We are a militant nation, always have been. We are constantly at war. The drug war, the culture war, the war on homelessness, the civil war, world war, the war on terror, and on & on. Everything we do in this country is couched in militaristic terms and viewed through the lens of war. And yet perhaps the most significant war we are all fighting is the one that never gets talked about. The Haves vs. the Have-nots. The Haves pretty much control everything. They own the factories; they control the means of production, they write the laws, and have more money (capital) than most of us could spend in a lifetime.
The only thing of value the Have-nots can offer the Haves, which they do not already own, is their labor - and the productivity of that labor. Since the Haves are not at all interested in working and mostly preoccupied with leisure, they use their capital to employ some of the Have-nots to keep their businesses running smoothly. The pursuit for that labor can easily be framed as a battle between the Haves and the Have nots, but in the interest of accuracy, let’s call it what it really is: a battle for time between Capital & Labor. Distilled down even further, the battle revolves around Labor trying to get as much as possible for their time, while Capital tries to get that time for as little as possible.
Let us first consider this battle from the view of Capital. The profit of any business is directly related to the productivity of its employees less the cost of those employees. For those who prefer an equation, ….
Profit = Productivity (of labor) - Cost (of labor).
Any business owner looking to increase profits must find ways to increase productivity, minimize employee costs, or both. This explains why when ABC corp lays off half its employees, their stock price jumps. Wall Street recognizes ABC’s cost of labor will be going down, thus increasing profits. As for the employees who were not laid off, most of them will now see increased workloads to make up for the productivity of the laid-off workers. Whenever Bag talks to any of his (corporate drone) friends, they all have the same complaint. They are constantly being tasked to do the work of what used to be the job of several people.
Now let’s consider this battle from the viewpoint of Labor. Understandably, everyone wants to get paid as much as possible for their time, and at the same time, they do not want to work any harder than necessary. In other words, the average employee is looking to minimize productivity and maximize cost. Notice how this is a direct conflict with the goals of Capital. When ABC corp hires an employee, they agree to pay that employee X dollars an hour. Capital puts up capital, and labor puts up labor. To labor (or anyone with an employee mindset), this looks more like an agreement between capital & labor, than a war. To capital (and anyone with an owner’s mindset), the war has only just begun.
The real crux of the problem for Labor, is they don’t even realize they are in a war. They look around, and think about the fact they are making more money than they have ever made in their life, yet can’t make ends meet. They can’t even figure out who the enemy is. Meanwhile, in nearly every industry, Capital is busy figuring out ways to replace Labor through automation. Hotel front desk clerks are being replaced by kiosks. Cashiers are being replaced by self-checkout. Even McDonalds is opening restaurants run by robots …. (Bag can hear the McRobot now…“I’m sorry Dave, I can’t give you fries with that”).
Slowly but surely, Capital is busy killing off Labor, and all Labor can think about is how much am I getting paid, and when is payday. If Labor stopped focusing on the X dollars per hour they earn, and instead focused on the purchasing power of those X dollars, they would realize instantly they have been losing this war for decades.
Once the X dollars an hour is agreed upon, Capital understands that ANY increase in productivity by that employee translates directly into profits for the corporation. If Labor wants any chance of turning the tide of war in their favor, they MUST learn how to garner some of those productivity gains for themselves. Accomplishing this requires a comprehension of economics, which, unfortunately, is possessed only by the Haves. It’s not that the Have-nots can’t grasp it - it’s just that the Haves control the educational system, and they recognize there is no upside in teaching it to the Have-nots. The last thing Capital wants is an educated working class.
The secret for Labor to seize those productivity gains for themselves requires an understanding of both Time and Money. Everything we do has an element of time to it. We work for X dollars an hour, vacation a week at a time, pay bills monthly, etc… Even money has a time component; it’s called Interest. Bagholder has been criticized for decades for keeping much of his wealth in Gold, which pays no interest. What those same critics do not understand is Gold possesses a unique property in that it captures productivity gains over time. For a detailed explanation of how exactly Gold does this (click here). For the purposes of today’s blog, a good example is Gold bought a lot more cotton after the cotton gin was invented, because the productivity of your average cotton farmer skyrocketed.
Increased productivity is really just a savings in the time required to produce goods. Because it uniquely captures productivity gains, Gold is the exact weapon Labor needs in their war against Capital. Theoretically, Paper money should function the same way as Gold, except the Haves are constantly increasing the supply of paper money. As a consequence of this constant dilution, the purchasing power of paper dollar savings buys less and less every year, effectively forcing labor to spend more time on the 9-5 hamster wheel. In sharp contrast, the gold supply on the planet is remarkably stable, and thus your savings in Gold is more than able to maintain its purchasing power. In effect, Gold is the ideal storage facility for the most valuable asset Labor has: Time. Technological advances, as well as the increased productivity of the working class, both guarantee Gold will buy more in the future than it does today. It’s no coincidence the older we get, the more valuable time becomes. Gold is no different.
The next column won’t be out for a couple of weeks as Bag will be on Holiday. For those interested in a deeper dive on the merits of Gold vs Paper money…. Please click here….
if i could just do enough labor to buy gold...
Very interesting perspective food for thought