All wealth comes from nature. This is axiomatic, but it does not take us very far at all when we try to understand value. Nature provides us with value only when we use our ability to labour to transform it in some way. Let us say that I am thirsty. There is a spring nearby. I walk to the spring and drink the water. This action of mine has created use value for me.
Now, let us imagine you are thirsty and I go to the spring, collect some water and give it to you. In this case my action has created use value for you. However, as we are doubtless all aware, human beings are often not altruistic. And so, before giving you the water, I will want an equivalent value in exchange. How can you and I solve this problem? How can we tell what equates with what? Should I demand a sheep for the water or would that be too much: how much water equals one sheep? How can one compare dissimilar objects? How do we routinely get round this difficulty?
The answer is money. So, what is money, you may well ask? How can a piece of paper, a promise, be the same as a sheep and the same as water? The answer to this conundrum lies in the fact that money does not exist. It is a figment of the imagination. Not mine, personally; but everyone's imagination: it is a fantasy of our collective imagination. And what it represents is not sheep or water or bread, but labour.
To keep this simple, imagine that one unit of money represents one hour of labour. So, let us imagine that I have to devote one hour of my time and effort to acquire a given quantity of water from the spring. Let us also imagine that you would like that water. You will pay me one unit of money in return for it. This is an exchange of equal values. Let us further imagine that I would like some bread and my local baker has some really tasty loaves, each of which required one hour of his labour. I take my one unit of money and he gives me one loaf in return: another exchange of equal values has occurred.
Now, if one lived in a small community, where everyone was an independent producer and consumer and everyone knew everyone else, this system would work perfectly. An efficient division of labour could be maintained by constant reciprocal exchanges of equivalence. The system could even cope with differing amounts of time and effort required for the unit of money on the basis of skill level. Within such an economic community differences in wealth would be slight and reflect natural and skill differences. In such a system, no one would ever get rich.
And yet, this is precisely the economic system that we do have. Exchanges are (in the long run) exchanges of equal value. Money simply reflects (socially necessary) labour time. So how is it that some people become very rich and some are very poor? There are a number of factors at play here. But the underlying reason is that labour costs less to produce than it can create. Human labour creates surplus value. If this were not the case, each generation would be poorer than the previous and eventually the humanity would be extinct. Indeed, this would have happened long ago.
So, given that labour creates more than is necessary to produce labour, once some people can, by whatever means, command the labour of others, they can accumulate a surplus of wealth and the more wealth they can accumulate, the easier it is for them to command more and more labour. Once the cycle begins, baring terrible disaster, it is self-perpetuating and the wealthy will become richer and richer.
So the reason why we see such gross and constantly increasing discrepancies in the relative wealth of individuals is due to the ability of some to command the labour of others. This gap cannot be resolved by economics; on the contrary, it is created and developed by economics, by fair and equal exchange in the market. It can only be ameliorated or reduced by political action through institutionalised authority, ie, the state. However, everywhere we look, states are being used by professional politicians to increase the power of the market, to enhance the capacity of those who can command the labour of others to extract the maximum amount of surplus labour.
So, when politicians seek your vote, I suggest you examine their policies closely. How do they propose to limit the capacity to extract surplus value of those who have the ability to command the labour of others? If they have no such plans, you can be sure that people who have to work for a living will not be getting wealthier. If you doubt this assertion, allow me to draw your attention to one empirical fact: in the West real wages have remained constant since the early 1970s.
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