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Do You Know The Ups And Downs Of Value?
In this article, I'm revealing the four most important things all items of value have. I also reveal how value is the engine of commerce and the key problems caused by it.
In this article, I’m revealing the four most important things all items of value have: Time, Stuff, Work, and Hype. I also reveal how value is the engine of commerce and the key problems caused by it.
Time - This is the most important item of all. All living things have a finite amount of it before they die which makes it non-renewable and very precious.
Stuff - This is the raw materials that surrounds us—anything and everything like iron ore in a mine to a jumbo jet flying through the sky.
Work - This is where time and stuff is intelligently combined together by people to form products of value.
Hype - This is used to promote the products and services created by the combination of time, stuff, and work. It can range from free word of mouth all the way up to a multi-million dollar advertisement shown during the Super Bowl football game.
Value And Commerce
The earliest civilizations revolved around farming because of the need for food for survival. Early farms barely fed the people who ate from them. As time went on, farming methods became more efficient thus creating surplus food—the first thing of value. This led to the barter system which enabled people to exchange things of value between each other. However, barter proved inefficient and cumbersome which led to the invention of money—a more efficient way to exchange goods and services among people.
Throughout history, the progress of commerce had been impeded by the following:
Greed
What Gordon Gekko said about greed in the movie WALL STREET (1987) is still as true today as it was when the movie first came out. Self-interest is the greatest motivator for commerce the world has ever seen—even when the business climate turns sour as it did on Wall Street itself in 1929 and 1987. As a result of these two stock market crashes, millions of people worldwide were affected and the global economy was sent into a tailspin that took quite some time to recover from. Even this did not stop shrewd, opportunistic investors from snapping up distressed companies at fire-sale prices for a big payday at a liquidation sale or as a genuine long-term investment.
Competition
As business is normally a for-profit enterprise, competition is inevitable. One key benefit of competition is lower prices for goods and services offered by competing firms to the consumer at large. Unfortunately, this leads to cutthroat practices to wring as much value out of a company as possible. This practice primarily benefit business owners, executive staff, and company shareholders at the expense of rank and file employees.
Inflation
Inflation is the bane of any organized economy where the price of goods and services rise and individual buying power does not rise at a similar level as well. This can lead to a number of unfavorable outcomes including:
1) Hyperinflation on a scale experienced by people in the Weimar Republic of Germany in the 1920’s. It was so bad that they burned money for heat and cooking as it would burn longer than the firewood would had the money been used to buy that instead.
2) Stagnant wages for rank and file employees at the lowest levels. In the U.S. alone, the Federal minimum wage stood at $5.15/hr for over nine years from September 1997 to January 2007. This feat is rivaled only by the time the Federal minimum wage was $3.35/hr from January 1981 to April 1990. Inflation simply makes it impossible for a person to enjoy the benefits of a single full-time minimum wage job if one can be found—thus the stories of people holding down two or more jobs just to try to get ahead.
3) The widening gap between rich and poor where wealth is concentrated in fewer and fewer hands due to corporate-level mergers and acquisitions. This is a recipe for disaster of societal proportions best summed up by the Greek historian Plutarch almost 2000 years ago: “An imbalance between rich and poor is the oldest and most fatal ailment of all republics.”
Advertising
Advertising is as old as civilization itself—as are its problems when used by for-profit companies to create demand for their products and services. This has resulted in a worldwide consumer culture financed largely on credit cards with interest rates bordering on usury. With the advent of mass media comes the problem of ad creep where advertising is literally EVERYWHERE...even in public restrooms! Advertiser-supported broadcast television is essentially unwatchable today in real time due to the large number of ad breaks and the large amount of broadcast time devoted to them. Instead, people who value their time and watch such programming do whatever they can to avoid the ads in programs they like to watch.
Closing Remarks
This has lead to the situation today....
After the U.S. dollar was taken off the gold standard in 1971 and replaced with fiat money, market forces determined the intrinsic value of the dollar. This created a feedback loop in the quest for profit that has resulted in an ever increasing money supply to go with the increase in prices of goods and services.
In the end, whatever gains in value the rank and file workers earn over the course of time is constantly eroded by greed, competition, inflation, and advertising—the four unavoidable costs of living in developed, industrialized societies.
Copyright(C) 2007 Bryan Taylor