This is a big topic, so I won’t do it justice in one post. But it is important, so let’s go. There’s a basic example I got from somewhere that illustrates this idea succinctly. Here it is: If you had a bottle of water, and I had a dollar, and we traded, what that means, is you wanted the dollar, more than you wanted the bottle of water, and likewise, I wanted the bottle of water, more than I wanted the dollar. But the most important idea here, is profit. And why is profit important? Because it happens on both sides of the transaction.
This is a huge concept that did not become clear to me until I heard this example several times. The fact is, if I were out on a road trip, or in the middle of the desert, or at an amusement park, or even just down the street at the store, chances are, if I felt the need to part with a dollar to buy a bottle of water, it’s because the dollar is a better deal, right then, at that place and time, than it would be for me to go home and drink the water. Or go someplace else where they’re giving the water away for free, or for me to think about it ahead of time, and pack the water in a bag, etc.
And because I don’t have to pack water in a bag and bring it with me, I am free to walk around with my dollar, and buy water, if that’s what I want to do. But more importantly, I can do something else with my time, instead of thinking about packing a bottle of water and lugging it around to wherever I might end up going.
This is why people don’t make their own clothes, for the most part. This is also why people don’t build their own cars and trucks, or make their own luggage, and dishes, and furniture. People are just starting to, in the West, it would seem, at least the average city dweller … they are just starting to grow their own food, in their apartments, and yards. I have neighbors who have their own chickens. It’s a good idea, and it has its benefits, but it has its costs, too. That’s one more thing a person has to do, equipment they have to buy, and time they end up spending making sure the product they are producing, is the way they want it, their equipment is maintained, etc.
This is all fine and good, but I digress. When I can just show up and buy something, I get my time back, and I can use that time to write this post, for example. I didn’t have to spend time building my own laptop, and I didn’t spend time mining ore to then melt down into my own jewelry, nor did I spend time growing plants or developing synthetic fibers for my clothes. All of that time savings I got from not doing any of those things came from the money I paid someone else to do them for me, instead. And the payment that person received was of course the profit.
And the time was my profit, which is so very important, because it’s the reason why in society today, we can successfully or cripplingly, depending on how you look at it, we can have 40% … 40 or 50%, I can’t remember, of the people employed in the US, work for some form of government. That basically means nearly half of the people working are paid with stolen goods (taxes).
And despite that, the other people, those who work to have that money stolen from them are able to do so and provide for their families, most of them, anyway, some can’t and end up on welfare themselves, or worse. Anyway, it’s a modern miracle we are so efficient that we’re able to provide for ourselves, produce such wonderful innovations, and on top of it all, support the parasites at both the top and bottom of society.
The state destroys abundance. The state interferes and turns win-win into win-lose. We can see this, when we think about robbery. If I make $100 a day, and a robber comes by, once a week, and takes $100 from me, let’s say I end up with $400 a week. So I lose $100 a week to the robber.
What if I need exactly $400 to feed my family, save for a rainy day, and otherwise scrape by and cover my expenses and obligations? Well, then I never make any progress. But worse yet, I don’t help anyone else, either.
The robber takes my profit, basically, and someone could argue I still have my rainy day fund, but let’s put that to the side. The $100 is stolen from me, and assuming I can’t do anything about it but pay the $100, that’s $100 I can’t spend doing things I love and enjoy. That means, maybe for my family to go out and relax, we need two incomes. Which means we’re busier and spend less time together. Which means we probably don’t end up relaxing as much. It means we are more stressed and enjoy life less.
What if we were big into charity? Well then, that’s $100 we can’t give away to help other people, either. No matter what we had planned, we can’t do anything with it. If we planned to spend that $100 a week having fun, we can’t, it won’t enrich our lives, because it’s stolen, gone, and with that money gone, and nothing I can do about it, I still need balance in my life. If this was a regular guy robbing me, once a week, I could probably do something about it. I could move, change up my habits so I don’t get robbed, maybe call the police as a last resort, (hahaha) etc.
But we all know who this robber is, right? It’s the state. The taxman. And you can’t run from this guy. So it’s worse. You have to give up your money, which means you can’t do anything about it except either find a loophole or make less, or maybe there are other things you can do, which we’ll discuss in other posts…
But if the taxman is robbing me every week, then I’m losing out, and so is everyone else, so it’s not likely I’ll, if I’m your “average Joe,” it’s not likely I’ll do anything about this. But I still need to feel like the work I do every day is meaningful, and useful, and if I’m not making enough money to enjoy life, how can I do that? I can’t, so I’ll be frustrated that I don’t make enough money, I’ll probably blame my employer for that. Or I’ll blame society, or maybe I’ll blame the rich? Does any of this sound familiar?
- Believing your employer is stingy and doesn’t pay you enough (maybe they don’t) or
- Believing society is just corrupt, i.e., the world is full of flawed humans, and very few of us are actually good people or
- Believing the rich are greedy and corrupt and everyone with a fortune either inherited it or got it by exploiting someone else
I’ve heard all those arguments before. But none of them explain the simple exchange between a buyer (person with a dollar) and a seller (person with a bottle of water) and how the seller gets taxed. When you’re an employee, you get taxed. When you’re taxed, you feel like you’re short changed, and you are! You’re on the losing end of a win-lose transaction. You get win-win when you work and get paid. Someone gets time, and/or services, and you get money in exchange (which allows you time or goods or services too, when you spend that money) … and just before you get your money, someone else walks in, takes part of the money, and gives you nothing in return.
Some people might argue ‘but the roads,’ or ‘but you went to school for free’ but really, have you driven on the roads? Have you had enough potholes and traffic? Want your money back? Or do you ride the bus or train? Also have you gone to school? Most elementary and high schools in the US are funded by property taxes, federal funds (from inflation and income taxes) and other money. So most people’s school was funded by money paid by poor people living in apartments and people living in homes, whether they had children in school or not. And to top it off, these people did not have a choice if they did have children in school. They had to uproot their family and move, or plan to move some place with a good school district if they wanted to send their children to a good school. Or, get this, they had to still pay the property taxes, which were being stolen from them anyway, and then on top of it, pay again to send their children to a better school, because the public school was not adequate, did not teach their children what they want them to learn, etc. So after having funded the government school involuntarily they still have to pay another school to teach them what they want their children to learn. That’s not fair.
Could you imagine going to a restaurant, and being told what you could eat, not having any choice in the matter, and being told you had to pay, and if you didn’t like it, what you could do, was leave your money on the table and pay, then go next door to a pricier restaurant, and pay more money and get what you want? And even there, the second restaurant answers to the first, so you probably still don’t get exactly what you want, and get some of what you want, and some of what you don’t.
Arent’t we all glad the government doesn’t control restaurants?
I digress. Abundance is not found in any of these scenarios. OMG this is a rambly post. It’s so easy to get on this platform and ramble. Enough.
Recap. Abundance is about one thing, fundamentally, it’s about the fact that whenever we’re voluntarily associated with one another, we’re making each other’s lives better. If you and I are friends, we each voluntarily choose to talk to each other and spend time together. That friendship makes us both happier people, stronger, we’re better because we are friends. That’s what abundance is, that’s what “the whole is greater than the sum of its parts” means. The amazing thing about this idea, is it is the very underpinning of economics! When two people enter into an economic relationship, even if it’s just a one-time buy sell transaction, the buyer decided they’d be better off if they made the purchase, and the seller decided they’d be better off if they made the sale. And the buyer gets time, and benefits from the good/service purchased, and the seller gets money to cover their costs, and profit to benefit them from their investment in the good/service they sold. That’s abundance, because both sides profit.
It’s not enough to talk about profit on both sides of a transaction, without talking about the opposite, in this discussion, which is a win-lose transaction where one side gets a benefit and the other side gets nothing in return. This happens when force or fraud is used in the transaction. I didn’t cover fraud above, but force or the threat of force accompanies all taxation, all fines, and most monetary transfers to governments.
This means things like, unfair prices on services, even if a service is still rendered, like school, for example, which is why people still send their children to private schools, and why people go to college in increasing numbers, and take longer to graduate, and … the cost of college goes up every year as well, though this is due to more than one factor, one of the factors here, is that high schools increasingly put out unqualified students who are supposedly ‘ready’ for college. It’s ironic, too, because of the money governments take and borrow to spend on schooling, and yet they still do a terrible job at it.
Fraud is something I will cover in a future post. The short of it is if a seller misrepresents a good/service the buyer ends up paying more for it, thinking they are getting one thing, then finding out they are getting another thing, a thing they would have paid less for, if the seller was honest. In that situation the seller makes off with the buyer’s profit, since they still have to invest time and energy to get what they originally wanted, and can’t necessarily get their money back. This is what happens when a student goes to a government high school, and then spends a couple of semesters in college relearning the same subjects so they build their skills up to the college level.
Some people will blame the student’s parents for this … yet another conversation.
There are also iterative downstream societal consequences. When you take a lose-win or win-lose interaction and replay it over and over through time, it makes a dent in the surrounding society. Just like the fact that the police aren’t good at catching criminals, combined with the media’s overemphasis on violent crime, leads to people restraining their social interaction, their friendliness, and how much they mix with strangers (also known as stranger danger, creepiness, etc.) because people are generally afraid of becoming victims. Well we have solutions to that, but we’ll get to them in another post. For example, if people could pay for private security, or properly defend themselves against criminals, without also fearing an attack from the government (i.e. gun control), they could relax and be friendly, knowing they could protect themselves and their loved ones.
Still much more to this topic … but this is a good introduction.