On Wed, 03 Sep 2008 22:14:13 -0700, Shrikeback wrote:
> On Sep 2, 3:49Â pm, The Trucker
verizon.net> wrote:>> On Tue, 02 Sep 2008 09:56:00 -0700, Shrikeback wrote:
>>> On Sep 1, 5:01Â pm, The Trucker
verizon.net> wrote:>>>> On Mon, 01 Sep 2008 10:44:44 -0700, Shrikeback wrote:
>>>>> On Sep 1, 8:14Â am, Bret Cahill
aol.com> wrote:>>>>>> "Labor is prior to, and independent of, capital. Capital is only the
>>>>>> fruit of labor, and could never have existed if Labor had not first
>>>>>> existed. Labor is superior to capital, and deserves much the higher
>>>>>> consideration."
>>
>>>>>> -- Lincoln
>>
>>>>> While that is true, if we didn't store our labor in the
>>>>> form of capital, we'd still be in the stone age right
>>>>> now.
>>
>>>> Storing fruit in jars has nothing to do with "capital". Â Investing those
>>>> jars of fruit feeding the self or someone else while the self or
>>>> someone else weaves a basket to be used in gathering more fruit makes the
>>>> stored fruit disappear and the resulting basket is actual capital. Â The
>>>> fruit was __**NEVER**__ capital. You might call it savings. Â You might
>>>> even use it to bribe someone else into making a basket. Â In that case
>>>> you might call jars of fruit a store of value or even money. But the jars
>>>> of fruit are __**NEVER**__ capital.
>>
>>> The definition of capital is:
>>
>>> any form of wealth capable of being employed in the production
>>> of more wealth.
>>
>>> It is not the case that the wealth has to not disappear.
>>
>> Never said that. Â I said that the savings must be consumed -- i.e.
>> disappear.
>
> I am saying that the wealth can disappear (i.e. be consumed)
> and still be considered capital.
>
>>> The hardware used in the means of production eventually
>>> wear out over time as well. Â
>>
>> But that id irrelevant. Â They are NOT consumed in the process but very
>> slowly over time.
>
> So what? That is a quantitative, not a qualitative difference.
It is a non-binary difference that is part of the actual definition
of capital. The _USE_ of the item is relevant.
>>> Presumably, the glass jar
>>> itself would be considered capital.
>>
>> Not unless it is used in the production of further wealth. Â Simply
>> providing a container for savings is not an investment in producing more
>> wealth that that which already exists.
>
> Actually, it does increase wealth to store the fruit. A
> community that is not capable of storing the fruit for
> winter is not as wealthy as one that can.
In most cases you are simply saving up the wealth already produced. The
society is wealthy by virtue of knowledge of the forthcoming winter and by
virtue of the knowledge to make a jar and to seal the jar and then heat it
to kill the harmful bacteria in the jar. But the put up jars of fruit are
not capital unless they are intended to be for sale. I actually disagree
with even this, but Smith and Henry George called these items for sale
"circulating capital". But these are physical embodiments and not pieces
of paper like land deeds or dollars.
> Therefore,
> the jar is used to create more wealth.
No. It is not. Not unless it is sold in a market as opposed to personally
being consumed.
> Never forget
> that the value of the fruit increases when it cannot
> be harvested precisely because of real world scarcity.
Again, this has nothing to do with _real_ capital. The notion that value
due to the changing of the seasons or the passage of time indicates the
presence of _real_ capital is Austrian swill. It is the continued attempt
to define money (a store of value) or political power as capital.
>>> It is employed in the
>>> storage of fruit, which can then be kept until fruit is in shorter
>>> supply, thus making it more valuable. Â More wealth
>>> is thereby created, since the value is higher.
>>
>> This is, in fact, one of the major flaws in Austrian and in latter day
>> neoclassical economic thinking. Â
>
> This is not an Austrian, a German, or an American thing.
> It is not a party thing. It is simply a logical result of the
> definition of capital:
It may be a the logical result of a mis-definition of capital. But I see
that I would tend to agree with the definition you proffered:
"any form of wealth capable of being employed in the production
of more wealth" but for two problems:
1. I would change "wealth" to "commodity". If you want to acknowledge
that "goods" are not land or other natural resource and that all "goods"
are produced, then we can us the word "goods" as opposed to "wealth" or
"commodities". The phrase "natural capital" is an oxygen moron.
2. The fact that the item "can be" employed in the pursuit of more wealth
is not sufficient. In order that the item be _capital_ it _must_ be
employed in the pursuit of more wealth. It is otherwise a store of value
-- a savings.
>
>> It is this very flaw that allows the
>> neoclassical lying pig to refer to money as being capital. Â Smith did the
>> same thing with gold. Â Speculative bets on shortages, or creating
>> shortages do absolutely nothing to enhance production. Â
>
> Creating shortages could only make a monopoly
> wealthier anyway. Speculative bets on shortages
> can actually make shortages less acute. Buying
> low and selling high means selling when supplies
> are short, thus reducing the shortage.
If the items are items of commerce and would be described by Smith and
George as circulating capital they were physical embodiments. Jars of
fruit in a store destined for consumers other than the producers would be
considered as circulating capital. Contracts for the delivery of items
or the provisioning of items do not qualify as per Henry George. Such
contracts are like money. They are not a physical embodiment of wealth.
>> They, in fact,
>> impede production. Â The use of "savings" in this way is not an example of
>> capital.
>
> Money is referred to as _financial capital_ as opposed to _real
> capital_,
Of course it is.... What else would you expect from the "financial"
sector or the neoclassical tap dancers that provide academic finance to
the financiers.
> but _capital_ it is nonetheless. And since financial capital can be
> exchanged for real capital, thus facilitating production, I fail to
> see
> why you get so emotional about the definition of the word.
I actually lack emotion on the subject. What you refer to as
"financial capital" is created from nothing. And there is a distinct
difference between "saving" and "investment". And a store of wealth is not
capital. Bulldozers are capital. Trains and tracks and hydroelectric dams
are capital.
Back to the jars of fruit: If the jars of fruit are "put up" for the
purpose of sale now or in the future and that is their purpose then the
jars of fruit are "circulating capital" just as the hats in a hat store or
the nuts and bolts in a hardware store. I don't like it but so says
Smith and George.
>>> The wheel as concept, and wheels as actual physical
>>> objects are certainly capital. Â So my original statement
>>> still stands. Â If we hadn't stored our labor in the form of
>>> capital, we'd still be in the stone age.
>>
>> The problem with your proclamation is that it is not true. Â We have seen
>> that money can be created from thin air and used to PRODUCE things. Â The
>> only "savings" necessary is actually excess production. Â The money directs
>> the flow of this excess. Â The only true "savings" are what is available in
>> nature; that which has not yet been exploited.
>
> That's absurd. The wheel is not a thing of nature. It is stored
> labor from
> the past. The CPU, whose raw material is merely sand is also stored
> labor, and it does the labor that used to be done on paper at a much
> slower rate.
Given the natural resources necessary to the realization of a wheel and
the knowledge of a wheel then a wheel is nothing more than the labor to
build it. In a society where the division and specialization of labor
have taken place, there is no savings necessary to the realization of a
wheel. The realization happens on the basis of a loan, a contract.
http://www.schalkenbach.org/library/george.henry/pp014.html
>> So long as the planet is
>> still naturally productive or naturally abundant and there is one
>> unemployed person then there is ample resource for more production.
>> Savings, as it typically thought of, is not necessary to real production
>> of goods, capital goods or durable goods. or consumer goods.
>
> Actually, it is. If we had to reinvent the wheel every time
> we wanted one, there'd be considerably less production.
Knowledge is being considered here as capital. But that is not
"savings, as typically thought of". It is not saved up money. It is not
an obligation of the productive to the holder of the money/store-of-wealth.
>> Without the level of capital we currently employ a good number of the
>> people on this planet would most certainly die. Â That is certainly agreed.
>> But jars of peaches will not get us where we need to be.
>
> It was sufficient to get us through many a winter.
Yes. And it was not capital in that case.
--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org/extend
