10-14-2010, 03:51 PM
(10-14-2010, 03:47 AM)unity100 Wrote: so then. where does those extra profits everyone make, come from ?
lets say there is X amount of total worth of goods, services, thousands of smiles generated.
and the entire system is built on profit, and, ( lets make up a percentage of profit like, %5), the system does 5% in total.
where does that profit come from ?
lets make it a closed system, and have 100 entities. lets say, these 100 entities generate 1 units of 'smiles' each. a total of 100 units of smiles generated. but, all entities ask for 5% profit for what they are giving.
where will the 5% more, come from ? where will the extra 5 units of smiles, come from, into this system ?
someone will have to give it. it wont materialize from thin air.
Actually it will materialize from the thin air of capitalism and I will show you how. The key concept is Circulation.
Let say 95 of these are fortunate ones and join the socialist club. They will all keep their smiles together and at the end of the month are given their wages as 1 smile each. So they will sing patriotic songs and can sleep peacefully in exactly same sized and similar looking sleeping quarters with the calm comfort knowing their neighbor has made the same amount of smiles exactly 1.
Now let's say only 5 of these unfortunate ones are thrown to the hell that is capitalism. So these people have to do something fast and innovate. They will figure out that each of them has a unique talent and ability to serve in a way that is needed by others. They all start with 1 smile each. Person A starts teaching yoga to others and gets 2 clients B and C, they give her 1 smile each. Then B starts a comedy show for all the rest they get A and D as clients and earns 2 smiles. C starts an arts class and gets 2 smiles from A and B. Meanwhile D comes up with a business innovation idea and come up with a gadget so you don't have to use the full smile but can use a fraction of it as a payment. He lets everyone use his idea and get .5 smiles each from A, B, C, and E. Now this paves the way for E who immediately opens a bank and lets everyone put the fraction of their 1 smile in bank for a month and then he promises to return 5% more at the end of the year. Meanwhile he buys 50% stocks in D's company with that money.
So what was the earning for A, B, C, D and E at the end of the month.
A earned 1+2=3 smiles, spends- 1+.5=1.5 smiles, saved- 1.5 smiles in the bank
B earned 1+2=3 smiles, spends- 1+1+.5=2.5 smiles, saved- .5 smiles in the bank
C earned 1+2=3 smiles, spends- 1+.5=1.5 smiles, saved- 1.5 smiles in the bank
D earned 1+2=3 smiles, spends- 1 smile, saved- 2 smiles in the bank
E earned 1+5.5=6.5 smiles, spends- .5 smiles, saved- 3 smiles in his mattress, Invested 3 smiles in D's business to earn more.
Total Earning for evil empire- 18.5 smiles
But wait there is more. Since this evil empire now has smiley money and a lots of it they attract the best and the brightest from the socialist club to come over and join them. Reluctantly scores of people come over and help build beautiful buildings and resorts and other forms to increase the overall richness of the society. These immigrants help by bringing their own expertize to the table and contribute. They also expand the market size and now E the rich and evil banker will have more money. Unless one of these new immigrants send their kids to schools and one of these kids open their own bank using the power of free markets. Maybe he will have 25 smiles making his earnings compared to other poor people who only earned 5 smiles; a big 5 times. But then again I would rather have my 1 smile and take comfort in the fact that my neighbor does not make more than me. oh well !!!