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It is not how much money you make; it is what you do with the money.
Talking to a person in my health club and she tells me about her brother-in-law in NYC who is getting a pension that is more money than he needs. He blows the entire check every month. Has no savings so what would he do if the check did not get to the bank or his mailbox? Crazy! This man suffers from a lack of management. Another person might take the extra and invest it and end up with twice as much money each month.
Then there are those who get their nails done every week for about $60. I like neat nails but there is no way I am paying that price to get them in that condition. You can buy enough nail polish for a year with $60.
Becoming a millionaire can be as simple as only spending what you need to spend and saving the rest and a little luck on the stock market.
The definition of "need" is all over the place, therefore it ISN'T simple at all. Furthermore, in a service economy the collective choice to exercise consumer restraint is antithetical to the employment and wage requirements of the population. Catch-22.
Second, piggybacking off of that comment, there is a logical fallacy known as the "musical chairs fallacy". I've referenced it without explanation a couple of times in other comments, but it's simple. Basically, you have a game of musical chairs, and when a person can't sit down, they are told "you could have sat down if you just ran faster!" The problem is that there are not enough chairs and if everyone ran to their maximum ability, SOMEBODY would have to lose.
The fallacy of this explanation is that it assumes a zero sum game ("not enough chairs"). For that to be true, there would not be economic growth. There would have been no progress on technological change.
Why bother creating the iPod, Facebook, Lipitor, Viagra, fiber optics, Windows, Post-it Notes, Bandaids, Kleenex, Netflix, Tesla, Depends, you name it? The possibility of failure is too high, why bother? There would be no reliable return on investment. The only reliable investment is in grabbing share from someone else. It would be much easier to change the rules so nobody is allowed to start any new business, and to regulate existing competitors into the ground.
No. Our (largely capitalist) world is not a zero sum game (a fixed "economic pie" to be divided up).
The wealth that someone like Bill Gates gained is not from pushing someone else "off the chair". It came from people willing to buy his software, because using it gave them the ability to do more than they could otherwise. Everyone gained in their productivity (either for business or for pleasure)...the pie expanded. Gates retained only a micro thin layer of that expanded circle.
Every transaction we make (outside of government mandates) is a voluntary decision we've made about the value that we are receiving in return. Presumably that value is enhancing our lives somewhat (expanding our circle). At the other end is someone who is retaining a small piece of that out of what we provided in return. This happens millions of times each day.
The analogy of a "musical chairs" economy is very far from what we can walk around and see everyday, and, more importantly, measure....it is a figment, that some political elites would like us to believe to create envy and animosity towards collecting power for themselves.
The definition of "need" is all over the place, therefore it ISN'T simple at all. Furthermore, in a service economy the collective choice to exercise consumer restraint is antithetical to the employment and wage requirements of the population. Catch-22.
While you are correct about the definition of "need" as it gets toss around, you miss the larger point from NCN. People can generally calibrate their expenditures according to their means. We all have choices.
About "need", man has proven that the only housing "needed" is a cave to survive. Anything more is a "want".
There is no catch-22. Society does not "need" people spending beyond their means. One can buy an expensive Montblanc pen, a cheaper Papermate pen, or the cheapest Bic pen. We each have 1000s of such choices to make. There is nothing "collective" about it. The economy is only the aggregation of those billions of choices.
As we go through the ups and downs of life, we make the choices that we individually think is the best value for our money / effort. Conditions change and choices adapt. There is nothing antithetical about it. In fact, it is integral to a dynamic economy (seen any buggy whips, typewriters, or VCRs, in a nearby store lately?).
LOL. Is that a joke? In other developed countries, working class people have far better quality of life, job security, vacation time, etc, AND more upward mobility.
I would be interested to know which countries you are referring to. Hope one of them is not France because my daughter's French friend told her the opposite. One of her friends had three degrees but could not immigrate legally and just the opposite of what you said was his reason for wanting to do this.
??? If you flip extra burgers, they won't sell in Ray Kroc's allotted time (ten minutes?) and they will be thrown out, and the burger flipper will probably get a warning.
The fallacy of this explanation is that it assumes a zero sum game ("not enough chairs"). For that to be true, there would not be economic growth. There would have been no progress on technological change.
Why bother creating the iPod, Facebook, Lipitor, Viagra, fiber optics, Windows, Post-it Notes, Bandaids, Kleenex, Netflix, Tesla, Depends, you name it? The possibility of failure is too high, why bother? There would be no reliable return on investment. The only reliable investment is in grabbing share from someone else. It would be much easier to change the rules so nobody is allowed to start any new business, and to regulate existing competitors into the ground.
No. Our (largely capitalist) world is not a zero sum game (a fixed "economic pie" to be divided up).
The wealth that someone like Bill Gates gained is not from pushing someone else "off the chair". It came from people willing to buy his software, because using it gave them the ability to do more than they could otherwise. Everyone gained in their productivity (either for business or for pleasure)...the pie expanded. Gates retained only a micro thin layer of that expanded circle.
Every transaction we make (outside of government mandates) is a voluntary decision we've made about the value that we are receiving in return. Presumably that value is enhancing our lives somewhat (expanding our circle). At the other end is someone who is retaining a small piece of that out of what we provided in return. This happens millions of times each day.
The analogy of a "musical chairs" economy is very far from what we can walk around and see everyday, and, more importantly, measure....it is a figment, that some political elites would like us to believe to create envy and animosity towards collecting power for themselves.
No. As economic growth PER CAPITA has increased, labor hours and total employment have nonetheless gone down. Worker productivity, capital investments, and the like have made a situation where the initial acquisition of capital - necessary to share in the growing pie - is difficult or impossible because there are few jobs that pay wages high enough to save capital in large enough amounts to receive a share of the new pie. New pie that the workers created, of course.
Also, economic growth in developed countries is slower and accrues mostly to capital anyway. Using Bill Gates as an example is ludicrous. Bill Gates is as representative of the opportunities for the 100-plus Americans in the potential workforce as consecutive siamese twins are representative of the outcome of all births. The whole "BUT YOU CAN GROW THE PIE" argument is willfully naive hand-waving at its utter worst.
Let me know where you can save money and buy enough land to farm on now, and make a decent living, much less save millions.
It's all relative... what some consider decent others would consider subsistence.
I see it all the time simply by seeing what we as a people throw away... incredible.
A beautiful home on 5 acres picture perfect at 10 years old... the new owners are gutting the kitchens and baths because they are dated and want to make the home their own... said it will cost 250k by the time they are done.
I come from a family that replaced things when they could no longer be fixed... who does this anymore?
The $800 car I bought in high school I drove for 25 years and still have it.
My brother just bought a ranch property that has been in one family since 1868...
Their friends came over for a visit and they got tons of advice from tearing it down to gutting to the studs... to a last person, no one could understand a home that never had A/C and wood for heat... amazing isn't it?
All I can say is pioneer folks came from hardy stock...
By the way it was 103 in the shade there yesterday without A/C
I've come to the conclusion there are savers and there are spenders...
You acknowledge new pie...that is a start. If all it is, is simply " the initial acquisition of capital" because it "is difficult or impossible (otherwise)" to "share in the growing pie", why would anyone want to come to this country? Clearly there is no opportunity (per your argument - zero sum game)!
Quote:
Originally Posted by kwhitegocubs
Also, economic growth in developed countries is slower and accrues mostly to capital anyway. Using Bill Gates as an example is ludicrous. Bill Gates is as representative of the opportunities for the 100-plus Americans in the potential workforce as consecutive siamese twins are representative of the outcome of all births. The whole "BUT YOU CAN GROW THE PIE" argument is willfully naive hand-waving at its utter worst.
The fallacy of this explanation is that it assumes a zero sum game ("not enough chairs"). For that to be true, there would not be economic growth. There would have been no progress on technological change.
Why bother creating the iPod, Facebook, Lipitor, Viagra, fiber optics, Windows, Post-it Notes, Bandaids, Kleenex, Netflix, Tesla, Depends, you name it? The possibility of failure is too high, why bother? There would be no reliable return on investment. The only reliable investment is in grabbing share from someone else. It would be much easier to change the rules so nobody is allowed to start any new business, and to regulate existing competitors into the ground.
No. Our (largely capitalist) world is not a zero sum game (a fixed "economic pie" to be divided up).
The wealth that someone like Bill Gates gained is not from pushing someone else "off the chair". It came from people willing to buy his software, because using it gave them the ability to do more than they could otherwise. Everyone gained in their productivity (either for business or for pleasure)...the pie expanded. Gates retained only a micro thin layer of that expanded circle.
Every transaction we make (outside of government mandates) is a voluntary decision we've made about the value that we are receiving in return. Presumably that value is enhancing our lives somewhat (expanding our circle). At the other end is someone who is retaining a small piece of that out of what we provided in return. This happens millions of times each day.
The analogy of a "musical chairs" economy is very far from what we can walk around and see everyday, and, more importantly, measure....it is a figment, that some political elites would like us to believe to create envy and animosity towards collecting power for themselves.
??? Do you really think transactions made at subsistence level are voluntary decisions? Like if I am broke and purchase 3/$1 mac-and-cheese (which is totally inappropriate for my doctor-recommended special diet), that's a voluntary transaction? if i'm broke after paying the exorbitant rent - and thus literally can't afford to move - that's voluntary too?
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