We are all concerned about the people of Japan as they recover from the devastation of Friday’s earthquake. If you’ve been living under a rock, the island nation experienced and 8.9 magnitude earthquake, a 23 foot tsunami wave and now a nuclear plant is leaking radiation. Scary stuff. Video images highlight the damage and the costs of cleanup will run into the billions of dollars. Billions.
Thinking about the ordinary costs of life causes enough stress. For many of the Japanese people their immediate concern is not the normal stress, but the unthinkable. Homes, businesses and farmland have been rendered useless. Where would you sleep if your home was destroyed? Where will you work and earn an income if your place of employment no longer exists? What will you eat today or tomorrow? These worries are very far from us, but very close to the people of Japan. Even if your home and job are unaffected, how will you help? Will you invite a stranger into your home and share your food? How long until that gets old?
The economic end of this tragedy highlights the importance of surplus value. Every business is in business to produce a profit by growing, making or improving something that someone will make an exchange for and we often use money to represent the trade. This sounds complicated, but really isn’t. When I work, I exchange my time and effort for a paycheck which I then use to trade for the things my family needs. Someone else used their time and effort and perhaps property to produce the thing I trade my money for. If I am wise, I will have more than I need and can anticipate some distance into the future to provide for my hungry children. If I am successful, I can use my money to trade for a higher standard of living or to save for future needs. This is ‘surplus value.’ Resources (money) have been produced in excess of need. Directing those resources appropriately is the owner’s responsibility. The ‘golden rule’applies here: he who has the gold, makes the rules.
In the American capitalist system, the means of producing value remain (mostly) in the hands of private individuals and this system has produced fantastic wealth. This is a good thing. Surplus value is necessary to pay taxes to the government, to provide for religious services and to help those in need. When the amount of surplus value declines the government receives less tax income, there are fewer jobs for clergy and less help for the needy. There is less surplus value in the world today, and that’s a bad thing. Particularly for the people in Japan who find themselves homeless and possession-less. They must rely on the surplus value created by other people for real daily necessities until they are able to return to creating their own. We are the ‘other people,’ and we have an obligation to dig deep and help out. Our current economic woes mean that we may not be able to help as much as we should.
Todd, Good thoughts. Your post made me wonder about non-capitalistic economies and how they handle the problems that surplus value can solve. In other words, if my income is fixed and I am reduced to sustenance living, then how can I contribute to my neighbor losing everything when I don't have extra? Probably I can't with any material wealth (although this is not to demean emotional and spiritual support). That means that most likely the government would have to be the entity which enters in with the surplus value to help out. But how many governments which operate in a non-capitalistic economy think about using their money to help that way? I honestly don't know, but I like the idea of individuals and communities having freedom to give versus having to depend on one entity (government) to give.
ReplyDeleteThere are three basic kinds of economy: market, command and traditional. In a market economy goods are distributed by market forces. A command economy distributes goods by central planning and a traditional economy by local traditions. Command economies have historically achieved great things, usually through cheap (slave) labor (think pyramids and the Great Wall of China), but are not known for compassion. I suppose a command economy would just redirect spending, with horrible inefficiency (Chernobyl might be a case study).
ReplyDeleteThe problem with government aid, even in a capitalistic society, is that it only comes as a drain on surplus value. It gets run through the government system and only then gets passed on to the beneficiary. Along the way, the taxes have to pay for government salaries, service on debt, etc. before providing some benefit to the 'needy.' The standards of 'need' are government standards and not really subject to appropriate scrutiny. I suppose the political side of the equation asks how much you trust any government to handle benevolence? My answer is that I trust governmental benevolence very little.
Of course, I owe Social Security taxes this year and may be a bit cynical. I wonder if they'll keep my money safe in a lock-box until I need it in my old age?
Hi Todd- I would like to know if you are the T.F. who spent a year in Dong Ying? Sincerely, Dave Watson - also of Dong Ying - dk_watson@hotmail.com
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