Wednesday, October 7, 2015


Property means right of ownership.

It doesn't mean chattel nor possession. Anyone can have property in chattel, work of the mind or credit.

A house isn't property. It's chattel. An improved parcel isn't property. It's chattel.
Someone can have property in a house and property in an improved parcel.

People buy and sell property in purchases and sales of trade.

When you go to your supermarket and buy milk, you buy property in milk. You aren't buying the milk. You are taking possession in what you have property when you bag it and bring it home.

The agents of the owners of the supermarket (those who have property in the supermarket) sell you their property in milk and buy your property in bank credit (either cash or checkable deposits).

What gets traded in the purchase and sale is property, not the stuff.

Wealth is property of exchange.

Things aren't wealth until the moment of trade. Things cease to be wealth thereafter (e.g., A once-new bicycle that has become rusted with bent spokes isn't wealth if its owner can't sell it to someone else).

Capital means property put to production.

Capital does not mean cash or money — coined metal by weight and fineness, which no longer exists. Too many confuse cash for capital because of paid in capital.

Labor is the poor man's capital.

The worker uses his labor (skills, body) to create work.

The work the laborer creates is his wealth. The laborer sells work through time in a purchase and sale and buys wages.

Work of the laborer is capital of the enterpriser.

If the work done is the final product, it becomes inventory (property of potential wealth). If it can be traded (bought and sold in a purchase and sale), it becomes wealth of the enterpriser.

Work done is no different than any other capital of the enterprisers.

From the enterpriser's perspective, work done isn't any different than any other component to produce a product. Any enterpriser buys work done and packages the work done into a product for final sale. Sometimes the work done is the final product.

Either way, the enterpriser acquires property in work done by trading property in bank credit, whether cash or bank credits negotiable with instruments. Said another way, the enterpriser sells his cash or credit and buys work done.

Most believe the employer-employee relationship like the parent-child relationship.

Wages aren't a gift. Wages aren't an allowance from mom and dad. Wages are income from recurring sales.

How is it most can understand what sales are for Wal-Mart, but not for those who sell work through time for wages?

The onus is on those who sell work for wages to gain better skills over time. They must either sell more work for the same time or sell the same work at lower prices.

How is it that most can understand producers of cars need to become more efficient at producing cars over time, but not those who sell work through time for wages?

Few have a problem with this when it comes to buying all of the stuff they like to buy, e.g., cars, TVs, mattresses, meals in restaurants, flights on airlines. The enjoy ever lowering prices over time. That is how their living standards rise.

Labor never competes with capital. There is no labor without capital.
Never does any enterpriser ask himself "Should I hire people or should I automate?" That never has reflected commercial reality. 

The true question is this: Is there a dearth of workers or is there an abundance of workers?

If there is an abundance of workers, there can't be much of a return to capital (property put to production). Thus, enterprisers hire workers, inefficiently.

For more on all of that, read: 

Capital is the source of wages (see: CAPITALISM. BECAUSE WITHOUT IT, YOU WOULD BE LIVING AS A BARE SUBSISTENCE SAVAGE). If returns to capital are paltry, wages are low. High wages comes from much capital because returns to capital are present and increasing.

When car manufacturing in the USA went from hand-made to massive steel stamping machines operated by men, true wages went up and went up high. High wages for auto workers were the result of efficiency of output owing to high returns to capital.

Where there are many workers even in the face of capital, wages are low — China. Where there is no capital, everyone lives as at bare subsistence — much of Africa.

Debt is the flip side of credit. There is no debt without credit. The two words describe the same relationship. Without credit there wouldn't be much of an economy. Most Americans would still be living on farms and working for their parents or grandparents. Life in America would look much like it did before the 1830s.

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