how wealth gets created and why services spring up from production. and why wealth can be used for lots of things, but the fundamental use is to increase chances to survive and reproduce..
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let's look at a couple of cavemen. both are constantly cold and starving and barely able to survive. they have no clothes or weapons and have little time, except to scavenge or occasionally kill something with a club or rock. up to this point, life is a real struggle.
one of the cavemen spends what little spare time he has trying to make a spear to help him hunt. he invests many hours improving his skill, until he finally comes up with a viable spear. after many hours he learns how to shape special stones into spearheads. he learns how to make a very good spear.
the other one, to keep himself warmer, spends his time learning how to make a good hide from animals that have just died. he also scavenges meat this way when it hasn't become too spoiled to eat. still he almost never has enough to eat.
so now, one caveman is cold but no longer constantly hungry and the other is hungry but not constantly cold. their condition has improved a little with their new skills.
one day they meet and since they're about the same size, they don't fight. instead, one trades 2 of his spears for 1 of the other's animal hides. one of them surely got the better of the deal, but it doesn't matter since they both benefited or profited from the trade.
they're now both warmer and better fed. their condition has improved markedly.
their chances to survive longer have greatly increased. both spear and hide are a labor saving device. the hide because fire for warmth isn't as necessary as often, and the spear because it makes killing for food easier.
what they have just done is free trade, done in a free market, where no one interferes with them. but it's not capitalism yet.
since they both can keep warmer and get food easier, they don't need to spend as much time at survival as they used to, and they can devote more time make even more of their spears and hides.
as their respective number of spears and hides increase, they can afford to trade some of them for someone else's services. services that enable them to make more of their products, like special stone gathering, etc. etc.. their spears and hides become easier for them to trade because they've become so efficient making them. they can 'stock pile' their products to trade as needed.
now we have capitalism, or more accurately, free market capitalism. the free market has to happen first.
their wealth continues to grow. other cavemen join them to work for them, but the working newcomers lives are much easier than they were. they are all well fed and warm. they all work for the two producers. all the services are supported by the producers, as no services existed before there was production.
the new community grows in prosperity to where it's easier to care for the old, sick and weak. their needs are cared for from the wealth of the community. there's no government 'forced sharing'. they share because they and they want to. the ones that don't share, learn to over time. if they don't, they're shamed, but not forced, as natural law still prevails.
later they see that it would be more convenient to be nearer to water and the animals they hunt. but new kinds of producers are needed. they need shelter that's close to resources. some men learn to efficiently make stone shelters. they are paid well, and can produce shelters cheaply enough to where others can afford to buy them with the spears and hides (which has become the currency of the day) that they've been able to save over a period of time. but even this type of production is only made possible by the efficient production of the original two producers.
and so it goes.. everyone gets wealthier over the years. they have more spare time to enjoy their lives and do other things, but all of them work at something. they all contribute with their labor. all their lives get better despite the fact that some are able to earn more than others. uhoh, income disparity has appeared!
but don't worry, the zero sum, wealth distributing, do-gooders are coming..... |
