factors to kick in, value needs to be added, usually in the form of some combination of raw materials.
For all other questions, get an MX5, but realise that it will never be as quick as a BMW 335d (mapped).
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