SETTING THE STAGE

To help you understand the philosophy and the goals in the Ripple articles to follow; it is best that I give it to you in the form of a story.  One must first recognize, the only thing that makes a country wealthier [besides it taking form another country] is the labor that takes natural resources and turns them into something useful and purchasable.   All other activities of man does not create wealth but redistributes that wealth; which was created by the laborer.

 The Story:

Once upon a time a man creates a device which we will call a widget.   Others see this widget and ask for one.  The creator decides to make and market them.   The cost of the material is $.50 and he sells them for $1.50.   Since he can make and distribute 100 a day he is making $100 a day.

 The demand grows and becomes so large he decides to build a factory and hire employees.   Now he can make and sell 100,000 widgets  a day for $150,000.   The materials still takes 1/3 of the income or $50,000.   For the purpose of this illustration let us assume that $95,000 a day is spent on employee wages and benefits and the maintenance of the plant.  That leaves him $5,000 a day profit. 

 That gives him a nice yearly income of $1,300,000 per year.  There are not 365 working days in a year.   The number of working days in a week times the number of weeks in a year comes to 260.  Keeping in mind that the $5,000 a day; was all created by those producing the product in the plant.  When he was alone he made $1 on each unit.  Now he is making only $.05 per unit but is much wealthier.  Without utilizing the labors of others he would still be making only $100 a day.

 With some forethought he comes to the realization that one day the world will be saturated with widgets so he hires a designer to create a zidget.   Now this is a necessary expense but will not produce any wealth until the production labor has produced some zidgets and they are purchased.   Keep in mind that the wages and benefits for the designer does not all come out of the owner's pocket. Since this increased his costs it reduces his tax and that reduction must be made up by other taxpayers so in essence they are paying a portion of the costs for the designer.

 As time goes by he decides to put this extra money to work for him.   It makes little difference where he puts it; this increased income from the investment must be paid by the producers as money does not produce or increase wealth.   Just for talking purposes let us say he decides to purchase tax free bonds.   Now the income from these bonds is all his; as there is no claim for taxes put on this income like there is on the producer’s income.  If this income is spent on luxury items, it will give jobs to producers and the wealth of the nation will increase.  However should he decide to invest it in art, or anything else that already  exist, the nation’s wealth will not be increased.   

 Well whataya know the zidget is also a success.   After say about 20 years this successful business man is now quite wealthy and decides to retire.   He hires a manager for the plant and with the new manager’s lack of experience the plant does not make a profit the following year.   Well in our present system  no profit no taxes.  However that tax which he was paying is still needed by your government so it must be made up by others.  To a great extent it is from the producers which leaves the producer even less for his labors.

Now can anyone give me a good reason why this individual should sit on his wealth and no longer support the government that let him utilize others labors to create that wealth.  This is why I wrote the article 2203 “Tax the Wealth”.  There may be many other ways to accomplish the same goal.  However the main point is that we avoid taking too much from the laborers efforts so that some day he will again rise up in revolt to the system.  Look at history and you will see that mankind many times has had to fight back to regain control of his life and his  labors.  Those in power take it away from him in slow increments and always for a good cause, until one day those who produce the wealth suddenly realize they are no longer receiving enough to exist on so why not fight to regain what their fore fathers had.  This has been going on for centuries. 

It is my hope that mankind has reached a point in our development that we can recognize this unbalance and change the system to support the laborer.  No I am not advocating doing away with everyone but the laborers for we need the planners, developers, and support people.  We need only to recognize that they can not take too much for themselves and still expect the laborer to continue on while his life style continues to spiral downward regardless of how hard he works. 

It has been a long time since an industrialist has recognized the importance of sharing what was produced with those who produced it.  One shinning example is Henry Ford who voluntarily raised the worker's wages to $5 a day back in 1913 or 1914.   Can anyone imagine that happening today.  No the increased profits go to bonuses for management and increased dividends to the stock holders.  While I do not have the figures to prove it I have a strong hunch that today's executives receive a far larger portion of what is produced than ever in history while the workers are receiving a lower percentage.  Ala shipping jobs overseas to lower the labor costs.   When they do that, do the executives take cuts also?

Somehow we need to tie the two together so that everyone benefits from the production in a given ratio.  Thereby eliminating the friction between labor and management.  It could be a happy world if we can recognize and remove greed.

THANKS FOR READING NOW ACT

"LET'S GET OUT THERE AND DO IT"

Just A. Pebble

CLOSING THOUGHT:

In reality you are paying your employer to hire you.

He calls it profit, but it is your labor that created it. A Hobyism

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