The Parable of Wealth Creation

A Parable

Once upon a time the earth was young a round and nobody had anything. And every morning everyone woke up hungry and went looking for bugs and berries and twigs and leaves. The lucky ones lived in caves near fresh water, except every living thing wanted to be there so they had to fend off bears and snakes and alligators and even large birds of prey who would love to snatch up a fat human baby to fed its own young. Life was full of dangers and hardships and most people died pretty quickly. Those that made it past adolescence reproduced and if they were lucky, their offspring did not starve and was not eaten, but a 30 year-old was an old man who might well see his grandchild before he died, except the child would likely die, too.

Along the way, some people got better at gathering food, some learned how to build pretty safe shelters. By using the only 4 possible ingredients to wealth building, some begin to acquire wealth.

These four things were and are: raw materials, labor, skill and knowledge. It wasn’t long before some people, let’s call them Planters, realized if they claimed some land as their own, and if they could force other people, let’s call them Drones, to work for them and make them share their gain, that the Planters would have more than those who were not Planters (or Miners, Smelters, etc.), and a lot more than the Drones who served them. Of course the first part was done through some system of squatting and the second part was slavery, or some form of servitude.

At first everything was brutish and violent, but as time went by, those overlords learned civility and learned to use clean and polite. They used the concept of the club more than the club itself. After generations, the great grandchildren of the thugs lived in fine houses, ate good food and learned about poetry and geometry. They decided they were innately better than the wretched Drones, who obviously deserved their plight, just as they, the Planters deserved theirs their entitled existence. The proof is that there were occasionally Planters who squandered their estates and fell almost to the Drones level, usually they were rescued by their families and allowed to waste their lives as a mild embarrassment.

Conversely, there were a few really clever drones who learned to work the system and integrated within a generation or two with the Planters. Almost always these late comers turned out to have the stomach to do anything necessary to climb. The Planters laughed behind the climber’s back, but they also knew the thugishness is where their pretty fancy money really came from.

 

A thousand years down the road the Drones, for the most part accepted their lot, and the Planters certainly accepted theirs. This is today.

 

Of course there were other ways. One family worked extra hard and saved some of their food and resources and so did a few of their neighbors and they worked together and they built a world and shared in it evenly and they cared for each other in turn as best as they could. This is pretty much describes every communal society that exists.

 

There are variations on the theme, but the truth is, we all left the caves behind and climbed up a bit or a lot, based on our access and use of the 4 elements of wealth. Today, most of us live in a world where the wealth has been separated from those who create it for so long, we honestly, even those of us in the Drone category, do not believe the Planters are exploiting us. We have been told at every turn that nothing happens without capital.

The Planter brings his capital, never mind where it came from, And for the use of his wealth (even if  it isn’t even really his  because he leveraged the value of the real wealth creators to a lender who lends him money, money that is actually the money the Drones put in the bank to earn a  penny on their dollar. The bank lends it to the Planter for a nickel and the Drone must work hard to pay back the Planters investment and debt.

Think about it. You are the bank. I give you my dollar and you promise to pay me a dollar and a penny a year later. My boss borrows my dollar from you and he promises to pay you back a dollar and a nickel. Now I have to earn my pay check, enough money to keep the boss in finery and a nickel for him to pay you back so you can pay me back my penny.

As the “old money” has been removed from its creators for so long and the thread is so thin there is no tracing, no real way to turn it back to the poor drone from the middle ages or even before. So we are stuck with the status quo, at least for the wealth. But what we could do, is look at new ways to think about the wealth that is created from this point forward. Yes, that leaves the planters with a huge advantage and the drones at a serious disadvantage. Things like raising the minimum wage to a livable wage, allowing the drones and especially their children to go to college at no charge to the student. These help even the playing field. But….

Understood, a large minority, at least, do not currently support these steps. But, they are not enough in the long run. To build the overall wealth of society, one would suppose is a rational goal of economic policy. The closer we can keep the most of the wealth to the wealth creators, the more likely we are to increase that wealth. Yes, the Planter will get less of it, but if the system works and the Drone creates more wealth, because he is being more equitably rewarded, the Planter will get a smaller piece of a bigger pie. He may end up with more or less than his current take off the top. But we aren’t worried about the Planter, or even exactly the Drone, we are interested in building wealth in the most efficient manner for the whole economy. The whole western world is based on the concept that the way to get more of what you want is to reward it. So if we reward the person who makes the wealth, he will make more of it.

 

 

 

 

 

 

 

 

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