Create to accumulate

Posted: September 10, 2012 in Uncategorized
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I wanted to make this succinct, because it is a subject one can extricate, knead and stretch forever and a day. I guess the best way of encapsulating it is the terminology used to justify inequality, particularly by the nonsensical and too-publicised extreme economic right wing of the Conservative Party.

I talk of ‘wealth creators’ primarily. Now, I could accept this term being thrown around in self-defence of the already-wealthy once in a while, but as a credible economic argument it does not stand up to scrutiny. A simple analysis of each word will make this clear.

‘Wealth’ is defined as the accrual of vast amounts of possessions or money. Wealth by its very nature is an accumulation. Accumulations are not ‘created’. An accumulation is not a thing in itself; it is a collection of other, rational things. You no more create wealth than you create a pile of rocks. The wealth is of course made up of money. Money, or anything valuable, already exists in our current monetary system. It does not need to be ‘created’. I’m aware that the Royal Mint technically creates money, and private banks have been given licence to print ‘digital’ money, but, other than banks, which are a law unto themselves, the money circulates amongst the general population and all has to be accounted for.

‘Creation’ is bringing into existence something new. At its most organic, it is life, but if we translate it to the economy, it would be applicable to products of industry and construction. The pile of rocks analogy works here. ‘Wealth’ would be like moving many rocks into a single pile. ‘Creation’ is moulding the rocks into a house. So, in conclusion, wealth is not the ‘creation’ of money or capital, it is the accumulation of already existing money. Pedantic perhaps, but it needs to be outlined for clarity.

Now, onto another favourite term of the Right: ‘job creators’. Now this one is a little more pertinent. It is not the accuracy of the term in question this time, but the implication. Jobs indeed do have to be created, but the source of jobs is wrongly implied to be the benevolent rich.

Jobs are not a gift to the feckless or desperate, yet this fallacy does not seem to be questioned. I’ve even heard some people laud the wealthy, as ‘poor men have never given me a job’. Perhaps this deference is in its way worthy, but it is ludicrous in its justification. It is clear to anyone with a functioning mind that jobs are not created out of altruism or a sense of the greater good; they are created because there is a need for additional labour. This extra labour is required to deal with additional demand. Demand has always been the only driving force behind businesses expanding, and yet history is being rewritten to suggest to the ignorant that it is the benevolent rich who invest when they do not feel oppressed by taxation. Of course, businesses would still not invest in new staff if these extra staff could not generate enough income to cover their wages and still turn more profit. So much for altruism.

It is not too difficult to cut through the weasel words and failed ideologies of zealots, but when the media keep lending them credibility, we may all end up thinking like fools.

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