But a quick response:
Wealth is anything that has value to someone. Basic necessities of life are examples of wealth. You really didn't know this?
I didn't disagree with you. I said, as you've said, that it is in the eye of the beholder. Unless their is a market for such "wealth", it remains a purely subjective and personal valuation.
Your attempt to move the goal posts, along with your extended question has no bearing on the fact that what I presented is a perfect example of wealth being created without capital.
We disagree. Whatever "wealth" you've created cannot be monetized on your island. It may have benefit to you for survival, but it has no value off your island or to anyone else. At best, in your example, you've created sustenance for survival. But that has value to you on your island if you want to live I suppose.
If it makes you happier, let's suppose an entire cruise line was shipwrecked on the same island. Suddenly there is a market for your stockpile of food, shelter, weapons, gardening tools, etc. This becomes "capital" in every sense of the word because you can use it to purchase labor from those in the market for food and shelter.
Well now I think we are getting somewhere on your island! You have now demonstrated my point. Your labor (and wealth) can now be monetized by your hypothetical creation of an instant economy and market!! It's all good now! Harmony on your island. An economy and society created with no capital!! Bravo, bravo! You have demonstrated your genius in macroeconomics. Now I am impressed!
My example was designed to prove the point that capital is not required for labor to create wealth. To prove "capital" can be created from labor without preexisting capital, all I had to do was alter the scenario to include a market. It was quite simple really.
But now who's moving the goal posts!! With enough hypothetical assumptions all examples and arguments are viable I suppose.
Oooops, almost forgot to ask one question: How did that cruise ship get built to bring you your instant economy and market? Damn - capital was required first wasn't it?!? Someone had to put up the capital to provide the material and labor to build the ship that brought you your instant economy to monetize your wealth. But a good example if we ignore the realities of economics.
I would probably agree that there was a time labor was capital. Thousands of years ago or perhaps where 100 % barter economies still exist (don't know of any). But where there are currencies and markets, labor needs capital. We have the most unemployed laborers in our economy today since the great depression. If labor can create wealth, or labor by itself can create commerce, why is unemployment so high today? Why do we give benefits to the unemployed? Unemployment should be zero by your logic and we should never have to provide govt benefits to this group. All the unemployed should simply, as you tried to demonstrate on your island, go out and create wealth!!! They don't need the backing of capital - right? They can create wealth without capital or gov't subsidies!
[ by the way I am not against unemployment benefits. I willingly pay into the fund and appreciate the hardships through experiences of some great people I work with and real life experiences]
Our economy, and our freedoms of democracy are very dependent on capital being invested. And the government can't provide jobs in the long run. It can give candy and entitlements in the short run, but the bill has to be paid. Free enterprise, particularly small businesses, have to be allowed to create commerce and provide jobs to generate revenues for our gov't. They are the largest providers of jobs in this nation. But they need policies that motivate them to invest, take risks and create jobs. We got a credit card balance pushing $16 trillion. If that balance becomes enough of an impairment on the US dollar - we have real problems on the cost of goods in this country. We have an administration who hasn't provided a budget in almost four years. I have no problem paying taxes. But for anyone with any fiscal and economic knowledge, we can't tax our way out of this mess. The numbers don't add up. Giving an out of fiscal control administration tax dollars is like giving an addict cash and telling him to go get well. The two only know one habit, respectively.
I'm still waiting for you to explain for us how capital came into existence without labor.
I never made that statement. CFR?
This is all myth. Please explain how the White House has created fear in corporate America's desire to invest!
I never said "fear", although I am very worried for our future. We can't ever tax our way out of a deficit this size in a pitiful economy. Had the current White House administration believed so, they would not have extended the existing rates in 2010. But now it's ok when you can't run on your record and need to divide the country into class warfare. To increase tax rates will absolutely kill small businesses. If anyone here owns a small business with more than 100 employees, please come forward and let's discuss. But if you have never created a small business you may not appreciate this significant and damaging policy being proposed.
And how can anyone not lose respect for the current administration when we go and invest in Brazil's offshore oil drilling to be, as our current President exuberantly claimed, "your largest customer"!!! But he has no problem blocking federal offshore reserves in this country from being developed while giving jobs to Brazil. One of my businesses is a trucking company in the south and i can't tell you how many gulf state people have lost jobs and livelihoods because of this admins energy policies. I was there delivering free water, ice and staples during Katrina. These are the greatest people in the country with the BEST work ethics I've ever seen. They don't want handouts - they have dignity and want to feel the respect of earning a wage. And when this white house chose Brazil over it's own people - well it was disgusting. This admin politicized the BP disaster. Used it for all it could to bash offshore drilling. But supporting the same type of job creator in Brazil - no problem!! So where is the "so called" environmental concern? We have a guy in the White House who's largest business transaction, in his life, was buying a house from a convicted felon - Tony Rezco! And this is a President who says he understands an economy and the challenges of small businesses?!?!? A community organizer in action. Perhaps he could make a real impact on this "deserted island"! If we could only find the capital to ship him the community to organize! Any investors out there willing to go halvies with me on THAT capital?
But I wonder. Is Joey really a weak-kneed wimp, or is he just being dishonest with us (and possibly with himself)? After all, if folks like Joey think government borrowing can lead to hyper-inflation, keeping his money on the sideline is risky too--the best way to mitigate that risk would be to invest it in a business where the profits would rise with CPI. Plus, he'd be making a great return in the meantime.
Always want to learn from those with good ideas. Could you give me your top three ideas by industry or brand description in these CPI correlated businesses and what you believe the answer to the following questions might be:
1. Are you suggesting active or passive investments? (I think i may already have the passive side covered but that is not a job creator as you obviously well know.)
2. For your top three ideas could you give me your thoughts on what you see as the risk adjusted return ranges might be?
3. What do you believe to be the liquidity avenues for your top three picks and the required hold periods one should expect?
Love your thoughts just want to gain your insights and experiences for your suggestion. Thanks.
I sense most on this board don't see it as I do. But everyone I've actually met here in Utah seems to get it. Im not a Mitt Romney fan. But I do believe he will do a much better job than what the current guy has demonstrated!
Off for some good sustenance now!
In my absence (I really don't have the time others have to spend here), please refer all your questions directly to this Kishkumen fella - he appears well versed in just about any topic here. Obviously a true Renaissance man if I may say.
