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Economics for Do-Gooders

Third Fundamental Fact:
The Two Things Required for Economic Production.

Economic production requires two things: resources and labor. Since the beginning of the industrial revolution we have increasingly been able to produce much more with less labor, but some labor (not necessarily of the manual sort) is always required. Someone needs to work with resources to produce goods and services. The resources are a gift of nature; the labor we must provide.

Elves and Trolls.

But if you can obtain control of the resources, you can force others to do all the labor. This is how economics determines social order. Class structures and class conflict are all founded in this fact. If you control a sufficient quantity of the world's resources, you can avoid doing your share of the world's necessary labor. You join the “elite,” which is to say, the exploiting class.

You do not even have to control the laborers. At least not directly.

Thus the world has come to be divided into trolls and elves. The trolls stand at bridges to the resources and demand tolls from the elves who must do the world labor. Those bridges are artificial social constructs called “the right of private property.” The labor one performs is both real and a genuine cost to the person doing the labor. The “right of private property” is an artificial and arbitrary claim on the bounty of nature. It has no intrinsic relation to the person making the claim.

Wealth. If you control the resources you are wealthy. As we all know, that means that you have the money to acquire all the goods and services you want. But the money that can get you all those goodies can also get you more of those resources. Which makes you even richer. So the rich trolls tend to keep getting more and more wealthy.

What You Were Waiting For. Which brings us to a subject you may have thought was the fundamental concern of economics: money. Money is actually not essential to an economy, but complex modern economies certainly cannot do without it. Money could be the heroine of a modern romantic novel: it is passionately loved, profoundly misunderstood and wantonly promiscuous.

[Next: Money, Our Beloved Betrayer]