Real wealth means real work

We all would like to live the life of luxury, sitting by the pool, drinking the day away, but life is not like that. But still, people try, by jacking up the profit margins on their business interests, demanding substantial dividends from the stock that they own, and hiring the cheapest possible labor to work for them. There is a point where self-interest becomes greed, and it seems to me that most people have no idea where that point is.

When we put our own needs ahead of the community that we live in, we degrade our quality of life. This is not usually apparent right off, but it gradually overwhelms our own standard of living, forcing higher spending for police, security, and maintenance. We may believe that we are above the common standard, but we cannot escape the effects of that standard, unless we wish to live in a vacuum.

When industries send jobs overseas, they reap the profits of lower labor costs, initially. But, in time, the decline in income in the markets where their products are sold forces their profit margins to shrink. At the same time, the quality of the community declines, as tax incomes shrink. This is not the same as the improvements in productivity brought about by new technologies, this is the complete elimination of employment opportunities in an established market. There are no new jobs created by the changes, as there are when productivity increases.

Greed pushes management to ignore long-term costs in the interest of maximizing short-term profits, resulting in a gradual diminishment of returns. A franchise owner who employees only high school age workers to maximize his profit is likely to see his trade dwindle, as people become unhappy with the service they receive and the quality of the product they get. The craftsmanship of workers who have never done a job before, and don’t buy the finished goods, is unlikely to equal that of people who have been raised in a culture based on craftsmanship.

By demanding extraordinarily high profits, the financial industry set the stage for an implosion of prices. Bidding up the price of stocks resulted in artificially high values, which could not be sustained. There is no reason for housing prices to appreciate substantially if no improvements are being made to the homes, yet it was assumed that prices would keep going up and up, for no other reason than that they always had before. Ignoring the possibility that housing prices might fall practically insured that they would, because even the smallest blip in the market would be magnified.

Sustainable, long-term growth is going to require hard work, the creation of real value, and re-investment into the community. There is no way around the fact that what we have called wealth is in reality merely inflated values. Real wealth is not created by manipulating numbers in computers, but in building things that have lasting value, that are tangible, and that can be used by large numbers of people. Real wealth takes real work to be created, something that we seem to have forgotten.

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